IN THE HIGH COURT IN MALAYA AT PENANG

[CIVIL SUIT NO: 22-259-2003]

BETWEEN

YEOH POH HONG .... PLAINTIF

AND

NG CHEUNG ON .... RESPONDENT

DECISION
Brief Facts

Defendant is a foreigner and was holding an international passport of United

Kingdom at the material time of this case. Sometime in 1994, Defendant came to

Malaysia and befriended the Plaintiff who was having two children. Their

relationship developed into the Plaintiff and Defendant living together as husband

and wife with the Plaintiff’s two children as a family and with the two children calling

the Defendant “Daddy”. Since then, Defendant had agreed to maintain and had

been maintaining the Plaintiff and her two children. Subsequently, on the request of

the Defendant, Plaintiff bore the Defendant’s child who was born on 31.5.1995.

Sometime in August 1994, after Plaintiff had conceived Defendant’s child, Defendant

promised to buy a unit of condominium as the dwelling place for Plaintiff, her two

children and the Defendant’s child to be born.

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On 10.9.1994, as promised, Defendant bought a unit of condominium known as Unit
1-12A-3, Horizon Towers, Tanjung Bungah, 11200 Pulau Pinang (hereinafter
referred to as “the Condo”). In early 1995 when the full purchase price of the Condo
had been paid, Defendant handed the original strata title of the Condo to the Plaintiff
with the affirmation and promise that he was holding the Condo for the Plaintiff for
convenience and would transfer the strate title which was registered in his name to
the Plaintiff as and when the Plaintiff so wished. Defendant in actual fact intended to
register the Condo in Plaintiffs name from the beginning but Plaintiff declined on
ground that Defendant had bought a shophouse in Butterworth which was registered
in the Plaintiff’s name at almost the same time and acquisition of two properties
under such circumstances may attract some perceived problems with the tax
authority. Hence Defendant agreed that the Condo be registered in his name for the
time being until such time that it could be transferred to the Plaintiff.

After the birth of Defendant’s child, the relationship between Defendant changed. In
or about 1999, Defendant’s trips back to Penang from overseas became less
frequent. Although there was plan to move the Plaintiff and family to Spain where
Defendant resided, it appeared that there was element of evasiveness on the
Defendant subsequently. Plaintiff was asked by the Defendant to liquidate all her
property and send all monies to him in Spain ahead of her departure to Spain.
Plaintiff had sent Defendant the money from her business, money in the bank and
her own savings and had put her Butterworth shophouse on the market. However,
after large sum of money had been remitted, Plaintiff encountered difficulty in
contacting the Defendant and when he was successfully contacted, he would
discourage the Plaintiff from going to Spain. Because of Defendant’s change in

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behaviour or attitude, Plaintiff took the Butterworth shophouse off the market. Later,

when Plaintiff requested the Defendant to transfer the Condo into her name,

Defendant refused.

Plaintiff and her 3 children are occupying the Condo and she has been paying for the

maintenance, assessment, quit rent and all outgoings including repair of the Condo.

Plaintiff therefore seeks, inter alia, a declaration that Defendant is holding the Condo

in trust for her and an order directing the Defendant to transfer the strata title to her.

Defendant in his pleadings denied that he bought the Condo for the Plaintiff but as

an investment. He admitted he is the father of the child Ng Wan Lin born of the

Plaintiff. He counterclaimed the Butterworth shophouse bought in the name of the

Plaintiff. In defence to the Counterclaim, Plaintiff averred that it was a gift to her as

well as a form of compensation to her for the cessation of her own business as

encouraged by the Defendant.

The Issues

The sole issue before this Court is whether the Defendant held the Condo in trust for

the Plaintiff.

On the counterclaim, the issue raised by the Defendant is whether there is a

resulting trust.

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Evaluation & Findings
Plaintiff’s Claim

On the day of the trial of this case on 17.5.2010, learned counsel for the Defendant
informed Court that the Defendant was absent as he is a foreigner and is in Spain.
No valid and reasonable ground was advanced for his absence.

