A single, informal loan does not constitute moneylending under the Moneylenders Act 1951, provided it lacks repeated transactions.

Introduction

[1] In the High Court, Applied Business Technologies Sdn Bhd (plaintiff at the High Court and respondent in Appeal 765) commenced an action against Triple Zest Trading & Suppliers Sdn Bhd, Junaidah binti Leman, Muhamad Fairuz bin Roslan and Mumtaz Syafinaz binti Roslan (the 1st, 2nd, 3rd and 4th defendants respectively at the High Court and appellants in Appeal 765) for breach of a friendly loan agreement and a "Personal Guarantee by Director".

[2] On 19 June 2020, after a full trial, the High Court had allowed the plaintiffs' claim in part in terms as follows:

(a) 1st, 2nd and 3rd defendants pay the sum of RM1,600,000.00 to the plaintiff;

(b) interest at the rate of 4% per annum on the judgment sum from the date of judgment until the date of full settlement; and

(c) cost of RM8,000.00 to be paid by the 1st, 2nd and 3rd defendants to the plaintiff and no costs to the 4th defendant.

[3] The plaintiff (appellant in Appeal 855) and the 1st, 2nd and 3rd defendants (the appellants in Appeal 765) have appealed against the decision of the High Court.

[4] The appeal by the defendants is against the decision of the High Court in allowing the plaintiffs' claim for the sum of RM1,600,000.00, cost of RM8,000.00 and interest at the rate of 8% p.a. from the date of judgment until full settlement being the sum due and owing to the plaintiff under a loan agreement.

[5] On the other hand, the plaintiff has appealed against the High Court's decision in disallowing the transfer to the plaintiff, lands described as Lot PT 9952 and Lot 9951, Pasir Panjang, Mukim Sitiawan, Daerah Manjung, Perak ("the lands") which, were used as collateral for the loan.

[6] We heard both the appeals together on 27 July 2021 and in a unanimous decision, allowed the defendants' appeal in Appeal 765 in part whereby the High Court order was set aside and substituted with an order that judgment be entered against the 1st to the 3rd defendants for the principal sum of RM800,000.00 together with interest at 4% per annum from date of judgment in the High Court to date of realisation.

[7] With regard to the plaintiffs' appeal, it was unanimously dismissed with a consequential order that the plaintiff do return the titles of the lands to the 2nd and 4th defendants within 14 days from the date of our judgment and further made no order in respect of the removal of caveat as it was a matter not pleaded and claimed by the defendants.

[8] For convenience, the parties will be referred to as they were in the High Court.

Background

[9] At the trial, the plaintiff was represented by its Chief Executive Officer ("CEO"), Faizairizal Akbar Bin Mohd Zawawee (SP1) who was the plaintiffs' sole witness.

[10] SD1 (2nd defendant) and SD2 (3rd defendant) and one Shamsuri bin Mohd Johar (SD3) gave evidence for the defence.

[11] The 2nd defendant (SD1) is the 3rd and 4th defendants' mother and the 1st defendant is a family owned company of the defendants.

[12] The plaintiff was a company involved in, amongst others, information technology. The 1st defendant was a company providing commercial services, supplier of certain petroleum products and was also involved in construction. The 2nd and 3rd defendants (SD1 & SD2) are directors in the 1st defendant.

[13] It is the case for the plaintiff that it had agreed to grant a loan to the 1st defendant amounting to RM800,000.00. SP1 stated that SD1 and SD3 had agreed as to the "agreed profits" to be given to SP1 for providing the loan. SP1 looked upon the agreement as a profitable investment for the plaintiff.

[14] According to SP1, both SD1 and SD3 had asked for a loan from the plaintiff as they desperately needed money for their business. SD1 was in