DALAM MAHKAMAH RAYUAN MALAYSIA
RAYUAN SIVIL NO. S-01(IM)-87-2009 & S-01(IM)-101-09
DATUK MUSA AMAN DATUK K.Y. MUSTAFA DATUK UJANG SULANI KUDAT TOWN BOARD
1st APPELLANT 2nd APPELLANT 3rd APPELLANT 4th APPELLANT
TAN SRI CHONG KAH KIAT
(SUING AS CHAIRMAN OF KUDAT THEAN
HOU CHARITABLE FOUNDATION) …. RESPONDENT
(In the matter of Suit No. K-22-19 of 2009 in the High Court and Sarawak at Kota Kinabalu)
Tan Sri Chong Kah Kiat
(Suing As Chairman Of Kudat …. Plaintiff
Thean Hou Charitable Foundation)
Datuk Musa Aman …. 1st Defendant
Datuk K.Y. Mustafa .. 2nd Defendant
Datuk Ujang Sulani .. 3rd Defendant
Kudat Town Board .. 4th Defendant
CORAM: RAUS SHARIF, HMR
ABDULL HAMID BIN EMBONG, HMR SULONG MATJERAIE, HMR
JUDGMENT OF THE COURT
1. Two appeals S.01(IM)-87-09 and S-01-(IM)-87-2009 were simultaneously heard by us. Both turn on the same issue i.e. to determine the question of whether the respondent who is suing as chairman of the Kudat Thean Hou Charitable Foundation has a legal standing to maintain this action. The respondent (plaintiff below) filed a writ action against the for appellants (defendants below) seeking for a declaration that an earlier approval given to the respondent was valid and thus cannot be withdrawn. The approval was in respect of building a statue of a deity and was given by the fourth respondent, the Kudat Town Board.
2. When trial commenced, the appellants filed an application under 0.33 r.2 RHC to determine a preliminary issue namely whether the respondent being an unregistered society and/or an unlawful body has the locus standi to maintain this action.
3. It was not in dispute that the Kudat Thean Hou Charitable Foundation (the Foundation) which the respondent represented in his capacity as Chairman in this action, is not a registered society or otherwise a legal body duly incorporated.
4. The appellants took the stand that the respondent has no locus standi since the Foundation itself is an unlawful society. The
respondent’s stand now is that it is actually a private trust body and thus capable of maintaining this action.
5. The High Court found that the question of whether the Foundation is a private trust or a purported society is both a question of law and fact which can only be determined at the end of the trial after mature consideration of the evidence adduced at the trial. The learned judicial commissioner found that 0.33 RHC is an “unsuitable” path since evidence to determine the locus standi of the respondent cannot be produced at this preliminary stage. The appellants’ application was consequently dismissed without actually giving an answer to the preliminary question raised by the appellants.
6. In our view this sole issue of locus standi of the respondent to maintain the action does not involve the substantive merits of the case and need not be determined at the end of a full trial.
7. If the appellants succeeds in showing this lack of legal capacity of the respondent then the matter ends there without the need of a full blown trial, thus meeting the purpose of 0.33 RHC.
8. 0.33 r.2 RHC states –
“ The court may order any question or issue arising in a cause or matter, whether of fact or law or partly of fact and partly of law, and whether raised by the pleadings or otherwise, to be tried before, at or after the trial of the
cause or matter, and may give directions as to the manner in which the question or issue shall be stated. ”
9. The respondent had in fact conceded that if this issue of locus standi is determined in favour of the appellants there would be no necessity of a trial. This issue is thus a threshold issue that needs determination as a prelude to the trial itself.
10. The question of one’s locus standi to maintain an action has been held in ALOR JANGGOS SOON SENG TRADING SDN. BHD & ORS v SEY HOE SDN BHD & ORS (1995)1 MLJ 241 to be a question suitable for disposal under 0.33 r.2 RHC. (see also TAN CHING CHOONG & ORS v EKABINA SDN BHD & ORS (2002) 5 MLJ 657.)
11. The appellants argument that the respondent has no locus standi is two-pronged. First, it was contended that the Foundation is not a registered body. Second, that by virtue of the Societies Act 1966, the Foundation is deemed an unlawful society.
12. The respondent took the stand that the preliminary question posed would not finally dispose of the substantive matter. Secondly, it was contended by Raja Aziz Addruse, learned counsel for the respondent that since all the facts were not yet before the trial court, it was proper for this preliminary issue be reserved until all the evidence are unveiled. A passage from
RICHARD v NAUM (1967) 1 QB 620 was read to us in support of this proposition. It says –
” If this issue were determined as a preliminary issue, the preliminary point might go to the House of Lords. They might say: ‘You must get the facts before we decide the law.’ Rather than put the parties to all that expense (and, I may add, delay), I think we should have the facts ascertained in the trial court before the difficult and important point of law is decided.”
Learned counsel submitted that this appellate court should thus not interfere unless it found that the trial judge was plainly wrong in not deciding on this preliminary issue. He concluded that the learned judicial commissioner had not wrongly exercised her discretion.
13. It may again be noted that, and this is not disputed, the Foundation was never incorporated or registered. The Foundation’s application to incorporate its trustees under the provisions of the Sabah Trustees (Incorporation) Ordinance.(cap. 148) was disallowed (more of this later). If incorporated it would certainly have the capacity to sue. S.2 of that Ordinance states that trustees to any body or association, once incorporated, becomes a body corporate and have the power to sue and be sued in its corporate name.
