Constructive trusts require clear evidence of wrongful enrichment or dishonesty; mere suspicion is insufficient.

Yeoh Wee Siam J:

Background Facts

[1] This is the plaintiffs' claim against the 1st, 2nd, 3rd, 4th and 5th defendants (to be referred to as D1, D2, D3, D4 and D5 respectively).

[2] The plaintiffs were defendants in an action brought against them by one Lim Pang Cheong alias George Lim ("George Lim") (now a bankrupt) in Kuala Lumpur High Court Civil Suit No: S-22-1108-2007 ("the 2007 suit").

[3] D1 is the wife of D2. D2 is an advocate and solicitor and a consultant to D3. D3 is a firm of advocates and solicitors ("the firm"). D4 is an advocate and solicitor and a partner in the firm/D3. The firm represented George Lim in the 2007 suit. D5 acted as trustee for George Lim under a Deed of Trust dated 28 February 2011 ("Trust Deed" or "Trust") (CBOD1 Pt B pp 10-22).

[4] On 29 November 2010, judgment was entered in the High Court against the plaintiffs in the 2007 suit for the sum of RM23,413,034.65 together with interest at 8% per annum until full payment.

[5] The plaintiffs appealed to the Court of Appeal against the whole judgment of the High Court in the 2007 suit.

[6] The parties to the 2007 suit agreed on an interim stay of execution. The judgment sum together with accrued interest amounting to RM34,989,978.47 was deposited with Messrs Zul Rafique & Partners, as stakeholders ("the stakeholders"), to be held by them in a fixed deposit pending the outcome of an application for stay of execution before the Court of Appeal.

[7] On 28 February 2011, the Court of Appeal refused a stay and the judgment sum of RM35,087,135.06 ("judgment sum") was paid out by the stakeholders to D3, as solicitor of George Lim, into its RHB client's account.

[8] The plaintiffs contend that their appeal against the judgment dated 29 November 2010 in the 2007 suit was a continuation of proceedings before the High Court and constituted a lis pendens which was impressed upon the judgment sum of RM35,087,135.06 and which bound each of the defendants.

[9] On 7 July 2011, the Court of Appeal allowed the plaintiffs' appeal and set aside the judgment in the 2007 suit and directed restitution of the sums of RM35,087,135.06 and RM359,557.97 paid under the judgment (CBOD1 Pt B pp 91-92).

[10] The plaintiffs assert that the Order of the Court of Appeal dated 7 July 2011 vested the plaintiffs with a right of restitution in equity to be restored to the position they stood prior to the entry of the judgment dated 29 November 2010.

[11] The plaintiffs contend that D1, D2, D3 and D4 are constructive trustees of the sum paid by the plaintiffs under the judgment of the High Court in the 2007 suit dated 29 November 2010 and are liable to account to the plaintiffs for the judgment sum.

[12] Further, in the alternative, the plaintiffs contend that D1, D2, D3 and D4 acting individually or jointly or in concert with each other and/or with George Lim wrongfully deprived the plaintiffs of the sum paid under the judgment dated 29 November 2010 with the intention of causing the plaintiffs wrongful loss and/or for obtaining for themselves or others a wrongful gain and thereby unjustly enriched themselves at the expense of the plaintiffs.

The Plaintiffs' Claim

[13] The plaintiffs' claim in prayer 14 of the statement of claim ("SOC") is as follows:

i) As against all the defendants, the sum of RM35,087,135.06;

ii) Alternatively:

a) as against D1, the sum of RM15,500.00;

b) as against D3, the sum of RM11,750,000.00;

c) as against D4, the sum of RM3,500,000.00;

iii) Interest on the aforesaid sums at the rate of 2% per annum on monthly rests on the footing of wilful default from 28 February 2011 until the date of full payment, (ie the prayer in the