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2025 MarsdenLR 4612
HIGH COURT MALAYA KUALA LUMPUR
MOHD FARID MOHAMED SANGIDO – Appellant
Versus
ACE CREDIT (M) SDN BHD & ORS – Respondent
[Civil Suit No: WA-22NCC-547-08/2023]
The obligations under the Investment Agreement are binding and not contingent on profitability. Guarantees were enforceable despite claims of illegality in the transaction.
Headnote:(A) Contracts Act, 1950 - Section 79 - Legal principles of contract interpretation - The Court ruled that the obligations of the First Defendant under the Investment Agreement are not contingent on profitability, with specific attention to Sections 2.01 and 2.03. The claim arose from Defendants' failure to pay the agreed return on the investment made by the Plaintiff. The Court found the Defendants' contention that the investment constituted an unlawful money-lending transaction to be unsubstantiated, ruling that the Investment Agreement is valid and enforceable - The Second and Third Defendants are liable under their guarantees of the First Defendant's obligations as obligations had matured and the First Defendant was in default. The Court confirmed that the Defendants' defenses were merely attempts to evade liability for the investment returns owed. (Paras 15, 23, 41, 66, 87)
Findings of Court:
The Plaintiff's investment in the First Defendant was valid, and the promised returns must be honored despite the First Defendant being wound up. The Defendants' guarantees required them to fulfill obligations upon the First Defendant's default.
Issues: Whether Defendants' claims about the investment being an unlawful money lending arrangement hold valid under Malaysian law; whether the Defendants are indeed liable under the guarantees provided.
Ratio Decidendi: The terms of the Investment Agreement are binding and must be interpreted as per established legal principles without ambiguity. The obligation of the Defendants stands irrespective of the First Defendant’s circumstances.
Result: Judgment entered in favor of the Plaintiff for recovery of principal and returns stated in the agreement, with costs awarded to the Plaintiff.
| Table of Content |
|---|
| 1. overview of investment agreements and terms. (Para 1 , 2 , 3 , 4) |
| 2. background of the case and parties' positions. (Para 5 , 6 , 7 , 8 , 9) |
| 3. parties' contentions regarding transactions. (Para 10 , 11 , 12) |
| 4. court's analysis of issues in dispute. (Para 13 , 14 , 15 , 16) |
| 5. interpretation of contract terms and obligations. (Para 17 , 18 , 19 , 20 , 21 , 22) |
| 6. evaluation of claims under the moneylenders act. (Para 41 , 42 , 43 , 44 , 45 , 46 , 47) |
| 7. assessment of guarantee obligations. (Para 58 , 59 , 60 , 61 , 62) |
| 8. court ruling on the liabilities of defendants. (Para 74 , 75 , 76) |
| 9. defendants' counterclaim outlined. (Para 83 , 84 , 85) |
| 10. summary of court orders and final judgment. (Para 87) |
A. Introduction
[1] This is one of many cases where the Defendants have been sued concerning the Investment Agreements entered between various individuals, the First Defendant and in some cases allegedly guaranteed by the Second and Third Defendants.
B. Background Facts
[2] The Plaintiff and the First Defendant did enter into the following agreements:
[3] Material terms of the said Investment Agreements are as follows:
Section 2 .01 The Investment and No Solicitation
A. In consideration of and subject always to the Investor paving the Investment Sum to the Company in the manner as stipulated in s 2.02 below, the Company agrees to pay the Investor the Investment Target Return within fourteen (14) Business Days from December 31 during the Tenure of the Investment, subject to the terms and conditions herein contained in this Agreement.
B. For the avoidance of doubt, the Investor acknowledges and agrees that at no time did the Company solicit the Investment from the Investor and the Investor is entering into this Agreement by its own accord and willingness without any promotion or solicitation by the Company.
Section 2 .03 Returns of the Investment
A. In consideration of the Investor paying the Investment Sum, the Company hereby agreeste to pay to the Investor the Investment Redemption Sum aturity Date.
B. Where payment is due to be made pursuant to the provisions of this Agreement hereof on a day which is not Business Day, the due date for such payment shall be extended to the next following Business Day provided that if the ne)t following Business Day falls in another calendar month such payment should be effected bn the Business Day preceding the due date of such payment.
Section 4.03
The Investor further agrees, represents and warrants to, apd agrees with, the Company, as follows:
A. It is fully aware the Investment involves a substantial degree risk as the return of the Investor is very much dependent on the performance of the Company's investment;
B. It is fully aware that any projections or predictions that may have been made available to Investor are based on estimates, assumptions and forecasts which may prove to be incorrect; and no assurance is given that actual results will correspond with the results contemplated by the various projections;
C. That the Investorfinancially responsible, able to rpeet acknowledges that this Investment will be long-term and is by nature, speculative;
D. That the Investor has received and carefully read and is familiar with the terms of this Agreement, and all other documents in connection therewith, and the Investor confirms that all documents, and books pertaining to e information cohtained in this Agreement and that no written or oral representation or information that is in any way inconsistent with this Agreement and has been made or furnished to the Investor in connection with the Investment, and if so made, has not been relied upon;'
F. That the Investor is capable of bearing the high degrees of economic risks and burdens of this venture including, but not limited to, the possibility of complete loss of investment and the lack of a pubThat the Investor is financially responsible, able to rpeetThat the Investor is financially responsible, able to rpeetThat the Investo