Plaintiff was ready to proceed with the trial. This Court finds that there is absolutely
no reason to adjourn the matter especially so when this is an old case of 7 years.
Defendant was well aware of the trial date and chose not to be present for reason

best known to himself. Any adjournment would serve no purpose since there is no
assurance that Defendant would ever show up for the trial. Learned counsel for the
Defendant was trying to give reason that Defendant was scared of the Plaintiff’s
brother who was an armed robber whom Plaintiff had never been in contact since
childhood as they lived separately. This Court finds this ground for not attending
Court to be devoid of any merit as the said brother of the Plaintiff had been shot
dead by the Police since 8.2.1995 (Bundle E page 6) which is more than 15 years
ago, well before this suit was filed. This Court is saddened that learned counsel for
the Defendant would use such an uttered lame ground for the Defendant’s absence.
This case was therefore proceeded on in the absence of the Defendant.

Plaintiff herself gave evidence through her Witness Statement marked as exhibit P1.
The gist of her evidence is briefly as recapitulated in the brief fact above. She also

called her eldest daughter PW2 who testified as to the good relationship of the
children with the Defendant whom they called ‘Daddy’ and who had given them false

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hope. Both Plaintiff and PW2 had been cross-examined by learned counsel for the
Defendant extensively.

After the close of the Plaintiff’s case, Defence led no evidence and learned counsel
for the Defendant informed this Court that he would submit on a no case to answer
and at the same time elected not to adduce any evidence for the Defence.

Defence’s submission raised two issues basically that the Plaintiff’s pleadings failed
to disclose any declaration of trust in respect of the Condo and that there was no
trust created thereof. On the counterclaim, he submitted that there was resulting
trust since the Defendant had contributed substantially towards the purchase price of
the Butterworth shophouse.

I will first deal with the issue whether the Plaintiff has pleaded material facts relating
to the existence of a trust in her pleadings as contended by the learned counsel for
the Defendant. Plaintiff’s solicitor pointed out that paragraphs 4, 5 and 7 in the
Statement of Claim clearly pleaded the material facts which show that the Defendant
was holding the Condo in trust for the Plaintiff. Having perused carefully paragraphs
4, 5 and 7 read together with paragraph 11(1) of the prayers, this Court must agree
with the submission by learned counsel for the Plaintiff that substantial material facts
of the existence of a trust had been pleaded in the Statement of Claim reading
paragraphs 4, 5 and 7 accumulatively. Although paragraph 4 only talks about the
Defendant’s promise to buy the Condo as dwelling for the Plaintiff, her 2 children and
the new born to be which cannot be a trust since a trust cannot be created for future
property as submitted by the Defence, paragraph 4 cannot be read in isolation.
Indeed paragraph 4 is the prelude fact that because of that intention and promise of

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the Defendant that he set out to carry out what he had so intended and promised
and that led to the facts in paragraph 5 in the Statement of Claim that he bought the
Condo, handed over the Condo together with the original strata title to the Plaintiff
and declared that he would transfer the title to the name of the Plaintiff. Hence the
declaration of the trust in respect of the Condo is expressed not only at the time of
the acquisition of the property but also at the surrendering of the original strata title
to the Plaintiff when Defendant affirmed his declaration again that he would transfer
the strata title into the name of the Plaintiff. This pleaded fact is emphatic of the
declaration or creation of the trust. Paragraph 7 pleaded further facts that the
Defendant had given his assurance at all times that the strata title was registered in
his name for convenience and that he was holding the Condo for the Plaintiff
although the word trust is not stated. In Re Kayford [1975] 1 All ER 604, Megarry J
said:

‘It is well settled that a trust can be created without the word “trust” or

“confidence” or the like; the question is whether in substance a sufficient

intention to create a trust had been manif ested.’

