PUTRAJAYA: The Court of Appeal has overturned a High Court ruling in favour of a businessman seeking to recover 238,096 shares in Semenyih Jaya Sdn Bhd from his nephew, holding that the transfer was valid and the claim was undermined by a lengthy delay.
The court also ruled that the uncle, Lau Kok Loon (@ Lau Say Siok), should not be granted relief even if the shares were held in trust for him, as the arrangement was intended to shield assets from creditors.
Justice Ravinthran Paramaguru, who chaired a three-member bench, delivered the 34-page judgment allowing Low Yee Meng’s appeal against the High Court decision in favour of Lau.
The bench, which also comprised Justices Faizah Jamaludin and Ahmad Shahrir Salleh, ordered Lau to pay RM120,000 in costs for the appeal and High Court proceedings.
The dispute concerned 238,096 shares, representing about 48% of Semenyih Jaya’s equity, registered in Low’s name.
Lau claimed that he transferred the shares to Low in 1995 without intending to give him beneficial ownership or receiving payment. He said the arrangement was made to prevent the shares from falling into the hands of creditors amid bankruptcy proceedings.
The High Court ruled that Low held the shares on a resulting trust for Lau, finding that the transfer had not prejudiced a bank creditor and that denying Lau recovery would give Low an undue windfall.
However, the Court of Appeal found that a trust deed executed in 1990 expressly stated that the shares were held for Low’s benefit. It said the transfer was completed in 1995 and the absence of consideration did not invalidate the trust.
Ravinthran also noted that the uncle waited about 25 years before filing his suit in 2020, after the nephew initiated legal action over more than RM10 million allegedly withdrawn from the company’s bank account.
The timing suggested that Lau’s claim was retaliatory and defensive, the judge said.
He added that the arrangement was intended to circumvent bankruptcy law and warned that granting relief could encourage debtors to conceal assets instead of meeting their obligations to creditors.
Ambiga Sreenevasan, Shireen Selvaratnam, Ivanpal Singh Grewal, Derrick Chan, Brandon Toh and Edward Lee appeared for Low. Porres Royan, Alex Tan and Cheah Kha Mun represented Lau.