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2025 MarsdenLR 1174
HIGH COURT MALAYA SHAH ALAM
ONG PAH KIAN @ KOH POH KIAN & ANOR – Appellant
Versus
KOKELAVANEI KUNJOO & ANOR – Respondent
[Suit No: BA-22NCVC-266-05/2018]
The court established that a transaction labeled as a sale and purchase can be deemed a sham if it camouflages a moneylending agreement, rendering it void under relevant laws.
Headnote:(A) Contracts Act 1950 - Section 24 - Moneylenders Act 1951 - Claim for declaration of sale and possession of property - Plaintiffs paid the purchase price but Defendant claimed documents were executed under deception for a loan - Court found SPA was a sham transaction camouflaging a moneylending agreement, thus void and unenforceable - Counterclaim by Defendant allowed. (Paras 73, 74, 78)
(B) Sale and Purchase Agreement - Genuine transaction versus sham agreement - Court emphasized the need to evaluate the true nature of the transaction despite the labels attached to documents, using the balance of probabilities standard. (Paras 39, 41)
Facts of the case:
Plaintiffs entered a Sale and Purchase Agreement with Defendant for a property, claiming full payment was made. Defendant contended she intended to secure a loan and was deceived into executing sale documents. (Paras 1, 2, 15, 30)
Findings of Court:
The transaction was determined to be a moneylending agreement disguised as a sale, thus the Plaintiffs were not entitled to the property or any claims. (Paras 70, 79)
Issues: Whether the transaction was a genuine sale or a sham agreement, and the enforceability of the moneylending agreement. (Paras 38)
Ratio Decidendi: The court ruled that the sale documents were not genuine, highlighting the inconsistencies and suspicious circumstances surrounding the transaction. (Paras 44, 58)
Result: Plaintiffs' claim dismissed; counterclaim allowed, declaring the documents void and ordering property title to be surrendered.
Introduction
[1] The Plaintiffs' case arises from an agreement entered into with the 1st Defendant to buy her house. Having fully paid for the property, the 1st Defendant failed to deliver vacant possession. They seek for a declaration to the effect that the various documents executed by the 1st Defendant giving effect to the sale of her house to them is valid and for an order that she delivers vacant possession to them.
[2] The 1st Defendant in turn, claims that she never intended to sell her property. She only wanted a loan, and had executed documents pertaining a loan. She was shocked to later discover she had executed documents relating to a sale and purchase agreement. She claims she was deceived into doing so.
Salient Facts
[3] The facts in so far as they are reflected in the documentary evidence adduced at the trial, are as follows.
[4] On 8 September 2015, the Plaintiffs and the 1st Defendant ("D1") executed a Sale and Purchase Agreement ("SPA") to sell the latter's property held under title HS(M) 8846, PT No 42, Mukim Petaling, Daerah Petaling, Selangor Darul Ehsan ("said property") for a sum of RM 150,000.00. The said property was a double storey link house bearing address No 14, Jalan PJS 4/20, Taman Medan, 46000 Petaling Jaya, Selangor. The SPA was dated a day later, on 9 September 2015.
[5] The said property is currently occupied by D1 and her son, the 2nd Defendant ("D2").
[6] Simultaneous with the execution of the SPA, D1 also signed a Trust Deed whereby the D1 acknowledged the Plaintiffs as beneficial owners and that she was a mere trustee of the property.
[7] A Power of Attorney ("PA") was also executed the same day, the Plaintiffs as her attorneys for D1 to execute and perform all acts in relation to the said property.
[8] In addition, the parties also executed an undated Memorandum of Transfer in Form 14A.
[9] The SPA, T rust Deed, PA and Form 14A were prepared by the firm of Messrs. Nurliny, Pannir Mannar & Co at the request of the Plaintiffs. Mr Pannirselvam a/l Mannar (PW1), an advocate and solicitor from the firm, attended to the documentation. He also witnessed and authenticated the signature and thumbprint of D1 on the documents.
[10] Subsequent to the execution, parties attended the office of Messrs. Nurliny, Pannir Mannar & Co on a later date to pay and collect the purchase price monies. There is a dispute as to whether it was14.9.2015 or 15 May 2015. I am of the view that the difference in dates is not significant and nothing turns on it.
[11] However, the amount paid and received by the respective parties is in serious contention. This conflict in evidence will be dealt with it in greater detail later.
[12] At the material time, the said property was charged to Hong Leong Bank Berhad. D1 signed a letter dated 8 October 2015 authorizing Messrs. Nurliny, Pannir Mannar & Co to attend to the discharge of charge of the property. The redemption sum of RM 58,400.00 was paid by the firm to Hong Leong Bank Berhad. Upon receipt of the redemption sum, the bank released the original security documents to Messrs. Nurliny, Pannir Mannar & Co on28.10.2015 for its further action. The title to the said property is currently with PW1 's firm.
[13] Clause 10 of the SPA states that "Vacant Possession of the said Property shall be delivered to the Purchaser(s) upon execution of this Agreement." Nonetheless, parties by consent agreed to a later date for delivery of vacant possession, evidenced by a letter dated14.9.2015 signed by D1, in which she promised to vacate the said property within 5 months from the date thereof. However, she failed to do so and to date, she continues to occupy the said property.
[14] In view of her refusal to vacate the said premises, the Plaintiffs instructed their solicitors to issue a Notice of Demand, which they did on 29 June 2016, giving D1 a final extension of time to vacate the said property by 28 July 2016. D1 paid no heed to the demand, hence the present suit.
The Plain
