CASE OF THE WEEK

Ismail Mohammed ('Ismail') was a majority shareholder and director of the respondent ('plaintiff') and also Rasa Rata Sdn Bhd ('second defendant'). The appellant ('first defendant'), who was the former wife of Ismail, was a director and a minority shareholder of the second defendant. In 1980, pursuant to a joint venture agreement between the plaintiff and Newacres Sdn Bhd ('Newacres'), the plaintiff was allotted 100,000 shares in Pacific Developer Credit Bhd ('PDC') and these shares were payments made in kind by Newacres. From the 100,000 units of PDC shares, 85,000 units ('the PDC shares') were transferred to the first defendant's name without any consideration. The second defendant, vide its board resolution, resolved to accept the PDC shares from the first defendant in exchange for 510,000 ordinary shares in the second defendant ('the Rasa Rata shares'). After more than 20 years, the plaintiff filed an action against the first and second defendants claiming, inter alia, that at the material time, since the first defendant was Ismail's wife, she was thus entrusted to hold the Rasa Rata shares as nominee or trustee for the plaintiff. Allowing the plaintiff's claim, the High Court found that the proprietorship of the shares was governed by the equitable doctrine of resulting trust in favour of the plaintiff. Dissatisfied with the said decision, the first defendant filed the present appeal. The issue that arose for the court's consideration was whether the Rasa Rata shares transferred to the first defendant was a gift from Ismail or whether the shares were held on trust for the plaintiff.

Held (allowing appeal with costs)

Per Zainun Ali JCA delivering the judgment of the court:

(1) A resulting trust is a presumption which is dependent on the intention of the parties at the time a property was acquired. The burden of proof alleging the existence of trust was upon the plaintiff before the burden could be shifted to the first defendant. (paras 13 & 15)

(2) It is trite that for a trust to exist and to be binding, the donor must make his intention clear in that at the time of its creation, there must be certainty of beneficial interest. The court has a duty to determine whether the plaintiff as the donor intended the property to be held by the first defendant as donee in trust for the plaintiff. It is only in the absence of any other intention of the parties that a presumption that the first defendant held the property in resulting trust may arise (Takako Sakao v. Ng Pek Yuen & Anor; foll). (para 16)

(3) The plaintiff could not directly rely on the presumption of a resulting trust. The facts as to the plaintiff's intention to create a trust must be established. However, there was a failure to do so here. Even if the plaintiff had successfully proved that the shares were acquired by the plaintiff with its money, it has to show that they were registered in the first defendant's name as its trustee, holding it in its favour, on a resulting trust. Further, it is common knowledge that a company is a separate and distinct entity from its shareholders. Hence, the existence of trust documents or other supporting documents such as the board of director's resolution becomes necessary. (paras 16 & 19)

(4) The onus of proof lied on the plaintiff to prove strictly by a preponderance of evidence the intention of the parties at the material time when the PDC shares were transferred to the first defendant. The plaintiff had to show that it was the intention of the parties that the PDC shares were transferred by the plaintiff to the first defendant as nominee and trustee and that the beneficial interest lied with the plaintiff. (para 16)

(5) There was no evidence to show that the first defendant was informed or made known that she was merely holding the PDC shares or the Rasa Rata shares in trust for the plaintiff. Further, there was no certainty that at the time the PDC shares were acquired and transferred to the first defendant, it was meant solely for the plaintiff's benefit. On the facts, the plaintiff did not lead any evidence to prove the plaintiff's intention that the PDC shares were to be held by the first defendant as a trustee or nominee for the plaintiff. Hence, the trial court ought to have drawn an adverse inference against the plaintiff. (paras 16 & 20)

(6) The fact that the first defendant was Ismail's wife when the PDC shares were transferred to her and that no trust document or other supporting documents were prepared by the plaintiff company did not support the existence of a trust. Further, it could be inferred that it was Ismail, who was the majority shareholder and managing director of the plaintiff who effected the transfer of the PDC shares to the first defendant. The plaintiff must be estopped from claiming that the first defendant was a mere nominee. In the circumstances, the impugned shares in the second defendant were held by the first defendant as the registered and beneficial owner thereof and therefore, the first defendant was entitled to those said shares. (paras 21 & 23)

Bahasa Malaysia Translation Of Headnotes

Ismail Mohammed ('Ismail') merupakan pemegang saham majoriti dan pengarah responden ('plaintif') dan juga Rasa Rata Sdn Bhd ('defendan kedua'). Perayu ('defendan pertama'), yang merupakan bekas isteri Ismail, adalah pengarah dan pemegang saham minoriti defendan kedua. Pada tahun 1980, melalui satu perjanjian usahasama antara plaintif dan Newacres Sdn Bhd ('Newacres'), plaintif diperuntukkan dengan 100,000 saham dalam Pacific Developer Credit Bhd ('PDC') dan saham ini merupakan bayaran yang dibuat oleh Newacres. Daripada 100,000 unit saham PDC, 85,000 unit ('saham-saham PDC') telah dipindah milik ke atas nama defendan pertama tanpa sebarang balasan. Defendan kedua, melalui resolusi lembaganya, memutuskan untuk menerima saham-saham PDC daripada defendan pertama dengan balasan 510,000 saham biasa dalam defendan kedua ('saham Rasa Rata'). Selepas lebih daripada 20 tahun, plaintif telah memfailkan tindakan terhadap defendan pertama dan defendan kedua menuntut, antara lain, bahawa pada masa material, memandangkan defendan pertama adalah bekas isteri Ismail, dia telah diamanahkan untuk memegang saham-saham Rasa Rata sebagai wakil atau pemegang amanah bagi pihak plaintif. Membenarkan tuntutan plaintif, Mahkamah Tinggi mendapati bahawa pemilik saham dikawal oleh doktrin ekuiti amanah berbangkit yang berpihak kepada plaintif. Tidak berpuas hati dengan keputusan tersebut, defendan pertama telah memfailkan rayuan ini. Isu yang timbul untuk pertimbangan mahkamah adalah sama ada saham Rasa Rata yang dipindah milik kepada defendan pertama merupakan hadiah daripada Ismail atau sama ada saham tersebut dipegang secara amanah bagi pihak plaintif.

