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DALAM MAHKAMAH RAYUAN, MALAYSIA

(APPEAL JURISDICTION) RAYUAN SIVIL/RAYUAN NO W-02-1301-06/2013

BETWEEN SHIRLEY KATHREYN YAP .... APPELLANT

AND

MALCOLM THWAITES .… RESPONDENT

(DALAM MAHKAMAH TINGGI DI KUALA LUMPUR, NO: S-22-552-2009)

ANTARA

SHIRLEY KATHREYN YAP …… PLAINTIF

DAN

MALCOLM THWAITES …….. DEFENDAN

CORAM:

ZAHARAH BINTI IBRAHIM, HMR

MOHAMAD ARIFF BIN MD YUSOF, HMR DAVID WONG DAK WAH, HMR

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JUDGMENT OF THE COURT

Introduction: 1. This appeal concerns a dispute arising from a breakdown of

some 19 years of relationship between a man and a woman

cohabitating together. The man is the Respondent/Plaintiff.

The woman is the Appellant/Defendant. The Respondent

during the trial had described that the Appellant was “his one

true love and soul mate” and had treated their relationship as

that of de facto husband and wife. The Appellant described the

Respondent as a “boyfriend” no more no less and the

relationship was never one of de facto husband and wife.

2. During the 19 years of cohabitation, enormous wealth was

accumulated and as sure as night follows day, when a

relationship of such nature breaks down, there is bound to be

a dispute as to the ownership of the wealth and this is what we

have here.

3. The High Court in a 160 page judgment found in favour of the

Respondent and this appeal is against that decision which

orders as follows:

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(1) The total sum of S$7,911,402.00 received in

Singapore by the defendant (Appellant) as the nominee

of the plaintiff (Respondent) and the total sum of

RM5,436,958.00 received in Malaysia by the defendant

(Appellant) as the nominee of the plaintiff (Respondent);

(2) A ½ share of the following properties: -

(a) The Country Heights property known as No. 368,

Jalan Pelangi Pagi, Country Heights, 43000 Kajang,

Selangor;

(b) The three (3) Apartments in Singapore known as

No 6, St Martin's Drive, Singapore, No 3, St Martin's

Drive, Singapore and No 1, King Albert Park, #06-15,

598326 Singapore; and

(c) 11 (eleven) Macau properties as detailed below:

(i) Wan Yu Villas, Tingkat 6/F, Flat I;

(ii) Wan Yu Villas, Tingkat 9/F, Flat C;

(iii) Wan Yu Villas, Tingkat 12/F, Flat I;

(iv) South East Asia Centre, Tingkat 17, Unit

H;

(v) South East Asia Centre, Tingkat 17, Unit I;

(vi) South East Asia Centre, Tingkat 17, Unit

T;

(vii) South East Asia Centre, Tingkat 17, Unit

U;

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(viii) South East Asia Centre, Tingkat 17, Unit L;

(ix) South East Asia Centre, Tingkat 17, Unit

P;

(x) South East Asia Centre, Tingkat 17, Unit S;

and

(xi) La Oceania Apartment, Unit 7/D.

(3) The sum of RM 260,000.00 in respect of the

purchase of a vehicle i.e. a BMW car bearing registration

number PET 7;

(4) Interest at the rate of 5% per annum on the judgment

sum from the date of the judgment until full realisation; and

(5) A global sum of RM250,000.00 as the costs of the

action and the defendant's Counterclaim.

4. We heard the appeal and after due consideration to respective

submissions of counsel, we dismissed the appeal and now

give our reasons.

Background: 5. The personalities in this appeal are well known in their own

rights. The Appellant is a director of Loh Kah Kheng Holdings

Sdn Bhd and was married to one Loh Kah Kheong (LKK), the

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youngest son, since deceased, of Tan Sri Loh Boon Siew,

since deceased. Tan Sri Loh is well known in Penang and

Malaysia. He was also a very wealthy businessman.

6. The Respondent is a professional horse trainer and comes

from a family well known in the legal and political field. He has

also during his professional life established for himself an

enormous reputation as a horse trainer in Asia making him a

much sought after trainer.

7. The Appellant and Respondent started seeing each other

sometime in the early 1970’s which was prior to the

Appellant’s marriage to LKK. According to the Respondent

they had an intimate relationship but that is denied by the

Appellant as she knew the Respondent was then married. Not

long after that the Appellant left for the USA for work purposes

and upon her return she married LKK.

8. From that marriage, two children, one boy and one girl, were

produced. They all lived in Penang and in February 1987, the

Appellant together with the children left LKK and the

matrimonial home in Penang. Very soon after her departure,

LKK was found dead from hanging in the matrimonial home.

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An inquest was conducted on the cause of death resulting in a

finding that the death of LKK was caused by a murder by an

unknown person or persons.

9. Both the Appellant and Respondent then started cohabitation

in 1987 in various places in Malaysia and Singapore. This is of

course after the Appellant had left LKK and the matrimonial

home. This cohabitation ended in 2006 when the Appellant

asked the Respondent to move out of their house built at

Country Heights, Kajang, Selangor.

10. During that 19 year cohabitation, it is undisputed that the

Respondent’s reputation as a horse trainer began to bloom, so

much so he had accumulated enormous wealth from the

winnings of the horses trained by him. Some of those winnings

were used to purchase properties. And as stated above, the

fight here is simply over the ownership of that wealth.

11. And to determine the aforesaid ownership, the trial Judge was

called upon to determine the nature of relationship between

the parties during the 19 year cohabitation. Was it one of a de

facto husband and wife relationship or was it one of boy and

girl friend relationship?

