A licensed moneylender cannot recover funds for loans made under agreements voided by statutory violations, emphasizing public policy against illegal transactions.

Introduction

[1] This is a judgment delivered after trial.

[2] The plaintiff is a licensed moneylender.

[3] In this action, the plaintiff is seeking to recover the money lent out in the course of its business based on the doctrine of unjust enrichment instead of claiming in, contract. This is because in carrying out the moneylending transactions in this case, the plaintiff had failed to comply and, in fact, had contravened certain material provisions of the Moneylenders Act 1951 which had the effect of rendering the moneylending transactions void and unenforceable. The main issue is whether a claim based on unjust enrichment or money had and received is permitted to get around the contraventions stipulated in the .

Background Facts

[4] The plaintiff is a licensed moneylender under the Moneylenders Act 1951 and has its registered address at D3A-M (Suite B), Jalan Selaman 1, Dataran Palma, Off Jalan Ampang, 68000 Ampang, Selangor Darul Ehsan and its business address at Suite 8.02, 8th Floor (North Block), The Ampwalk 218, Jalan Ampang, 50460 Kuala Lumpur, Wilayah Persekutuan.

[5] At all material times, the defendant is and was a director and a shareholder of one Instant Bonus Development Sdn Bhd (company no 988847-P) ('Instant Bonus').

[6] Sometimes on 9 July 2018 and 24 August 2018, the plaintiff and the defendant entered into two moneylending agreements wherein the plaintiff agreed to provide loans of RM2,000,000 and RM1,500,000, respectively ('the moneylending agreements') to the defendant.

[7] Contemporaneously with the moneylending agreements, the defendant also executed two letters of undertaking on 9 July 2018 and 24 August 2018 respectively relating to the aforesaid loans ('the letters of undertaking'). The terms of the letters of undertaking include as follow:

(i) the defendant directing the plaintiff to disburse the loan sums under the moneylending agreements to Instant Bonus;

(ii) the defendant guarantees and undertakes that the loan sums are deemed as received by the defendant and that the defendant is bound by the loan sums once the same are disbursed to Instant Bonus as instructed by the defendant;

(iii) the defendant further guarantees and undertakes to be liable for all demands, losses and or damages arising from the defendant's instruction.

[8] There is no dispute that Instant Bonus had provided its guarantee for the defendant's payment obligations under the moneylending agreements.

[9] Both the plaintiff and the defendant had agreed that a sum of RM76,500 would be deducted from the loan sums towards payment of the 'transaction costs' which were to be borne by the defendant.

[10] Accordingly, and as agreed aforesaid, it is not in dispute that the plaintiff had disbursed a total sum of RM3,423,500 to Instant Bonus's Maybank account in the following tranches:

i. 11 July 2018 = RM 482,000.00

ii. 24 July 2018 = RM 1,470,000.00

iii. 27 August 2018 = RM 1,471,500.00

[11] It is also not in dispute that the defendant had paid to the plaintiff a sum of RM40,000 as repayment for the loan sums, leaving a balance outstanding of RM3,383,500, not including the interest charged.

[12] In this action, the plaintiff is seeking only the sum of RM3,383,500 from the defendant. The plaintiff's cause of action, as pleaded, is for money had and received and or unjust enrichment and not based on the moneylending agreements.

[13] It is the plaintiff's pleaded case that the defendant has been unjustly enriched by the loan sums which the defendant had received from the plaintiff. The plaintiff contends that it was never the intention for the defendant to retain the loan sums without the obligation to repay the same and that it is unjust and or unconscionable for the def