When does one party hold a property on trust for another?
GOH JUI LEANG V TAY SING HWA  MLJU 810
- Goh Jui Leang (“Goh”) had brought an action against his previous mistress, Tay Sing Hwa (“Tay”) for a declaration that a house which had been registered in the name of Tay, was held by Tay on trust for Goh (the “House”).
- The purchase price of the House at the time of purchase was RM274,000-00.
- Tay had entered into a sale and purchase agreement for the House and had paid an earnest deposit of RM3,000-00 under the sale and purchase agreement.
- Tay’s initial plan was to obtain a bank loan to finance the purchase of the House.
- Goh however had decided to make a monetary gift of approximately RM280,000-00 to Tay to support Tay’s purchase of the House.
- Tay accordingly used the monetary gift from Goh to pay for the purchase of the House.
- The House was registered in Tay’s name in 1994.
- On or about 5 July 1994, Goh had moved into the House and cohabited with Tay in the House.
- Goh ended the extra-marital relationship with Tay approximately five (5) months after moving into the House with Tay and moved out of the House.
- Tay stayed on in the House and was fully responsible for the maintenance of the House.
- Sometime around 2007, Tay rented out the House and in 2009, put up the House for sale.
- Goh is now claiming that he owned 50% of the said property and therefore, he is entitled to 50% of the proceeds of the sale. Goh therefore claims that Tay held his 50% share on trust for Goh all the while.
- The High Court found that no presumption of trust arose after examining the facts and evidence of the surrounding circumstances and found that the RM280,000.00 that Goh gave was a gift.
- Goh appealed to the Court of Appeal.
- The House was sold for the purchase price of RM2,320,000-00 and subsequently, the ownership of the House was transferred to the new buyers.
COURT OF APPEAL DECISION – APPEAL DISMISSED!
The Court of Appeal dismissed the appeal and held as follows:
- In order to determine whether there had been a trust, the courts must determine the intention of the parties and this is done through an objective and meticulous examination of the facts and evidence surrounding the case.
- Upon the conclusion of such examination and if the court finds that the intention when giving the money [the RM280,000.00 here] was as a gift or donation, then that is the end of the matter and there shall be no room for a presumption of trust to arise.
- Therefore, in this case the Court ruled that Goh was not entitled to 50% of the proceeds of the sale of the property.