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Respective position of parties:

Respondent:

12. The pleaded case of the Respondent in so far as the

relationship is concerned is simply they were de facto husband

and wife during the 19 years of cohabitation. During that

period he had earned a lot of money from his works as a horse

trainer so much so that he was the third most successful

trainer in the Malayan Racing Association.

13. In the businesses set up by the Respondent, he had made the

Appellant his nominee. She was the registered manager of

over 10 stables and sole proprietor of the businesses. As the

nominee and registered manager, all the money from winnings

from the horse racing were paid to her as required by the

MRA. It is also alleged that from the records of the Turf Clubs

a total of RM24,549,719.03 was received between the period

of 1987 to 2003. And it is also alleged that the Appellant had

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used some of those winnings to purchase numerous

properties in Malaysia and overseas.

14. In this suit, the Respondent in his statement of claim claimed

for the following reliefs:

(a) An accounting of all income generated by

various partnerships registered in the Defendant’s

(Appellant’s) name including all winnings in respect of

the Plaintiff’s (Respondent’s) race horses and winning

bets received by the Defendant (Appellant) on trust for

the Plaintiff (Respondent).

(b) Payment of all monies due to the Plaintiff

(Respondent) based on the said accounting.

(c) An equitable share of the Country Heights

house known as Lot 368, Jalan Pelangi Pagi, Country

Heights, 43000 Kajang, Selangor, held in the

Defendant’s (Appellant’s) name on a constructive trust

for the Plaintiff (Respondent).

(d) An equitable share of the Macau properties

purchased by the Defendant (Appellant) in 2005 on a

constructive trust for the Plaintiff (Respondent).

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(e) A declaration that the loan of HK$2 million for

the Macau apartment was from the Plaintiff’s

(Respondent’s) earnings from the racing partnerships

registered in the Defendant’s (Appellant’s) name.

(f) An equitable share of all assets allegedly

acquired by the Defendant (Appellant) using earnings

of the Plaintiff (Respondent) from the above said

partnerships during the years from 1987 to 2006 and

held under a constructive trust for the Plaintiff

(Respondent).

(g) An order that the Defendant (Appellant) pay

the Plaintiff (Respondent) the value of the BMW 3.5

Coupe car allegedly purchased by the Plaintiff

(Respondent) for the sum of RM300,000.00 and put in

the Defendant’s (Appellant’s) name; and

(h) Interest as 8% p.a on all sums due from the

Defendant (Appellant) to the Plaintiff (Respondent)

from due date or date the cause of action arose as

adjudicated by the Court until date of payment.

(i) Cost of this proceeding to be paid by the

Defendant (Appellant) to the Plaintiff (Respondent).

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(j) Any other relief deemed suitable by the

Honourable Court.

Appellant: 15. In brief, the Appellant denies that she was required to render

any accounting to the Respondent as that was never the

understanding between the parties. Further their relationship

was never one of de facto husband and wife relationship,

hence the question of constructive trust did not arise.

16. It is also her position that she was never dependent on the

Respondent’s wealth as she was and is financially

independent in her own right in that she had inherited a

substantial fortune from the estate of her late husband. It was

in fact as alleged by her that it was the Respondent who was

dependent on her financially. In fact she alleges that she had

given 9 loans to the Respondent and had also paid on his

behalf for the upkeep of horses in Queensland, Australia.

17. The aforesaid loans and payments from the Appellant to the

Respondent are the subject of a counterclaim by the

Appellant.

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Our grounds of decision:

18. In our view this appeal raised three main issues which are

these:

(1) Is this appeal an appeal purely on pure

questions of fact?

(2) What was the nature of the relationship

between the Appellant and the Respondent during the

19 years of cohabitation?

(3) If it is one of de facto husband and wife

relationship, does the concept of constructive trust

apply?

Issue 1 – question of fact? :

19. Having read the lengthy judgment of the learned Judge and

submissions of respective counsel, we find that the learned

Judge was called upon to determine which version of events

from the combating parties is more credible. And these can be

seen from the 22 agreed issues which need to be resolved by

her.

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20. For clarity these 22 issues are these:

(1) Whether the Defendant was financially

dependent on the Plaintiff from time to time she left

husband, the late LKK in 1987 until 1887?

(2) Whether the Plaintiff and the Defendant had

cohabitated for about 19 years as husband and wife?

(3) Whether there was acrimony between the

Defendant and her father-in-law, the late TSLBS, from

1987 until the day he died in 1995?

(4) Whether the said acrimony led to the

Defendant being blocked by TSLBS from access to the

funds of her late husband’s estate and the company

known as Loh Kah Kheng Holdings Sdn Bhd (“the

company”).

(5) Whether the Defendant had received

substantial dividends from the company during the

period between 1990 and 1999 as alleged in

paragraph 19 of the Defendant’s Re-amended defence

and counterclaim?

(6) Whether the Defendant received from the

Plaintiff substantial sums of winning bets in addition to

partnership earnings from horses’ winnings as the

registered manager from 1987 to 2003?

(7) Whether the Plaintiff had paid a sum of about

RM800,000.00 to purchase the land in 1991 on which

the Country Heights house was subsequently built and

completed in 1998 and whether the Plaintiff had paid

for the cost of building the Country Heights house and

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also for the cost of the furniture, furnishings and

fittings, landscaping, etc for the Country Heights house

totalling about RM4-5 million?

(8) Whether the Defendant had paid winnings

into her single account in the HSBC Bank in Singapore

without the knowledge of the Plaintiff?

