Mahmood Bin Ooyub v LI Chee Loong (J-02(NCVC)(W)-463-03/2018 Didengar Bersama J-02(NCVC)(W)-1603-08/2018 Didengar Bersama J-02(NCVC)(W)-2049-10/2018)

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TETUAN WOON WEE YUEN & PARTNERS) ... RESPONDEN-RESPONDEN GUAMAN SIVIL NO.: JA-22NCVC-2-01/2017 … PLAINTIF 3 of 88

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TETUAN WOON WEE YUEN & PARTNERS) ..DEFENDAN-DEFENDAN] [DALAM MAHKAMAH TINGGI DI JOHOR BAHRU DALAM NEGERI JOHOR DARUL TAKZIM, MALAYSIA SAMAN PEMULA NO.: JA-24NCVC-220-04/2016

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SEMUA ORANG YANG MENDUDUKI DI ATAS Geran 338205, Lot 77232 (dahulu dikenali sebagai HS(D) 172500, PTD 88401) dalam Mukim Plentong, Daerah Johor Bahru, Negeri Johor De Ngan ke Lua SAN Se Anuar 228 meter persegi dengan satu unit rumah teres 4 of 88 satu tingkat setengah dan dikenali sebagai No.37, Jalan Molek 3/9, Taman Molek,81100, Johor Bahru, Johor (“Hartanah tersebut”) … DEFENDAN-DEFENDAN]

PUSHPAVALLI A/P D SUPPIAH

RAJESWARI A/P SUPPIAH

S. RAMAN A/L SUPPAIAH (NO. K/P: 650523-01-5629) … PERAYU-PERAYU

5 of 88 2. TETUAN WOON WEE YUEN & PARTNERS) ... RESPONDEN-RESPONDEN

PUSHPAVALLI A/P D SUPPIAH

RAJESWARI A/P SUPPIAH

S. RAMAN A/L SUPPAIAH (NO. K/P: 650523-01-5629) … PLAINTIFF-PLAINTIF

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TETUAN WOON WEE YUEN & PARTNERS) ... DEFENDAN-DEFENDAN] 6 of 88 CORAM: KAMARDIN BIN HASHIM, JCA SURAYA BINTI OTHMAN, JCA LEE SWEE SENG, JCA JUDGMENT OF THE COURT [1] It is not always easy to discern and distinguish the real from the fake, the genuine from the sham. It is often a world of genuine imitation that we find ourselves to be in. It is no different in the seedy world of illegal moneylending or “along” as is our local parlance for it. Human nature being what it is, we are not far from the days of The Merchant of Venice, where Shylock demanded his pound of flesh! If at all, the subterfuge and chicanery have become more sophisticated. [2] Granted there would be those cases where the transactions are genuine as reflected in the documents and then one party tries to resile from it and alleges it is illegal moneylending. Then on the opposite side would be cases where the moneylending transaction is dressed like an innocuous sale and purchase transaction where it is argued that the Court should not go beyond its four walls for otherwise no transaction would be certain. [3] The Court would always, in cases of this nature, have to tread cautiously where one side alleges a clandestine operation camouflaged as a conveyance of property and the other cries foul! The Court would look for suspicious circumstances or unusual features that tend to lend support to the colourable actions. The task is made more difficult because 7 of 88 more often than not, the one perpetrating the pernicious act would have covered his tracks leaving no trace of illegal moneylending. [4] We had earlier allowed the request of all the appellants to have the 3 appeals heard together and with that the Court was able to see the whole big picture and to detect the uncanny similarities in the modus operandi deployed. It is a case where the differences lie in their similarities to each other as we shall explore, not to mention also where the similarities lie in their differences! Proceedings in the High Court [5] The first appeal involved the “purchaser” claiming for specific performance of the relevant sale and purchase agreement (“SPA”), the removal of the caveat lodged and damages arising therefrom. The “vendor” counterclaimed for the transaction is a sham and an illegal moneylending transaction that is null and void and unenforceable and a return of the title. [6] In the other 2 appeals the “vendor(s)” prayed for a declaration that the transaction is a sham and an illegal moneylending transaction that is null and void and unenforceable and a return of the title and further a cancellation or entry in the title of the “purchaser” as the registered owner with respect to their respective properties. [7] The “purchaser” in turn claimed for vacant possession because the same “purchaser” is already the registered owner of the property in question as in the second appeal or damages from loss of use of the 8 of 88 property as in the third appeal and in both for the removal of the caveat lodged by the plaintiff(s) and damages to be assessed. [8] The High Court in all the 3 cases had found for the “purchaser”, having being convinced that the documents are consistent with a straight forward sale and purchase transaction and that the “vendor(s)” had not proved the illegal moneylending transaction. [9] The “vendors” have all appealed to this Court from the respective decisions of the High Court and the parties shall be referred to as they were in the High Court as plaintiff(s) and defendant(s) or sometimes for clarity and to avoid confusion, by their names. Civil Appeal J-02(NCVC)(W)-463-03/2018 (“Appeal 463”) Mahmood Bin Ooyub v Li Chee Loong (“Mahmood’s Appeal”) [10] The defendant Mahmood, a retiree, was already 69 years old, when he was persuaded by an acquaintance one Luqmannur Hakim (“Luqman”) to enter into a business venture. They started a partnership duly registered as Syarikat Kristal Biru Enterprise. What happened subsequently was anything but crystal blue! [11] Like all businesses, some funds were needed of about RM250,000.00 and Luqman introduced him to one Ponytail Lee as the man was so introduced. He could lend the money needed for capital but needed the title to the property owned by the defendant. The defendant has to his name a piece of property in a single storey bungalow of about 5,400 square feet sitting on Geran 45482 Lot 14296 Mukim Bandar Johor Bahru, Daerah Johor Bahru, Johor (“the Property”). 9 of 88 [12] The defendant was initially reluctant for that was the only property he has which is the abode for his wife and him in their old age. He relented after Ponytail Lee brought him to the law office of Messrs Woon Wee Yuen & Partners. Ponytail assured the defendant that the title was merely needed as a security to ensure the repayment of the loan. He was then asked to sign a blank and undated SPA. [13] Upon signing the SPA, the defendant was given a bank draft of RM250,000.00 from one Puan Fauziah (PW 1) who was a lawyer in the law office. Ponytail Lee was present in attendance at the law office throughout the execution of the relevant documents culminating in the handing over of the bank draft to the defendant on 12.5.2014 at the law office. [14] The defendant also parted with his original issue document of title to the Property to the lawyer from the law office of Messrs Woon Wee Yuen and Partners. Little did he realise that he would not see his title again and that he would have to sue for its return. [15] One unusual feature of the transaction is that the plaintiff and the defendant had never met each other until the trial at the Johor Bahru High Court! [16] The lawyer Puan Fauziah PW 1 narrated in her testimony that the relevant documents to effect the transfer including the Form 14A were signed four days later on 16.5.2014. 10 of 88 [17] The defendant understood that as a borrower he must make repayments of the loan on time and so upon instruction from Ponytail he made the following repayments to the accounts as directed:

(a) on 16.5.2014, 17.5.2014 and 18.5.2014 a sum of RM5,000.00 each totalling RM15,000.00 was banked into the Public Bank account number 4-5588194-27 belonging to LAM AH WAH. The 3 bank-in slips were marked as Exhibit D17 at page 265 of Rekod Rayuan RR Vol 2.

