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2024 MarsdenLR 2820
HIGH COURT MALAYA SHAH ALAM
MUTHU KUMAR MUTHU – Appellant
Versus
HAMSIAH JAAFAR – Respondent
[Suit No: BA-22NCvC-73-02/2024]
Trusts involving non-Malays over Malay Reserve Land are unenforceable under the Malay Reservations Enactment, nullifying claims for beneficial ownership or restitution.
Headnote:(A) Malay Reservations Enactment (FMS Cap 142) - Sections 14, 15, and 19 - Trust arrangements concerning Malay Reserve Land - Claim for beneficial ownership and restitution found unenforceable due to illegality under Malay Reservations Enactment - Court cannot recognize rights of non-Malay over Malay land. (Paras 14-18)
(B) Contracts Act 1950 - Sections 66 and 73 - Claims for money had and received and unjust enrichment - Claim dismissed as unenforceable due to underlying illegal trust arrangement - No restitution available where both parties are equally at fault. (Paras 21-30)
Facts of the case:
The Plaintiff, as executor of the estate of the Deceased, claimed beneficial ownership of two parcels of Malay Reserve Land, alleging a trust arrangement with the Defendant. The Defendant denied the trust and asserted her title. (Paras 1-10)
Findings of Court:
The court found the trust arrangement unenforceable due to the Plaintiff being a non-Malay, thus the claims regarding the Lands were unsustainable. (Paras 31-38)
Issues: Whether the trust arrangement was enforceable given the Plaintiff's status as a non-Malay and the implications of the Malay Reservations Enactment. (Paras 14-18)
Ratio Decidendi: The court ruled that any trust in favor of a non-Malay regarding Malay Reserve Land is null and void, reinforcing that such dealings cannot be recognized under the law. (Paras 17-19)
Result: The Defendant's application to strike out the Plaintiff's action is allowed, with costs awarded to the Defendant. (Para 38)
JUDGMENT
Introduction
[1] The Plaintiff is the executor of the estate of one M. Arumugam a/l Muthu Pillai ("Deceased") who died on 23 September 2022. The Defendant is the registered proprietor of two (2) parcels of land in Selangor and has been so registered since 23 September 2016 and 3 January 2014 respectively.
[2] The 2 parcels of land (collectively, "Land") have the following particulars of title:
a) a 7/12 share of land held under GM 463, Lot 46146, Batu 9, Jalan Sungai Tua, Mukim Batu, Daerah Gombak, Negeri Selangor ("Land 1"); and
b) all land held under HS(M) 24763, PT No 11179, Bandar Selayang, Daerah Gombak, Negeri Selangor ("Land 2").
[3] On 26 February 2024, the Plaintiff filed this action on behalf of the Deceased's estate to claim as follows (in a condensed summary):
a) a declaration that the Deceased was the beneficial owner of the Lands and holds the same as beneficiary of a constructive and/or resulting trust;
b) a declaration that the Plaintiff shall be entitled to the current market valua of the Lands in proportion to the Deceased's contribution and an order for sale of the Lands;
c) other declarations, orders and injunctions affecting the Lands as well as an account of all monies collected from the tenants of the Lands from the date of the Deceased's death until date of Judgment;
d) alternatively, the sums RM1,330,867.20 and RM1,102,472.00 as money had and received or restitution of the purchase consideration for the Lands; and
e) various ancillary relief.
[4] The Defendant claims indefeasible title to the Lands and denies the existence of any trust arrangement with the Deceased as asserted by the Plaintiff.
The Pleaded Case
[5] The Defendant and the Deceased were at one point in time, shareholders in Teknitek Services (M) Sdn Bhd ("Teknitek") and Senja Setia Sdn Bhd ("Senja Setia"). Teknitek and Senja Setia are involved in the business of collection and disposal of domestic waste.
[6] The Plaintiff claims that the Deceased was the de facto owner of Teknitek and Senja Setia, and that the Defendant was his proxy shareholder, in the same way that the shareholder to whom the Deceased subsequently transferred his own shares is a proxy shareholder.
[7] According to the Plaintiff, the Defendant paid no part of the consideration for either the shares in Teknitek or Senja Setia, the business or the Lands, and merely lent her name. The Lands were allegedly purchased as free parking space for Teknitek and Senja Setia to park vehicles used in the business.
[8] The cost of the Lands and legal fees and disbursements for the purchase are said to have been paid for substantially by the Deceased personally, and in respect of Land 1, also by Teknitek and Senja Setia.
[9] The trust arrangement was allegedly such that the Defendant shall sell Land 1 and Land 2 when so requested by the Deceased and pay the consideration to the Deceased. In exchange, the Defendant could keep 20% of the purchase price after deducting the original costs of purchase and all legal fees and disbursements.
[10] After the death of the Deceased, it is alleged that the Defendant:
a) Denied the trust arrangement and claimed beneficial interest in the Lands;
b) Demanded parking charges to be paid by Senja Setia for parking about 120 vehicles belonging to the business; and
c) Fraudulently procured a replacement title in respect of Land 2.
[11] The Defendant denied all allegations that she is a mere nominee for the Deceased and asserted that the Deceased had resigned as a director of Teknitek and Senja Setia, and sold all his shares in 2021.
Analysis Of Grounds For Striking Out
[12] The Defendant applied to strike out the Writ and Statement of Claim on grounds that:
a) the Plaintiff is a non-Malay and the 2 parcels of land in question are both Malay Reserve Land; and
b) the Plaintiff's claim for restitution for money had and received is time-barred.
[13] In essence, the Defendant submitted that the Plaintiff's claim is unsustainable as any claim on the Lands ar
