Trust principles defeat time-bar defenses under Limitation Act when beneficiaries seek recovery of trust property.

[1] The Plaintiffs, Who Are Husband And Wife Respectively, Found Their Claims Against The Defendants On The Basis Of Two Sale And Purchase Agreements Dated 26 November 1997.

[2] The Plaintiffs and the First to Sixth Defendants, (D1 - D6) in 1997 were business associates in various companies and businesses including the Seventh Defendant, Fabrika Am Holdings Sdn Bhd (D7), the Eighth Defendant, Fabrika Topi Am Holdings Sdn Bhd (D8) and one Fabrika Technologies Sdn Bhd (which is not a party to this suit). In 1997 the Plaintiffs owned approximately 51% of the paid up share capital of D7 while D1 - D6 owned the remaining 49%. As for D8, the Plaintiffs owned approximately 34% of the paid up share capital while the remaining 66% was held by third parties who are acknowledged nominees of D1 - D6. The Plaintiffs also held in 1997, 55% of the shares in Fabrika Techonologies Sdn Bhd while D1 - D6 owned the remaining 45% shareholding.

[3] It was relevant that D8 was and remaned the registered owner of land HS (D) 4267, PT 9048 Mukim Setepak, Daerah Gombak, Selangor with a terrace shop house bearing the postal address No 48, Jalan Bandar 1, Taman Melawati 53100 Kuala Lumpur. It has since been issued with a new title namely Grant 39484, Lot 14443 Mukim Setapak, Daerah Gombak, Selangor. This property shall be referred to as the shop house.

Salient Facts

[4] 1.0. The salient facts giving rise to the dispute here are as follows:-

1.1. In or around September 1997 the Plaintiffs and the six Defendants decided to dissolve their business association and distribute the assets. This is recorded in a memorandum of understanding signed between the 1st Plaintiff, D2, D3 and one Avtar Singh, the father of the 1st Defendant. The Memorandum of Understanding dated 10 September 1997 records that the 1st Plaintiff was desirous of acquiring all the interests of the other parties, known collectively as the second party, in Fabrika Am Holdings Sdn Bhd ie, D7. The assets of D7 included the shophouse. In consideration of the same, the second party collectively was desirous of acquiring all the interests of the Plaintiff in D8, Fabrika Berets (M) Sdn Bhd and Fabrika Technologies Sdn Bhd The parties then agreed to undertake all necessary acts, steps and actions necessary to transfer their respective interests in the respective companies. This is how the two share sale agreements which are the subject matter of dispute came about.

1.2. On 26 November 1997 a Share Sale Agreement (the First Agreement) was executed between the Plaintiffs on one hand and D1 to D6 on the other hand. The material terms of the First Agreement include the following:-

(a) The Plaintiffs agreed to transfer their 51% shareholding in D7 to D1 - D6 who already owned 49% of D7. This is reflected in clause 5.1;

(b) In consideration of the aforesaid transfer, D1 to D6 agreed to transfer their 45% shareholding in Fabrika Technologies Sdn Bhd to the Plaintiffs, who already owned 55%. This is reflected in cl 6.1. Additionally D1 to D6 agreed to pay the Plaintiffs the sum of RM180,000-00; This sum was to be paid by way of an initial deposit of RM50,0000-00 with the balance RM130,000 in six instalments as set out in Schedule 4 of the First Agreement, the last of which was due on 26 May 1998. This is reflected in cls 6.1, 6.2 and 3.6. D1 to D6 agreed to undertake joint and several responsibility for the repayment of the balance RM130,000-00 to the Plaintiffs under cl 6.3.

1.3. On the same day, ie, 26 November 1997, a second written agreement was entered into between the Plaintiffs on the one hand, and D7 and D8 on the other hand (the Second Agreement). Under the terms of this S