A plaintiff must plead specific particulars of fraud to invoke extended limitation periods, and the limitation for claims of conversion is three years from the time of knowledge of the fraud.

[1] Leave was granted on 29 May 2012 to the appellants to appeal against the order of the Court of Appeal in respect of the matter decided by the High Court of Sabah & Sarawak at Sandakan in the exercise of its original jurisdiction, on the following questions:

A. Limitation under the Sabah Limitation Ordinance for Fraud and Conversion

(i) Whether it is incumbent on a plaintiff seeking the benefit of s 18 of the Sabah Limitation Ordinance to distinctly allege with particulars the particular fraud (actual or constructive), by which he has been kept from the knowledge of his right of suit against the defendant?

(ii) Where a plaintiff invokes concealed fraud under s 18, whether it is incumbent for him to plead the acts or particulars of concealment, and of the affirmative action by the defendant by which he was allegedly kept out of knowledge?

(iii) Where concealed fraud is pleaded under s 18, whether the phrase from the time when the fraud first became known to the person is to be determined on a subjective or objective basis, meaning that a person who chooses to remain indifferent to events around him cannot invoke s 18?

(iv) In an action for the tort of wrongful conversion in Sabah, whether the applicable limitation period is three years under Item 37 or six years under Item 97 of the Sabah Limitation Ordinance ?

B. Actionable Fraud, Non est Factum and Conversion

(v) Whether a plaintiff is entitled to succeed on a charge of fraud when the fraud as found by the trial Court is not the fraud as pleaded?

(vi) [Where] a plaintiff relies on the type of fraud called equitable or constructive fraud, whether it is incumbent on him to plead the particulars of this class of fraud as would be incumbent on him if he were to plead fraudulent misrepresentation or common law fraud?

(vii) Whether the tort of conversion is committed in relation to shares in a public listed company when the shares remained in the ownership of the true owner and the pledge is disclosed in the audited accounts of the company and duly acknowledged by the directors?

(viii) Whether a plaintiff who relies on the existence of fiduciary duty or any obligation under the Companies Act 1965 must assert and plead it in his statement of claim?

[2] From pleadings and evidence, the background facts to the claim which was allowed by the trial Court and affirmed by the Court of Appeal could be summarised as follows. The 2nd and 3rd respondents were founders of the 1st respondent (Kwan Chee Hang Sdn Bhd - KCH), and parents of the 4th appellant. The 4th and 5th appellants were spouses. The issued share capital of KCH was divided into 700 Class A shares and 7 million Class B shares. All 700 Class A shares, which conferred special rights to holders, were held by the 2nd and 3rd respondents in the proportion of 630:70 (note: by a special resolution of 29 August 1998, it was resolved that holders of Class B shares would have the same rights and privileges as holders of Class A shares, but on 1 October 2006, it was resolved to reinstate the Class A and Class B shares to the former position). Class B shares were issued equally to the 2nd, 3rd respondents, 4th appellant, and two other children of the 2nd and 3rd respondents, namely Michael Kwan and one Kwan Phui Ha; each held 1.4 million Class B shares.

[3] KCH wholly owned the 1st appellant (Zung Zang Wood Products Sdn Bhd) (ZZ Wood) (see para 9 of 121AR read together with para 7 of 141AR).

[4] ZZ Wood held 80% of the equity of ZZ Holdings (see 30