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2025 MarsdenLR 6071
HIGH COURT MALAYA KUALA LUMPUR
ABDUL RAHMAN USOF & ORS – Appellant
Versus
RHB TRUSTEES BERHAD – Respondent
[Originating Summons No: WA-24NCvC-2583-07/2024]
Trustees must act in the beneficiaries' best interest, and the court can set aside ex-parte orders obtained without full disclosure.
Headnote:(A) Trust Law - Breach of fiduciary duty - The trustee, RHB Trustees Berhad, failed in its duty by agreeing to pay exorbitant 'Upgrade and Renovation Costs' totaling RM7,624,347.45 to a property agent without proper beneficiary consent - The Court ruled in favor of the Applicants, deeming that the impugned Order was intended to defraud and deplete Trust assets. (Paras 24-50)
(B) Ex-parte Orders - Proper procedures - An ex-parte order may be set aside due to a lack of full and frank disclosure by the applicant. (Paras 41-44)
Facts of the case:
This action was initiated by 65 Orang Asli beneficiaries of a trust to contest a trustee's sale terms of trust properties that included significant fees to a property agent without their consent.
Issues: Whether the trustee acted within their powers, and if the ex-parte Order should be set aside due to lack of disclosure or fiduciary breach.
Findings of Court:
The court found evidence of serious lack of probity by the trustee and ruled in favor of the applicants, granting orders to set aside the impugned Order and to ensure future sales are conducted transparently.
Ratio Decidendi: The court emphasized that while trustees have powers under the Deed of Trust, such powers are not unfettered and must always act in the best interest of beneficiaries.
Result: The impugned Order set aside; the sale of properties must proceed via public auction or tender.
| Table of Content |
|---|
| 1. trust beneficiaries' interests and trustee conduct. (Para 1 , 2 , 5 , 6 , 7 , 8 , 9 , 10 , 11) |
| 2. allegations of mismanagement and undervaluation. (Para 12 , 13 , 14 , 15 , 16 , 17 , 19 , 20 , 21 , 22) |
| 3. trustee's fiduciary duties and lack of probity. (Para 24 , 26 , 27 , 29 , 30 , 32 , 38 , 39 , 40 , 41 , 45 , 49 , 50) |
| 4. legal grounds for setting aside orders. (Para 25 , 28 , 42 , 43 , 44) |
| 5. orders for removal and sale transparency. (Para 51) |
Introduction
[1] In Malaysia, we call our aborigines "Orang Asli", which is an apt nomenclature as it means "original people". There is a long and chequered history behind this case which was filed by 65 Orang Asli who are beneficiaries of a trust. Their tribe, which is part of the Jakun Tribe, 'came into big money' about three decades ago. More facts, as are necessary for the determination of this action, shall be elucidated below.
[2] Those 65 Orang Asli commenced this action to protect their interest upon discovering that the trustee of the trust has agreed to highly abnormal terms and conditions for the sale of trust properties. The trustee is RHB Trustees Berhad, whom they have rightly named as the respondent herein.
[3] Various allegations are averred in the Applicants' supporting affidavit affirmed by the 6th plaintiff Jasni bin Amat on behalf of the applicants; the most glaring one being a proposed sale of 57 condominiums held by the trust with an absurd condition that a property agent appointed by the Respondent shall be receiving about RM7.6 million out of the sale proceeds, purportedly as "upgrade and renovation costs".
[4] After reading the cause papers and hearing submissions by both counsel, I decided that this court ought to rule in favour of the applicants/Orang Asli. My reasons for allowing the Applicants' application are as explained below.
Background Facts
[5] The 65 Applicants in this action are Orang Asli of the Jakun tribe who are beneficiaries of a trust known as the Linggiu Valley Orang Asli (Jakuns) Trust ("the Trust").
[6] There were earlier trustees appointed for the Trust but for the purpose of this case, only the conduct of the Respondent RHB Trustees Berhad is relevant. The respondent was appointed vide a court order dated 10th March 2019 to be the trustee of the Trust.
[7] The Applicants had a windfall in the 1990's when their ancestral land was acquired by the State Government of Johor and an award of RM26,000,000.00 was made by the court then.
[8] By the time the land acquisition award was affirmed after appeals, the sum received in year 2000 was more than RM38,000,000.00, including interest on the principal sum. After payment of legal fees and some initial distribution to the Orang Asli, the Trust was set up with a balance sum of RM22,000,000.00.
[9] There has been litigation over the past years involving past trustees and solicitors, creating a chequered history for the Trust. The factual matrix as to how the Trust ended up having 57 condominiums in Kuala Lumpur is irrelevant in this case. Here, it is sufficient just to mention that 53 units of those condominiums are in the development known as Lanai Gurney Corporate Suites and 4 units are within Gurney Heights, both of which are located in Mukim Setapak, Kuala Lumpur ("the 57 Condos").
[10] The respondent had failed to render statements of accounts regularly to the applicants, ignoring numerous letters sent by the applicants' solicitors, which led to the applicants filing an action against the respondent in September 2022. In that civil suit, Roz Mawar Rozain JC (as Her Ladyship then was) ordered the respondent to furnish accounts and make payments. It is unnecessary here to delve into the details of the previous civil suit, save to note that the applicants had encountered difficulties earlier in obtaining information from the respondent about the Trust accounts, etcetera.
[11] On 7th January 2025, this court issued a discovery order upon the application of the applicants to requir
