The jurisdiction issues of the Sessions Court in trust matters, and the application of res judicata concerning previously adjudicated claims.

[1] This is an appeal by the appellants against the decision by the Court of Appeal that affirmed the decision of the High Court.

[2] The High Court had earlier dismissed the appellants' application for an order to strike out certain paragraphs of the 1st and 2nd respondents' ReAmended Statement of Claim under O 18 r 19 of the Rules of 2012.

[3] The central issue in this appeal is whether the Sessions Court is precluded altogether under the Subordinate Courts Act 1948 (Revised 2013) from deciding any question relating to a trust?

[4] The learned counsel for the appellants contended that the trust issue which appeared in the 1st and 2nd respondents' Re-amended Statement of Claim, had earlier been decided by the Sessions Court, and thus the 1st and 2nd respondents were estopped from raising the same issue again. It was contended that retrying of the trust issue in the action would be an abuse of the Court process by reason of estoppel and the principle of res judicata. As such, it came within the purview of O 18 r 19(1)(b) and (d) of the Rules of 2012.

[5] The 1st and 2nd respondents contended that estoppel and res judicata did not apply in this case as by virtue of s 69(e) of the Subordinate Courts Act 1948 , the Sessions Court had no jurisdiction to enforce a trust. In reply, the appellants relied on s 66 of the same Act which states that where the matter was said to be beyond the jurisdiction of the Court but was raised by way of a defence to a counterclaim by a defendant, the Sessions Court will have the competence or duty to dispose of "the whole matter in controversy" between the parties.

[6] Thus, the question of compatibility of the two sections and whether one section takes precedence over the other arises. In the result, this Court had allowed the following questions of law for determination of this appeal:

Question 1

Whether a Sessions Court is precluded under Subordinate Courts Act 1948 from adjudicating on any matter relating to a trust?

Question 2

Whether s 66 of the Subordinate Courts Act 1948 should be read as an exception to s 69 of the Subordinate Courts 1948 to enable disposal of the whole matter in controversy and to prevent truncated trials or the staying of proceedings in the Sessions Court for referral of the matter to the High Court?

Question 3

Whether the determination of the existence of a trust or otherwise by the Sessions Court as affirmed by the High Court can give rise to issue estoppel in subsequent legal proceedings where the same issue is raised?

Background Facts

[7] The appellants are the 1st and 2nd defendants in Suit MT4-22-204-2003 brought by the 1st and 2nd respondents in the Shah Alam High Court (Shah Alam High Court action). The 3rd to the 8th respondents are the 3rd and 8th defendants respectively in the same action.

[8] There are five different causes of action in the Shah Alam High Court action, brought by the 1st and 2nd respondent as the plaintiffs in various capacities. One of them is the claim by the 1st respondent that the appellants held some 13% of the shares in each of the 3rd to 8th respondent companies in trust for him (the trust issue).

[9] While the Shah Alam High Court action was still pending, the 3rd respondent's company sued the 1st respondent in the Sessions Court at Shah Alam (the Sessions Court action) to recover monies owed to it as a debt. In the Sessions Court action, the 3rd respondent's company was the plaintiff and the 1st respondent was the defendant.

[10] In the Sessions Court action, the 1st respondent raised as his defence to the claim for the debt that the present appellants held 13% of the shares in each of the 3rd and 8th respondents companies in trust for him. The 1st respondent therefore claimed that the dividends due to him f