(b) on 19.5. 2014 another sum of RM15,500.00 was banked into the same Public Bank account in the name of LAM AH WAH (number 4-5588194-27). The bank-in slip was marked as Exhibit D18 at page 266 of RR Vol 2.

(c) on 17.6.2014, 25.7.2014, 15.8.2014 and 29.9.2014 amounts of RM12,800.00, RM13,500.00, RM12,500.00 and RM5,000.00 respectively were banked into the account of one MAWAR CONSTRUCTIONS in Maybank with the account number 551258507311. The 4 bank-in slips were marked as Exhibit D14 (a), (b) and (c) at pages 267 - 269 of RR Vol 2. [18] Puan Salwa Laila (DW 1) gave evidence that the Maybank bank-in slips for the account of Mawar Constructions were genuine. Learned counsel for the defendant said that upon strenuous objection from the plaintiff's solicitors, the owner of the account was not revealed in Court. One wonders why the strenuous objection unless the evidence would be detrimental to the plaintiff. If the owner of the account is totally unrelated 11 of 88 to the plaintiff, Ponytail Lee or Lam Ah Wah, then the rationale for resisting disclosure is not there. [19] In total, the defendant had re-paid an amount of RM74,300.00 to the above accounts of LAM AH WAH and MAWAR CONSTRUCTIONS. It was not for the defendant to ask why he should be making repayment into these accounts as directed because as a borrower he must know his position not to be difficult. Looking back, it must be the outworking of the proverb observed by Solomon of old that the rich rule over the poor and the debtor is a slave to the creditor! [20] After having objected vigorously to the identity of the owner of Mawar Construction being revealed by the bank officer DW 1, it appears quite hollow for the plaintiff to now submit that there is no connection between the plaintiff and Mawar Constructions to say that the payments were for the interest charged. [21] We are more disturbed by the question as to why a borrower like the defendant would want to make unrelated payments at all to Lam Ah Wah and Mawar Constructions unless he had been directed to by the said Ponytail Lee. [22] Even assuming that there would be people doing that it would be a strange coincidence for the same name of Lam Ah Wah’s account to surface again in another case pleaded by the defendant and for which evidence was led. [23] The defendant pleaded in his Defence and Counterclaim in paragraphs 9(a), (d) and 11(b) thereof, the identical accounts which 12 of 88 another borrower was directed to make payments in Civil Suit No. 22NCvC - 138 - 08/2015 in the Johor Bahru High Court which was reported in Ngai Fong Lan (P) & Anor v Li Chee Loong [2018] MLJU 1518, a decision of Dr Choo Kah Sing J holding that the sale and purchase transaction was a sham and which decision was affirmed by the Court of Appeal. [24] The probability of that happening can be likened to being struck by lightning on 2 separate occasions at the same place in the same month and still survived! [25] The Book of Odds by Amram Shapiro, Louise Firth Campbell and Rosalind Wright, published by William Morrow, in a study done in the United States at page 455 recorded that only 1 in 1,101,000 people is struck by lightning in a year and one can imagine the odds being multiplied manifold when one talks of being struck twice in the same place and the same month! [26] After all there are just millions of names and the sheer impossibility of 2 different borrowers banking in the interest payments to the name of the same account holder with the same account number and bank! For that to happen can be likened to a typist hammering away blindfolded and randomly at a keyboard and out came Martin Luther Jr’s speech on “I have a dream”! The sheer impossibility of it is only too obvious to state. [27] The learned Judge there in Ngai Fong Lan (P) & Anor v Li Chee Loong (supra) had stated as follows: 13 of 88 “[4] The plaintiffs are husband (2nd plaintiff/PW1) and wife (1st plaintiff/PW2). They are in their early 60s’ and late 50s’ respectively. The plaintiffs averred that in October 2014, the 2nd plaintiff borrowed a sum of RM40,000.00 (hereinafter ‘the borrowed sum’) from a person by the name of Kelvin who the plaintiffs asserted was an illegitimate money lender. [5] The plaintiffs averred that the 2nd plaintiff in actual fact received cash of only RM33,900.00 out of the borrowed sum from Kelvin. The 2nd plaintiff explained that a sum of RM6,100.00 was deducted from the borrowed sum for (i) three months chargeable interest at the rate of 3% per month calculated based on the borrowed sum (RM40,000.00 x 3% = RM1,200.00 x 3 months = RM3,600.00), and (ii) stamp duty of RM2,500.00. The borrowed sum was paid through several convoluted transactions as instructed by Kelvin, the 2nd plaintiff averred. [6] In addition to the above, the plaintiffs averred that they were required to execute the impugned SPA as security for the repayment of the borrowed sum. The plaintiffs did not deny executing the impugned SPA document. However, the 1st plaintiff denied having knowledge of the contents of the impugned SPA until the 2nd plaintiff defaulted in his repayment of the borrowed sum. The 2nd plaintiff averred that he executed the impugned SPA in the belief that it was a security document for the repayment of the borrowed sum. The plaintiffs, at all material times, had no intention to sell their property. [7] The plaintiffs were also required, as instructed by Kelvin, to deposit their house’s title deed Geran 178738, Lot 57845, Mukim Plentong, Daerah Johor Bahru which has a postal address known as No. 42, Jalan Molek 2/13, Taman Molek, Johor Bahru (hereinafter ‘the property’) to the defendant or his solicitors as security. [8] The impugned SPA was prepared by a firm of solicitors Messrs. Woon Wee Yuen & Partners (hereinafter ‘the Firm’) in Skudai, Johor. The plaintiffs averred that it was Kelvin who brought them to the Firm to execute the impugned SPA on 23.10.2014. 14 of 88 [9] The plaintiffs averred that after they had executed the impugned SPA in the Firm, the 2nd plaintiff was accompanied by Kelvin to the 2nd plaintiff’s bank, i.e Public Bank, Taman Perling, Johor Bahru. At the bank, Kelvin deposited cash of RM300,000.00 into the 2nd plaintiff’s account. However, the record shows the depositor was the defendant, instead of Kelvin. [10] The 2nd plaintiff averred that on the same day he was instructed by Kelvin to transfer via ATM a sum of RM5,000.00 into an account holder by the name of Lam Ah Wah (hereinafter ‘LAW’) who also had an account with Public Bank. The 2nd plaintiff also withdrew a sum of RM10,000.00 cash to pay to Kelvin. [11] On the following day (on 24.10.2014), under the instruction of Kelvin, the 2nd plaintiff withdrew a sum of RM251,100.00 from his account and deposited the said sum into the account of LAW. [12] With regard to how the money had transacted, it is illustrated as below: Cash deposited into the RM300,000.00 2nd Plaintiff’s account by Kelvin on 23.10.2014 Less: Paid to LAW via ATM (on 23.10.2014) RM 5,000.00 Paid to Kelvin by cash (on 23.10.2014) RM 10,000.00 Paid to LAW by cash (on 24.10.2014) RM251,100.00 ____________ Balance retained by 2nd plaintiff RM 33,900.00” ============ (emphasis added) [28] We of course can appreciate that there may be strange coincidences in life but if we have to choose between sheer coincidences with no interference of an unseen hand as opposed to a scheme where 15 of 88 the dramatis personae are actively working behind the scene, we would choose the latter. [29] It goes without saying that in cases of illegal moneylending transactions it is quite a common feature for the borrower/“vendor” to have to use the lender/“purchaser’s” solicitors for to protest would be a no-deal. The borrower is in no position to bargain. [30] It must be rather unfortunate for Messrs Woon Wee Yuen & Partners to have acted for “purchasers” who ended up having disputes with the “vendors” as to the true nature of the transaction and having to take legal action to evict the “vendors”. See another illegal moneylending case involving the same solicitors in Pannir Selvam a/l Sinnaiyah & Anor v Tan Chia Foo & Ors [2019] MLJU 1699 from Johor Bahru High Court and also the second and third case under discussion below in Civil Appeal J-02(NCVC)(W)-1603-08/2018 (“Appeal 1603”) Tan Bok Eng v Lim Len Tat & Another (“Tan Bok Eng’s Appeal) and in Civil Appeal J- 02(NCVC)(W)-2049-10/2018 (“Appeal 2049”) Pushpavalli A/P D.Suppaiah & 2 Others v Lim Len Tat & Another (“Pushpavalli’s Appeal). [31] It does not appear fair for such a misfortune to have been visited upon the same solicitors and perhaps the explanation is more likely that the said solicitors appeared to have won the trust of the illegal moneylender(s) in minding his own business and looking the other way without asking too many questions. Illegal moneylenders would have an affinity for solicitors who are prepared to lend an air of legality to the transactions dressed up as a sale and purchase transaction and who are 16 of 88 prepared not to bat an eye and indeed to be wilfully blind to what is happening. [32] For the said defendant Li Chee Loong, Messrs Woon Wee Yuen & Partners and Lam Ah Wah to coalesce together all between May to October 2014 in transactions involving “purchasing” 2 properties cash of a total of RM550,000.00, would require all the universe conspiring to make it happen, to borrow an expression from Paulo Coelho in The Alchemist. It is more probable that it was the active participation of the dramatis personae behind the curtain, running low on characters they can trust, that was behind the personalities coming together to perpetrate or participate in an illegal act. [33] We agree with learned counsel for the defendant that the similarities are so striking that it cannot be a construct of the defendant nor a mere coincidence. Section 15 of the Evidence Act 1950 allows for the admission of similar fact evidence as follows: “15. Facts bearing on question whether act was accidental or intentional When there is a question whether an act was accidental or intentional or done with a particular knowledge or intention, the fact that the act formed part of series of similar occurrences, in each of which the person doing the act was concerned, is relevant. ILLUSTRATIONS