Defence’s contention that there was no trust because the word ‘trust’ did not appear
is misconceived in law; see also Wan Naimah v. Wan Mohamad Nawawi [1974] 1
MLJ 41 F.C. (infra); Paul v. Constance [1977] 1 All ER 195. This Court finds no
doubt that the material facts of the existence or creation of an express trust are
pleaded and it follows that the Plaintiff had prayed for a declaration that the
Defendant is holding the Condo in trust for the Plaintiff as in paragraph 11(a) of the
Statement of Claim consistent with the cause of action pleaded. Counsel for the
Defendant desperately attempted to contend that only paragraph 11 (a) of the
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Statement of Claim carried the word ‘trust’ but he argued that this prayer is not
pleadings. No authority was tendered in support of his contention. I am perturbed
by his argument. Prayer vide paragraph 11 (a) is consistent with the preceding
paragraphs 4, 5 and 7 of the declaration of a trust. I find no valid reason to agree
with counsel for the Defendant that paragraph 11 is not the pleadings. To say so is
to ignore Order 18 of the Rules of the High Court (RHC) which governs Pleadings of
a case. The pleadings of the Plaintiff as in the Statement of Claim must state
specifically the relief or remedy which the Plaintiff claims [O. 18 r. 15(1)]. By O. 18
r. 15(2) RHC, the cause of action must arise from the facts which are the same as the
facts giving rise to a cause of action so mentioned, inter alia. The prayers are
therefore part and parcel of the pleadings without which, it cannot be said that Order
18 RHC has been complied with. Any Statement of Claim without prayers as in
paragraph 11 herein this case will be in direct breach or contravention of O. 18 r.
15(1) and (2) RHC and may be struck out as an incomplete pleading. The
submission by learned counsel for the Defendant in this aspect is against the Rules
of the High Court and ought to be rejected. I therefore make the finding that the
facts of the trust had been duly pleaded in the Plaintiff’s Statement of Claim in this
case.

On the main issue of whether the Defendant is holding the Condo in trust for the
Plaintiff, it is trite that for a trust to exist and binding, the first requirement is that, the
donor must make his intention clear or he must express himself in terms which are
sufficiently certain or imperative; see Wright v. Atkyns [1823] Turn & R 143. In Paul
v. Constance (supra), Mr. Constance held a bank account in his sole name but said
to Mrs. Paul, when referring to the account: “The money is as much yours as it is
mine’; the Court accepted this as sufficient evidence that he regarded himself as

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holding the account as trustee for himself and Mrs. Paul and accordingly she was
entitled to claim a half share from Mr. Constance’s estate. In the instant case, facts
and evidence show that Defendant was reckoned as a generous man. He treated
not only the Plaintiff well but also the Plaintiff’s 2 previous children not born of him.
He requested Plaintiff to bear his child which Plaintiff did and he was well aware of
this fact. The family did not have a dwelling house of their own at the material time.
Defendant then intended and promised to buy the Condo for the Plaintiff and family
to live in and to give this Condo to the Plaintiff. Defendant in fact wanted to buy the
Condo in the name of the Plaintiff but Plaintiff declined to register it in her name as at
about that time, the Butterworth shop house was purchased and registered in her
name. Plaintiff perceived that there might be tax problems for acquiring two
properties at almost the same time bearing in mind the total purchase price of the 2
properties amounted to RM930,000.00 (exhibit P10 and Agreed Documents in
Bundle B pages 3-10: the Sales and Purchase Agreements). Plaintiff did not want
the tax problems to stress her as she was pregnant then. For that reason the Condo
was registered in the name of the Defendant but Defendant had declared to the
Plaintiff that he would transfer the title into the name of the Plaintiff at any
subsequent time. His intention to create a trust is indeed manifest at the time of
acquisition of the property. In Wan Naimah v. Wan Mohamad Nawawi (supra) the
Federal Court had the occasion to deal with the issue of declaration of trust; His
Lordship Suffian C.J. (as he then was) said:

‘The law is that a declaration of trust may be made quite informally, provided

that the words used are clear and unequivocal. As was stated by Romilly

M.R. in Grant v Grant, words declaring a trust,

“need not be in writing.. They must be clear, unequivocal and irrevocable, but it is

not necessary to say, ‘I hold the property in trust for you,’ nor it is necessary to say,

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 ‘I hold the same for your separate use’. Any words that the donor means, at the

time he speaks, to divest himself of all beneficial interest in the property are, in my

opinion, sufficient for the purpose of creating the trust. I think that it is also

sufficient for the purpose of showing that the trust has been created, if he

afterwards states that he has so created the trust, though there was no witness

except the donee present at the time the trust was created”.’