Diputuskan (membenarkan rayuan dengan kos)

Oleh Zainun Ali HMR menyampaikan penghakiman mahkamah:

(1) Amanah berbangkit adalah anggapan yang bergantung kepada niat pihak-pihak pada masa suatu harta diperolehi. Beban pembuktian yang mendakwa kewujudan amanah terletak atas plaintif sebelum beban tersebut beralih kepada defendan pertama.

(2) Adalah matan bahawa untuk suatu amanah itu wujud dan mengikat, pemberi mestilah memastikan niatnya jelas di mana semasa kewujudannya, perlu ada kepastian kepentingan benefisial. Mahkamah mempunyai tugas untuk menentukan sama ada plaintif sebagai pemberi mempunyai niat agar harta tersebut dipegang oleh defendan pertama sebagai amanah bagi pihak plaintif. Hanya dalam ketidakhadiran niat lain pihak-pihak di mana anggapan bahawa defendan pertama memegang hartanah dalam amanah berbangkit akan timbul (Takako Sakao v. Ng Pek Yuen & Anor; diikuti).

(3) Plaintif tidak boleh bergantung secara langsung terhadap anggapan amanah berbangkit. Fakta berkenaan niat plaintif untuk mewujudkan suatu amanah mestilah dibuktikan. Walau bagaimanapun, terdapat kegagalan untuk berbuat sedemikian di sini. Walaupun plaintif telah berjaya membuktikan bahawa saham-saham telah diperolehi oleh plaintif dengan wangnya, ia perlu menunjukkan bahawa saham-saham tersebut telah didaftarkan atas nama defendan pertama sebagai pemegang amanah, memegangnya bagi pihak plaintif, berdasarkan amanah berbangkit. Tambahan lagi, diketahui umum bahawa syarikat merupakan entiti berasingan daripada pemegang sahamnya. Oleh itu, kewujudan dokumen-dokumen amanah atau pun dokuman-dokumen sokongan lain seperti resolusi lembaga pengarah menjadi suatu keperluan.

(4) Beban pembuktian terletak pada plaintif untuk membuktikan melalui keterangan kuat niat pihak-pihak pada masa material apabila saham-saham PDC dipindah milik kepada defendan pertama. Plaintif perlu menunjukkan bahawa adalah niat pihak-pihak bahawa saham-saham PDC dipindah milik oleh plaintif kepada defendan pertama sebagai wakil dan pemegang amanah dan bahawa kepentingan benefisial terletak pada plaintif.

(5) Tiada keterangan untuk menunjukkan bahawa defendan pertama telah dimaklumkan atau mengetahui bahawa dia hanya memegang saham-saham PDC atau saham-saham Rasa Rata sebagai amanah bagi plaintif. Tambahan, tiada kepastian bahawa pada masa saham-saham PDC diperolehi dan dipindah milik kepada defendan pertama, ia hanya bagi manfaat plaintif. Berdasarkan fakta, plaintif tidak mengemukakan sebarang keterangan untuk membuktikan niat plaintif bahawa saham-saham PDC dipegang oleh defendan pertama sebagai pemegang amanah atau wakil bagi pihak plaintif. Oleh itu, mahkamah bicara sepatutnya membuat anggapan bertentangan terhadap plaintif.

(6) Fakta bahawa defendan pertama merupakan bekas isteri Ismail apabila saham-saham PDC dipindah milik kepadanya dan tiada dokumen amanah atau pun dokumen sokongan lain yang telah disediakan oleh syarikat plaintif untuk menyangkal kewujudan amanah. Tambahan lagi, boleh diandaikan bahawa Ismail, yang merupakan pemegang saham majoriti dan pengarah pengurusan plaintif, yang telah memindah milik saham PDC kepada defendan pertama. Plaintif mestilah diestop daripada menuntut bahawa defendan pertama hanyalah seorang wakil. Dengan itu, saham-saham pada defendan kedua telah dipegang oleh defendan pertama sebagai pemilik berdaftar dan benefisial dan oleh itu, defendan pertama layak ke atas saham-saham tersebut.

Case(s) referred to:

Choong Kwee Sang v. Choong Kwee Keong [2008] 5 CLJ 229 CA (refd)

Midland Bank Plc v. Cooke [1995] 4 All ER 562 (refd)

Takako Sakao v. Ng Pek Yuen & Anor [2010] 1 CLJ 381 FC (foll)

For the appellant - Chong Phow Yew; M/s Kamaruzaman Arif, Amran & Chong

For the respondent - Alan Wong; M/s Khalek Awang & Assocs

[Editor's note: For the High Court judgment, please see Sri Alam Sdn Bhd v. Wan Khairani Wan Mahmood & Anor [2009] 1 LNS 719.]

Reported by Kumitha Abd Majid