(9) Whether the joint account for winnings in

Singapore was opened on 12 April 2002 and whether

before this date, all winnings in Singapore Dollars for

the period from 1988 to 2002 went into the

Defendant’s single account in the HSBC Bank in

Singapore?

(10) Whether even after May 2002, cheques from

Turf Clubs continue to be deposited into the

Defendant’s single account in the HSBC Bank in

Singapore?

(11) Whether the Defendant had ever given to the

Plaintiff any proper accounting of all winnings received

by her as the registered manager?

(12) Whether the Defendant is liable to render an

accounting of the said sum of RM27.5 million to the

Plaintiff?

(13) Whether the Defendant holds the Country

Heights house known as Lot 368, Jalan Pelangi Pagi,

Country Heights under constructive trust for the

Plaintiff as to such equitable share as the Court deems

fir based on what he has paid towards the acquisition

and construction of the house and all other costs

related to it?

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(14) Whether the Defendant holds other assets

under a constructive trust for the Plaintiff including all

the Macau apartments and the BMW 3.5 Coupe car

which was purchased with the Plaintiff’s monies?

(15) Whether the Defendant holds the assets listed

in paragraph 33 of the ASOC or any of them under a

constructive trust for the Plaintiff as to such equitable

share thereof as deemed fit by the Court?

(16) Whether the Defendant holds substantial

monies belonging to the Plaintiff in a retirement fund

which he had entrusted to her to accumulate over the

years?

(17) Whether the Plaintiff’s claim based on account

is statute – barred by virtue of section 6 and section 32

of the Limitation Act 1953?

(18) Whether the Plaintiff’s other claims r likewise

statute- barred?

(19) Whether the Plaintiff received from the

Defendant a sum of RM1 million in August 2002 vide a

Bank Bumiputra cheque No 287303 in full and final

settlement of any and all claims against the

Defendant?

(20) Whether the Plaintiff is estopped from making

this claim by virtue of the settlement particularised

under paragraph graph 28 of the Defendant’s

amended defence and counterclaim?

(21) Whether the Defendant agreed to be an

accounting party?

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(22) Whether the Defendant is an accounting party

under the circumstances of the case?

21. From the agreed issues, there is little doubt in our minds that

the Judge was tasked to dwell into the evidence of all the

witnesses called and evaluate the same judicially and then

make findings of facts to answer the agreed issues posed.

She so to speak had to make judgment call as to who is more

credible.

22. In fact, the grounds of the learned Judge contains numerous

findings of fact. An example of this can be found at page 140

of the Rekod Rayuan Tambahan (3) where her ladyship said

this:

“The Court noted that the Defendant’s defense on

this issue evolved from being a “financier and lender

of last resort … to that of a mere nominee who

allegedly had no knowledge whatsoever of any

monies received on the basis that the Plaintiff was in

fact the actual person who had actual knowledge

and who kept the accounts pertaining to the income,

winning bets and their distribution.

In order to provide proof of this fact-in-issue, the

Defendant opted to disclose a handful of cheque

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butts and cheques to show that it was written by the

Plaintiff who allegedly issued out all the cheques to

himself and/or third parties and/or other partners, in

my respectful view, the selective disclosure of these

documents certainly falls short of the total sum

received by the Defendant from various Turf Clubs

in terms of stake monies.”

23. Another example can be found at page 192 of the Rekod

Rayuan Tambahan (3). The learned Judge in preferring the

Respondent’s version as to why he started this suit said this:

“The Court believed the Plaintiff when he said that

he would not have filed this suit to claim the reliefs

as stated in paragraph 60 of his ASOC if the

Defendant had not insisted on the Plaintiff signing a

proposed settlement agreement which contained a

“full and final settlement” clause in respect of the

repayment by the Plaintiff of the alleged HK 2 million

which the Plaintiff took from the company to pay for

his Macau apartment. The Plaintiff had explained

that he became suspicious of the bona fides of

Defendant in asking him to sign a settlement

agreement containing such a clause. Hence he

conducted an investigation and he found that the

Defendant had received considerable sums of

monies belonging to him.

Therefore, in my respectful view, the action of the

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Plaintiff in filing this suit was not “ the inspiration of a

vengeful afterthought calculated to cause distress to

the Defendant for demanding the repayment of the

loan of HK2 million” as pleaded by the Defendant

…but was genuinely filed by the Plaintiff in order to

seek the repayment of monies which were paid

and/or handed over on trust to the Defendant and

for the recovery of an equitable share in

properties/assets acquired with trust monies but

registered solely in the Defendant’s name”

24. In the appeal before us learned counsel for the Appellant listed

five core issues and twenty two ancillary issues for our

consideration. The five core issues are these:

(1) Whether the Judge made a manifest and

egregious error apparent of the face of the record by

going beyond the Respondent’s pleaded case and the

weight of evidence to make a finding that the Appellant

was an accounting party and a fiduciary.

(2) Whether the learned Judge made a manifest

and egregious error apparent on the face of the record

by going beyond the Respondent’s pleaded case and

awarding Judgment for the gross stake monies of

S$7,911,402.00 and RM5,436,958.00 and a ½ share

of the Appellant’s properties when the Respondent’s

pleaded case and his evidence given in court was not

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for Judgment for the gross stake monies of

S$7,911,402.00 and RM5,436,958.00 but was for an

accounting of the said stake monies.

