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2016 MarsdenLR 463
HIGH COURT MALAYA IPOH
KUAN CHEE JON & ORS – Appellant
Versus
SSF CONSTRUCTION SDN BHD (ENCL 37) – Respondent
[Civil Suit No: 22NCVC-63-03/2013]
A moneylending transaction lacking necessary licensing is unenforceable, and agreements functioning as collateral are likewise void.
Headnote:The appeal concerns a fourth plaintiff's claim regarding the enforceability of a loan agreement and a sale and purchase agreement (SPA). The court determined that the unsigned loan agreement, while not formally executed, was binding due to the conduct of the parties. The court framed issues of enforceability concerning both agreements, ultimately finding the SPA served as collateral to the loan agreement and ruled the entire transaction was unenforceable due to illegal moneylending practices. The appeal was dismissed, affirming the decision of the learned Senior Assistant Registrar.
| Table of Content |
|---|
| 1. appeal on damages from lower court (Para 1 , 2 , 3) |
| 2. allegations of loan and property transactions (Para 4 , 5 , 6 , 7) |
| 3. arguments regarding loan agreement and spa enforcement (Para 8 , 9 , 10 , 11) |
| 4. defendant’s counterarguments on loan amounts and evidence (Para 12 , 13 , 14 , 15 , 16) |
| 5. court evaluation of damages and procedure for assessment (Para 17 , 18 , 19 , 20) |
| 6. understanding contracts' enforceability and collateral (Para 22 , 23 , 24 , 25) |
| 7. impact of illegal contracts and restitution (Para 26 , 27 , 28 , 29) |
| 8. clarification of spa as not merely a transaction (Para 30 , 31 , 32 , 33 , 34) |
| 9. conclusions on moneylending legality and sham agreements (Para 35 , 36 , 38 , 39) |
Introduction
[1] This is the fourth plaintiff's appeal (encl. 37) against the decision of the learned Senior Assistant Registrar ("SAR") for assessment of damages dated 2 November 2015.
[2] The cause papers for purposes of the application before the learned SAR in this appeal were as follows:
(a) the writ of summons and statement of claim dated 5 March 2013 ("encls. 1 and 2 respectively");
(b) plaintiffs' affidavit affirmed by Gan Cheng Koh (fourth plaintiff) dated 4 August 2014 ("encl. 21");
(c) defendant's affidavit in reply affirmed by Chew Chee Bor dated 19 August 2014 ("encl. 22");
(d) plaintiffs' affidavit in reply affirmed by Gan Cheng Koh (fourth plaintiff) dated 9 September 2014 ("encl. 23");
(e) defendant's affidavit in reply affirmed by Chew Chee Bor dated 30 September 2014 ("encl. 24").
[3] Encl 37 was heard by this court on 26 May 2016. After duly perusing the affidavits and the respective written submissions of the parties filed herein and upon hearing learned counsel for the plaintiffs and the defendant, encl. 37 was dismissed with cost of RM5,000 and this court affirmed the decision of the learned SAR. Aggrieved with the said decision the fourth plaintiff has now filed an appeal against the whole of the said decision with the court of Appeal.
Brief Facts
[4] The fourth plaintiff alleged that he is the nominee of the first, second and third plaintiffs, though no cogent evidence was adduced herein to substantiate the same save and except for the bare averment of the said fourth plaintiff as regards to the same. The defendant is a company registered under the Companies Act 1965 . On 7 January 2011, the first, second and third plaintiffs entered into a loan agreement ("the loan agreement") with the defendant for a sum of RM3,000,000 ("the said loan"). The fourth plaintiff alleged that as a settlement for the said loan, the defendant has agreed to "contra" to him three lots of properties ("the said properties").
[5] The fourth plaintiff alleged that to facilitate the above contra, he and the defendant had entered into a sale and purchase agreement ("SPA") dated 7 January 2011 for the said properties and the total purchase price of the sale and purchase agreement was RM6,500,000 (exh. A - encl. 21). The purported paper transaction of the said properties are as follows:
(i) RM 2,500,000.00, sebuah rumah berkembar 31/2 tingkat, Parcel No 40 Jenis TH 1A, dipegang di bawah Hakmilik Induk H.S.(D) 46211, No P.T 27424, Mukim Ampang, Daerah Hulu Langat dan Negeri Selangor Darul Ehsan dan berukuran 298 meter persegi; dan
(ii) RM 2,500,000.00, sebuah rumah berkembar 31/2 tingkat, Parcel No 50 Jenis TH 1A, dipegang di bawah Hakmilik Induk H.S.(D) 46211, No P.T 27424, Mukim Ampang, Daerah Hulu Langat dan Negeri Selangor Darul Ehsan dan berukuran 298 meter persegi; dan
(iii) RM 1,500,000.00, sebuah rumah "link" 31/2 tingkat, Parcel No 109 Jenis TH 4, dipegang di bawah Hakmilik Induk H.S.(D) 46211, No P.T 27424, Mukim Ampang, Daerah Hulu Langat dan Negeri Selangor Darul Ehsan dan berukuran 290 meter persegi.
[6] According the story of the fourth plaintiff, sometime in 2011, it came to his knowledge that the defendant had apparently sold the said properties to another party without the knowledge and consent of the fourth
