The Moneylenders Act provisions do not render genuine loans from businesspersons unlawful, enabling recovery under unjust enrichment principles.

[1] This is a suit (This Action) by two plaintiffs (Plaintiffs) who claim that they have given "friendly loans" totaling RM3,000,000.00 (Plaintiffs' Loans) to the first defendant company (1st Defendant). The 1st Defendant has resisted This Action with a whole host of defences, including an allegation that the Plaintiffs' Loans are prohibited by the Moneylenders Act 1951 ( MA ).

B. Issues

[2] The following questions, among others, arise in This Action:

(1) whether the 1st Defendant is bound by contracts in writing entered by the 1st Defendant under its common seal. This question discusses the effect of s 35(4)(a) of the Companies Act 1965 [ CA (1965)]. This case does not concern the application of the present Companies Act 2016 (which comes into force on 31 January 2017);

(2) could the Plaintiffs rely on the "Indoor Management Rule" and assume that a director of the 1st Defendant had the authority to borrow money on behalf of the 1st Defendant?;

(3) whether the Plaintiffs' Loans are unenforceable under s 15 MA . In this regard, does a rebuttable presumption that the Plaintiffs carry on a business of "moneylending" arise in this case under s 10 OA ?; and

(4) if the Plaintiffs' Loan is not enforceable under s 15 MA , whether the Plaintiffs' Loan can be recovered pursuant to-

(a) s 66 of the Contracts Act 1950 [ CA (1950)]; and/or

(b) the doctrine of unjust enrichment.

C. Plaintiffs' Case

[3] The first plaintiff (1st Plaintiff) is a director and largest shareholder of Novel Furniture Sdn Bhd (NF).

[4] The second plaintiff (2nd Plaintiff) is a director and shareholder of Eukenco Furniture Trading Sdn Bhd (EFT) and LDP Promotion Fair Sdn Bhd (LDP).

[5] The 1st Defendant, NF, EFT and LDP are in the business of manufacture, export and marketing of furniture.

[6] Mr Chew Kar Chong (Mr Chew) was a director and majority shareholder of the 1st Defendant before Mr Chew passed away on 28 July 2017. The second defendant (2nd Defendant) is the personal representative of Mr Chew's estate.

[7] Both the Plaintiffs gave evidence in This Action as follows, among others:

(1) at about August 2015, Mr Chew informed the Plaintiffs that the 1st Defendant was facing financial difficulties and Mr Chew requested on behalf of the 1st Defendant for friendly loans from the Plaintiffs to the 1st Defendant;

(2) the 1st Plaintiff lent a total of RM2,000,000.00 to the 1st Defendant (1st Plaintiff's Loan) as follows-

(a) cash of RM200,000.00 from the 1st Plaintiff's bank account; and

(b) four cheques from the 1st Plaintiff's bank account totaling RM1,800,000.00;

(3) in respect of the 1st Plaintiff's Loan-

(a) the 1st Plaintiff and 1st Defendant entered into a deed of covenant dated 22 December 2015 [DC (1st Plaintiff & 1st Defendant)]. Mr Chew and another director of the 1st Defendant, Encik Hamdan bin Yusof (Encik Hamdan) signed the DC (1st Plaintiff & 1st Defendant) on behalf of the 1st Defendant as its directors. The 1st Defendant's common seal was affixed on the DC (1st Plaintiff & 1st Defendant);

(b) the 1st Defendant gave a letter dated 22 December 2015 to the 1st Plaintiff which acknowledged the 1st Defendant's receipt of the 1st Plaintiff's Loan [1st Defendant's Letter to 1st Plaintiff (22 December 2015) ]. The 1st Defendant's Letter to 1st Plaintiff (22 December 2015) was signed by Mr Chew and Encik Hamdan as the 1st Defendant's directors. The 1st Defendant's Letter to 1st Plaintiff (22 December 2015) bore the 1st Defendant's common seal; and

(c) Mr Chew executed a personal guarantee dated 22 December 2015 to repay the 1st Plaintiff's Loan [Mr Chew's Guarantee (1st Plaintiff)];

(4) the 2nd Plaintiff lent a total of RM1,000,000.00 to the 1st Defendant (2nd Plaintiff's