(a) A is accused of burning down his house in order to obtain money for which it is insured. 17 of 88 The facts that A lived in several houses successively, each of which he insured, in each of which a fire occurred, and after each of which fires A received payment from a different insurance office, are relevant as tending to show that the fire was not accidental.

(b) A is employed to receive money from the debtors of B. It is A's duty to make entries in a book showing the amounts received by him. He makes an entry showing that on a particular occasion he received less than he really did receive. The question is whether this false entry was accidental or intentional. The facts that other entries made by A in the same book are false, and that the false entry is in each case in favour of A are relevant.

(d) A is accused of fraudulently delivering to B a counterfeit ringgit. The question is whether the delivery of the dollar was accidental. The facts that soon before or soon after the delivery to B, A delivered counterfeit dollars to C, D and E are relevant as showing that the delivery to B was not accidental.” [34] In civil cases the rule in relation to similar fact evidence was explained in the English decision of Mood Music Publishing Co. Ltd. vs De Wolfe Publishing Ltd [1976] Ch 119 where Lord Denning MR held as follows as summarised in the headnotes: “Held: The admissibility of evidence as to similar facts has been much considered in the criminal law. Some of them have reached the highest tribunal, the latest of them being Reg v Boardman [1975] AC 421. The criminal courts have been very careful not to admit such evidence unless its probative value is so strong that it should be received in the interests of justice: and its admission will not operate unfairly to the accused. In civil cases the courts have followed a similar line but have not been so chary of 18 of 88 admitting it. In civil cases the courts will admit evidence of similar facts if it is logically probative, that is, if it is logically relevant in determining the matter which is in issue: provided that it is not oppressive or unfair to the other side and also that the other side has fair notice of it and is able to deal with it.” (emphasis added) [35] Here we are satisfied that the probative value overshadows the prejudice that may be caused as the plaintiff Li Chee Loong was given every opportunity to explain the uncanny coincidences and no explanation had been forthcoming with respect to facts that are certainly relevant to the defendant’s assertion that he had been instructed by Ponytail Lee to bank into the accounts of Lam Ah Wah and Mawar Constructions. [36] The approach in Mood Music’s case (supra) was cited with approval in Barbara Lim Cheng Sim v Uptown Alliance (M) Sdn Bhd & Ors [2013] 5 CLJ 488 where it was held at page 500 as follows: “In civil cases the court would admit evidence of similar facts if it was logically probative and it was not oppressive or unfair to the other side to admit the evidence.” [37] After making the last repayment on 29.9.2014 the defendant could not continue making further repayments as his tap had dried up and his resources exhausted. He lodged a police report on 5.10.2014 for fear that the Property may be transferred out to the lender that he could only link to one Li Chee Loong that he had never met for a loan of RM250,000.00 taken for which he had surrendered his land title when the Property is easily worth much more. 19 of 88 [38] He also proceeded to lodge a private caveat on 21.10.2014 and in his statutory declaration in support of the caveat he stated that he had borrowed RM250,000.00 from Li Chee Loong and he was worried that the Property would be transferred out. [39] The plaintiff Li Chee Loong, unlike a normal purchaser and especially one who had paid the full purchase price, did not even bother to lodge his own caveat on the land. Either he was trusting of the defendant whom he had not met or that he already had the upper hand, in the transfer having been executed and the title having been deposited with his own solicitors. [40] It has become an almost reflex action in a standard operating procedure or checklist that as soon as the deposit is paid towards the purchase of a property, and more so when the full purchase price had been paid, for the purchaser to lodge a caveat against the property immediately. That is to protect the interest of the purchaser in that the caveat would be notice to the world that the caveator has a right to interest or title to the land and the presence of the caveat would also prevent the owner from dealing with the land until the caveat is removed. [41] The delay until 7.1.2015 when the plaintiff Li Chee Loong lodged his caveat, was of course to allow the defendant time to repay and only if he could not, then the caveat would be necessary while the Form 14A is being sent for adjudication to find out the government’s valuation for the payment of stamp duty. [42] The delay was some 8 months from the date the SPA was signed. It has not escaped our notice that whilst a normal SPA would only 20 of 88 require a payment of 10% deposit towards purchase price upon the execution of the SPA and the balance purchase price being payable within 3 months plus another month of extension with interest, and indeed that were expressly spelt out in the SPA, here the full payment of purchase price was said to have been made upon the execution of the SPA. [43] Whilst that alone by itself may be explained away in that in a fire sale for a lower purchase price the vendor might want the full purchase price to be paid upon the execution of the SPA, one would expect the purchaser in such a case to have entered his caveat immediately. [44] However as pointed out by learned counsel for the defendant, the plaintiff had gone down on record as saying both in the Statement of Claim as well as in his evidence in Court that the entire purchase price is RM250,000.00. [45] He must have forgotten what he said in his statutory declaration in support of his entry of caveat, probably prepared at the time the SPA was signed that he had paid RM250,000.00 as the initial deposit to the seller and that whilst awaiting the payment of the balance purchase price he wanted to enter the caveat to protect his interest. The statutory declaration avoided saying altogether how much the purchase price is and with that what is the balance purchase price! [46] To be less than truthful one needs to have a good memory because one needs to remember different versions of the “truth” and fortunately for the defendant, the plaintiff tripped over on this! It stood out like a sore thumb. To have paid the full purchase price cannot be 21 of 88 reconciled with to have paid an initial deposit of the amount which is the same as the full purchase price with a balance to be paid! [47] We were all not born yesterday and the plaintiff would have to try harder if he wanted to convince us to believe him. [48] We pause to observe that in a lot of illegal moneylending transactions the purchase price seems to be an amount that is quite malleable to some massaging. It is rather uniquely unusual to say the least and that is because the amount is not important for on default the whole of the property would be transferred over to the lender/“purchaser”. [49] There is a further departure from normal conveyancing practice as confirmed by none other than Puan Fauziah PW 1, the solicitor handling the transaction, in that whilst the full purchase price is said to have been paid upon the signing of the SPA and the title delivered to the purchaser’s solicitors, surprisingly here the keys to the Property were not handed over to the purchaser’s solicitors and indeed the keys were never demanded by the plaintiff at any time. That appears to be more consistent with cases where the illegal moneylender would have just used force to forcibly enter the house for after all, even from common knowledge acquired through one’s reading of the press, their tactics would include spilling red paint on the door to embarrass the owner and also that of criminal intimidation if the amount plus interest is not paid to