Amendments to pleadings cannot cure fundamental jurisdictional defects identified by the opposing party, especially when made in bad faith, as per the mandatory provisions of the Moneylenders Act.

(Enclosure 8)

Introduction

[1] This is an application by the Defendants to disallow the Plaintiff's Amended Statement of Claim dated 13 March 2024 pursuant to O 20 r 4 of the Rules of Court 2012. The Defendant's application was allowed. The Plaintiff has since filed an appeal.

Background Facts

[2] The Plaintiff commenced this action on 7 February 2024 claiming RM5,200,000.00 under a Loan Agreement subject to the Moneylenders Act 1951 .

[3] The Defendants filed their Statement of Defence on 29 February 2024, highlighting several procedural defects in the Plaintiff's Statement of Claim:

a) Breach of s 16 of the Moneylenders Act 1951 - loan disbursement before delivery of stamped agreement;

b) Non-compliance with ss 21(1) and 19 - failure to annex statements of account;

c) Breach of r 79 r 1(e), (f), (k) ROC 2012 - omission of required details regarding the loan agreement

[4] On 13 March 2024, the Plaintiff filed an Amended Statement of Claim incorporating the previously omitted details.

The Law

[5] Order 20 r 4 ROC 2012 provides:

(1) Within fourteen days after service of an amended pleading, a party may apply to disallow the amendment

(2) The Court shall disallow the amendment if leave would have been refused had the amendment been sought under r 5

[6] The principles governing amendments are established in Yamaha Motor Co Ltd v. Yamaha (M) Sdn Bhd & Ors [1982] 1 MLRA 417; ; [1983] CLJ (Rep) 428. Essentially, an amendment can be allowed upon considering the following considerations:

(a) Whether the application is bona fide;

(b) Whether prejudice can be compensated by costs;

(c) Whether amendments would change the suit's character.

Analysis

[7] I find merit in the Defendants' application for these reasons:

[8] First, the amendments fundamentally alter the suit's character. The original claim lacked essential requirements under the Moneylenders Act 1951 .

[9] In the Defendants' Statement of Defence, the Defendants pleaded that the Plaintiff's procedure in filing their Statement of Claim against the Defendants is incorrect on the following grounds:

(a) The Plaintiff breached the provision under s 16 of the Money Lenders Act 1951 because the advance loan was remitted to the Defendant before the stamped copy of the Loan Agreement and/or the Loan Agreement was handed over to the Defendant;

(b) The Plaintiff breached the provisions under s 21(1) of the Money Lenders Act 1951 read together with s 19 of the Money Lenders Act 1951 wherein the Plaintiff had failed to annex any statements of account in the Plaintiff's Statement of Claim;

(c) The Plaintiff breached the provision under r 79 r 1(e), (f), (k) of the Rules of Court 2012 wherein the Plaintiff had failed to include the following details in the Statement of Claim:

i. the fact that a note or memorandum of the Loan Agreement was made and was signed by the First Defendant;

ii. the date when a copy of the note or memorandum was delivered or sent to the First Defendant; and

iii. the form in which the money was lent.

[10] The Defendants in their Statement of Defence have pleaded that since the Plaintiff had breached the provisions under the Moneylenders Act 1951 and the Rules of Court 2012, the Loan Agreement cannot be enforced under the law.

[11] To my mind, the defects raised by the Defendants goes to the root of the Plaintiff's claim. It is not merely pointing a trivial issue that was lacking in the Plaintiff's claim.

[12] The amendments proposed by the Plaintiff seek to cure these jurisdictional defects after they were exposed by the Defence. The proposed amendments will result in the Defence raised by the Defendants to be ineffective. This is because of the reformulat