JUDGMENT

Choong Yeow Choy J:

Introduction

[1] To a lay observer, the present dispute may appear to present a scenario where the borrower not only retains the benefit of the loan but also seeks to profit from it, a situation akin to having the cake, eating it, and being paid for doing so.

[2] However, public perception or appearances notwithstanding, this court is duty-bound to determine the present appeal strictly in accordance with the applicable legal framework, namely, the Moneylenders Act 1951, if applicable, and the relevant case law authorities.

The Core Issues

[3] The essential issues for consideration in this appeal are:

(a) Whether the appellant/plaintiff is entitled to recover the loan that she had given to the respondents/defendants;

(b) Whether the respondents/defendants are entitled to recover a sum of money that they have paid thus far as interest on the said loan from the appellant/plaintiff; and

(c) These questions turn on the issue of whether the Moneylenders Act 1951 applies to the present appeal.

The Decision Of The Sessions court

[4] The Sessions court dismissed both the appellant/plaintiff's claim for the recovery of the money lent and the respondents/defendants' counterclaim for the recovery of interest already paid.

[5] It is against the above decisions that the parties have appealed and cross-appealed to this court.

[6] The parties are referred to as they were in the Sessions court. Pertinent Factual Background.

[7] Save for the difference in the figure of the interests paid (a difference of RM1,000.00), the following are the salient undisputed facts.

[8] In or around May 2015, at the request of the 2nd defendant and based on his oral representation and warranty that he would guarantee the repayment of the loan amount, including interest and costs, in the event of default by the 1st defendant, the plaintiff lent a sum of RM200,000.00 to the 1st defendant. The loan was subject to the following material terms and conditions:

(a) The loan sum was to be repaid in full within one (1) year from the date of disbursement;

(b) The 1st defendant was to pay interest to the plaintiff at the rate of 6% per annum on the loan amount, or alternatively RM1,000.00 per month, commencing one month after the disbursement of the loan and continuing until full repayment.

[9] There was no formal written loan agreement between the plaintiff and the 1st defendant. The loan was extended based on mutual trust between the plaintiff and the 2nd defendant, who, at the material time, was in a personal relationship.

[10] The loan sum was disbursed to the 1st defendant on or about 15 May 2015.

[11] At the plaintiff's request, and on 15 July 2015, the 2nd defendant sent an email to the plaintiff to record the terms of the agreement between the parties.

[12] The 1st defendant commenced partial payment of the agreed monthly interest of RM1,000.00 on 5 August 2015.

[13] However, the 1st defendant breached the agreement by failing to repay the principal loan sum of RM200,000.00 and the outstanding accrued interest to the plaintiff within the stipulated time.

[14] At the request of the 2nd defendant, both in his personal capacity and as a director of the 1st defendant, the plaintiff granted several extensions of time for the repayment of the principal sum and the accrued overdue interest.

[15] As noted, the plaintiff contended that the total interest paid amounted to RM93,000.00, whereas the defendants claimed that the amount paid was RM94,000.00.

The Respective Contentions

[16] In the Sessions court, the plaintiff's primary position was that the transaction constituted a friendly loan between the parties, and therefore, the Moneylenders Act 1951 was not applicable.

[17] Alternatively, the plaintiff argued that if the loan was to be declared void, s 66 of the Contracts Act 1950 would apply, thereby entitling the plaintiff to a refund of RM103,000.00, being the principal sum of RM200,000.00 less the RM93,000.00 already repaid.

[18] The plaintiff raised the following grou