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2020 MarsdenLR 95
COURT OF APPEAL PUTRAJAYA
POWERNET INDUSTRIES SDN BHD – Appellant
Versus
GOLDEN WHEEL CREDIT SDN BHD – Respondent
[Civil Appeal No: W-04(IM)(NCC)-700-12/2019]
Waiver of compliance with Moneylenders Act provisions is impermissible; agreements failing statutory requirements remain unenforceable.
Headnote:(A) Moneylenders Act 1951 – Section 16 – Moneylending agreement to be given to the borrower – Loan agreement deemed unenforceable as a stamped copy was not delivered before loan disbursement – Waiver of statutory rights regarding agreements is impermissible under the law protecting borrowers. (Paras 63, 86)
(B) Estoppel – Estoppel cannot operate against a statutory provision designed to protect the public interest – Arguments of waiver regarding the non-compliance with Section 16 are rejected due to the inherent protection supporters of the Act provide to vulnerable borrowers. (Paras 68, 74)
Facts of the case: The plaintiff, a licensed moneylender, provided a RM500,000 loan to the defendant; however, the corresponding stamped agreement was delivered only after the loan was disbursed, contravening Section 16 of the Act.
Findings of Court: The court found that the loan agreement was unenforceable due to the breach of Section 16 – The plaintiff's plea for waiver was dismissed as being against public policy.
Issues: Whether the agreement was enforceable despite statutory non-compliance and the implications of waiver by the defendant regarding compliance with the Act.
Ratio Decidendi: The court asserted that statutory protections cannot be waived, emphasizing the legislative intent to safeguard borrowers, especially when economic pressures could coerce them into adverse agreements.
Result: Appeal allowed, and the order granting liberty to file a fresh suit was set aside.
Introduction
[1] There are 2 appeals before us, namely Civil Appeal No: W- 04(IM)(NCC)-700-12/2019 ("Appeal 700") and Civil Appeal No: W- 04(IM)(NCC)-701 -12/2019("Appeal 701"). Both appeals originated from suits that were filed in the Sessions Court. For convenience, the parties shall be referred to by the titles that were assigned to them in the Sessions Court. Thus, the appellant shall be referred to as "the defendant" and the respondent as "the plaintiff". The present appeals are directed at the decision of the High Court dated 3 December 2019. The appeals involve the same parties and similar factual background. The legal issues are common to both appeals. As such, our decision in respect of Appeal 700 will bind Appeal 701.
[2] The plaintiff is a licenced moneylender. The defendant borrowed monies from the plaintiff. The defendant made some payments and then they defaulted. The plaintiff filed an action in the Sessions Court for the recovery of monies that were lent to the defendant. The defendant alleged that the relevant moneylending agreement contravened the Moneylenders Act 1951 ("the Act"). They applied under O 18 r 19 (1) (b) and (d) of the Rules of 2012 to strike out the suit. However, the application to strike out the suit was dismissed by the Sessions Court.
[3] On appeal, the High Court allowed the defendant's appeal and struck out the suit. However, the High Court also granted liberty to the plaintiff to file a fresh suit.
[4] Although the suit was struck out by the High Court, the defendant nevertheless appeals to this Court and contends that the plaintiff should not have been granted liberty to file a fresh suit. The appeal herein is against that part of the decision of the High Court which granted liberty to the plaintiff to file a fresh suit.
[5] On 10 June 2020, we allowed Appeal 700 and Appeal 701 and set aside that part of the learned Judge's decision to grant liberty to the plaintiff to file a fresh suit. These are the reasons for our decision. The facts narrated below are derived from Appeal 700.
The Facts
[6] On 29 December 2017, the plaintiff and the defendant entered into a moneylending agreement ("the agreement") whereby the plaintiff agreed to provide a loan of RM500,000.00 to the defendant with interest at the rate of 18% per annum. The other terms of the agreement are:
a) the defendant shall repay the loan in instalments which are to be paid by the 29th of every month for 36 months beginning with the first instalment on 29 January 2018; and
b) the plaintiff shall be entitled to charge simple interest at the rate of 8% per annum on the unpaid loan together with interest that is due from the date of default in repayment until the date of payment.
[7] The loan was released to the defendant on 29 December 2017 which is the same date as the agreement. A stamped copy of the agreement was delivered to the defendant on 28 June 2018.
[8] After making some instalment payments, the defendant defaulted in the loan repayments. By a letter of demand dated 15 February 2019, the plaintiff demanded the outstanding sum of RM75,915.07 and notified the defendant that the agreement will be deemed terminated if the defendant failed to settle the said outstanding sum within 14 days from the date of the letter of demand.
[9] The defendant failed to pay the outstanding sum that was claimed in the letter of demand. According to the plaintiff, the agreement was deemed terminated on 2 March 2019 and all the unpaid instalments under the agreement became due and payable on 2 March 2019.
[10] On March 26, 2019, the plaintiff commenced the action against the defendant claiming for repayment of the sum of RM325,677.77 which was due and owing under the agreement.
[11] The stance taken by the defendant is that the plaintiff had breached various provisions of the Act. For purposes of this appeal, counsel for the defendant relied on s 16 of the Act and contended, inter alia that the agreement was in breach of s 16 of th
