Salleh Abas FJ

The appellant is a seamstress living in Dungun, Trengganu. On January 22, 1970, she deposited a sum of $5,000 with Kow Sin Pajak Gadai (the pawnshop) of No. 58 Kuala Brang, Ulu Trengganu bearing interest at the rate of 14.4% per annum. The pawnshop was owned and run by one Mr. Choo Shin Shian, who lived in Dungun. He passed away on September 10, 1971. For the purpose of this judgment he is referred to as "the deceased". The deceased started the pawnshop business on July 1, 1957 (Exhibit P5) and held pawnbroker's licences up to December 31, 1968 to cover the business (Exhibits P3, D8 and D9). From January 1, 1969 onwards till his death the licence in respect of the business was issued to the first respondent who was the deceased's nephew. The first respondent gave no evidence at the trial but he admitted in paragraph 2 of his statement of defence that the deceased was the proprietor whilst the pawnbroker licence was issued by the authorities in his name. There is no evidence as to what part the first respondent played in respect of the pawnshop business other than that he was a mere licence holder. The deceased, however, ran the business with the assistance of the ninth respondent, who is his son. On the death of the deceased the tenth respondent, another son of the deceased who is a public accountant by profession, became the deceased's personal representative. During his lifetime the deceased financed his pawnshop business by using money deposited with the pawnshop by members of the public. He paid interest on such deposits. The rate was lower than that at which the pawnshop charged on the loan to a pawner of articles, but higher that that at which any commercial bank paid on deposits with it. The pawnshop took deposits from 41 persons in all, including the appellant. According to her evidence she gave the money to the deceased in Dungun, where the deceased lived. She did not go to the pawnshop at Kuala Brang to deposit the sum. The deceased issued a receipt for the deposit (Exhibit P2), signed by him as the treasurer and by the ninth respondent as the manager. From the date of the deposit till the death of the deceased, the appellant received interest on this deposit once from the deceased. Earlier in 1969 she had deposited a sum of $1,000 with the pawnshop under a similar arrangement, but had since then withdrawn the amount. On March 1, 1971, the appellant deposited another sum of $5,000 at 12% with another pawnshop for two months and withdrew the sum on May 2, 1971 (Exhibit D10 and D11). She knew that depositing money at the pawnshop earns interest.

After the death of the deceased the appellant asked the tenth respondent for the refund of her deposit. Having failed to obtain the restitution, she then started a civil action in Dungun Sessions Court on October 9, 1975, suing the first, ninth and tenth respondents and seven other persons. Before the trial took place the action against these seven persons were withdrawn by the appellant. The case was then fought before the Sessions Court, the High Court and before us only against the first, ninth and tenth respondents. The learned President who heard the case in the first instance took the view that the deposit transaction between the appellant and the deceased pawnbroker was a void contract because the transaction was caught by Moneylenders Ordinance, 1951. He held that the appellant was an unlicensed moneylender and the contract was illegal and as such unenforceable and she was therefore left without remedy. On appeal to the High Court, Abdul Razak J. upheld this decision and he likewise held that appellant was not entitled to the restitution because the appellant was in pari delicto as the deceased in that despite her knowledge that she had no licence to act as a moneylender at all relevant times, she did lend money to the deceased.

The first question which we have to address ourselves to is whether the deposit transaction was caught by the Moneylenders Ordin