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2021 MarsdenLR 2754
COURT OF APPEAL PUTRAJAYA
CHONG YAW MING – Appellant
Versus
HEW AH FATT – Respondent
[Civil Appeal No: B-02 (NCvC) (W)-1051-06/2019]
The court upheld the binding nature of a Declaration of Trust, affirming no ownership claims without financial contribution.
Headnote:(A) Declaration of Trust – Regarding ownership and sale of property – Appeal against High Court's decision allowing plaintiff's claim despite the binding effect of the Declaration of Trust dated 25 July 2011 – It was established that the plaintiff did not contribute financially towards purchasing the property, and the defendant's claim of full payment was substantiated. (Paras 12, 21, 24, 28)
(B) Partnership Law – Legal standing of partners and contributions – The court concluded that the plaintiff was not a partner in the true sense and, therefore, had no grounds for his claims against the defendant regarding the property. (Paras 16, 19, 22)
Facts of the case: The defendant bought a property and claimed that the plaintiff only had a nominal interest due to a Declaration of Trust despite not contributing to the purchase price. The plaintiff sought various forms of relief regarding the sale of the property, arguing partnership claims.
Findings of Court: The court found the Declaration of Trust valid and binding, and that the plaintiff had no rights to challenge the sale based on it.
Issues: The key issues revolved around the plaintiff's financial contributions, the validity of the Declaration of Trust, and the nature of their partnership.
Ratio Decidendi: The court emphasized that the Declaration of Trust was clear and binding, rejecting the plaintiff's claims about ownership rights without financial contribution.
Result: Appeal allowed, High Court decision set aside.
JUDGMENT
Introduction
[1] This is the appellant/defendant's appeal against the decision of the High Court on 30 April 2019 after a full trial and allowing the plaintiff's Statement of Claim as per prayer 21 (a), (b), (c), (d), (e), (g) and (h) with cost of RM15,000.00 subject to allocatur.
[2] For ease of reference, parties will be referred to as they were in the proceedings before the High Court.
[3] Having considered the appeal records and the submissions of the parties, it is our unanimous decision that there is merit in the appeal and we allowed the defendant's appeal with costs. The decision of the High Court is set aside. We now give our reasons for the same.
Background Facts
[4] The defendant had entered into a sale and purchase agreement ("the SPA") for a property known as GM2742, Lot No 3631 Mukim Sabai District of Bentong ("the said Property") for the purchase price of RM230,118.10.
[5] The defendant, at all material time, had made all the necessary payment to procure the said Property. Particulars of such payment are as follows:
[6] The plaintiff and defendant were at one time good friends and partners in managing a vegetable farm. In that spirit, the defendant had entered into a Declaration of Trust dated 25 July 2011 declaring that the defendant stand possessed and hold one half (1/2) of the said Property on behalf of the plaintiff ("the said Declaration"). A copy of the said Declaration was served on the plaintiff by M/s Tan Kong Hai & Tui (plaintiff's and defendant's previous solicitors). For ease of reference, the said Declaration is reproduced as follows:
"THIS DECLARATION OF TRUST is made on the 25th day of July, 2011.
By Chong Yaw Ming (NRIC No: 550311-08-5205) of 8, Jalan SP 5, Taman Sri Putra, 47000 Sungai Buloh, Selangor (hereinafter called the 'Trustee') of the part, Haw Ah Fatt (NRIC No: 610526-08-5271) of No: Jalan Semarak 1C, Bandar Utama Batang Kali, 44300 Batang Kali, Selangor of the second part.
1. In consideration of the premises aforesaid, the Trustee hereby declare that the Trustee stand possessed of and hold the Trust Property UPON TRUST for the parties hereby absolutely in the share as indicated against their respective names herein below:
5. In the event of the sale or transfer of the agreed of any party(s) hereto under and pursuant to the PROVISO of cl 4 hereinabove, the purchase price shall be calculated on the basis of the acquisition price stipulated in the Sale and Purchase Agreement stated in cl 1 hereinabove notwithstanding the time and date of the sale or transfer of the agreed shares."
[7] Further, by virtue of the said Declaration, the plaintiff had entered a caveat on the said Property to preserve his rights.
[8] By letter dated 27 May 2016, the plaintiff through his solicitor offered to the defendant to sell his share of the said Property for the amount of RM536,000.00 in which the defendant rejected the offer. According to the defendant, any sale and purchase and/or dealing of the said Property are subjected to the said Declaration. The said Declaration had specifically prescribed that the purchase price shall be calculated on the basis of acquisition price stipulated in the SPA of the said Property.
[9] Dissatisfied, the plaintiff brought an action against the defendant and sought prayers from the Court with regard to the "selling price" of the said Property without raising any cause of action to dispute the said Declaration. The plaintiff, in para 21 of the Statement of Claim prayed as follows:
"21. Justeru itu, Plaintif menuntut terhadap Defendan:
(a) Plaintif dibenarkan melantik seorang Penilai Berdaftar yang bertauliah bagi melakukan laporan penilaian terhadap Hartanah yang di bawah No Hakmilik GM2742, Lot No 3631 Mukim Sabai Tempat Rancangan Tanah Pinggir Sg Dua, Daerah Bentong, Negeri Pahang (selepas ini dikenali sebagai "Hartanah") untuk menentukan nilai harga pasaran semasa Hartanah tersebut;
(b) Defendan harus menyerahkan sesalinan kunci Hartanah tersebut kepada