This declaration of trust is further strengthened by the fact that upon full settlement
of the purchase price and acquiring of the strate title of the Condo a few months
later, this original strata title was handed over to the Plaintiff which shows irresistibly
that Defendant intended continuously to divest himself of the said property.
Defendant had also given assurances to the Plaintiff that though the strate title was
registered in his name for ‘convenience’, he is holding the Condo for the Plaintiff
only. This further indicates and reaffirms his continuous intention to divest himself of
any interest in the Condo. All these material facts and evidence were not rebutted or
even challenged in cross-examination. The general rule is that a failure to cross-
examine a witness on a crucial part of the case will amount to an acceptance of the
witness’s testimony: Wong Swee Chin v. P.P. [1981] 1 MLJ 212 F.C. Such basic
procedure is not confined to criminal trials but is applicable with equal force to civil
cases. This Court will therefore hold that the undisputed evidence of the Plaintiff as
to the certainty of the intention of the Defendant to declare and hold the Condo in
trust for the Plaintiff at the time of the acquisition of the Condo is a true fact on a
balance probabilities.

The other requirements for the creation of a trust is that the subject matter of the
trust must be clearly identified i.e. certainly of subject matter; see Palmer v.
Simmonds [1854] 2 Drew 221. There is no dispute that the subject matter is the

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Condo (as described above). The final requirement of a trust is that the donor shall
have identified with certainty the person who is to benefit under the trust i.e. the
certainty of objects. In Re Endacott [1959] 3 All ER 562, Lord Evershed M.R.
stated:

“No principle perhaps has greater sanction or authority behind it than the

general proposition that trust by English law ... in order to be effective, must

have ascertained or ascertainable beneficiaries.”

So long as the objects are ascertainable, it suffices to satisfy the requirement of

certainty of objects; see Re Eden [1957] 2 All ER 430 unless evidence demonstrates
beyond peradventure that it is impossible to ascertain the range of objects at the
relevant time. In the present case, the beneficiary is undoubted and undisputed ie,
the Plaintiff.

With all the elements of a trust having been established by the Plaintiff and with no
challenge by the Defendant of all the material evidence of the Plaintiff nor any
rebuttal evidence from the Defendant who had chosen not to attend the trial, this
Court is duty bound to accept the Plaintiff’s evidence as true. In Jakako Sakao v.
Ng Pek Yuen & Anor [2010] 1 CLJ 381, the Court of Appeal held, inter alia, as
follows: “Per Gopal Sri Ram FCJ:

(1) Two consequences followed when the first respondent who was fully

conversant with the facts studiously refrained from giving evidence.

Firstly, the evidence given by the appellant ought to have been

presumed to be true. The judge was under a duty to accept the

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 appellant’s evidence as true in the absence of any evidence from the

first respondent going the other way. His failure to direct himself in this

fashion thereby occasioned a serious miscarriage of justice. Secondly,

the Court ought to have drawn an adverse inference against the first

respondent on the amount of the appellant’s contribution to the purchase

price as well as the existence and the terms of the mutual understanding

or agreement that she had with the first respondent. The trial judge in

the present case ought to have held that the failure of the first

respondent to give evidence apart from discrediting her case

strengthened the appellant’s case on those vital points that lay at the

axis of the dispute between the parties ….”

On the evidence as a whole and on a balance of probabilities, this Court holds that
the Plaintiff has proved her claim against the Defendant that the Defendant is
holding the Condo in trust for the Plaintiff who is the beneficiary. Plaintiffs claim is
therefore allowed as per prayers (1) to (7) in paragraph 11 of the Statement of Claim
with costs of RM 15,000.00.

Defendant’s Counterclaim

Defendant had counterclaimed the Butterworth shophouse known as No. 1270 Jalan
Baru, Taman Emas, 13700 Prai, Penang together with the land erected thereon. He
pleaded that it was purchased under the inducement or representation of the Plaintiff
that it would be a good investment for the Defendant. Defendant pleaded further
that he had telegraph-transferred RM303,504.81 to the Plaintiff for the purchase and
for convenience, the Butterworth shophouse was registered in the name of the
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Plaintiff. He counterclaimed inter alia for a declaration that the Plaintiff is holding the
Butterworth shophouse in trust for him and for an order for sale of the said property
with the proceeds to be distributed to the Defendant according to his shares. He
also claimed for the strata title of the Condo to be returned to him which is not
relevant anymore on the finding of this Court above.

