A licensed moneylender's demand for payment computed in breach of the Moneylenders Act disentitles the moneylender to an order for sale of the charged property.

Su Tiang Joo J:

(Enclosures 1 And 5)

A licensed moneylender's demand for an amount computed in breach of the statutory formula prescribed by s 17 of the Moneylenders Act 1951 (Revised 1989) amounts to a cause to the contrary so as to disentitle the moneylender to an order for sale of the property charged to the moneylender as security.

Introduction

[1] In seeking to enforce a third party charge over a piece of property, the plaintiff, a licensed moneylender, applied (Encl 1) for an order for sale of the property alleging that the defendant / third party chargor, has failed to comply with its statutory demand for payment. The defendant applied to strike out the application (Encl 5). asserting that it has raised a novel point which has not been decided before, namely that, the plaintiff's computation of the amount owing is in breach of the Moneylenders Act 1951 (Revised 1989) ("MLA 1951") and this amounts to cause to the contrary as to disentitle the plaintiff to an order for sale.

[2] After hearing parties, this Court found that the statutory demand made in Form 16D pursuant to s 254(1) of the National Land Code (" NLC ") was in contravention of s 17(1) of the MLA 1951 and, that this amounts to cause to the contrary pursuant to s 256(3) of the , and had dismissed the application (Encl 1) with costs and with liberty to the plaintiff to apply afresh premised upon the computation of the amount owing in accordance with the MLA 1951. Upon the dismissal of Encl 1, the defendant withdrew Encl 5 and it was struck out. Dissatisfied, the plaintiff has appealed, and these are the full grounds of judgment.

Parties

[3] The plaintiff is a licensed moneylender under the MLA 1951.

[4] The defendant is a private limited company with a company registration number No Syarikat: 198901009519 (186820-M).

Background Facts

[5] The plaintiff has given a loan (the "said Loan") to a private company, Best Birdsnest Sdn Bhd ("Principal Borrower").

[6] The terms of the said Loan are contained in a moneylending agreement carrying the title Schedule K Moneylenders Act 1951 Moneylenders (Control and Licensing) Regulations 2003 [Subregulation 10(1)] Moneylending Agreement (Secured Loan) made on 13 July 2021 (Encl 2 pp 11 to 18) (the "said MLA").

[7] The material terms set out in the First Schedule to the said MLA (Encl 2 p 15) are:

(i) The principal sum of the loan is RM24,500,000.00 (the "Principal Sum");

(ii) Interest rate is at ten per centum (10%) per annum;

(iii) Duration of repayment of the loan is 5 months from the date of disbursement of the Principal Sum, which was 16 July 2021 (Encl 2 para 6);

(iv) Repayment is to be via only one [single] instalment; and

(v) The Principal Sum and the total accrued interest or any balance thereof shall be repaid in full immediately UPON EXPIRY OF THE DURATION OF REPAYMENT and shall be repaid together with any charges that may be outstanding on the account.

[8] Clause 2 of the MLA (Encl 2 p 11) provides that:

"(1) If default is made in the repayment upon the due date of any sum of instalment payable to the Lender under this Agreement, whether in respect of principal or interest, the Lender shall be entitled to charge simple interest on the unpaid sum of instalment which shall be calculated at the rate of eight per centum per annum from day to day from the date of default in repayment of the sum of instalment until that sum of instalment is paid, and any interest so charged shall not be reckoned for the purposes of this Agreement as part of the interest charged in respect of the loan.

(2) The interest shall be calculated in accordance with the following formula:

R = 8/100 x D/365 x S

where

R represents sum of interest to be paid.

D represents the number of days in default.

S represents the sum of monthly instalment which is overdue."

[9] One of the securities given for the said Loan is that the defendant has given a third party first legal charge under Presentation of Charge No PDSC 15537/2022 (the "said Charge") over its land