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2024 MarsdenLR 58
HIGH COURT MALAYA SHAH ALAM
LING SOON PING – Appellant
Versus
KOPERASI PEMBANGUNAN PENDIDIKAN BERHAD & ANOR – Respondent
[Civil Appeal No: BA-12A-25-04/2024]
The Sessions Court lacks jurisdiction to hear claims involving breach of trust and fiduciary duties under the Co-Operative Societies Act 1993 and the Subordinate Courts Act 1948.
Headnote:(A) Co-Operative Societies Act 1993 - Sections 69(e) and 82 - Subordinate Courts Act 1948 - Jurisdiction of Sessions Court - Dispute regarding mismanagement of Scholarship Fund by co-operative society and trust company - Sessions Court lacked jurisdiction to adjudicate claims for breach of trust and fiduciary duties - Claims must be brought before High Court. (Paras 19, 42, 49)
(B) Jurisdiction - The court ruled that the dispute does not fall under the jurisdiction of the Malaysia Co-Operative Societies Commission, as the trust company is not governed by the Act. (Paras 19, 23, 26)
(C) Trust and Fiduciary Duties - Claims against the Respondents are intertwined, but the Sessions Court cannot enforce trusts per s 69(e) of the Subordinate Courts Act 1948. (Paras 28, 44)
Facts of the case:
The Appellant/Plaintiff invested in a Scholarship Fund managed by the First Respondent/Defendant, a co-operative society, and the Second Respondent/Defendant, a trust company. After the maturity date, he did not receive the promised return, leading to a claim against both Respondents. (Paras 5, 8, 9)
Findings of Court:
The court found that the Sessions Court lacks jurisdiction to hear the claims regarding breach of trust and fiduciary duties, which must be addressed in the High Court instead. (Paras 42, 49)
Issues: The main issues were whether the dispute fell under the jurisdiction of the Malaysia Co-Operative Societies Commission and whether the Sessions Court could adjudicate the case. (Paras 3, 4)
Ratio Decidendi: The court held that the claims are outside the jurisdiction of the Malaysia Co-Operative Societies Commission and that the Sessions Court cannot enforce trusts as per s 69(e) of the Subordinate Courts Act 1948. (Paras 19, 44)
Result: Appeal dismissed.
Key Points: - (!) - (!) - (!) - (!) - (!) - (!) - (!) - (!) - (!) - (!)
What is the applicable forum/jurisdiction for a dispute involving breach of fiduciary duties and trust related to a Scholarship Fund: Malaysia Co-Operative Societies Commission under s 82 and related provisions, or the Sessions Court under s 69(e) of the Subordinate Courts Act 1948?
What is the true nature of the dispute and whether it falls under s 82 (dispute touching the management or business of a co-operative society) or requires enforcement of a trust, thereby excluding Sessions Court jurisdiction?
What is the proper forum for claims seeking declaration of breach of trust and damages arising from a Deed of Trust and Scholarship Fund Agreement, considering exceptions to the Sessions Court’s jurisdiction under s 69(e) and the potential intertwining of claims against both respondents?
JUDGMENT
Introduction
[1] Ling Soon Ping, a devoted and responsible parent, had affectionately contributed to a co-operative society's Scholarship Fund in the interest of his child's education. Troublingly, however, the fund was allegedly mismanaged by the co-operative society and a trust company appointed to administer it, resulting in a legal dispute between the parties.
[2] Before a deliberation on the merits of the dispute is undertaken, this Court is requited to answer a legal question pertaining to jurisdiction and the appropriate forum to adjudicate this dispute.
The Principal Issues
[3] The two key issues for consideration by this Court are:
(1) Whether the dispute falls within the jurisdiction of the Malaysia Co-Operative Societies Commission pursuant to s 82 of the Co-Operative Societies Act 1993 ? and
(2) Whether the Sessions Court possess jurisdiction over this dispute, notwithstanding s 69(e) of the Subordinate Courts Act 1948 ?
[4] These issues are raised against the backdrop of an appeal by the Appellant/Plaintiff against a decision of the Sessions Court on 2 April 2024 to strike out the Appellant/Plaintiff's Writ under O 18 r 19(1)(a), (b), (c) and (d) of the Rules of 2012 on the basis that the Sessions Court lacked jurisdiction to adjudicate the dispute between the parties.
The Parties And The Pertinent Facts
[5] The Appellant/Plaintiff is a member of the First Respondent/Defendant, a co-operative society registered under the Co-Operative Societies Act 1993 . He invested in a Scholarship Fund established by the First Respondent/Defendant.
[6] On the other hand, the Second Respondent/Defendant is a trust company that manages the Fund.
[7] On 1 December 1994, the Respondents/Defendants signed a Deed of Trust so as to enable the First Respondent/Defendant to establish a Scholarship Fund and for the Second Respondent/Defendant to serve as trustee of the said fund.
[8] On 1 May 2010, the Appellant/Plaintiff invested RM16,814.00 into the Scholarship Fund under the Scholarship Fund Agreement with the First Respondent/Defendant. This investment was made with an understanding that it would yield a guaranteed return of RM34,084.00 upon maturity on 1 May 2021.
[9] Following the maturity date of 1 May 2021, the Appellant/Plaintiff did not receive the promised return. This led the Appellant/Plaintiff to file a claim against the Respondents/Defendants in the Sessions Court .
[10] However, on 2 April 2024, the Sessions Court struck out the Appellant/Plaintiff's claim pursuant to O 18 r 19(1)(a), (b), (c), and (d) of the Rules of 2012, on grounds that it lacked jurisdiction to adjudicate the dispute. The Appellant has since appealed to this Court .
The Parties' Contentions
The Appellant/Plaintiff's Position And Contentions
[11] The Appellant/Plaintiff's position and contentions that the learned Sessions Court Judge had erred in striking out his claim under O 18 r 19(1)(a), (b), (c), and (d) of the Rules of 2012 on basis of lack of jurisdiction were as follows.
(i) The Malaysia Co-Operative Societies Commission has no jurisdiction over the claim because the Second Respondent/Defendant is a trust company not governed by the Co-Operative Societies Act 1993 ;
(ii) The Sessions Court 's jurisdiction was not ousted because there is an absence of an ouster clause against the courts' jurisdiction in the Co-Operative Societies Act 1993 ;
(iii) The Appellant/Plaintiff's claims against both Respondents/Defendants concern allegations of breach of fiduciary duties in the context of the administration of the Deed of Trust involving the Appellant/Plaintiff's investment funds, amongst others the alleged non-appointment of a trust fund manager as required by the Deed of Trust itself;
(iv) The Malaysia Co-Operative Societies Commission has no jurisdiction over the claim because there is a question of law (whether the Respondents/Defendants have breached their fiduciary duties and the Deed of Trust) and potentially an assessment
