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2021 MarsdenLR 131
HIGH COURT MALAYA MUAR
TAY ENG TIAN & ANOR – Appellant
Versus
KOH KOH KIAN – Respondent
[Civil Suit No: JB-22NCVC-24-07/2020]
The illegality of a money lending agreement does not automatically invalidate a related claim for a sale and purchase of property; a full examination at trial is necessary.
Headnote:(A) Rules of Court 2012 – Order 18 Rule 19 – Application to strike out writ of summons and statement of claim based on allegations of illegal money lending – Court ruled that claim is not obviously unsustainable and should proceed to trial – Doctrine of illegality does not preclude the claim for sale and purchase of property where established lending practices were in question. (Paras 5, 17, 50)
(B) Doctrine of Ex Turpi Causa – The principle that no action arises from an illegal act can be argued, but the claim must be examined in context, particularly where the illegality does not pertain to the core of the claim. (Paras 18-49)
(C) Approbate and Reprobate – A party cannot argue one position to gain advantage and later seek to deny the same. (Paras 41-46)
Facts of the case: Plaintiffs alleged illegal money lending by Defendant relating to a sale and purchase agreement dated June 12, 2015. The Defendant claimed the action must fail due to the illegal nature of the loan agreement.
Findings of Court: Application to strike out the action was dismissed as the actions presented do not constitute an obviously unsustainable claim.
Issues: Whether the allegations of illegality preclude the plaintiffs from pursuing their claims and the implications of the doctrine of ex turpi causa.
Ratio Decidendi: The Court emphasized that the illegality must not directly invalidate the claim and that public policy considerations warrant a full examination of the claims at trial.
Result: Application dismissed with costs.
JUDGMENT
Introduction
[1] This is an application to strike out the Writ of Summons and the Statement of Claim pursuant to O 18 r 19(1)(a) Rules of 2012. No affidavits were filed by virtue of O 18 r 19(2).
[2] The prayers sought for pursuant to Enclosure 7 are as follows:
i. The writ action is to be struck out.
ii. The Plaintiffs is not given liberty to file afresh.
iii. The Plaintiffs are to bear the cost of this application.
[3] The reason for the applications are as follows:
i. According to the Statement of Claim:
a. The Defendant is "an illegal money lender who charge a high interest rate".
b. The Defendant offers to give a loan of RM64,000-00 to the 1st Plaintiff "on the condition that the said property is to be used as a collateral".
c. On 12 June 2015 the Plaintiffs signed an agreement and "the agreement is actually an agreement for money lending without licence which is disguised as a Sale and Purchase Agreement of the said property".
d. "after that the 1st Plaintiff paid the interest sum of RM3,900-00 for the 1st month and subsequently RM3,900-00 for the interest of 2nd month.
ii. Since the writ action is based on the allegation of an illegal action which the Plaintiffs are involved this Court cannot assist the Plaintiffs.
iii. This writ of summons and the statement of claim must be struck out.
[4] The Writ of Summons and the Statement of Claim seeks for the following reliefs / Orders:
(a) A Declaration that the Sale and Purchase Agreement dated 12 June 2015 and the Form 14A in respect of the property that is held under the Title HS(D) 26617, PTB 11989, Bandar Maharani, District of Muar, State of Johore ("the said property") is null, void and of no legal effect.
(b) Alternatively, a declaration that the Sale and Purchase Agreement dated 12 June 2015 and the Form 14A in respect of the property that is held under the Title HS(D) 26617, PTB 11989, Bandar Maharani, District of Muar, State of Johore ("the said property") has lapsed and expired on 11 September 2017.
(c) A Declaration that the Redemption in respect of the said property by the Defendant from Public Bank Berhad is null and void.
(d) A Declaration that the Defendant has no right whatsoever to make any transfer of Title to the Defendant in person or to any other party.
(e) A Declaration that the deposit of RM64,000-00 paid by the Defendant is forfeited to the Plaintiffs.
(f) A Declaration that any payment by the Defendant to Public Bank is to be forfeited to the Plaintiffs and the Defendant is not entitle to demand any payment from the Plaintiffs or the Public Bank Berhad.
(g) The Defendant, must within 7 days from the Date of the Court Order, surrender or caused to be surrendered or direct the Defendant's solicitors to surrender all original Document of Title, Charges, redemption of Charges of the said property to the Plaintiffs' solicitors.
(h) Private caveat with the presentation number 14999/2015 on the said Property and / or any other caveat entered by the Defendant or a representative of the Defendant on the said property.
(i) The Registrar or the Land Administrator and / or the Land and Mineral Office, is to remove and / or cancel any caveat entered pursuant to the Presentation Number 14999/2015 entered by the Defendant or his representative on the said property.
(j) Further, if the Defendant has effected a Transfer of Title of the said property, a Declaration that the said Transfer of Title is null, void and invalid and the said property is to be registered and / or transfer back to the Plaintiffs.
(k) The Registrar of Land Title / District or State Land Administrator and / or Director of Land and Mineral, Johore to execute and enter all relevant entries and / or any necessary memorial to give effect and enforce all the terms and conditions of the Court's Order.
(l) The Defendant is to pay the Plaintiffs late charges at the rate of 6% per annum on a daily calculation basis on the amount RM585,000-00 for the period 12 September 2015 until the date th
