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2025 MarsdenLR 629
HIGH COURT MALAYA KUALA LUMPUR
CHEUNG HO FAT CYRUS – Appellant
Versus
NG KHAR BOON – Respondent
[Civil Suit No: WA-22NCvC-706-12/2022]
The trust arrangement between former partners is valid and enforceable, with the Defendant breaching her fiduciary duties by wrongfully retaining the property and misappropriating funds.
Headnote:(A) Contracts Act 1950 - Section 24 - Trust law principles - Trust arrangement between former partners regarding property ownership - Valid trust arrangement found, not void due to illegality - Defendant breached trust by wrongful retention and misappropriation of funds - Plaintiff committed no breach as beneficiary. (Paras 3, 10, 41)
(B) Breach of Trust - Fiduciary duties of trustee - Plaintiff's reactive conduct in stopping loan payments was not an initiating breach - Defendant's refusal to transfer property and conditions imposed constituted breach of fiduciary duty. (Paras 19, 25, 41)
Facts of the case:
The parties had a romantic relationship, during which a condominium was purchased. Disputes arose after the relationship ended, leading to claims regarding the trust arrangement and property rights. (Paras 1, 5, 41)
Findings of Court:
A valid trust existed; the Defendant breached her fiduciary duties; the Plaintiff acted within his rights as a beneficiary. (Paras 3, 41)
Issues: Whether the trust arrangement was void under Section 24, and who breached the agreement. (Paras 10, 19)
Ratio Decidendi: The trust arrangement is enforceable as it did not involve illegality; the Defendant's actions constituted a breach of trust, while the Plaintiff's responses were justified. (Paras 10, 41)
Result: The Defendant is ordered to transfer property to the Plaintiff upon loan settlement, and her counterclaim is dismissed.
[1] The core dispute centers on whether a trust arrangement between former romantic partners was legitimate or void due to illegality, and the extent of financial obligations between them. The subject matter is a condominium unit at B-3A-01, Pavilion Hilltop Mont Kiara, No 5, Changkat Duta Kiara, 50480 Kuala Lumpur, together with two parking bays (the Property), purchased for RM1,580,000.00 in January 2019.
[2] The Plaintiff framed this as a straightforward resulting trust with the Defendant as trustee. The Defendant argued it was either an illegal scheme or a romantic gift, while appearing to shift legal strategies mid-case by raising new defences not originally pleaded. This Court must assess the parties' original intentions, the credibility of their respective accounts, and the application of established trust law principles to this admittedly unconventional arrangement.
Summary Of This Court's Findings
[3] This Court finds that: (1) a valid trust arrangement existed with the Defendant as trustee for the Plaintiff; (2) the arrangement is not void under s 24 of the Contracts Act 1950 ; (3) the Defendant materially breached the trust through wrongful retention of the Property, exclusion of the Plaintiff's right and enjoyment of the Property as the beneficiary, and misappropriation by the Defendant of the surplus funds transmitted by the Plaintiff; (4) the Plaintiff committed no breach as beneficiary; and (5) the Defendant must transfer the Property upon loan settlement, subject to accounting for proven expenses and misappropriated surplus funds.
[4] The Defendant's claim in the Counterclaim lay unproven at the end of the case. As such, the Defendant's Counterclaim is dismissed.
Agreed And Undisputed Facts Of The Case
[5] The chronological timeframe can be stated as follows:
(i) September 2018 - December 2021: Intimate and romantic relationship between parties;
(ii) January 2019: Property purchase arrangement commenced;
(iii) 1 February 2019: Public Bank Berhad granted housing loan of RM1,115,346.00 to Defendant;
(iv) December 2021: Relationship breakdown and commencement of disputes.
[6] The financial evidence is that the Plaintiff paid the differential sum of RM464,654.00 between the purchase price (RM1,580,000.00) and the housing loan amount. The Public Bank Berhad loan was serviced monthly by the Plaintiff until November 2021. Critically, loan statements (pp 23-26 Bundle B) show the Plaintiff transferred a total surplus of RM60,180.57 beyond required loan instalments for property-related expenses.
[7] The trust agreement/arrangement, though not in the written form, is undisputed. Both parties agreed that one of the terms of their agreement is that the Property is held in trust by the Defendant for the Plaintiff (Agreed Fact 7). The Defendant's solicitor letter dated 5 April 2022 explicitly admitted the Defendant holds the Property "on trust for the Plaintiff' (p 12 Bundle C1). The conveyancing solicitor's (PW2) unchallenged evidence confirmed the major legal fees of RM52,780.70 were paid by the Plaintiffs mother via cheque No MBB 287822.
[8] Evidence at trial strengthen the undisputed fact on the joint use of the Property. WhatsApp communications (pp 65-213 Bundle C) demonstrate both parties' active participation in renovation planning, with the Plaintiff approving a RM180,000.00 budget and authorizing the Defendant (who was physically in the country) to make decisions. The Defendant admitted (p 145 NOP) she was allowed to stay because of their romantic relationship, establishing conditional occupancy. She simultaneously rented out her X2 Residency property while living rent-free in the Plaintiffs Property.
[9] After the relationship ended in December 2021, the Plaintiff immediately demanded the Defendant vacate and transfer the Property. The Defendant has remained in exclusive possession for over 3 years (pages 147-148 NOP), preventing the Plaintiff from accessing his own Property.
Issues To Be Tried
