1. ) Ho Yoke Kien v Chow Heng (BA-12BNCC-15-10/2024)

HO YOKE KIEN

LOH WOON PEI (NO. K/P: 840809-10-5504) (Sebagai Pentadbir Bersama harta pusaka kepada Si mati, LOH CHIEW HEOON [NO. K/P: 530905-10-6095 / 4531611]) …PERAYU-PERAYU DAN CHOW HENG (NO. K/P: 520916-10-5275) …RESPONDEN [DALAM MAHKAMAH SESYEN DI KAJANG DALAM NEGERI SELANGOR DARUL EHSAN GUAMAN SIVIL NO: BH-A52NCC-17-09/2022 ANTARA CHOW HENG (NO. K/P: 520916-10-5275) …PLAINTIF

HO YOKE KIEN

LOH WOON PEI (NO. K/P: 840809-10-5504) (Sebagai Pentadbir Bersama harta pusaka kepada Si mati, LOH CHIEW HEOON [NO. K/P: 530905-10-6095 / 4531611]) …DEFENDAN-DEFENDAN]

The Sessions Court allowed the Respondent/Plaintiff’s claim for recovery of RM200,000.00 from the Appellants/Defendants as executors of the estate of one Loh Chiew Heoon (deceased). Judgment was entered for the sum claimed with interest and costs.

The issues for determination were:

whether the RM200,000.00 was the Plaintiff’s investment in the deceased’s restaurant business or a loan given to the deceased; and

if it was a loan, whether it was caught by the Moneylenders Act 1951 as the Plaintiff was admittedly not licensed under the Act.

The Defendants appealed against the decision of the Sessions Court Judge who had found that the RM200,000.00 was an investment rather than a loan. This Court allowed the appeal because the probabilities of the case plainly militated against such a finding.

The undisputed facts of the case were as follows:

The Plaintiff had remitted RM100,000.00 to the deceased’s account on 5-11-2020 and another RM100,000.00 on 3-12-2020

Between 3-12-2020 and 3-4-2021, the deceased paid the Plaintiff RM4,000.00 every month, totalling RM20,000.00

Before he passed away on 7-5-2021, the deceased issued 2 post-dated cheques for RM100,000.00 each in favour of the Plaintiff on 3-5-2021 and 5-5-2021, but the cheques were not cashed.

The Plaintiff pleaded that he had invested RM200,000.00 in the deceased’s restaurant business called “Fei Chui Restaurant” and had asked for the RM200,000.00 back at the end of April 2021 because he needed the funds. The alleged terms agreed to by the deceased were that RM4,000.00 was payable monthly to the Plaintiff and the RM200,000.00 was repayable within 1 month upon demand (“Agreement”).

This Court recognizes that the doctrine of freedom of contract requires the Court to enforce contracts on its terms, but the commerciality or otherwise of the Agreement entered into between the Plaintiff and the deceased is relevant to the inherent probabilities of this case. Investment terms for a restaurant business that required the deceased to pay fixed monthly returns in addition to the return of capital on demand, which in this case, happened within 5 months, seemed improbable.

It is also trite that the Court looks at the substance of a transaction and not at the labels attached to them by the parties. In the absence of any other evidence, the transaction had all the features of a loan rather than an investment. In this case, there are also these other facts that the learned Sessions Court Judge either misapprehended or did not fully consider in concluding that the RM200,000.00 was an investment with monthly returns of RM4,000.00:

The Sessions Court noted that the deceased was the sole proprietor of Fei Chui Enterprise, presumably under the impression that Fei Chui Enterprise owned and operated Fei Chui Restaurant. The undisputed fact is that this business registration had expired on 5-11-2017 and according to unchallenged evidence, Fei Chui Restaurant was in fact owned and operated by Restoran Fui Chuai (Sg Chua) Sdn Bhd, a company in which the deceased was a director and shareholder. There were other stakeholders in that business.

The money transfers were made between the Plaintiff and the deceased personally through their personal accounts, and the RM200,000.00 did not translate into shares by the Plaintiff in Restoran Fui Chuai (Sg. Chua) Sdn Bhd nor were the monies shown to have otherwise been applied towards the operation of Fei Chui Restaurant. In fact, the Plaintiff testified that he had “invested” in the deceased and was not concerned what he did with the money: “NLT: En Chow, adakah anda setuju bahawa under business type dinyatakan perniagaan menjual makanan dan minuman arak? Adakah anda setuju? CH: Jadi saya melabur pada dia, dia buat restoran ke, dia buat apa ke, saya tak persoal sangat. Saya melabur pada orang dia.” “NLT: En Chow, anda menyatakan bahawa anda melabur dalam Fei Chui Restaurant, betul? CH: Jadi, itu Mr Loh ada banyak perniagaan, ada Fei Chui, ada ini, ada itu, saya pun tak tahu lah.”

Further, the learned Sessions Court Judge had also missed the point of the pleaded defence case by failing to recognize that even the Plaintiff had consistently characterized the transaction as a loan of RM200,000.00 from the Plaintiff to the deceased:

The Statement of Claim set out the material facts relied upon by the Plaintiff which was pleaded as follows: “5. Pada atau sekitar November 2020, Simati telah mengajak Plaintif untuk melabur dalam perniagaan Simati yang menjalankan perniagaan restaurant yang dikenali sebagai “Fei Chui Restaurant” di mana simati telah meminta Plaintif untuk meminjam kepada simati jumlah sebanyak RM200,000.00 (“pinjaman tersebut”) dan simati berjanji untuk membayar pulangan sebanyak RM4,000.00 setiap bulan dan Simati menjamin bahawa jumlah pinjaman tersebut akan dibayar balik dalam tempoh satu (1) bulan apabila diminta oleh Plaintif.