(3) Whether, in awarding Judgment for the gross

stake monies of S$7,911,420.00 earned in Singapore

and RM5,436,958.00 earned in Malaysia, the learned

Judge made a manifest and egregious error apparent

on the face of the record by failing to consider and take

into account the weight of evidence adduced before

the Court and in the summary accounting produced in

the Appellant’s Reply Submissions that showed that

there was nothing left and due to be paid from the

gross stake monies.

(4) Whether, the Judge made a manifest and

egregious error of law and procedure apparent on the

face of the record by failing to consider and take into

account that in the event of Judgment being given for

the full gross stake monies of S$7,911,420.00 and

RM5,436,958.00, there would thereafter be no balance

of stake monies left for any further Judgment to be

made in respect of the Respondent’s consequential

reliefs based on an accounting of the said stake

monies under paragraphs 60(b), 60(c) 60(d), 60(e) and

60(f); and

(5) Whether the learned Judge made a manifest

and egregious error apparent on the face of the record

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by unilaterally adding 3 additional issues in her

Grounds of Judgment when these issues were not

raised or canvassed by either of the parties at the trial.

25. From these core issues it can be easily discerned that this

appeal substantially concerns an appeal on questions of fact

findings by the learned Judge. The issues of law as we see it

are two only and they are these. Firstly whether the learned

Judge went beyond the pleadings in making her decision.

Secondly whether the Appellant was denied natural justice

when the learned Judge added unilaterally three additional

issues in her grounds. We will deal with these two issues later

on in our grounds.

26. As for the 22 ancillary issues, we also find them to be an

attack on the findings of fact by the learned Judge. Those

attacks are mainly on the findings that there was a de facto

marriage between the parties and there was a duty to account

for the wealth accrued by the Respondent. The other issues

are nothing but consequent findings relating to specific

properties accrued during the 19 years relationship.

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27. That being the case, we are bound by the established principle

as to how an appellate tribunal should behave when

confronted on an appeal on questions of facts. There are

numerous cases on this area of law but suffice for us to refer

to four decisions of high authority.

28. The Federal Court in Ming Holdings (M) Sdn Bhd v Syed

Azahari Noh Shahbudin & Anor [2010] 6 CLJ 857 approved

what was stated by Viscount Sankey LC in Powell And Wife

v Streatham Manor Nursing Home [1935] Ac 243 and it is

this:

“The matter is rather different in the case of an

appeal to the Court of Appeal. There the onus is

upon the appellant to satisfy the court that his

appeal should be allowed.”

29. The Privy Council case of Chow Yee Wah & Anor V Choo

Ah Pat [1978] 2 MLJ 41a adopts the same approach:

“The trial Judge's decision on first question, the

question of fact, was reached after he had heard a

considerable volume of evidence, some of it sharply

conflicting, and had accepted the appellants'

evidence, and rejected the respondent's. The

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principles on which an appellate Court should act in

reviewing the decision of a Judge of first instance on

a question of fact have been stated in many cases in

the House of Lords and in this Committee, and it will

be appropriate to quote from two of them. In Watt or

Thomas v. Thomas [1947] AC 487 at p. 487 Lord

Thankerton said this:-

(1) Where a question of fact has been

tried by a Judge without a jury, and there

is no question of misdirection of himself

by the judge, an appellate court which is

disposed to come to a different conclusion

on the printed evidence, should not do so

unless it is satisfied that any advantage

enjoyed by the trial Judge by reason of

having seen and heard the witnesses,

could not be sufficient to explain or justify

the trial judge's conclusion.

(2) The appellate Court may take the view

that, without having seen or heard the

witnesses, it is not in a position to come to

any satisfactory conclusion on the printed

evidence.”

30. In Renal Link (Kl) Sdn Bhd v Dato’ Dr. Harnam Singh

[1997] 3 CLJ 225, this Court through the judgment of His

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Lordship Gopal Sri Ram, HMR had this to say on the same

topic :

“In our judgment this appeal really turns upon a pure

question of fact based upon the credibility of the

witnesses who gave their evidence at the trial. The

function of determining where, on a balance of

probabilities, the truth lay is entrusted by law to the

trial Court. Unless we, as a Court of appeal, are

convinced that there was no judicial appreciation of

the evidence by the trier of fact, or that the audio-

visual advantage reserved to a trial Judge had been

missed or that the findings made do not accord with

the probabilities of the case when taken as a whole,

it would not be open to us to intervene and upset the

findings made by a trial Judge.

The judgment under appeal in the present instance

does not contain any error warranting appellate

interference. On the other hand, we are satisfied

that the Learned Judge has done all that is required

of her by law. She has admirably analysed the

material before her and drawn the inferences

properly admitted by the evidence. She directed

herself correctly upon the law of nuisance and the

rule in Rylands v Fletcher [1868] 3 HL 330. She

evaluated the material placed before her with care

and her conclusions of fact are reasonably

supported by the evidence. Having scrutinised the

record of appeal with care, we are of opinion that

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there was more than sufficient admissible evidence

before the Learned Judge to warrant the three

questions posed by Encik Ranjan being answered

against the appellant. The Learned Judge resolved

them against the appellant. We agree with her and

would do likewise.

The appeal was therefore dismissed. The judgment

of the Learned Judge and the orders made by her

were affirmed. We also ordered that the costs of the

appeal be taxed and be paid by the appellant to the

respondent. The deposit paid into Court by the

appellant was ordered to be paid out to the

respondent to account of his taxed costs.”

