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2025 MarsdenLR 535
HIGH COURT MALAYA KUALA LUMPUR
TEOH SENG KIAN – Appellant
Versus
CHAN CHOON MAN & ORS – Respondent
[Civil Suit No: WA-22NCvC-320-06/2022]
The Plaintiff failed to prove undue influence or lack of capacity of the deceased to execute trust documents, which were deemed valid and binding.
Headnote:(A) Trust Companies Act 1949 - Section 8(1)(n) - Trustee Act 1949 - Allegations of undue influence in executing trust documents - Plaintiff failed to prove that the late Madam Lee was under undue influence or lacked capacity to execute trust documents, which were found valid and binding. (Paras 3, 10, 32, 37)
(B) Burden of Proof - The Plaintiff bears the burden of proving allegations of undue influence, which must be specifically pleaded and substantiated with evidence. (Paras 16, 19, 20)
(C) Fiduciary Duty - No fiduciary relationship established between the late Madam Lee and the First Defendant at the time of the alleged transactions. (Paras 15, 37)
Facts of the case:
The Plaintiff, as executor of the late Madam Lee's estate, sought to recover RM750,000 allegedly transferred under undue influence and to declare trust documents void. The late Madam Lee was elderly, wheelchair-bound, and claimed to lack capacity to manage her finances. (Paras 1-2)
Findings of Court:
The court found no evidence of undue influence by the Defendants, affirmed the validity of the trust documents, and concluded the Plaintiff's claims were unsubstantiated. (Paras 37-38)
Issues: The main issues included the validity of the trust documents, the alleged undue influence over the late Madam Lee, and whether the Defendants had a fiduciary duty. (Paras 1, 37)
Ratio Decidendi: The court ruled that the Plaintiff failed to prove undue influence or incapacity, and the trust documents were executed validly. The Defendants were not liable for the investment decisions made by the late Madam Lee. (Paras 10, 32, 37)
Result: Plaintiff's claim dismissed; costs awarded to the Defendants.
[1] The Plaintiff brought this action in his capacity as an executor and trustee of estate of the late Lee Choon Hiong (Madam Lee), who passed away on 18 May 2021. The Plaintiff seeks to recover the sum of RM750,000.00 from the Defendants, alleging that these funds were transferred from the late Madam Lee's bank account through undue influence, and further seeking a declaration that certain trust documents executed by the late Madam Lee with the Third Defendant (D3) are void and illegal.
[2] Specifically, the main allegations are that the Defendants jointly and severally used undue influence to cause the late Madam Lee (she was about 80 years of age, wheelchair-bound and illiterate in English) to execute various trust documents. The First Defendant (D1) a Private Wealth Relationship Manager at CIMB Bank Berhad who had a fiduciary duty to the late Madam Lee, was in a position to dominate her will, and he did just that. The Plaintiff alleged that the Defendants had caused the late Madam Lee to issue a CIMB Bank Berhad cheque no 00001 dated 26 March 2019 that had transferred a total of RM750,000.00 to D3's account. The Plaintiff contended that after the transfer, the late Madam Lee was allegedly induced to execute:
(i) An undated, partially unsigned consent form
(ii) Declaration of Trust 1 dated 31 March 2019 for the sums of RM150,000.00 and RM600,000.00
(iii) A Master Deed of Trust dated 31 March 2019
(iv) A Master Service Agreement and Service Schedule with a company called Asia Cornerstone Management Company Ltd (ACMCL)
[3] It was the Plaintiffs argument that all those documents (collectively hereafter referred to as Trust Documents) are null and void as they contravened s 8(1)(n) of the Trust Companies Act 1949 ( TCA ) and ss 4 and 5 of the Trustee Act 1949 ( TA ). The Plaintiff sought the following from this Court:
(a) A declaration that the trust documents are null and void;
(b) A return of the RM750,000.00;
(c) 5% interest from the date of judgment;
(d) Costs;
(e) Other appropriate relief.
[4] D1's pleaded defence is that he has no knowledge of the Plaintiffs allegations. He was employed as a Preferred Relationship Manager at CIMB Bank Berhad from November 2014 to March 2015. The late Madam Lee's account was part of his portfolio during that time. He worked at other banks after March 2015 (RHB Bank Bhd and Kenanga Investment Bank Bhd) and had only re-joined CIMB Bank Berhad in April 2020, which was after the disputed transactions. D1 additionally claimed that he did not manage customer accounts and was not authorised to make any transactions on behalf of customers. D1 denies any involvement in the late Madam Lee's dealings with D2 and/or D3. It was pleaded that the late Madam Lee was an avid and active investor, not susceptible to undue influence.
[5] D2 claimed no relationship, having never met with the late Madam Lee. The Plaintiff was put to strict proof of all his allegations.
[6] D3 acknowledged having received RM750,000.00 from the late Madam Lee but claims it was deposited into a Trust Fund account under the Clause of the Declaration of Trust 1. Clause 12.3 of the Master Deed of Trust was highlighted, which provided D3 was not liable for any loss except due to gross negligence or breach of trust. D3 denied any wrongdoing. D3 claimed that all documents executed between the late Madam Lee and D3 were legal and they signed willingly. D3 filed its Counterclaim seeking a declaration that it was not responsible for the investment returns, losses, or repayment period.
[7] Below is this Court's assessment of the evidence regarding the late Madam Lee's mental capacity to determine whether the Defendants had exercised undue influence over her and caused and/or induced her to execute the documents, particularly the Declaration of Trust and the Master Deed of Trust. This Court will also analyse whether the Plaintiff has adduced evidence to conclude, on a balance of probabilities, that D1 and D3 had caused the late M
