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2024 MarsdenLR 59

HIGH COURT MALAYA PULAU PINANG
YAP CHIN HUAT – Appellant
Versus
TUNG GOON GUAT & ANOR – Respondent
[Civil Appeal No: PA-12BNCVC-5-10/2022]



Petitioner Advocates:Ang Boon Pin,M/s Toh Khay Yann ,Respondent Advocate: Kavineesh Ravintahran

The Family Settlement Agreement was voidable due to undue influence and coercion, as the father exerted pressure on the daughter-in-law, preventing her from giving free consent.

Headnote:(A) Contracts Act 1950 - Sections 14, 15, 16, 19, and 20 - Appeal concerning the validity of a Family Settlement Agreement (FSA) - The Sessions Court found that the FSA was voidable due to undue influence and coercion exerted by the father on the daughter-in-law, rendering the agreement unenforceable. (Paras 32, 34, 45)

(B) Appellate Intervention - The appellate court will not interfere with the trial court's findings unless they are 'plainly wrong', which requires a fundamental error in the trial court's appreciation of evidence or application of law. (Paras 14, 21)

Facts of the case:
The father claimed RM275,000.00 from his daughter-in-law based on an FSA, asserting that she was obligated to pay him after a negotiated settlement regarding the estate of his deceased son. The daughter-in-law counterclaimed that the FSA was void due to undue influence and coercion. (Paras 2, 23)

Findings of Court:
The appellate court found no errors in the Sessions Court's reasoning and affirmed that the FSA was voidable due to lack of free consent. (Paras 50)

Issues: The main issues were whether the FSA was valid and whether the Sessions Court's findings were 'plainly wrong'. (Paras 4, 21)

Ratio Decidendi: The court ruled that the FSA was voidable because the daughter-in-law did not give free consent, having been subjected to undue influence and coercion by the father, which was substantiated by the evidence. (Paras 34, 45)

Result: Appeal dismissed with costs. (Paras 51)

JUDGMENT

(Post-Trial Appeal)

Kenneth St James JC:

Prelusion

[1] A son passed away. He had made a Will. The father asserted that the son died intestate (died without a Will). With the Will, the son's wife, as executrix (whom I will refer to, purely for convenience, as "executor") of the estate, applied for a grant of probate. The father lodged a probate caveat and made known his intention to contest the grant of probate.

[2] Before probate was granted, the father and the daughter-in-law negotiated to settle the dispute. The probate was then granted. The parties signed an agreement to pay the father a sum of money. The wife (daughter-in-law) could not fulfil all the payments. The father sued the wife for the balance amount of RM275,000.00 not paid. The wife counterclaimed for a declaration that the agreement was void and unenforceable. They went to trial.

[3] The Sessions Court dismissed P's claim and allowed the wife's Counterclaim. Hence the father appeals to this High Court .

[4] Applying the principles of appellate intervention, should P's Appeal be allowed (and the Sessions Court 's judgment be reversed), or should it be dismissed (and the Sessions Court 's judgment be upheld)?

The Parties

[5] Mr Yap Kuang is the deceased. The Appellant-Plaintiff is his father. I will refer to him as "P". Mr Yap Kuang's wife is Madam Tung Goon Guat. She is the executor of Mr Yap Kuang's estate. She is also a beneficiary.

[6] In the Sessions Court suit, P sued his son: Mr Yap Kuang's estate and his daughter-in-law: Madam Tung. The 1st Defendant is Madam Tung, as executor of the estate. The 2nd Defendant is Madam Tung in her personal capacity. I will refer to Madam Tung, in either or both her capacities as the 1st Defendant and 2nd Defendant simply as "D2".

The Pertinent Facts

[7] Mr Yap Kuang passed away in November 2018. In January 2019, P asserted that Mr Yap Kuang passed away intestate i.e. without leaving a Will, which would mean that P (as the father) and his wife (as the mother) are entitled to a ¼ share each to Mr Yap Kuang's estate. To secure their rights, P proceeded to lodge a probate caveat over Mr Yap Kuang's estate.

[8] Also in January 2019, D2 (as wife and executor of Mr Yap Kuang's estate) notified P that Mr Yap Kuang did not die intestate. He had left a Will. And P and his wife (the father and mother) were not named as beneficiaries under the Will. D2 proceeded to apply for a grant of probate.

[9] A few months later in July 2019, P notified D2 that he intended to challenge the validity of the Will. At the same time, P made a without prejudice proposal to settle the dispute for RM30,000.00. In other words, he would not challenge the validity of the Will and contest the grant of probate application if he is paid RM30,000.00.

[10] D2 counter-proposed to pay off P with 1/4 shares in two properties owned by Mr Yap Kuang's estate. P rejected the counter-proposal and maintained his request for the RM30,000.00 in cash. After some negotiations, the parties agreed to a RM30,000.00 payment in instalments.

[11] P's caveat was not renewed. D2 obtained the grant of probate in August 2019.

[12] After obtaining the grant of probate, in September 2019, the parties signed a Family Settlement Agreement (FSA) based on this RM30,000.00 amount. The pertinent terms of the FSA include these terms-

(1) P is to be paid RM5,000.00 a month for six months (totalling RM30,000.00) from September 2019 to February 2020;

(2) P is to be paid the remaining RM270,000.00 in a lump sum in March 2020;

(3) D2 personally guarantees the RM30,000.00 payment.

[13] As it turned out, RM25,000.00 was paid, but RM275,000.00 was not. P thus sued D2 for the RM275,000.00. D2 mounted a Defence and Counterclaim that sought-

(1) a declaration that the FSA was null and void;

(2) the return of the RM25,000.00 that was paid over; and

(3) damages.

The Law On Appellate Intervention - The 'plainly Wrong' Test

[14] It is vital, in this post-trial Appeal, to review the law on appellate intervention. An app


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