31. The latest pronouncement on this issue can be found in the

Federal Court decision in Dream Property Sdn Bhd V. Atlas

Housing Sdn Bhd [2015] 2 CLJ 453 where the Court said as

follows:

[60] It is now established that the principle on which

an appellate court could interfere with findings of

fact by the trial court is "the plainly wrong test"

principle; see the Federal Court in Gan Yook Chin &

Anor (P) v. Lee Ing Chin @ Lee Teck Seng & Anor

[2004] 4 CLJ 309; [2005] 2 MLJ 1 (at p. 10) per

Steve Shim CJ SS. More recently, this principle of

appellate intervention was affirmed by the Federal

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Court in UEM Group Berhad v. Genisys Integrated

Engineers Pte Ltd [2010] 9 CLJ 785 where it was

held at p. 800:

It is well settled law that an appellate court will not

generally speaking, intervene with the decision of a

trial court unless the trial court is shown to be plainly

wrong in arriving at its decision. A plainly wrong

decision happens when the trial court is guilty of no

or insufficient judicial appreciation of evidence. (See

Chow Yee Wah & Anor v. Choo Ah Pat [1978] 1

LNS 32; Watt v. Thomas [1947] AC 484; and Gan

Yook Chin & Anor v. Lee Ing Chin & Ors [2004] 4

CLJ 309).

The “plainly wrong test” is akin to the “perverse Judgment” test

in that both tests require the appellate Court to determine

whether there was sufficient judicial appreciation of the

evidence. Or put it another way, is the decision arrived at by

the trial Judge a decision which no reasonable tribunal would

have done so.

32. Reverting to the case at hand, can we say that the trial Judge

did not have enough judicial appreciation of the evidence? Her

grounds run into 162 pages and as learned counsel for the

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Respondent puts it, she dealt with every point raised by the

Appellant. Not only that, we find that the learned Judge’s

findings were based on established evidence. One must not

lose sight of the fact that on the side of the Appellant, she was

the only witness for herself and hence prima facie her

evidence is self-serving. What made her case worse was

simply that she did not or may be could not produce adequate

documentary evidence to rebut the Respondent’s case. On

the side of the Respondent, his case was corroborated by

witnesses whom the trial Judge found to be credible. Hence

we see no reason to conclude that the Appellant had shown to

this Court that the decision of the trial Judge is perverse or

plainly wrong. That being the case, there is no reason to

interfere at all. Be that as it may, we will now deal with the

substance of this appeal, namely the nature of the relationship

between the parties.

Issue 2 – Nature of relationship:

33. To recapitulate, it is the Appellant’s case that she and the

Respondent were at best in a boyfriend and girlfriend

relationship, no more no less. There was never any intention

by her to “tie the knot” with him as he had two failed marriages

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and other relationships with other women. Further he was

never a father figure for her two children. For the Respondent,

the 19 years of cohabitation was one of living with his “soul

mate” for life and as for their behaviors both within the

household and to the outside world, they were living the life of

husband and wife.

34. The evidence of the Appellant as stated above was only her

oral evidence in Court. Contrast to that the Respondent’s

evidence was backed up by the evidence of other witnesses.

So from the start, this is not a case of the Court dealing with

the scenario of “I say this” and “you say that” and making a

choice as to who is more credible.

35. What the learned Judge did in this case was that she went to

full length in evaluating the evidence of the Appellant and that

of the Respondent and then made her findings. Her approach

is exemplified in this paragraph from her grounds:

“Based on the overwhelming oral and documentary

evidence adduced by the plaintiff before the Court,

the Court was satisfied that both parties had co-

habited for almost 19 years from 1987 to 2006.

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Hence, the Court rejected the defendant’s bare

denial to that effect. The Court agreed with and

accepted the plaintiff’s contention that the

defendant’s denial was a blatant lie in the face of

the plaintiff’s glaring evidence and the admission in

her own defence that she signed the consent form

as the plaintiff’s wife when he was admitted into

hospital for an operation. The Court also agreed

with and accepted the plaintiff’s contention that the

defendant’s denial was resorted to by the defendant

as a convenient but unsuccessful attempt to defeat

the issue of constructive trust pleaded by the

plaintiff in order to claim an equitable share in the

properties/assets acquired by the parties during

their 19 years of cohabitation.

A constructive trust can arise from the conduct of a

couple. It does not necessarily have to be based on

cohabitation alone. Nevertheless, the Court was of

the respectful view that the defendant’s denial of

cohabitation with the plaintiff is only her self-serving

denial which is completely at odds with the credible

and cogent evidence adduced by the plaintiff and

his witnesses.

There was ample evidence to show that socially,

among family members and close friends and in the

horse racing world, the plaintiff and defendant were

regarded as husband and wife although they were

not legally married. More importantly, as stated

earlier, when the plaintiff was admitted into the

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hospital because he required an urgent operation to

be performed on him the defendant declared herself

as the plaintiff’s wife in the consent form of the

hospital which she signed.

Unlike the defendant, the plaintiff and his witnesses

produced both oral and documentary evidence to

prove and support the plaintiff’s assertions that the

parties had a close and intimate relationship, had

cohabited together, had a common intention of

building a life together as de facto husband and

wife, that they had accumulated assets and a home

wherein the parties had a common intention to live

together as de facto husband and wife.

The plaintiff’s oral evidence of the parties’ intimate

relationship as well as that of the close relationship

between the plaintiff and the defendant’s children

are at Q4 to Q28 (see pages 2-8, P4 and Q13A of

P4 of Bundle B).This evidence included details of

the parties sharing bed and lodging, going on

holidays together with and without their children and

purchasing properties and assets together.

