Tan Bak Lee v Chen Siew Lee & Ors [2025] MLJU 3567
Have you ever placed assets or company shares under the name of your spouse or family member out of trust? Many people do this believing that personal relationships are sufficient protection. However, in the eyes of the law, trust without clear written documentation is fragile and difficult to defend once a dispute arises.
In this case, a husband claimed that 10% of the company shares registered in his wife’s name since 1994 were in fact held on trust for him. The wife, on the other hand, maintained that the shares were a gift made during the marriage. When the shares were sold to a third party, the husband attempted to stop the sale on the basis that a trust existed.
The High Court dismissed the claim. The court held that there was no clear evidence of an intention to create a trust at the time the shares were registered. The allegation of a trust was only raised many years later, after the marriage had broken down. The court also applied the principle of presumption of advancement, where a transfer of assets by a husband to a wife is presumed to be a gift unless proven otherwise.
The court further referred to the company’s articles of constitution, which did not recognise shareholdings held on trust, in line with Section 101 of the Companies Act 2016, under which a company recognises only its registered shareholders. Issues relating to matrimonial assets under Section 76 of the Law Reform (Marriage and Divorce) Act 1976 could not be used to support a claim of trust in the absence of evidence.
In conclusion, without clear trust documentation, shares registered in another person’s name remain the property of that person. In law, trust alone is not enough.
Lesson learned:
If something matters to your future, do not wait until relationships break down to ask legal questions. More often than not, the best protection is put in place when everything is still good — not when it is already too late.
