A trust cannot be enforced if founded on illegal acts and its validity requires certainty of intention, subject, and object.

The Application

[1] This is an application by the defendants to strike out the plaintiffs' claim under limbs (a) or (b) or (d) of O 18 r 19(1) of the Rules of 2012 and/or the inherent jurisdiction of the Court. The plaintiffs' claim is for a declaration that certain properties in the 1st and 2nd defendants' names were held in trust for them. The properties were:

i. Shares in a company called Sri Magjuta Sdn Bhd ("shares") ; and

ii. A house held under HS (D) 183963 Lot PT 6817, Mukim Sungai Buloh, Daerah Petaling, Selangor ("Damansara house").

[2] The application was strenuously objected to by the plaintiffs on the grounds that the claim ought to properly be the subject of evidence and submission at the trial and cannot be resolved summarily. After these introductory remarks, it is now time to turn to the facts.

Factual Summary

[3] The undisputed affidavit evidence is that the late Ho An Kee @ Ho Fong Shun ("HAK") was the patriarch of the family. Ho Yee Chee ("HYC") and the 1st defendant are two of his children. The 1st and 2nd plaintiffs are HYC's sons and the nephews. The 2nd defendant is the 1st defendant's husband.

[4] Sometime in 1996, HAK incorporated Sri Magjuta as his other company, Hup Soon Enterprise Sdn Bhd was facing financial constraints and was on the verge of being wound up. HYC's wife, the 1st defendant and two other daughters became the shareholders and the first directors of the company. Between then and the filing of the present action, the shares of Sri Magjuta changed hands several times.

[5] The plaintiffs and the defendants are the present shareholders in Sri Magjuta, each plaintiff holding 212,500 shares and the 1st defendant and 2nd defendants holding 305,000 and 270,000 shares, respectively. The present directors of Sri Magjuta are the plaintiffs, the 1st defendant and her sister. The 2nd defendant is an alternative director.

[6] HAK and his wife Chin Joon Moy ("CJM") and HYC were all adjudicated bankrupts on 21 December 2000, 23 November 2000 and 24 October 2000, respectively.

[7] A dispute over the business arose when HAK passed away on 15 August 2013. This resulted in the defendants filing an originating summons ("the first action") under s 167(6) of the Companies Act 1965 for an order to inspect the books of Sri Magjuta. The two plaintiffs opposed the said application and filed affidavits alleging that the defendants had no right to do so as they were only nominal directors and held the shares in trust for them. They then instituted the present claim against the defendants to recover the shares and the Damansara Jaya house.

Principles Governing Striking Out

[8] It is trite that O 18 r 19(1) of Rules of the High 2012 is designed to deal with cases that are not fit for trial at all. Order 18 r 19(1) empowers the Court to, inter alia, strike out any pleading which discloses no reasonable cause of action or defence. The standard which must be satisfied before the Court can exercise this power is clearly set out in the two leading cases of Bandar Builder Sdn Bhd & Ors v. United Malayan Banking Corporation Bhd and Raja Zainal Abidin Raja Tachik & Ors v. British-American Life & General Insurance Bhd, 1993 MarsdenLR 1454 , where it was held that the power should be exercised only in cases where a claim or defence is so obviously untenable that it cannot possibly succeed and manifestly groundless.

Grounds Relied On To Strike Out Claim

[9] The defendants contended that the claim was unsustainable on these grounds. First, the alleged trust was unenforceable as it was created by HAK for an illegal purpose, namely to defeat his creditors in the event of bankruptcy; secondly, the alleged trust w