14. The respondent has since changed its stance when this application was argued in the court below. It now states that is was established as a private trust, with Tan Sri Chong Kah Kiat as its Chairman. But its pleadings show that this is not the position taken by the respondent when filing this action. The respondent had initially pleaded that it was a Foundation and/or a society. And surely it is trite that a party in any civil action is bound by its pleadings. That aside, it can be seen from the documentary evidence in the form of the Trust Deed (Exbt. CKK 1) that there are 7 trustees to the so called private trust. Yet those 7 trustees were not named as the plaintiffs in the action. Only Tan Sri Chong Kah Kiat is named the plaintiff as Chairman of the Foundation. The other feature which nullifies the argument that the Foundation is a private trust is the question of certainty of its subject, a legal requirement for creating a valid private trust. It is not disputed that no property or rights had been settled for the purposes of the Foundation. A basic prerequisite of a valid trust is thus missing in this instance. A private trust invariably deals with property already in hand, not one in the future. Thus, this uncertainty. In other words, in the absence of any subject vested onto the trustees the Foundation is merely a charity. So how could the Foundation be said to be a validly constituted private trust when there had not been settled in the trustees any subject? In YEONG AH CHEE v LEE CHONG HAAI & ANOR (1994) 2 MLJ 614 the Supreme Court had held that –
” An incompletely constituted trust is one in which the trust properly has not been finally and completely vested in the trustee. ”
Similarly, in METRAMAC CORPORATION S.B. v FAWZIAH HOLDINGS SDN BHD (2007) 5 MLJ 501 the Federal Court ruled that” Further, due to the uncertainty of what projects and works should come under the purported trust there is therefore uncertainty in the subject matter of the trust. “
15. Dato’ Mohd Shafee Abdullah of counsel for the appellants also submitted that the trustees had run foul of s.39(2) of the Trustees Act 1949 by naming 7 trustees in the Trust Deed. The law limits the number of trustees in a private trust to 4. We agree that the legal limit here has been contravened.
16. It was also argued by the appellant that the naming of 7 trustees shows that the intention was to establish a society not a private trust. The respondent had replied that these 7 persons “were merely exercising their fundamental liberty to form an association and propagate the Taoist religion guaranteed under the Federal Constitution”. This seems to confirm the appellants’ argument. As a society which is not registered, it cannot therefore have any locus standi to pursue this action. S.4 of the Societies Act 1966 makes the Foundation an unlawful society since it was not registered.
17. Another feature which negates the supposition that the Foundation is a private trust, is the absence of any definite object i.e. ” a somebody in whose favour the court can decree performance ” (see MORICE v BISHOP OF DURHAM (180313) AII ER 451). Thus, again one of the essential perquisites of a valid trust ( i.e. certainty of words, of subject, of object) is missing. In this Trust Deed, the Foundation, characterised as a ‘charitable foundation’ does not in its purposes, appear to target any single person. Conversely it purports “to create and establish a non profit religious trust body to promote the act of charity amongst devotees of the Deity Thean Hou” It seemingly intended to be a charitable trust as its own name depicts, although here too, and for the same reasons already stated above, it would be invalidly created as such an entity.
18. In its attempt to have itself incorporated, the Foundation made an application under Section 2 of Cap.148 to the public trustee i.e Amanah Raya Berhad (Cawangan Sabah), who in turn referred the application to the State Attorney General (SAG) for advice. The SAG proferred the following advice which we now quote from its letter dated 30.10.2008. It says –
” 2. Jabatan kami berpendapat bahawa permohonan berkenaan tidak teratur atas sebab-sebab berikut :-
(a) It should be noted that the Trustees (Incorporation) Ordinance is to incorporate the trustees appointed by any established body or
association of persons as a corporate body and the said Ordinance is not for the purpose of incorporating that body or association of persons as a corporate body. It seems the trust deed is used to create “The Kudat Thean Hou Charitable Foundation” and registered it as “The Registered Trustees of the Kudat Thean Hou Charitable Foundation” under the said Ordinance. This is against the intention of the said Ordinance. ”
This resulted in the application for its incorporation being rejected (see letter of Amanah Raya dated 26.2.2009).
19. There is thus clear evidence that the trustees were never incorporated as required under s.2 of Cap. 148.
20. In this appeal, the facts which no longer are hypothetical are not in dispute. The situation as shown in the quote from RICHARD v NAUM (supra) is thus not applicable to this case. What we need to determine is whether this is a fit and proper case for invoking 0.33 r. 2 RHC for a speedy and expeditious disposal of this matter. As we see it, what is left for our determination now is purely a well defined question of law viz the locus standi of the respondent to pursue this action. We need to reiterate that, the respondent here is suing by his name as Chairman of the Kudat Thean Hou Charitable Foundation. The said Foundation, as we found it, is neither a registered society nor an incorporated private trust as is now alleged. The
trustees too were never incorporated as required under Cap. 148. We therefore hold that it has no locus standi to maintain its action and to allow it to stand would be an abuse of the court’s process. We disagree with the learned judicial commissioner that the matter needs to go for full trial to further establish the facts. The facts are clearly there. What is left is for a finding on the law so that advantage can be taken of the rules that provide for decisive litigation in a manner that would save time and money. This aptly is such a case.
21. For these reasons, the appeals were allowed with costs. Both suits K 22-19-2008 and K 25-31-2007 are struck out with costs.
Dated: 13 November, 2009
DATO’ ABDULL HAMID EMBONG Judge Court of Appeal Malaysia
Counsel for the Appellants
Dato’ Mohd. Shafee Abdullah (En. Richard Barnes and En. Hassan Hj. Murtaza with him)
(Solicitors: Tetuan Shelly Yap)
Counsel for the Respondents
YM Raja Aziz Addruse (Hj. Ansari Abdullah and Erveana Ansari with him)
(Solicitors: Tetuan Ansari & Co.)