KUALA LUMPUR (Nov 13): The High Court has dismissed a bid to remove court-appointed administrators overseeing the RM1.6 billion inheritance belonging to the late Lim Siew Kim, daughter of the Genting founder.
High Court judge Mahazan Mat Taib dismissed Siew Kim's son Marcus Chan Jau Chwen's application, as he failed to establish sufficient grounds for the removal of Datuk Satharuban Sivasubramaniam and Khoo Siew Kiat as joint administrators, or administrators pendente lite (APLs), of the disputed inheritance.
"The APLs were appointed precisely because the estate was the subject of substantial disputes between interested parties. The court must be careful not to allow the objective of appointing an independent administrator to be defeated merely because one beneficiary has lost confidence in them.
"Loss of confidence may be relevant where it is founded upon established facts demonstrating misconduct, a disabling conflict, and inability to administer the estate or other circumstances rendering continued appointment detrimental to the estate.
"However, subjective dissatisfaction, personal disagreement, or repeated opposition to administrative decisions is not by itself sufficient," she said in an hour-long, detailed judgement on Friday.
She said that Satharuban, who is a practising lawyer, and Khoo from Deloitte Malaysia will continue to hold office per the Nov 27, 2023, court order.
The judge, however, stressed that the dismissal of Marcus' application cannot be taken as a blanket approval for every expenditure or transactions made by the APLs.
"Their obligation to account for estate assets, comply with the terms of the appointment order, and submit to the examination of costs and remuneration remain unaffected," Mahazan said.
On Friday, the court also ordered RM30,000 to be paid to the administrators.
Marcus, who is the only son of Siew Kim and a 30% beneficiary of the residuary estate, had sought the removal of both administrators, as he alleges misconduct and non-compliance with the court order in the appointment of the administrators.
Marcus has indicated that he will be appealing Friday's decision.
APLs don't need court approval for 'every payment or administrative decision'
Among the highlights of Mahazan's decision on Friday are that the APLs do not need court approval for "every payment or administrative decision" or before acting on every power accorded to them by the court.
The judge said the phrasing of the appointment order showed that the APLs had the responsibility of exercising their independent professional judgement in the administration and preservation of the estate, "while retaining the court's supervisory jurisdiction to address matters involving uncertainty" or matters requiring court intervention.
"[The appointment order gives] the APLs the liberty to approach the court for further orders or directions where appropriate or necessary. They do not expressly impose a mandatory obligation to seek prior judicial approval before exercising every power already conferred upon them," she said.
Judge: Legal fees not necessarily for executor's and APLs' private benefit
Further, Marcus had contended that lawyer fees for executors and trustees of the will, Malcolm Fernandez and Chan Mei Yi in the ongoing main trial, were not for the estate's benefit.
About RM1.7 million of the estate's funds had been paid to Messrs Cecil Abraham & Partners and Arvinder Gill for their services.
Mahazan disagreed.
She said the legal fees incurred by the executors in the ongoing case do not necessarily mean that it was solely for the executors' private benefit.
She added that Marcus had failed to establish that the payment constituted deliberate misappropriation, dishonest diversion, or such a serious and established breach of administrative duty as to require the removal of the APLs.
"There is a recognised distinction between expenses incurred for purely personal purposes and proper testamentary expenses incurred in connection with the execution, preservation, or administration of an estate.
"Whether particular expenses ultimately qualify for payment or reimbursement from estate funds depends upon their nature, purpose, legal basis, and the circumstances in which they were incurred," she said.
Marcus had also contended that payments were made to one of the administrators' solicitors at Thangaraj & Associates.
Mahazan said the appointment of lawyers to represent the APLs in itself cannot be regarded as misconduct.
"The APLs are entitled to obtain appropriate professional assistance in the performance of their lawful administrative functions, subject to the applicable rules governing the payment and recovery of such expenses," she said.
Contention over completion of tomb has to be seen within context
Marcus had also complained that the appointed APLs failed to make timely payments for the construction and completion of Siew Kim's tomb.
Highlighting the APLs' explanation over the contractual agreements with funeral service provider Xiao En, Mahazan said that outstanding payment or a period of delay does not equal dereliction of duty.
"The circumstances must be considered in the light of the contractual arrangements, the timing of payment obligations, the availability of estate funds, and the steps taken by the administrators," she said.
Lawyers Goik Kenwayne and Foong Kar Yee appeared for Marcus on Friday while lawyer B Thangaraj appeared for the APLs. Tan Sri Cecil Abraham appeared for Fernandez.
Marcus' application is part of the larger ongoing court case over the inheritance.
His sisters Chan T'Shiao Li and Chan T'Shiao Miin filed a probate suit in 2023, naming Marcus and three others as defendants. The main trial is slated to resume in January next year.
Siew Kim, who is the Genting Group of Companies founder Tan Sri Lim Goh Tong's third child, passed away due to cancer in July 2022. She was 73 years old.