the last sen. [50] There must either be a lot of trust built up between the “vendor” and the “purchaser” as in between the defendant and the plaintiff even though they have not met or seen each other or more likely that the time had not come to deliver vacant possession yet until the defendant should 22 of 88 first have defaulted in the repayments even though the SPA said the sale was with vacant possession and the full purchase price paid up front. [51] The fact that the Form 14A Transfer Form was only submitted for adjudication in November 2014 to ascertain the stamp duty payable upon instruction by the plaintiff as PW 1 Puan Fauziah testified, would be more consistent with the defendant’s version that the repayment was to be made within 6 months of the disbursement of the loan of RM250,000.00 on 12.5.2014 with interest at 5% per month. [52] One would have thought that it is the solicitor who would determine when the Form 14A is submitted for adjudication especially when the full purchase price is said to have been paid upon signing of the SPA rather than the “purchaser” so called, to use a euphemism, “instructing” the solicitor to submit the Form 14A for adjudication. [53] The aberration becomes more acute when the SPA had provided in Clause 8.2 thereof that the purchaser’s solicitors shall present the Form 14A for adjudication within 30 days of execution of the SPA. [54] The plaintiff had introduced himself to the Court in his witness statement that he is a property investor with over 10 years’ experience, and one would suppose, looking for a good buy especially in Johor Bahru where he operates. He said he was introduced to the Property by his friend, one Mr Ong and that before buying, Mr Ong and him went to see the Property and looked from outside the fence but did not enter the Property nor did they meet the defendant. 23 of 88 [55] One would have thought that it would be more normal for a purchaser to want to see the inside of the house to know its condition, and especially when one is purchasing a residential property, to at least meet the owner and size up the owner as to whether he is genuine and who is staying in the house at the moment. [56] The plaintiff trusted his friend Mr Ong who said the price of RM250,000.00 is cheap and far below market price with regard to the type of property and the size and location of it. Under cross-examination he said there was no need to negotiate on the price because it was already so low. [57] The plaintiff did not call this “Mr Ong” as his witness and as far as the defendant is concerned he had no intention to sell the Property much less to appoint an agent to look for a purchaser. There was no land search done on the Property before the plaintiff decided to buy it. [58] The plaintiff said he had engaged the services of Messrs Woon Wee Yuen & Partners to act for him because he had used the said firm for over 10 other purchases before! If that were true, taking an average of RM250,000.00 per property, it would be some RM2.5 million worth of properties purchased. Perhaps 10 properties are a lot and so when asked for the address of the properties under cross-examination, he could not remember! [59] Puan Fauziah PW 1 further testified that the plaintiff had instructed her to prepare SPA based on an outright cash purchase. That seems to be the mode of payment for the other transaction too in Ngai Fong Lan (P) & Anor v Li Chee Loong (supra). 24 of 88 [60] PW 1 testified that she handled the conveyancing file until November 2014 after which she went on maternity leave and the file was taken over by the other lawyers in the firm, one Puan Nurul Syafawaty and Mr Woon himself but none of these lawyers were called as witnesses. Granted a single anomaly or aberration may not arouse any suspicion. However here is a case where the unusual features, when taken together, strongly support the suspicious circumstances that would negate a genuine SPA and lend credence to the fact that the SPA and the related documents are all a sham designed to distract and deceive the enforcement authority and vulnerable borrower like the defendant. [61] On the balance of probabilities the overall anomalies and aberrations are such that they point to a moneylending transaction and an illegal one as such for it is not in dispute that the plaintiff is not a licensed moneylender. Civil Appeal J-02(NCVC)(W)-1603-08/2018 (“Appeal 1603”) Tan Bok Eng v Lim Len Tat & Another (“Tan Bok Eng’s Appeal) [62] In this appeal, the appellant Tan Bok Eng (“TBE”) was the plaintiff in the Civil Suit in the High Court below where he had claimed for the cancellation of the registration of his property in the name of the defendant Lim Len Tat (“LLT”) and the restoration of the property to his name as well as the return of the title to his property on ground that the SPA and the related documents were a sham and in any event the transaction is an illegal moneylending transaction such that the documents executed are null and void and unenforceable and that the transfer was effected fraudulently. TBE had also joined in the solicitors who acted for LLT in the transaction, Mr Woon Wee Yuen (“WWY”) as the second defendant. 25 of 88 [63] LLT in a separate Originating Summons action as the plaintiff there had applied for vacant possession of the said property. The 2 cases were heard together by the High Court and TBE’s claim was dismissed and LLT’s claim was allowed with the result that the appellant TBE had appealed to this Court. [64] TBE narrated the story as to how he was enticed by one person known only to him as “Lee” to borrow money from time to time on a high interest rate per month beyond that permitted under the law. He admitted having borrowed from Lee about RM100,000.00 for which he had repaid between RM70,000.00 to RM80,000.00. This evidence was not challenged by LLT’s counsel under cross-examination. TBE made it clear that he borrowed from Lee and not from LLT. [65] For the purpose of the loan he was instructed by Lee to attend at the office of a legal firm known as Messrs Woon Wee Yuen & Partners to sign a slew of documents all in one go, which documents were a sham designed to dress up the illegal moneylending transaction as an innocuous sale and purchase transaction. [66] He could not recall exactly what he signed because he was not given a copy when he asked for them at the time of signing. He was told by a legal clerk attending to him that the documents had to be stamped and legal fees had to be paid before a copy of the documents could be released to him. From the documents found in the Bundle of Documents (“BODs”) filed by LLT and WWY for the purpose of the trial, it would appear that the documents included an SPA with one Bernard Lee Poh Heng (“Bernard Lee”), a Deed of Rescission and Revocation (“DRR”) between TBE and Bernard Lee, another SPA with LLT and a Form 14A 26 of 88 Memorandum of Transfer under the National Land Code 1965 (“NLC”) between TBE and Bernard Lee as well as another Form 14A between TBE and LLT. TBE stressed that all these documents were signed with the relevant details left blank. [67] He had never met the transferee LLT before and only realised that the transfer of his property had been effected when he received a Notice of Delivery of Vacant Possession from LLT’s solicitors. As for Bernard Lee, he does not know him from Adam and has never met him! He had all along dealt with Lee and the borrowing was from Lee. His contention was that LLT is a proxy of Lee who had funded his borrowings from the beginning leading to the execution of the SPA of his property. [68] His property is a house held under Geran 338205 Lot 77232 Mukim Plentong District of Johor Bahru in Taman Molek, Johor Bahru (“the Property”). [69] According to TBE, he was assured by Lee as well as a legal clerk of Messrs Woon Wee Yuen & Partners that the documents were a security for the loans in case he could not pay back. All the documents were signed in the presence of the legal clerk and not before any solicitors. [70] Though all the documents were signed in one sitting, yet he was later to discover from the documents filed that they were dated differently as follows:

When the defence of a sham agreement is raised the Court must of necessity scrutinise the overall conduct of the parties to ascertain if there is any evidence revealing the dissonance and discrepancies that cry out for an explanation and whether any explanation is forthcoming. [147] The learned JC fell into error in not embarking on such an exercise with the consequence of arriving at a finding that was plainly wrong. We are more than satisfied that this so-called SPA and the various payments said to have been made, have all the indicia of an illegal moneylending transaction. 45 of 88 Civil Appeal J-02(NCVC)(W)-2049-10/2018 (“Appeal 2049”) Pushpavalli A/P D.Suppaiah & 2 Others v Lim Len Tat & Another (“Pushpavalli’s Appeal) [148] This is yet another case where the same defence had been raised to the plaintiffs’ claim of an illegal moneylending transaction dressed up as a decent sale and purchase transaction. It involves the same “purchaser”/transferee who is now the registered owner of the plaintiffs’ property and the same legal firm. [149] There is thus evidence on top of this case, of at least the above case in Tan Bok Eng’s Appeal and another case for which evidence had been led involving the same “purchaser” and the same legal firm which acted for the “purchaser”. [150] The High Court did not see anything amiss and hence nothing to be alerted of anything suspicious of what the SPA said and stood for. The High Court allowed the first plaintiff’s caveat to be removed and for damages for loss of use of the property since 24.2.2015. [151] The plaintiffs’ claim that the transfer of their property to the first defendant (D1) Lim Len Tat (“LLT”) was unlawful and fraudulent and for an order cancelling the said registration of the title in LLT’s name and for a return of the title were dismissed by the learned High Court Judge. The second defendant (D2) is the legal firm of Messrs Woon Wee Yuen & Partners. The plaintiffs’ claimed for damages against both the defendants was also dismissed. [152] Hence this appeal by the plaintiffs as appellants. 46 of 88 [153] The plaintiffs were the registered owners of a single storey corner terrace house in Skudai (“the Property”). The plaintiffs are all siblings. The first and second plaintiffs are sisters aged 62 and 52 respectively and they are selling spices in Market Tebrau whilst their brother, the third plaintiff is an Accounts Executive. [154] The plaintiffs had borrowed RM60,000.00 from a moneylender they know as one Mr Siva in Kulai, Johor at an interest of RM3,000.00 per month. Siva entered a lien-holder’s caveat against the Property. [155] The plaintiffs were not able to repay Siva and so there was a threatened auction of the Property around September or October 2014. The plaintiffs sought the help of another moneylender called Marcus and Marcus was informed by Siva that he required the sum of RM103,000.00 for the repayment of the loan taken by the plaintiffs and the removal of the lien-holder’s caveat. [156] The plaintiffs then agreed to take a loan from Marcus for the sum of RM150,000.00. Marcus then paid Siva for the sum of RM103,000.00 but the demand draft stated that it was paid by one Tan Weng Giap at page 1442 of the Appeal Record. Prior to the release of the loan the plaintiffs were required by Marcus to sign some documents at the law office of Messrs Woon Wee Yuen & Partners at Taman Tun Aminah, Johor Bahru. [157] According to the plaintiffs they only received a sum of RM18,500.00 for a loan of RM150,000.00 taken from Marcus for which RM103,000.00 went towards paying Siva and with that Siva’s lien-holder’s 47 of 88 caveat was removed. The interest exacted by Marcus was RM10,500.00 per month! [158] There is a ring of truth to the plaintiffs’ narrative for a land search at pages 1415-7 showed a lien-holder’s caveat entered against the said Property on 4.9.2012 by one Sivaraja @ Selvarajah a/l Kalimuthu at page

