A trust arrangement requires clear intention, substantiating evidence, and credibility in claims; absence of such leads to dismissal of beneficial ownership claims.

[1] This case revolves around a dispute over 250,000 ordinary shares in Forensic Services (Malaysia) Sdn Bhd (FSM), a company providing forensic investigation services across Asia. The company is the 2nd Defendant in the Main Claim. The nature of FSM's business is forensic investigation services to insurance companies. The central question before this Court is whether these shares, issued on 26 June 2009 to the late Barry Ian Dillon (the Deceased) and his late wife Evelyn Dillon, were held on trust for the benefit of the Plaintiff (Paul Leong).

[2] Paul Leong, who is a Director and shareholder of FSM, claims beneficial ownership of these disputed shares on the basis that he paid for them with an understanding that they would be held in trust for him. According to Paul Leong, the arrangement was made to assist the Deceased in renewing his work permit in Malaysia. The Plaintiff's claim is founded on three alternative legal bases: express trust, resulting trust, and constructive trust.

[3] The 1st Defendant (Dr James Dillon), who is the son of the Deceased and the current Executor of his father's estate, firmly denies the existence of any trust arrangement. He contends that the shares belonged absolutely to his father and now form part of the Deceased's Estate to be distributed according to the Deceased's will to himself and his sister, Mardi Rachel Dillon.

[4] The dispute emerged after the Deceased's death on 19 June 2018, when attempts were made to transfer his 372,500 shares in FSM (including the disputed 250,000 shares) to his beneficiaries. Paul Leong objected to transferring the 250,000 shares, claiming they were held in trust for him. At the same time, Chow Seek Kai (Chow), who is the 2nd Defendant in the Counterclaim, declined to effect the transfer without proper resolution due to the ongoing dispute.

[5] Dr James Dillon has further brought a counterclaim against the Plaintiff and Chow, both in his capacity as the Executor of the Deceased's Estate and in his personal capacity. He alleges conspiracy to prevent the rightful transfer of the Deceased's shares to his beneficiaries and mismanagement of FSM to the detriment of the estate's interests.

[6] This dispute, with its competing narratives about ownership, trust arrangements, and corporate governance, brings into sharp focus fundamental principles of trust law, company law, and evidence. This Court sets out to determine whether the evidence adduced at full trial shows on a balance of probabilities that the contested shares were indeed subject to a trust arrangement as claimed by Paul Leong, or whether they rightfully belong to the Deceased's estate as maintained by Dr James Dillon.

Background

[7] FSM was incorporated on 4 October 1986. The Deceased, who hailed from Australia, became a shareholder on 15 September 1989 until his demise on 19 June 2018. It was an undisputed fact that the Deceased was the key person who had managed and built FSM over the years. He had a scientific background and the expertise for forensic investigation. He had relocated his family from Australia to Malaysia and had spent 30 years of his life dedicated to FSM. His wife, Evelyn Dillon (now deceased), became a shareholder of FSM in 1990.

[8] Between 1990 and 2004, FSM increased its share capital by several allotment and issuance of new shares. The chronology is as follows:

(a) Issuance of 49,998 new shares on 8 May 1990 — the Deceased and Evelyn Dillon held 24,500 shares (49% shareholding), Choo Mang Yang (Choo) held 12,750 shares (25.5% shareholding), and Chee Kim Meng (Chee) held the remaining 12,750 shares (25.5%)