The plaintiff has over the years, paid for the

following gifts of jewellery, cars, lingerie, pieces of

art and holidays for the defendant and her 2 children

and for the defendant and her parents:

(a) One heart shaped Diamond Ring worth about

Singapore $8,000.00;

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(b)Two solitaire diamonds purchased from one

Datin Tan Eng Soon that were made into earrings

worth about RM118,000.00;

(c) One pair of smaller diamond earrings worth

about S$ 3,000.00;

(d) One Happy Diamond Watch worth about S$

12,000.00;

(e) One second hand Proton Saga worth about

RM10,000.00;

(f) One new Proton Perdana worth about

RM80,000.00;

(g) Lingerie from Paris worth about 12,000 Euros;

(h) Pieces of art purchased in Singapore;

(i) Round the World trip for the defendant and her

2 children costing about RM30,000.00 for

airtickets and additional for accommodation; and

(j) Phuket Holiday for her and her parents.

……..Based on the evidence of PW2 which was

corroborated by the evidence of PW1, PW3, PW14

and PW15 and the relevant documentary evidence

and contrary to what the defendant would like the

Court to believe, the Court was satisfied that the

plaintiff has proven on a balance of probability that

the relationship between the defendant and LKK

was unhappy before he passed away because if the

defendant was happy with LKK she would not have

left him for the plaintiff and that the parties’ 19 years

relationship from 1987 to 2006, was that of a de

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facto husband and wife and not merely that of a

boyfriend and girlfriend.

Unlike the plaintiff who has called witnesses and

produced documentary evidence to support his

averments on this fact-in-issue, the defendant’s

evidence stands alone, unsupported by the

evidence of witnesses or documentary evidence.

The Court was of the respectful view that the reason

why the plaintiff and the defendant did not marry

after the demise of LKK, was most probably

because the defendant was embroiled in a legal

tussle with her father-in-law, the late TSLBS, for the

control of her late husband’s estate and the

company.

It was clear to the Court that unlike the plaintiff who

was by nature a trusting person and who was

deeply in love with the defendant at all material

times, the defendant was not a trusting person. The

Court formed the impression that the defendant took

steps from the very beginning of her relationship

with the plaintiff to protect her own interests and the

interests of her 2 children vis-à-vis the plaintiff. The

Court was of the respectful view that she had done

that because of her unhappy marriage with LKK and

that LKK did not provide adequately for her and her

2 children. This had caused her to leave LKK

together with her 2 children and to seek refuge in

the plaintiff’s love and care for her and to be

maintained financially by the plaintiff.

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She was able to do that because she knew that the

plaintiff was deeply in love with her and trusted her

completely. She also knew that the plaintiff regarded

her as his one true love and his soul mate. The

Court believed the evidence of the plaintiff and his

son (PW14) that the plaintiff’s marriage to his

second wife had ended in divorce because of the

plaintiff’s love for the defendant.

It was also because of the plaintiff’s implicit love for

the defendant that for the duration of their 19 years

of cohabitation as de facto husband and wife the

plaintiff never asked the defendant to account for

any of his income in the form of stake monies which

were credited into the horse stable partnerships of

which the defendant was the registered manager

and nominee of the plaintiff.

Therefore, the Court drew an irresistible conclusion

that the plaintiff and the defendant were in truth

cohabiting as de facto husband and wife for the 19

years period from 1987 to 2006.”

36. It is evident from the just quoted paragraph that the learned

Judge did not make findings of facts premised on imaginary

evidence. On the contrary she had weighted all the evidence

in details before her and then made an informed decision. Her

grounds of judgment in fact contain such analysis of the

evidence before her. Hence there is no doubt that she had

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adopted the correct approach in her judicial function. That

being the case, we agree with her in no uncertain terms that

the Appellant and Respondent had been living for all intents

and purposes as husband and wife. With that we move to next

issue.

Issue 3 – Constructive trust:

37. The learned Judge at page 167 – 173 of Rekod Rayuan

Tambahan discussed this area of law by referring to cases in

the United Kingdom. She started off her discussion by

referring to Black’s Law Dictionary, 9th edition which defines

constructive trust as follows:

"constructive trust. (18c) An equitable remedy that a

court imposes against one who has obtained

property by wrongdoing. A constructive trust,

imposed to prevent unjust enrichment, creates no

fiduciary relationship. Despite its name, it is not a

trust at all. - Also termed implied trust; involuntary

trust; trust de son tort; trust ex delicto; trust ex

maleficio; remedial trust; trust in invitum. See

trustee de son tort under TRUSTEE. Cf. resulting

trust. [Cases: Trusts 91-111]

"A constructive trust is the formula through which

the conscience of equity finds expression. When

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property has been acquired in such circumstances

that the holder of the legal title may not in good

conscience retain the beneficial interest, equity

converts him into a trustee. "Beatty v. Guggenheim

Exploration Co., 122 N.E. 378, 380 (N.Y. 1919)

(Cardozo, J.).

"It is sometimes said that when there are

sufficient grounds for imposing a

constructive trust, the court 'constructs a

trust.' The expression is, of course,

absurd. The word 'constructive' is derived

from the verb 'construe,' not from the verb

construct.'... The court construes the

circumstances in the sense that it

explains or interprets them; it does not

construct them." 5 Austin W. Scott &

William F. Fratcher, The Law of Trusts

462.4 (4th ed. 1987)."

38. She then referred to an article titled “Constructive Trusts – A

Practical Guide” by Tim Lawson-Cruttenden in [1995] Fam

Law 560 which traces the development in this area of law.

