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2014 MarsdenLR 504

HIGH COURT MALAYA KUALA LUMPUR
MALCOLM THWAITES – Appellant
Versus
SHIRLEY KATHREYN YAP – Respondent
[Civil Suit No: S-22-552-2009]



A constructive trust arises from a fiduciary relationship, compelling the trustee to account for benefits received from partnership earnings, especially when fraudulent concealment impedes discovery.

Headnote:(A) Contracts - Constructive Trust - Equity - Fiduciary Duties - The essence of a constructive trust arises where one party has gained an advantage over another through reliance on a fiduciary relationship. The plaintiff proved a constructive trust over the properties and sums he entrusted to the defendant during their cohabitation. (Paras 151, 155, 382-398)

(B) Cohabitation - Status as de facto spouse - The court recognized the relationship’s nature over 19 years as akin to marriage, necessitating equitable principles to be applied in property division. (Paras 204-221)

(C) Accounting - Duty to Account - The defendant, as nominee and registered manager, was required to account for all funds received by her, as the plaintiff demonstrated fraudulent concealment of stakeholder balances. (Paras 265-274)

(D) Limitation - Fraudulent Concealment - The defendant's fraudulent actions postponed limitation periods allowing the plaintiff's claims to proceed. (Paras 447-458)

Facts of the case:
The case involves a long-term non-marital cohabitation where the plaintiff, a horse trainer, sought a share of properties and assets acquired during the relationship from the defendant, who was the registered manager of various racing partnerships. Tensions arose following their breakup which involved issues of trust and hidden financial dealings. (Paras 1-13, 57-69)

Findings of Court:
The court concluded that the defendant had acted as a fiduciary and held assets on constructive trust for the plaintiff, and thus, ordered her to transfer a half share of the properties along with monetary compensation. (Paras 151-155, 365-373)

Issues: The key issues were whether the relationship constituted a de facto marriage, whether the defendant acted in a fiduciary capacity, and whether the plaintiff’s claims were time-barred due to fraudulent concealment by the defendant. (Para 160)

Ratio Decidendi: The court found that the plaintiff's assertions were credible, supported by both oral and documentary evidence, and established that the defendant had a fiduciary obligation to render an account of the funds held in trust for the plaintiff. (Paras 265-274, 393-399)

Result: The plaintiff's claims were upheld, and the defendant’s counterclaims were dismissed. (Paras 151, 153)

Table of Content
1. plaintiff's prestigious family background. (Para 1 , 2 , 3)
2. defendant's family ties and wealth. (Para 4 , 5 , 6)
3. plaintiff's success as a horse trainer. (Para 29 , 30 , 32)
4. discussion of financial trusts and responsibilities. (Para 51 , 55)

[1] The plaintiff is a horse trainer by profession.

[2] He comes from a distinguished family background which included legal and political luminaries such as an uncle called Lim Kean Chye and an aunt called Tan Sri PG Lim who was Malaysia's 1st woman ambassador.

[3] His family background also included another uncle called Lim Kean Siew who was a well known politician and lawyer; a distinguished grand uncle called Lim Cheng Ean, who was a state assembly man under British rule; a distinguished grandfather called Philip Hoalim Snr., who was a famous lawyer in Singapore; a grand uncle, who was a famous movie producer called Ho Ah Loke and an uncle called Philip Hoalim Jnr. and his wife Miki W. A. Goh, who were both distinguished lawyers in Penang.

[4] The defendant is a company director of Loh Kah Kheng Holdings Sdn Bhd ("the company").

[5] The defendant was the wife of Loh Kah Kheng ("LKK"), the youngest son, since deceased, of Tan Sri Loh Boon Siew ("TSLBS"), since deceased.

[6] Before his demise in 1995, TSLBS was a wealthy and prominent businessman in Penang.

[7] According to the plaintiff, in the early 1970's, before the defendant married LKK, he and the defendant began an intimate relationship. However, after the defendant left for the United States of America ("USA") to work as an air stewardess with the airline by the name of PANAM ie Pan American Airlines, their relationship ended.

[8] According to the defendant, she first met the plaintiff in the early 1970's when she was working as a clerk in the Merlin Hotel. However, the defendant denied any intimate relationship with the plaintiff when they first met because she knew he was already married to his first wife by the name of Rita. Shortly after meeting the plaintiff, the defendant left for the USA to work for PANAM.

[9] After she returned from the USA, she married LKK.

[10] After her marriage to LKK, the defendant lived in Penang with LKK. The defendant's marriage to LKK produced two children, a boy named Loh Yu Jen and a girl named Loh Wei Lyn.

[11] In February 1987, the defendant left LKK with her two young children.

[12] Soon after the defendant left LKK in February 1987, LKK was found dead from hanging in their matrimonial home in Penang. The defendant's brother, namely, Jeffrey Yap, was detained by the police for investigations relating to the death of her late husband.

[13] An inquest was conducted into LKK's death in order to ascertain whether LKK had committed suicide or there was any evidence that any person or persons was or were criminally responsible for his death. The defendant was represented by Mr Mahendran a/l Ponniah from the legal firm of Chelliah Brothers in the said inquest. The defendant's father-in-law (TSLBS) was represented by Dato' Ghazi Ishak from the legal firm of Messrs. Ghazi & Lim in the said inquest. At the conclusion of the inquest, the coroner returned a verdict that LKK was murdered by an unknown person or persons.

[14] According to the plaintiff, immediately after the defendant left LKK with her two children in 1987, she started cohabiting with him as de facto wife and husband in various places in Malaysia and Singapore for about 19 years from 1987 until 2006.

[15] According to the plaintiff, the defendant was totally dependent on the plaintiff for the maintenance of herself and her two children during their 19 years of cohabitation. This is because at the time the defendant left LKK in 1987, she had only RM 15,000 cash on her. After the demise of LKK right until the demise of TSLBS, the defendant had no access to the funds of the estate of LKK and the company.

[16] According to the plaintiff, he considered the defendant his one true love and his soul mate. The plaintiff also believed that

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