There were also correspondence between Messrs Woon Wee Yuen & Partners and Messrs John Ang & Guna acting for Siva on the payment of RM103,000.00 and the removal of the lien-holder’s caveat and the delivery of the issue document of title. See pages 1418-1421 of the Appeal Record. [159] There is also the incontrovertible evidence that the interest charged by Siva was RM3,000.00 per month as by Messrs John Ang & Guna’s letter of 27.11.2014 to Messrs Woon Wee Yuen & Partners at page 1420, it was stated that the sum of RM100,000.00 must be paid and the Cheque cleared on or before 3.12.2014 and if not the owners of the Property would have to “pay an additional sum of RM3,000.00 which would be valid up to 3rd January 2015.” [160] Strangely Messrs Woon Wee Yuen & Partners did not state in their correspondence who they acted for. [161] The RHB Remittance Application Form disclosed the name of the applicant for the Demand Draft of RM103,000.00 as Tan Weng Giap and judging from his Identification card number he was born on 22.4.1985; hardly 29 years old at the time of the transaction. The beneficiary name was stated to be Messrs John Ang & Guna. The RHB Demand Draft was dated 10.12.2014 for RM103,000.00 at page 1443 of the Appeal Record 48 of 88 and the Application to Enter a Private Caveat Form 19B by LLT at page 1444 of the Appeal Record was also dated 10.12.2014. [162] LLT would of course like to create the impression that the said Tan Weng Giap’s application for the Bank Draft which led to the withdrawal of the lien-holder’s caveat on the Property has nothing to do with his purchase of the same Property which was done independently. [163] Whilst there is such a thing as coincidence, when a series of events happened with such uncanny closeness to one another, we are permitted to have our doubts as to the genuineness of the SPA that appears more to be a facade to facilitate illegal moneylending. [164] The first plaintiff narrated that they were attended to by one Malay staff and one Chinese staff by the name of one Miss Liew of the legal firm. No lawyers were present to give advice to the plaintiffs on the terms and conditions of the so-called agreement. No details were entered into the agreement nor was any explanation made by the staff of D2. The plaintiffs said they did not understand the terms of the agreement signed and were informed that the agreement is a Loan agreement. [165] The third plaintiff had later applied for a loan to repay the said loan taken from Marcus and that was when the bank informed him that there was a caveat on the Property lodged by LLT. [166] The plaintiffs were later to be served with a Notice of Demand from D1’s solicitors in July 2015. Horror of horrors, they were more than shocked when they learned from the Notice of Demand that D1 had fully paid the purchase price for the Property now registered in his name! 49 of 88 [167] The plaintiffs sought an explanation from D2 but no explanation was forthcoming. The plaintiffs said they were not given a copy of the documents and agreement that they signed which they now discovered that it was an SPA dated 5.12.2014 of their Property for RM150,000.00. [168] On 5.8.2015 D1 filed a claim at the Magistrate Court Johor Bahru vide Civil Suit No. A72-159-08/2015 seeking delivery of vacant possession of the Property and that the plaintiffs here had been unlawfully occupying the Property. [169] The plaintiffs commenced a Civil Suit in the Sessions Court Johor Bahru wherein they claimed against D1 there for the losses and damages to their goods for apparently their furniture, gas stove and sewing machine and food items were thrown on the roadside in an attempt by D1 to forcibly enter and take vacant possession of the Property. The grills were dismantled and doors broken down and the house roof taken off too. [170] We pause to observe that such an action would certainly have gone beyond the use of reasonable force to obtain vacant possession and more akin to high-handed actions of a loan sharks who would often combine embarrassment and intimidation to get what they want. [171] Little wonder that Parliament in all its wisdom had enacted section 29B(1) of the Moneylenders Act 1951 making it a criminal offence for a moneylender or anyone acting on his behalf to harass or intimidate a borrower or any member of the borrower’s family and section 29B(5) further defined what “causes hurt”, “harassment” and “intimidation” mean. 50 of 88 [172] The plaintiffs brought an action in the Johor Bahru Sessions Court for damage to their goods and property in Civil Suit No. JA-B52-20- 10/2017. The first plaintiff also lodged a police report on 9.6.2015 and 11.6.2015 on the incidents when the forcible entry and destruction of their goods and property took place. [173] Both the plaintiffs and D1 confirmed that they had never met before the trial and certainly not when the SPA was signed. [174] As we have observed before it is quite common in illegal moneylending transactions for the solicitors involved to act only for the “purchaser” with the “vendor” left unrepresented and it is no different here. [175] It is undisputed here that both the first and second plaintiffs are illiterates and were unable to understand the documents that they had signed. [176] The plaintiffs further alleged that the purchase price was not fixed by the parties but instead was fixed by D1 through D2. There was no negotiation much less a discussion on the purchase price of the Property. [177] The plaintiffs said they were not advised that they have a right to separate representation by their own solicitors. There was of course a statutory declaration produced by D2 that the plaintiffs had signed an acknowledgment that they confirmed that they did not want to appoint their own solicitors. That is probably one of the many documents they were made to sign when they went to D2’s office. 51 of 88 [178] When there is no separate representation and advice given and where 2 of the plaintiffs are illiterate and unaware of their rights, we would find manifestation of unconscionable terms such as in Clause 16 when for default of the vendors, there is exacted not just a full refund of all monies paid but also an agreed liquidated damages of another RM150,000.00 as stated in section 13 of the Schedule to the SPA! [179] The plaintiffs’ stand was that they had never agreed to sell their Property to D1 and they had understood that they were signing a Loan agreement. [180] Learned counsel for the plaintiffs argued that the learned High Court Judicial Commissioner (“JC”) had failed to sufficiently appreciate the evidence led that D1 had been involved in a series of cases filed before the Courts suggesting very strongly his involvement in illegal moneylending transactions. [181] Learned counsel for the plaintiffs highlighted that the trial Judge seemed to be under the impression that the plaintiffs could not pay anything at all for the loan taken at paragraph 26 of the learned JC’s Grounds of Judgment (“GOJ”) as follows: “There was also no suggestion at all as to what the Plaintiffs were able, willing or prepared to pay. It would seem that they were unable to pay anything.” [182] It would appear that the learned JC was saying in effect that the ends justify the means in that the plaintiffs cannot pay the loan taken anyway. That is not just a simplistic approach but fraught with serious 52 of 88 consequences if the loan taken does not comply with the provisions of the Moneylenders Act 1951 and D1 is unlicensed and there is no evidence that he is licensed under the Moneylenders Act 1951. We are further fortified in our conclusion when in paragraph 27 of his GOJ he commented as follows: “Whether or not the documents signed were intended to be a loan or a sale and purchase arrangement would appear to matter very little.” [183] We agree with learned counsel for the plaintiffs that the learned JC had misdirected himself in taking that approach as, if it is a Loan Agreement as the plaintiffs understood it is, then the provisions of the Moneylenders Act 1951 would by default, presume to apply, since it is not disputed that interest was chargeable on the amount borrowed. [184] It is not for the learned JC to rationalise that D1 was merely “exercising default provisions under the Loan Agreement.” We must say here that if it is a Loan Agreement then it cannot be at the same time an SPA and certainly not a mode of security for a loan which security must of necessity take the form of a charge or a lien-holders caveat by the lender under the NLC which provisions are exclusive and exhaustive with respect to the remedies available with the necessary safeguards for a borrower