Cases such as Gissing v Gissing [1971] AC 886, Jones v

Kernott [2012] 1 FLR 45 and Stack v Dowden [2007] 2 ALL

ER 929 were referred to. The upshot of all these cases is

simply that it is the Court’s function to discern from the facts of

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each case (where there is no documentary evidence) to

impute the intentions of parties as to whether there ought to be

a constructive trust. This of course is premised on the concept

of fairness in the eyes of the Court.

39. The learned Judge placed much reliance in the case of

Aspden v Elvy [2012] 2 FCR 435 where the facts were these.

A property was transferred into the name of the wife despite

the fact that the money consideration was provided by the

husband. The learned Judge there resolved the conflict as

thus:

[124] "I have not found the resolution of the question

easy. In the end I cannot accept that the proper

inference is that the contributions were intended to

be gifts. The moneys involved represented a very

substantial part of Mr. Aspden's assets after he had

paid off his creditors. If they were intended as gifts

he would, in effect, have left himself with nowhere to

live except the caravan. I think that Mr. Aspden did

hope and expect to be able to live in and have an

interest in Outlaithe Barn when it was complete and

that Ms Elvy was fully aware of it."

35

[125] "I think that the proper inference from the

whole course of dealing is that there was a common

intention that Mr. Aspden should have some interest

in Outlaithe Barn as a result of the very substantial

contributions made to the conversion works."

40. Applying the aforesaid principle, the learned Judge concluded

as follows:

“In my judgment, the facts of the instant case are

similar to the facts in Aspden v. Elvy, supra. Hence,

in my respectful view, the same approach ought to

be adopted in finding the common intention

constructive trust based on inferred intention in

favour of the plaintiff in respect of a half undivided

share in the Country Heights property. As for the

other properties/assets acquired during the long

term cohabitation of the parties, in view of the long

term business partnership between the parties, the

Court ought to invoke equity to impose a

constructive trust on the properties/assets and to

convert the status of the defendant from that of a

legal owner having the sole beneficial ownership in

the properties/assets to one of a trustee in respect

of an equitable share of the properties/assets in

favour of the plaintiff.

36

Based on the evidence before the Court with regard

to the nature of the relationship of the parties, the

defendant's poor financial standing for the period of

1986 to 1998 and, more importantly her inability to

show her allegedly good financial standing for the

period of 1986 to 1998, and based on the oral and

documentary evidence produced by the plaintiff and

his witnesses, the Court found that the assets and

properties purchased and referred to in the

pleadings except one ie the Macau apartment, were

registered in the sole name of the defendant

although they were purchased using solely or

substantially the funds earned from winnings in the

form of stake monies paid to and received by the

defendant as the nominee of the plaintiff and also

solely or substantially the funds from the winning

bets which were given as gifts to the plaintiff and

which the plaintiff in turn had landed over to the

defendant for safe keeping in a retirement fund.”

41. Can we say that the learned Judge had erred in her analysis?

The answer is a resounding “no” as she had applied the

correct law to the factual matrix. Her reasons for her finding

are premised on a thorough analysis of the evidence before

her.

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Legal issues raised by Appellant:

Pleadings:

42. We agree with the Appellant’s submission that the

Respondent’s claim is one of accounting by the Appellant. And

it is not disputed that the learned Judge had not ordered that

but instead gave specific orders as set out earlier. Her reasons

are as follows:

“At the very least, the defendant must show where

and how each cheque or money are received was

kept and/or spent. In other words she must be made

accountable for all the monies received in her own

name and as admitted to having been received by

the defendant herself. The same would not be so if

the cheques were issued in the name of the plaintiff

and/or if all the cheques were indeed banked into the

parties' joint account.

Nevertheless, in view of the fact that the defendant

has refused to render an accounting of the stake

monies which were confirmed by the defendant

herself as having been received since the

commencement of trial and even during the trial

itself, it is unlikely that the defendant would do so

even if she was ordered by Court to do so. Hence, it

would be futile for the Court to make such an order.

In other words, it would not serve any purpose for the

38

Court to make such an order when the Court knows

that the defendant is not going to comply with it.

Therefore, as the plaintiff himself had during the trial

established the fact that the defendant had received

the aforesaid sum from the various Turf Clubs, the

Court ought to grant the orders sought by the plaintiff

in relation to the recovery of the monetary sums

prayed for and a 1/2 share of the properties/assets

purchased using solely or substantially the plaintiff's

funds but registered in the sole name of the

defendant.”

43. It is our view that despite the express plea of “the need for the

Appellant’s to account” the learned Judge in view of the

conduct of the Appellant during trial she had every right to

make the orders that she did. The phrase “Any other relief

deemed suitable by the Honourable Court” appearing in

prayer (j) is not a phrase without any meaning.

44. Here the learned Judge felt that in view of the evidence which

unfolded during trial, an order for accounting on the part of the

Appellant would be hard to enforce and it would be best in the

interest for all that she made specific orders on the properties

disclosed during trial. We see no error on her part. One can

39

say that the Respondent had during the trial been able to force

the Appellant’s to account for the wealth acquired during the

19 year relationship. That being the case, the learned Judge

was correct to make specific orders which in our view were

“such reliefs as deemed appropriate by the Court”. In fact,

what she had done was to put closure in this dispute which we

feel should be done as soon as possible.

Denial of natural justice:

45. This submission is made in respect of the learned Judge

unilaterally adding three additional issues when they were not

canvassed by parties. For clarity we set out the three

additional issues:

(1) “Whether the defendant received from the

EPF Board, on 3 May 1989, a sum of RM435,303.09

being the EPF contributions of LKK?”

