The court found the trust deed to be a sham and imposed a constructive trust, allowing recovery of funds to the plaintiffs.

[1] This is an appeal by the appellants (the plaintiffs before the High Court) against the decision by the High Court at Kuala Lumpur which dismissed the plaintiffs' claim against each of the respondents (the defendants before the High Court). The learned High Court Judge found that the plaintiffs have failed to prove their case against each of the respondents on a balance of probabilities.

[2] We heard the appeal on 4 August 2015 and to a continued hearing on 1 September 2015. Upon hearing the oral submissions of the counsel and having read their written submissions and the relevant Appeal Records, we reserved our judgment to be delivered on a date to be fixed. This is our decision.

[3] For convenience, we will refer to the parties as how they were referred to at the High Court.

The Parties

[4] The 1st defendant is the wife of the 2nd defendant. The 2nd defendant is an advocate and solicitor and a consultant to the 3rd defendant. The 3rd defendant is a firm of advocates and solicitors ("the firm"). The 4th defendant is an advocate and solicitor and a partner in the firm. The firm represented Lim Pang Cheong @ George Lim in the Kuala Lumpur High Court Suit No: S-22-1180-2007 ("the 2007 suit"). The 5th defendant acted as a trustee for Lim Pang Cheong @ George Lim ("George Lim") under a deed of trust dated 28 February 2011 ("trust deed").

[5] The plaintiffs' claim against all the defendants was for the return of the sum of RM35,087,135.06, or alternatively against the 1st, 3rd and 4th defendants for the return of the sum of RM15,500.00, RM11,750,000.00 and RM3,500,000.00 respectively, as well as other incidental reliefs.

The Facts in Brief

[6] George Lim obtained a judgment against the plaintiffs in the 2007 suit at the Kuala Lumpur High Court for the sum of RM23,413,034.65 with interest at 8% per anum until full payment on 29 November 2009. At the time the High Court delivered its decision, George Lim was already a bankrupt. The plaintiffs lodged an appeal of the 2007 suit to this Court.

[7] As a condition of an interim stay of execution, the judgment sum together with accrued interest amounting to RM34,989.978.47 was deposited with a stakeholder, Messrs Zul Rafique & Partners. The High Court later refused a stay of execution at the hearing of the stay application made by the plaintiffs. The plaintiffs, however, obtained an interim ex parte stay at the Court of Appeal.

[8] On 28 February 2011, the Court of Appeal at the inter partes hearing however dismissed the plaintiffs' stay application. Subsequent to that, the judgment sum held by the stakeholders including the accrued interest in all amounting to RM35,087,135.06 was released to the solicitor of George Lim, the firm. The monies were paid into the firm's client's account with RHB Bank.

[9] At or about the same time with the release of the money by the stakeholder, the 3rd defendant had prepared the trust deed. It is to be noted that the trust deed bears the same date (28 February 2011) as the date the Court of Appeal refused the stay and the monies paid to the 3rd defendant as stakeholder for George Lim. Under this trust deed, the 5th defendant purportedly acts as a trustee for George Lim for the released judgment sum.

[10] On 7 July 2011 this Court allowed the plaintiffs' appeal against the High Court decision in the 2007 suit, and set aside the High Court judgment. Consequently, this Court ordered the restitution of the judgment sum to the plaintiffs.

[11] Between the date of the release of the judgment sum to the firm by the stakeholder and the date this Court allowed the plaintiffs' appeal, various related event