The court ruled that agreements were not breached, and trust deeds were invalid due to illegal purposes, denying constructive trust claims.

Introduction

[1] In this action, the Plaintiffs claimed against the 1st Defendant ("D1") 4,800,000 units of issued and fully paid up shares in the 3rd Defendant ("Jepak") on the basis that D1 is a constructive trustee for the Second Plaintiff ("P2")) of 2,700,000 Jepak shares and the Second Defendant ("D2") of 2,100,000 Jepak shares, account by D1 and Jepak of all monies received from the Ministry of Education ("MOE") and/or the Government of Malaysia ("GOM") from 8 May 2019 to date of Order and the payment of such monies to the Plaintiffs found payable upon the taking of accounts; indemnity from D1 in respect of settlement of all liabilities and debts of Jepak as audited and/or declared as at 31 January 2019 based on payments recede by Jepak from MOE or GOM in respect of work done before and up to 31 December 2018 under the Project (defined hereafter), and damages.

[2] During trial agreed to be conducted virtually online by using the Zoom video conferencing platform, lasting 7 days, the Plaintiffs called 4 witnesses to adduce evidence whilst the Defendants called 3 witnesses in support of the Defence.

[3] I had on 29.11.22 dismissed the Plaintiff's claim. This judgment contains the reasons for my decision.

Background Facts

[4] The 3rd Defendant, Jepak is a private limited company incorporated under the laws of Malaysia and is in the construction business which includes civil, electrical and mechanical contract works, design, project management, labour supply, marine work and workshop. It is also in the business of renting out motor vehicles.

[5] The 1st Plaintiff ("P1") was the managing director and a shareholder of Jepak when GOM and/or MOE had on 20 June 2017 awarded Jepak a contract known as "Projek Bersepadu Sistem Solar Photovoltaic (PV) Hibrid dan Penyelenggaraan dan Operasi Genset/Diesel bagi 369 Sekolah Luar Bandar Sarawak" ("Project") at a contract value of RM1,325,000,000.00.

[6] The Project comprises two portions: (i) operation of gensets and maintenance of generator sets, and (ii) installation of solar photovoltaic system.

[7] Prior to December 2018, P1 was the registered owner of 4,800,000 ordinary shares out of the 6,000,000 ordinary shares that were issued and paid up in Jepak.

[8] According to P1, payments to Jepak under the Project came to a halt after the 9 May 2018 General Election which saw a change in the government. At the same time, the award came under the scrutiny of the new government and he was being investigated by the Malaysia Anti-Corruption Commission ("MACC").

[9] To protect Jepak and ensure the continuity of the Project, P1 decided to transfer 2,100,000 of his shares in Jepak on 6 December 2018 to his wife, D2 and 2,700,000 shares to P2 to be held on trust for him; with these 2 individuals each signing a trust deed and power of attorney dated 6 December 2018 as well as a Shareholders' Agreement dated 4 December 2018 pertaining to these shares.

[10] It is not disputed that the T rust Deeds, the Powers of Attorney and the Shareholders Agreement, were not registered in the books of Jepak nor was it lodged at the Companies Commission of Malaysia ("CCM").

[11] MOE and/or GOM continued to refuse to make payment to Jepak for work done since January 2018 in re