being built into the statutory provisions and protection. See Kimlin Housing Development Sdn Bhd (Appointed Receiver and Manager)(In Liquidation) v Bank Bumiputra (M) Bhd & Ors [1997] 2 MLJ 805, a decision of the Supreme Court. [185] The learned JC lamented in paragraph 27 of his GOJ that as the plaintiffs were not able to repay the loan it does not quite matter whether 53 of 88 it is by way of they being dispossessed of their Property in a transfer of it to D1 or the Property being sold by exercising the default provisions under the Loan Agreement; it is all “a cruel manifestation of reality, but that is the way it is.” [186] The resignation of the learned JC to what he deemed as the inevitable consequence of the plaintiffs’ default failed to take into consideration that the Moneylenders Act 1951 had been passed by Parliament to protect vulnerable borrowers with no bargaining power from being oppressed and exploited by unscrupulous illegal moneylenders who would decide what price to fix for the property that would change hands if the loan is not repaid, in the process making a windfall at the expense of the borrower. [187] The facade of an SPA would have to be discarded and dismantled so that what is fabricated and false would fall and the Court must scrutinise whether the entire circumstances of the case and the conduct of the parties to see if they support the fact that the SPA prepared was a sham, designed to circumvent the law and in this case that of the prohibition of illegal moneylending where exorbitant interest is charged and the borrowers being at the mercy of the lender, might well end up like in this case and the Tan Bok Eng’s Appeal, losing their property. [188] With the greatest of respect the learned JC misapprehended the evidence before him in relation to the factual matrix characteristics of illegal moneylending when he took the view that “who had paid and whether the payment had appeared to have been made by a third party is not relevant.” 54 of 88 [189] Whilst that may not be relevant for an ordinary sale and purchase agreement, it is highly relevant especially when the one who procured the payment from one Tan Weng Giap does not appear in Court nor the said Tan Weng Giap and D1 could not explain the connection. [190] If the said Marcus and Tan Weng Giap were totally unrelated to LLT, we would have expected LLT to have paid the purchase price by way of withdrawing the full sum of RM150,000.00 from somewhere and paid into the clients’ account of D2’s legal firm. Instead what we have is another letter prepared by D2’s legal firm where the plaintiffs signed on it confirming they had received the full payment of RM150,000.00 upon signing the SPA. This of course is a convenient method of evidencing the full receipt of the full purchase price paid in cash with no supporting documents as to whether the said sum had been paid into D2’s clients’ account first or that the payment was in the form of a bank draft. [191] The query raised is reasonable because it is pitted against the plaintiffs’ version that RM103,000.00 was paid to Siva’s solicitors Messrs John Ang & Guna for the loan taken and upon payment the lien-holder’s caveat was removed and indeed the land search confirmed the said removal of the lien-holder’s caveat and there are correspondence between none other than Messrs Wee Woon Yuen & Partners and Messrs John Ang & Guna dated 15.12.2014 and 23.12.2014 confirming the receipt of RM103,000.00 and the removal of the lien-holder’s caveat at pages 1453 - 1457 of the Appeal Record. [192] The probability of LLT buying the same property soon after that on 5.12.2014 with his private caveat lodged to protect his interest on 55 of 88 11.12.2014 in what is painted as unrelated transactions, may be likened to striking the jackpot twice within the same month! [193] It is against such improbabilities of a coincidence that it is reasonable to ask for the empirical evidence showing payment in full in one go by LLT for the purchase of the Property for RM150,000.00 and such evidence had not been forthcoming. [194] It becomes more imperative when Messrs Woon Wee Yuen & Partners wrote to Messrs John Ang & Guna enclosing the RHB Demand Draft no. 003533 for RM103,000.00 bought by Tan Weng Giap on the latter’s undertaking to withdraw the lien-holder’s caveat and to deliver the original issue document of title to the Property to them. [195] Surely after parting with RM103,000.00 there must be a need for some security generally in the form of a charge or lien-holder’s caveat but instead we are asked to believe that, unconnected and oblivious to what had happened, LLT walked into the office of D2 to sign an SPA dated 5.12.2014 and paid cash RM150,000.00 for the purchase upon signing the SPA! It just does not compute and we must be pardoned for feeling most uncomfortable about the transaction being a genuine SPA. [196] We are further disturbed by the fact that though the consideration for the SPA is stated to be RM150,000.00 yet the Notice of Assessment of ad valorem stamp duty dated 25.1.2015 showed that the government’s valuation revealed a market value of RM240,000.00 as shown at page 1464 of the Appeal Record. It lends support to the plaintiff’s assertion that the purchase price was unilaterally fixed by LLT. 56 of 88 [197] Having heard this appeal after the Tan Bok Eng’s appeal we are struck by the closeness of dates of the SPA between TBE and LLT being 17.12.2014 for a purchase price of RM260,000.00 when the government’s valuation was RM380,000.00 and the present SPA dated 5.12.2014 for RM150,000.00 when the government’s valuation showed RM240,000.00. [198] If there is a skill in spotting good buys within so short a time, many would be keen to acquire such an acumen. It is more likely a flexing of strong muscles where the borrower is not supposed to ask too much when it comes to the purchase price that the lender would simply decide in the lender’s favour. [199] Where the plaintiffs here advanced the argument that the SPA was a sham, masquerading as one when its mission was to mask a Loan Agreement, the trial Judge must scrutinise the evidence adduced and to see if there are unusual features of the SPA that would lend support to the allegation, bearing in mind that illegal moneylenders would endeavour to leave no document trail behind so that their tracks are completely covered with no traces of moneylending activities. [200] There is also the issue of res judicata raised in that the magistrate court in Civil Suit A72-159-08/2015 had granted a vacant possession order to LLT in his summary judgment applied for against Pushpavalli and her siblings and there has been no appeal against such an order and subsequently a wrote of possession had been issued. [201] The proper forum before whom the parties had gone for resolving the core and central issue was the High Court in Johor Bahru where the plaintiffs in Pushpavalli and her 2 siblings had brought the action declaring 57 of 88 the transfer of their Property to LLT to be unlawful and void and for a cancellation of the transfer as well as the return of the title to them. [202] LLT had also there claimed for damages arising out of loss of use of the Property since he became the registered owner on 24.2.2015 and for the removal of the caveat lodged by the first plaintiff on 29.11.2015. By so doing the parties had agreed to the High Court resolving the core and cent ral issue as to whether the transfer of the land was right in law. That decision and subsequent appeals from there would be determinative and final and not the Magistrate Court’s decision on the vacant possession order based on who is the current registered owner without considering the core and central issue of the legality of the transfer. [203] LLT cannot launched a collateral attack on the plaintiffs via a vacant possession order from the Magistrate Court. The Magistrate Court did not decide on the core and central issue but only on the peripheral issue as to a registered owner’s right to have vacant possession of the property. Res judicata can only be successfully and properly invoked if the subject matter or issue has been “necessarily and with precision” determined between the parties. See Tong Lee Hwa & Anor v Lee Yoke San [1979] 1 MLJ 24 affirmed by the Privy Council in [1981] 1 MLJ 54. [204] We must add that it must first be established that the finding was a “necessary step” for the determination of the whole case or a “matter which it was necessary to decide, and which was actually decided, as the groundwork of the decision”: see Carl Zeiss Stiftung v Rayner and Keeler Ltd (No. 2) Rayner and Keeler Ltd v Courts [1967] 1 AC 853 at