It must be expressed that pleadings are not evidence. Whatever material facts
pleaded must still be proved with cogent evidence. When the Defendant puts up his
counterclaim, the burden is on him to prove his claim. This is fundamental. He who
asserts must prove: section 101 Evidence Act 1950. Since the Defendant had
absented himself and led no evidence at all to prove his counterclaim, he had failed
in law to prove his claim. On this ground alone, Defendant’s counterclaim ought to
be dismissed with costs.

However, learned counsel for the Defendant has raised the issue of resulting trust
which he submitted to be a question of law that arose in respect of the Butterworth
shophouse since Plaintiff admitted in evidence that Defendant had paid
RM300,000.00 over towards the purchase price of RM430,000.00 while the Plaintiff
paid the balance of RM100,000.00 over. Since it is so submitted as a question of
law, I will consider this issue in line with the evidence adduced before this Court.

Several cases were cited in relation to resulting trust. I do not propose to go into
everyone of them as I find the law on resulting trust is well categorized by Lord
Browne-Wilkinson in Westdeutsche Landesbank v. Islington London Borough
Council [1996] 2 All ER 961 where His Lordship said:

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“Under existing law a resulting trust arises in two sets of circumstances:

[A] where A makes a voluntary payment to B or pays [wholly or in part] for the

purchase of property which is vested either in B alone or in the joint

names of A and B, there is a presumption that A did not intend to make

a gift to B: the money or property is held on trust for A [if he is the sole

provider of the money] or in the case of a joint purchase by A and B in

shares proportionate to their contributions. It is important to stress that

this is only a presumption, which presumption is easily rebutted either by

the counter-presumption of advancement or by direct evidence of A’s

intention to make an outright transfer: see Underbill and Hayton pp 317ff,

Vandervell v. IRC [1967] 1 All ER 1 at 8, [1967] 2 AC 291 at 312ff and Re

Vandervell’s Trusts (No.2), White v. Vandervell Trustees Ltd [1974] 1 All

ER 47 at 63ff, [1974] Ch 269 at 288ff.

[B] Where A transfers property to B on express trusts, but the trusts declared

do not exhaust the whole beneficial interest: ibid and Barclays Bank Ltd v.

Quistclose Investements Ltd [1968] 2 All ER 651, [1970] AC 567.

Both types of resulting trust are traditionally regarded as examples of trusts

giving effect to the common intention of the parties. A resulting trust is not

imposed by law against the intentions of the trustee [as is a constructive trust] but

gives effect to his presumed intention. Megarry J in Re Vandervell’s Trusts

(No. 2) suggests that a resulting trust of type [B] does not depend on

intention but operates automatically. I am not convinced that this is right. If

the settlor has expressly, or by necessary implication, abandoned any

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 beneficial interest in the trust property, there is in my view no resulting trust:

the undisposed-of equitable interest vests in the Crown as bona vacantia: see

Re West Sussex Constabulary’s Widows, Children and Benevolent (1930)

Fund Trusts [1970] 1 All ER 544, [1971] 1 Ch 1.”

Resulting trust is indeed a presumption which depends on the intention of the parties
at the time a property was acquired. As stated by Lord Browne-Wilkinson, the
presumption in the present case is that the Plaintiff is holding the Butterworth
shophouse which was a joint purchase with the Plaintiff and the Defendant
respectively contributing towards the purchase price in acquiring the said property
but that it was only registered in the name of the Plaintiff, in resulting trust in shares
proportionate to their respective contributions in the absence of any other intention of
the parties expressed or implied. Prime facie, it appears so but the pertinent fact is
that, to reiterate the words of Lord Browne-Wilkinson above-quoted. “It is important
to stress that this is only a presumption, which presumption is easily rebutted either
by the counter-presumption of advancement or by direct evidence of A’s (the
Defendant in the present case) intention to make an outright transfer.” Presumption
of resulting trust can therefore be easily rebutted by either counter-presumption of
advancement which may not be applicable in the present case since Plaintiff and
Defendant were not legally married though they lived together as husband and wife,
and by direct evidence showing that the Defendant intended an outright transfer of
the said Butterworth shophouse to the Plaintiff which is more probable in this case.

