Azmel J (now FCJ)::

[1] In this case the plaintiffs’ claim against the defendants are for breach of trust, breach of fiduciary duty and fraud.

[2] The brief facts are as follows. The plaintiffs are members of ‘Persatuan Kheng Chew’ (‘society’). At the material time the first and second defendants were trustees for the society. The third and fourth defendants were the Vice President of the Society. The fifth defendant was the treasurer of the society whilst the sixth defendant was the assistant treasurer. The seventh defendant was the Secretary of the society, the eighth defendant was the assistant education officer whilst the ninth defendant was the Social Relation’s Officer of the society. The tenth to the fourteenth defendants were the members of the Executive Committee of the society.

[3] The society intended to build a temple. In order to achieve this purpose, the society applied and was alienated with a piece of land known as HS(D) 10427 Lot 3 Mukim dan Bandar Kuala Lumpur (the 10427 land) comprising an area of 33,079 sq ft. However, during the commencement of the construction of the temple, the society faced certain difficulties, namely:

(a) it was difficult to carry out works because of the gradient of the

10427 land;

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(b) access to the site was only from the main road where the traffic was

heavy;

(c) the piling for the foundation caused some earth movements and there

were concerns for the safety of the neighbouring houses; and

(d) Tan Sri Lim Goh Tong (‘Tan Sri’), the owner of a neighbouring land

requested the society to reconsider the building of the temple on the

10427 land as it would affect the security of his house.

[4] Tan Sri’s land is situated at Lot 50 section 94A. He offered to exchange 2.08 acres of land known as Mukim Grant no 67 Lot 42 Mukim Kuala Lumpur (Lot 42) with the 10427 land. The total area of Lot 42 was 4.8 acres. It was registered in the name of Kien Huat Realty Sdn Bhd (‘Kien Huat’) of which Tan Sri is a shareholder and director.

[5] Tan Sri wanted the exchange to be done in a certain manner. Lot 42 was to be subdivided so that a separate title would be issued for the part of the land to be used for the temple. On 1 July 1979, the Executive Committee of the society (the members of the Executive Committee at the material time) had authorized the second defendant and Tan Koon Swan (‘DW1 ’) to discuss the matter with Tan Sri.

[6] The society, through the second defendant and Tan Koon Swan, agreed to exchange the land based on the following reasons:

(a) the members of the society were impatient to have the temple;

(b) the area of Lot 42 to be given by Tan Sri upon which the temple was to

be built was greater than the 10427 land;

(c) Lot 42 is a freehold land whereas 10427 land is leasehold; and

(d) Lot 42 is away from the main road, with easy access and much easier to

construct the temple.

[7] The agreement for the exchange of land was documented by a deed of gift dated 6 December 1979 executed by Kien Huat and the society. The land had to be converted and sub-divided. Accordingly Kien Huat applied for conversion of land use and sub-division of Lot 42. The application was approved and RM503,138 was to be paid as additional premium for the sub-division and conversion of land use of Lot 42. A drainage fee of RM24,600 was also to be paid to the authorities.

[8] The society was to have only 2.8 acres of Lot 42. In addition the society had to bear the cost of conversion and the drainage fee. Kien Huat suggested to the society that if they wanted the remaining part of Lot 42 they would [*38] have to pay an additional amount of RM400,000 in the form of a donation to Yayasan Lim (a charitable foundation set up by Tan Sri) thus making a total payment of RM927,198 for the society to get the whole of Lot 42.

[9] But the society could not, at that relevant time, raise that amount of money. The money that the society