Bergantung kepada representasi dan jaminan simati tersebut, Plaintif telah meminjam jumlah sebanyak RM200,000.00 ke dalam akaun simati pada 5/11/2020 untuk jumlah RM100,000.00 dan seterusnya pada 3/12/2020 untuk jumlah

Setakat ini, Simati hanya membayar jumlah pulangan sebanyak RM20,000.00 kepada Plaintif sebelum simati meninggal dunia seperti berikut: - BUTIR-BUTIR Tarikh

04.01.2021

03.02.2021

03.03.2021

03.04.2021 Jumlah

Pada akhir bulan April 2021, Plaintif telah meminta simati untuk memulangkan jumlah pinjaman tersebut kerana Plaintif memerlukan duit untuk penggunaan sendiri. …”

In the Plaintiff’s own evidence, he described the purpose of the RM200,000.00 remittance to the deceased in these terms: “CH: Saya percaya kepada En Loh, kepada bisnes dia bagus, saya melabur pinjam kepada dia.”

The finding of the Sessions Court was also in similar terms: “[45] Dalam meneliti bukti-bukti dan keterangan-keterangan SD1 tersebut, Mahkamah mendapati dan berpuashati bahawa jumlah RM200,000.00 tersebut merupakan satu bentuk pinjaman atas pelaburan kepada Simati yang harus dipulangkan semula kepada Plaintif.”

The Sessions Court also found that the issuance of the post-dated cheques by the deceased was an admission that the deceased owed a debt of RM200,000.00 to the Plaintiff.

To cap off this point, Plaintiff’s counsel also described the RM200,000.00 as a loan given by the Plaintiff to the deceased in its written submissions filed in this appeal:

Based on the substantially undisputed facts of this case, the learned Sessions Court Judge ought to have concluded that the Agreement was in substance and fact a money lending agreement by which RM200,000.00 was personally loaned by the Plaintiff to the deceased with RM4,000.00 interest payable monthly and with the principal repayable on demand. If so, the presumption in section 10OA of the Moneylenders Act 1951 would apply: “Presumption as to the business of moneylending Where in any proceedings against any person, it is alleged that such person is a moneylender, the proof of a single loan at interest made by such person shall raise a presumption that such person is carrying on the business of moneylending, until the contrary is proved.”

As explained by the Federal Court in Triple Zest Trading Suppliers & Ors v Applied Business Technologies Sdn Bhd [2023] 10 CLJ 187: “[51] With due respect to the Court of Appeal, it fell into the same error as did the High Court when it found no evidence that the respondent was engaged in moneylending business, which is another way of saying that the appellants led no evidence at the trial to discharge their burden of proving that the respondent was carrying on the business of moneylending. [52] This is wrong because by the reversal of the onus of proof by s. 10OA of the MA51, the burden was not on the appellants to prove that the respondent was carrying on the business of moneylending. Rather, the burden was on the respondent to prove to the contrary that it was not carrying on the business of moneylending. … [55] The presumption under s. 10OA of the MA51 applies against the respondent as a matter of law and not “even if” it applied as implied by the Court of Appeal. It applied as a matter of law because it was alleged in the pleadings that the respondent was a moneylender. This automatically kicked in the presumption that the respondent was carrying on the business of moneylending “until the contrary is proved”. Failure to rebut the presumption must lead to a finding that the presumed fact is true. [56] To successfully rebut the presumption under s. 10OA of the MA51, the respondent must prove on the balance of probabilities that by entering into the loan agreement with the appellants, it was not engaging in an act of “lending of money at interest, with or without security, by a moneylender to a borrower’, which is the meaning ascribed to the word “moneylending” by s. 2 of the MA51.”

The statutory presumption in section 10OA above was introduced by way of an amendment to the Moneylenders Act 1951 on 15-4-2011. The learned Sessions Court Judge fell into the same error described in the passage above when she failed to recognize that the burden of proof had shifted to the Plaintiff to rebut the statutory presumption that the RM200,000.00 was remitted to the deceased as part of an unlicensed moneylending business, and no evidence was led by the Plaintiff to discharge that burden.

Consequently, section 15 of the Moneylenders Act 1951 should have applied to render the pleaded Agreement an unenforceable moneylending agreement between the Plaintiff and the deceased. Based on a preponderance of case law on this point, such an agreement would also be void under section 24 of the Contracts Act 1950 as the Court will lend no assistance to the unlicensed moneylender. The effect of any illegal transaction will result in the “loss will lie where it falls”.

Based on the appealable errors identified above, the appeal was accordingly allowed and the Judgment of the Sessions Court was set aside with costs of RM15,000.00 here and below to the Defendants. Bertarikh : 29 Julai 2025 ELAINE YAP CHIN GAIK PESURUHJAYA KEHAKIMAN MAHKAMAH TINGGI MALAYA SHAH ALAM Peguam bagi pihak Perayu-Perayu: Neo Lok Tian (bersama Seok Mae Jane) Tetuan Cheong Yee & Partners Peguam bagi pihak Untuk Responden: Tan Lee Kiat (bersama Chang