The facts leading to the purchase of the Butterworth shophouse show that after
Defendant and Plaintiff had lived together as husband and wife, Defendant had
asked the Plaintiff who was then operating her own hair saloon business to close
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down her business. Plaintiff stated in evidence that she had just started operating
her business at Desa Tanjung not too long ago and had invested a lot of money.
The Butterworth shophouse was offered by the Defendant to the Plaintiff to
reimburse her for all her efforts and monies expended in setting up her own
business. The Defendant wanted to make it worthwhile for the Plaintiff to walk away
from her business to become a full time housewife to him and to accompany him
wherever he travelled to. Plaintiff acceded and relinquished her own business.
Defendant and Plaintiff then bought the said shophouse and registered it in the sole
name of the Plaintiff. The Defendant’s intention as expressed to the Plaintiff was to
compensate her. This material part of Plaintiff’s evidence was also not challenged in
cross-examination nor was there any evidence to show the intention of the
Defendant to the contrary. Hence, this Court will accept Plaintiff’s evidence as a
proven fact and holds that on this undisputed fact with the expressed intention of the
Defendant to buy the shophouse to compensate the Plaintiff, there is no resulting
trust in favour of the Defendant.

In addition, there is also absolutely no evidence to show any conduct of the

Defendant which may suggest or which a reasonable inference can be drawn that
the Defendant intended the Plaintiff to hold the Butterworth shophouse in trust for
him or that they were joint owners. All along until the acquisition of the Butterworth
shophouse and even thereafter, Defendant had been deeply in love with the Plaintiff.
Bundle B pages 18-25 are letters from Defendant to the Plaintiff confessing his
love for Plaintiff forever. They lived together as husband and wife. Defendant had
been maintaining the Plaintiff well and her 2 earlier children as well who called the
Defendant ‘Daddy’. Plaintiff was asked by Defendant to bear his child resulting in
the birth of their daughter, Ng Wan Lin and they had been living together like a

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happy family. All these facts coupled with the fact that Plaintiff was encouraged to

give up her own business for which the Defendant would reimburse her with the

purchase of the Butterworth shophouse for her, indicate on a balance of

probabilities, that the registration of the Plaintiffs sole name as sole proprietor of the

Butterworth shophouse was an outright gift or transfer to the Plaintiff. This Court

finds on the evidence as whole that there is no presumption of a resulting trust in

respect of this property. Even arguably that if resulting trust were to arise, the

presumption has been totally rebutted by the unchallenged evidence of the Plaintiff

as illustrated above. Defendant’s counterclaim relying in this presumption must still

fail.

Consequently, Defendant’s counterclaim is dismissed with costs of RM10,000.00.

Dated: 31 MAY 2010.

(CHEW SOO HO)

JUDICIAL COMMISSIONER
HIGH COURT
PENANG

For the plaintiff - Petra Onn; M/s Yuslinov Ahmad & Petra Oon
For the respondent - Saw Lip Khai; M/s Chooi, Saw & Lim

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Case(s) referred to:
Re Kayford [1975] All ER 604

Wan Naimah v. Wan Mohamad Nawawai [1974] 1 MLJ 41 FC

Paul v. Constance [1977] 1 All ER 195

Wright v. Atkyns [1823] Turn & R 143

Wong Swee Chin v. PP [1981] 1 MLJ 212 FC

Palmer v. Simmonds [1854] 2 Drew 221
Re Endacott [1959] 2 All ER 562

Takako Sakao v. Ng Pek Yuen & Anor [2010] 1 CLJ 381

Westdeutsche Landesbank v. Islington London Borough Council [1996] 2
All ER 961

Legislation referred to:

Rules of the High Court (RHC), Order 18 r. 15

Evidence Act 1950, s. 101

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