JUDGMENT

John Lee Kien How @ Mohd Johan Lee J:

(After Trial)

Introduction

[1] This lawsuit pertains to a dispute regarding stakeholder funds between a solicitor and his client, and the utilisation of stakeholder funds.

Brief Facts Of The Case

[2] Somewhere in 2011, Veheng Global Traders Sdn Bhd ("Veheng"), a company owned by Eddie Ng ("Eddie"), appointed the Plaintiff as counsel to represent them in a lawsuit against Kurnia Insurans (M) Bhd (now AM General Insurance Berhad) for insurance claims in the Shah Alam High Court Suit No: 22A NCVC-78-2011 ("Suit 78").

[3] The High Court ruled in favor of Veheng and ordered AM General Insurance Berhad to pay RM86,799,784.00 in compensation for fire insurance, along with 5% interest per year and RM1,200,000.00 in costs.

[4] A consent judgment dated 1 July 2016 ("Consent Judgment") pending appeal was entered, where Veheng would receive RM61,006,570.84 ("Stakeholder Money") within 7 working days of the Consent Judgment. This amount was to be held in trust by the Plaintiff's firm, KFEe & Co, until the appeal was resolved.

[5] However, upon request by Eddie to assist Veheng in repaying EXIM Bank to avoid a winding-up proceeding, the Plaintiff then entered into a Friendly Loan Agreement ("the FLA") dated 2 December 2016 with the Defendant (Eddie's wife). The FLA mentioned, among others:

a) a loan sum of RM2 million allegedly lent to the Defendant ("the Alleged Loan Sum") but paid to Veheng, supposedly at her request;

b) the FLA also provides for the pledging of the Defendant's bungalow house ("the said Property") as security for the alleged loan sum of RM2 million;

c) upon default of the repayment of the Alleged Loan Sum, the Defendant was to enter into a sale and purchase agreement to sell the said Property to the Plaintiff or his nominee;

d) it also provides that the sale proceeds are to be utilized to settle the redemption sum owing to the chargee bank, repay the alleged loan sum and the balance thereof to be returned to the Defendant; and

e) both the Plaintiff and Defendant agreed for the loan sum of RM2 million to be withdrawn from the Stakeholder Money.

[6] The Court of Appeal later overturned the High Court 's decision and decided in favor of AM General Insurance Berhad, requiring Veheng to return the Stakeholder Money.

[7] The Plaintiff claimed that the Defendant only returned RM1,410,000.00 from the RM2 million loan taken from the Stakeholder Money. This leaves a balance of RM590,000.00.

[8] The Plaintiff's firm then sent a demand letter on 3 June 2019 to the Defendant, demanding the repayment of the RM590,005.30 loan. Later, the Defendant's lawyer, Messrs. BB Teh, requested a copy of the FLA. The Defendant also disputed if she had ever signed it, to which the Plaintiff's firm responded by providing a copy of the FLA and questioning the Defendant's claim that she had not signed it.

[9] The Defendant had since refused to pay or comply with the FLA. Dissatisfied, the Plaintiff filed this action seeking an order for specific performance to compel the Defendant to sell and transfer the said Property to the Plaintiff or his nominees. Alternatively, the Plaintiff claimed the repayment of a loan sum of RM590,005.30.

[10] The Defendant, on the other hand, filed a counterclaim seeking the removal of the private caveat lodged by the Plaintiff against the said Property and seeking damages against the Plaintiff.

The Trial

[11] The Plaintiff had called four (4) witnesses during the trial:

(i) Mr Ee Kah Fuk ("PW1")

(ii) Mr Chong Siew Teck ("PW2")

(iii) Miss Hiew Yee Peng ("PW3")

(iv) Mr Lim Yok Chaw ("PW4")

[12] Meanwhile, five (5) witnesses were called by the Defendant to support her case during trial:

(i) Mr Lim Ming Tian ("DW1")

(ii) Mr Chua Ah Tee @ Chua Kim Mai ("DW2")

(iii) Mr Eddie Ng Boon Liong ("DW3")

(iv) Madam Lim Bee Kua ("DW4")

(v) Mr Wong Kong Yong ("DW5")

Issues To Be Determined By The Court

[13] The main triable issues agreed by both parties before the trial are as follows:

(a) whether the Defendant owes