Court of Appeal revives suit over Han Chiang School land

PUTRAJAYA: The Court of Appeal has ruled that trustees of charitable trusts may sue to protect trust property without first obtaining the attorney-general’s consent, reviving a lawsuit over a 12.5ha plot of land on which Penang’s Han Chiang School is located.

A three-member bench led by Justice Wong Kian Kheong allowed an appeal by Lim Boon Lin, the sole surviving trustee of the Han Chiang trust, to set aside a High Court decision that had struck out his suit.

Justices Ahmad Kamal Shahid and Radzi Abdul Hamid also heard the appeal.

The dispute concerns land placed under a charitable trust through a 1948 indenture, established to create and operate Han Chiang School. The land has since been used for Han Chiang Secondary School and Han Chiang Primary School.

The Penang Han Chiang Associated Chinese Schools Association (PHCACSA) was incorporated in 1965 to manage the schools and promote educational activities linked to the institution.

Lim, the grandson of the trust’s original benefactor and nephew of its settlor, became a trustee in 2001. He later became the sole surviving trustee after the other trustees either died or retired.

The conflict began when PHCACSA pursued plans to expand educational activities on the trust land, including the proposed RM50 million Han Chiang Education City (HCEC) project, which envisaged facilities for tertiary education.

Lim objected to the proposal, arguing that the trust deed only permitted the operation of Chinese schools and did not authorise the establishment of a university or college on the land.

He also claimed that development plans were submitted and approvals obtained without his consent as trustee, raising concerns about compliance with the trust’s purposes.

The dispute escalated during the construction of a new Block C building for the primary school. Although Lim initially signed the building plans, he later withdrew his approval after failing to obtain assurances that the building would be used exclusively for primary school purposes.

Lim subsequently alleged that revised plans were submitted to the Penang City Council without his signature and that the defendants wrongly represented themselves as owners of the trust land when seeking planning approvals.

In 2023, Lim filed a suit against PHCACSA, its former chairman Tan Kok Ping, current chairman Ooi Soo Hing, architectural firm Alm Architects, and the city council, alleging breaches of trust, misrepresentation, and other statutory wrongdoing connected to the Education City project.

However, the High Court struck out the action in 2024 and dismissed an injunction application, holding that Lim was required to first obtain written consent from the attorney-general under Section 9 of the Government Proceedings Act 1956.

The Court of Appeal disagreed, holding that trustees occupy a special legal position because they are responsible for protecting and enforcing the trust.

It said Section 9’s requirement for the attorney-general’s consent applies to interested persons who are not trustees and, therefore, did not prevent Lim from bringing the action.

In his 91-page judgment, Wong said a full trial is necessary, among others, to determine whether the trust deed permits tertiary education facilities and whether the defendants breached the trust.

The bench issued an interlocutory injunction to restrain PHCACSA, Tan and Ooi from submitting any application or building plans to the city council with regard to the HCEC project.

It also ordered for the case to proceed expeditiously, noting the public importance of the trust and Lim’s advanced age.

Lawyers Robert Lazar, Jeyasingam Balasingam and Kiranjeet Kaur Baldeep Singh appeared for Lim.

K Kirubakaran, Ong Yu Shin, Loh Yeow Khoon, Lim Wooi Ying and Phuah Wen Jian acted for PHCACSA, Tan and Ooi, while Chen Wooi Teong and Ooi Zie Yiong represented Alm Architects.