(2) “Whether the court ought to order the

defendant to pay to the plaintiff (Respondent) the total

sum of S$7,911,402.00 received by the defendant in

Singapore and the total sum of RM 5,436,958.00

received by the defendant in Malaysia?”

(3) “Whether the Court ought to order the defendant

to transfer to the plaintiff, a half share of the Country

40

Heights property and a half share of each of the 3

properties in Singapore and each of the eleven Macau

properties, on the basis that the defendant held them

as the constructive trustee of the plaintiff because

there was a common intention between the parties to

cohabit as de facto husband and wife from 1987 until

2006 when the plaintiff left the Country Heights house

upon the breakdown of their common law marriage?”

46. In respect of the additional issue (1), this is what the learned

Judge said:

“It is an unpleaded issue raised by the Defendant in

the course of the final trial. It is whether the

Defendant had received from the EPF Board, on

May 1989, a sum of RM435,303.09 being EPF

contributions of LKK”

This finding is consistent in what is stated in Notes of

Proceedings at page 797 of Jilid 2(3) of the Record of Appeal.

47. As for the other additional issues, it cannot be denied that the

manner in which the trial was conducted by the counsel for the

parties, these two issues needed to be decided and in any

event they are very much connected to the other issues

agreed and non-agreed of the parties.

41

48. As for the complaint as to the amounts ordered by the Court to

be accounted for, the learned Judge relied on independent

evidence in the form of a letter from MRA dated 11 August

2010, hence the Appellant cannot complain about it, more so

when she failed to produce any evidence to rebut the same.

Limitation issue:

49. In view of the finding of the existence of a constructive trust by

the learned Judge, it is our view that the Limitation Act as

contended by the Appellant does not apply. In the factual matrix

before us, the Respondent had pleaded that there was some

element of fraud on the part of the Appellant in that she failed or

refused to disclose the wealth and the use of the same during

the 19 year relationship. And it is only after the Respondent was

asked to leave the matrimonial house in 2006 that he started to

investigate what had happened to his accumulated wealth and

it was only in 2009 he completed his investigation and in the

same year filed this suit. The learned Judge accepted the

evidence of the Respondent and rightly so.

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50. That being the case the following provisions of the Limitation

Act 1953 apply:

Section 22:

(1) No period of limitation prescribed by this Act shall apply to

an action by a beneficiary under a trust, being an action-

(a) in respect of any fraud or fraudulent breach of trust to

which the trustee was a party or privy; or

(b) to recover from the trustee trust property or the proceeds

thereof in the possession of the trustee, or previously received

by the trustee and converted to his use.

(2) Subject as aforesaid, an action by a beneficiary to recover

trust property or in respect of any breach of trust, not being an

action for which a period of limitation is prescribed by any

other provision of this Act, shall not be brought after the

expiration of six years from the date on which the right of

action accrued:

Provided that the right of action shall not be deemed to have

accrued to any beneficiary entitled to a future interest in the

trust property, until the interest fell into possession.

(3) No beneficiary as against whom there would be a good

defence under this Act shall derive any greater or other benefit

from a judgment or order obtained by any other beneficiary

than he could have obtained if he had brought the action and

this Act had been pleaded in defence.

43

Section 29: Where, in the case of any action for which a period of

limitation is prescribed by this Act, either-

(a) the action is based upon the fraud of the defendant or his

agent or of any person through whom he claims or his agent;

or

(b) the right of action is concealed by the fraud of any such

person as aforesaid; or

(c) the action is for relief from the consequences of a mistake,

the period of limitation shall not begin to run until the plaintiff

has discovered the fraud or the mistake, as the case may be,

or could with reasonable diligence have discovered it:

Provided that nothing in this section shall enable any action to

be brought to recover, or enforce any charge against, or set

aside any transaction affecting, any property which –

(i) in the case of fraud, has been purchased for

valuable consideration by a person who was not a

party to the fraud and did not at the time of the

purchase know or have reason to believe that any

fraud had been committed; or

(ii) in the case of mistake, has been purchased for

valuable consideration, subsequently to the

transaction in which the mistake was made, by a

person who did not know or have reason to believe

that the mistake had been made.

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51. The two provisions speak for themselves, hence we see no

error on the part of the learned Judge on this issue.

Conclusion:

52. We have taken the view that this appeal is substantially an

appeal on questions of fact. That being the case, we have

followed the well-established principle of non-interference.

Hence for issues which we have not specifically dealt with, we

agree with the reasons of the learned Judge as the Appellant

had not discharged the burden of showing us that the decision

of the learned Judge on the disputed facts were perverse or

plainly wrong.

53. We also find this is a case where one party (the Appellant

here) had refused or failed to adduce evidence to substantiate

her version of events. We hasten to guess that she had no

such evidence where we find that there was overwhelming

evidence to the contrary that they were living as husband and

wife for those 19 years. Litigation is concerned with evidence

before the Court and when one party’s case lacks in that

respect, the Court has no alternative but to find the opposing

side’s version of events more credible.

45

54. Accordingly we dismissed the appeal with costs of

RM50,000.00. The orders of the High Court are affirmed and

we order that the deposit to be refunded to the Appellant.

Dated : 27 August 2015

(DAVID WONG DAK WAH) Judge Court of Appeal Malaysia For the Appellant : Dato’ Ghazi Ishak with him

B. Jeyasingam and Nazeera Hanifa

Tetuan Ghazi & Lim

For the Respondent : Chew Swee Yoke with her

Dhiren Norendra, Saroop Rampal and

X.Y. Tan

Tetuan Norendra & Yap

Notice: This copy of the Court's Reasons for Judgment is subject to formal revision.