Court rejects ex-aide’s claim to late Kedah Raja Muda’s RM11.6mil

 Alor Setar High Court rules that a survivorship clause does not override the true ownership of the funds.

Alor Setar High Court judge Johan Lee said Wan Badaruddin Che Wan Basor Ali’s claims were ‘fundamentally misconceived in law, unsupported by facts, and plagued by fatal procedural defects’. (File pic)

PETALING JAYA:

The Alor Setar High Court has ruled that RM11.6 million in a joint fixed deposit account belongs to the estate of the late Raja Muda of Kedah, rejecting his former aide’s claim that he automatically became entitled to the money as the surviving account holder.

In a decision clarifying the legal effect of joint bank accounts, Justice Johan Lee said a survivorship clause allows the surviving account holder to deal with the bank but does not automatically make that person the beneficial owner of the money.

“The plaintiff’s entire premise relies on the impermissible leap that a survivorship mandate automatically turns into beneficial entitlement. The law strictly dictates otherwise,” he said in a 46-page judgment released yesterday.

The judge explained that a survivorship clause merely governs the contractual relationship between the bank and its customers by allowing the bank to pay the surviving account holder without remaining legally liable.

“The administrative right to withdraw funds must not be conflated with an absolute proprietary right to retain them. Beneficial ownership remains governed by the contributors’ intentions and the operation of equity,” he said.

Facts of the case

The dispute centred on a joint fixed deposit account opened in 2011 in the names of the late Raja Muda, Tunku Abdul Malik Almarhum Sultan Badlishah, and his former personal aide, Wan Badaruddin Che Wan Basor Ali.

The account was funded entirely by transferring money from 26 fixed deposits belonging solely to the Raja Muda. Wan Badaruddin did not contribute any money to the account. By October 2015, the balance had grown to RM11.59 million.

After the Raja Muda died on Nov 29, 2015, competing claims emerged over the money and CIMB Bank froze the account after instructions from the Kedah royal household. The bank later refused Wan Badaruddin’s request to release the entire sum to him.

Wan Badaruddin then sued CIMB, alleging breach of contract, negligence and breach of banking secrecy. He also sued the estate’s administrator, Tunku Puteri Intan Safinaz, claiming she had wrongfully caused the account to be frozen.

Claims that cannot be sustained

Johan dismissed all of Wan Badaruddin’s claims, describing them as “fundamentally misconceived in law, unsupported by facts, and plagued by fatal procedural defects”, and allowed the estate’s counterclaim that the money formed part of the Raja Muda’s estate.

He first ruled that the negligence and banking secrecy claims were filed outside the six-year limitation period and were therefore statute-barred.

The judge also found that CIMB had acted lawfully by freezing the account after being informed of the Raja Muda’s death and the competing claims. “By freezing the joint account upon receiving official directives, the bank did not breach the contract,” he said.

On the ownership of the money, Johan held that the law presumed the funds were being held for the Raja Muda’s estate because every sen came from the Raja Muda, while Wan Badaruddin made no financial contribution.

The judge found that Wan Badaruddin failed to prove the Raja Muda intended to give him the money as a gift, describing his claims about an alleged timber business and gift as unsupported by pleadings or documentary evidence.

Ashok K Raman and Jamil Yaacob represented Wan Badaruddin. K Sathya, M Saresh, She Zen Yang and Chew Ming Yih appeared for CIMB, while Hizzri Hasshan, Dorina Abdullah and Najib Zakaria acted for the Raja Muda’s estate. - FMT