This principle as succinctly set out in Spencer Bower, Turner and Handley on the Doctrine of Res Judicata (Butterworth, 3rd Ed, 1996), 58 of 88 which was cited with approval by the Singapore Court of Appeal in Lee Tat Development Pte Ltd v Management Corporation of Strata Title Plan No 301 [2005] 3 SLR(R) as follows: “Even when the court has expressly determined the same issue in the earlier proceeding an issue estoppel will not necessarily result. Only determinations which are necessary to the decision, and fundamental to it, will found an issue estoppel. Other determinations, however positive, cannot.” [205] It was the High Court that dealt comprehensively and precisely with the core and central issue of the legality of the transfer and if the transfer is unlawful, fraudulent and the instrument of transfer void, then the edifice of LLT’s claim would fall as well. Therefore, when this Court decides on an appeal from the High Court that the transfer to LLT is unlawful then the magistrate court order falls with it. [206] We cannot see how a Magistrate Court’s decision on summary judgment can impair or impede the decision of the High Court and with that the appeal to this Court in the circumstances of this case. [207] We are ever mindful of the fact that the doctrine of res judicata is designed to achieve justice and where its application would yield an unjust result it should not be applied. See the case of Chee Pok Choy & Ors v Scotch Leasing Sdn Bhd [2001] 4 MLJ 346 and the House of Lords case of Arnold v National Westminster Bank Plc [1991] 2 AC 93 where at page 109 it was held that: 59 of 88 "One of the purposes of estoppel being to work justice between the parties, it is open to the courts to recognise that in special circumstances inflexible application of it may have the opposite result...." [208] The plaintiffs may want to apply for the Magistrate Court’s order to be vacated and indeed any writ of possession issued would have to be stayed upon an application by the plaintiffs. [209] We are more than satisfied on the balance of probabilities that the transaction in the SPA is a sham designed to distract the enforcement authorities and to deceive the plaintiffs as borrowers to part with their Property with no protection that comes with a judicial sale by way of public auction as provided for in the NLC for securities over land. Principles Whether the trial Court is confined to the four corners of the Sale and Purchase Agreements and related documents in determining the true nature of the transaction [210] In Global Globe Property (Melawati) Sdn Bhd v Jangka Prestasi Sdn Bhd [2020] MLJU 424 the Court of Appeal observed as follows in the context of an illegal moneylending transaction masquerading as an SPA: “[99] A sham agreement is slimily resorted to in creating a smoke screen to shield the real transaction from surfacing for the eyes of the authorities to scrutinise and sanction. Often it has less than an honourable purpose for otherwise why a sham. It is a device to divert and direct an observer the other way, if not to distract him from being detained by what is real, and often less palatable if not downright perverse! It is as old as mankind and 60 of 88 after all there is nothing new under the sun but accepting always that sunlight is the best disinfectant and the electric light the best policeman. [100] Often times the weaker party has no choice but to agree to signing the documents prescribed by the stronger party who is in a position to dictate. Though initially starting off as documents that the parties would not act on as in both sides understand that it would not be used, its dark side is that when the stronger controlling party renege on it, it can be abused to serve a nefarious end. [101] In the House of Lords’ case of AG Securities v Vaughan & Ors [1990] 1 AC 417 Lord Justice Bingham explained a “sham agreement” as follows: “A written agreement is a sham where it incorporates clauses by which neither party intends to be bound and which is obviously a smoke screen to cover the real intentions of both contracting parties: Hadjiloucas v Crean [1987] 3 All ER 1008, 1014, per Purchas LJ. The accepted definition of a sham is that given by Diplock LJ in Snook v London and West Riding Investments Ltd [1967] 2 QB 786, 802: As regards the contention of the plaintiff that the transactions between himself, Auto Finance and the defendants were a ‘sham’, it is, I think, necessary to consider what, if any, legal concept is involved in the use of this popular and pejorative word. I apprehend that, if it has any meaning in law, it means acts done or documents executed by the parties to the ‘sham’ which are intended by them to give to third parties or to the court the appearance of creating between the parties legal rights and obligations different from the actual legal rights and obligations (if any) which the parties intend to create. But one thing, I think, is clear in legal principle, morality and the authorities (see Yorkshire Railway Wagon Co v Maclure (1882) 21 Ch D 309, CA and Stoneleigh Finance Ltd v Phillips [1965] 2 QB 537), that for acts or documents to be a ‘sham’, with whatever legal 61 of 88 consequences follow from this, all the parties thereto must have a common intention that the acts or documents are not to create the legal rights and obligations which they give the appearance of creating.’ [102] Put simply, a sham exists where the parties say one thing intending another: Donald v Baldwyn [1953] NZLR 313, 321, per FB Adams J. [103] In a world of genuine imitation, it is often not easy to discern a sham from what it really is in substance for those bent on perfecting the art of deception would try their level best to leave behind no trace. [104] We therefore, with the greatest of respect to the learned trial Judge, cannot accept his lament that if it really was a moneylending transaction then ironically there were no documents on the loan agreement and nothing showing the amount of the loan and the repayment and interest. See paragraph [33] of the Grounds of Judgment of the High Court.” (emphasis added) [211] It therefore behooves the trial Court, when there is the allegation that the agreement is a sham and a fabrication with the object of circumventing the law, to examine the external evidence to see if the pieces in the puzzle would fit to from a coherent whole. The Court must probe further to see if there are unusual features in the agreement as in here, a sale and purchase agreement and examine the circumstantial evidence such as the conduct of the parties that may arouse suspicion if not setting off the alarm bell. [212] Precisely because of the difficulty in discerning the differences that would distinguish the real from the fake, the UK Court of Appeal in Hitch and others v Stone (Inspector of Taxes) (2001) STC 214 referred to the Snook v London and West Riding Investments Ltd [1967] 2 QB 62 of 88 786, and laid down the applicable test to sniff and smoke out a sham document as follows: “[64] An inquiry as to whether an act or document is a sham requires careful analysis of the facts and the following points emerge from the authorities. [65] First, in the case of a document, the court is not restricted to examining the four comers of the document. It may examine external evidence. This will include the parties’ explanations and circumstantial evidence such as evidence of the subsequent conduct of the parties. [66] Second, as the passage from Snook makes clear, the test of intention is subjective. The parties must have intended to create different rights and obligations from those appearing from (say) the relevant document, and in addition they must have intended to give a false impression of those rights and obligations to third parties. [67] Third, the fact that the act or document is uncommercial, or even artificial, does not mean that it is a sham. A distinction is to be drawn between the situation where parties make an agreement which is unfavourable to one of them, or artificial, and a situation where they intend some other arrangement to bind them. In the former situation, they intend the agreement to take effect according to its tenor. In the latter situation, the agreement is not to bind their relationship. [68] Fourth, the fact that parties subsequently depart from an agreement does not necessarily mean that they never intended the agreement to be effective and binding. The proper conclusion to draw may be that they agreed to vary their agreement and that they have become bound by the agreement as varied (see for example Garnac Grain Co Inc v HMF Faure & Fairclough Ltd [1966] 1 QB 650 at 683-684 per Diplock LJ, which was cited by Mr Price). 63 of 88 [69] Fifth, the intention must be a common intention (see Snook) ......” (emphasis added) [213] The above test was followed by our Court of Appeal in Dr Mansur bin Hussain & Ors v Barisan Tenaga Perancang (M) Sdn Bhd & Ors [2019] MLJU 1552 where Justice Abang Iskandar JCA (now CJSS) observed as follows: “[46] It had been observed that the policy considerations that underpin the concept of sham are the protection of the rule of law, to prevent abuse of fundamental legal principles and the prevention of evasion of statutes, among others. It was also commented that the Snook case [supra] had narrowed down the test for sham. See the relatively recent case of Autoclenz Ltd v Belcher [2011] UKSC 41, a landmark case in the UK on labour law and contract law; and the related article by Toby Graham, appearing in Trusts and Trustees, volume 22, Issue 8, October 2016. Indeed, on the authority of the case of Sri Kelangkota-Rakan Engineering JV Sdn Bhd v Arab Malaysian Prima Realty Sdn Bhd [2001] 1 MLJ 324, the courts are entitled to go behind the impugned agreement or transaction to ascertain the true nature of such agreement or transaction. In the case of Lori Malaysia Bhd v Arab Malayasian Finance Bhd [1999] 2 CLJ 997, it was there observed by our apex court that in other Common Law countries, courts were slow to declare commercial contracts as void on ground of illegality, but having said that if the circumstances so warrant, the courts would not shy away, from doing what would be in accord with what the law expects to be done, as a keeper of the public conscience. The fact that the apex court had done that could be seen in the recent case of Merong Mahawangsa Sdn Bhd & Anor v Dato’ Shazryl Eskay bin Abdullah [2015] 5 MLJ 619 FC, among others.” (emphasis added) 64 of 88 [214] The Court in scrutinising the transaction is duty bound to shine the search light of consistency and coherence and to see if there are contradictions that cry out for an explanation. [215] No one factor is conclusive but if when taken together more questions are raised than there are satisfying answers, then in all probabilities the agreement is a sham and fabrication to camouflage and counterfeit the real transaction, which if allowed would contravene the law. The dressing up and decoy is deliberately if not delicately designed to escape detection by the enforcement authority and to deceive the weaker party when the crunch comes. The “deal” is structured in such a way that the substance is shielded from detection. [216] It is against that backdrop that this Court had weighed in on the evidence of suspicious circumstances and unusual features, the tell-tale signs and the indicia for dismantling and discarding the facade and exposing the transaction for what it really is - an illegal moneylending transaction. [217] The following are some of the suspicious circumstances and unusual features that would justify a further probing as pointing in the direction of a sham agreement like an SPA masking the illegal moneylending transaction:

(a) it is forbidden by a law;

(b) it is of such a nature that, if permitted, it would defeat any law;

(c) it is fraudulent;

(d) it involves or implies injury to the person or property of another; or

(e) the court regards it as immoral, or opposed to public policy. In each of the above cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void.” (emphasis added) [238] What then is the effect of a transfer that arises from a void SPA. The transfer cannot but be void as the consideration is unlawful. [239] Not only that, the transfer is also fraud on the borrowers for they had never intended to transfer their properties at those so-called agreed purchase price. Though they were ignorant of their legal rights, the law even in a case of a licensed moneylending would require the relevant securities to be in the form of a charge or a lien-holder’s caveat where the lender must apply to Court for an order for sale after serving the relevant statutory notice and where the conditions of sale in the Proclamation of Sale have to be approved by the Court before an auction sale is permitted 74 of 88 under the supervision of the Court with a licensed auctioneer being appointed and the borrower allowed to tender the amount owing before the auction. There is the added protection of the reserve price being fixed only after a valuation report has been submitted. [240] The SPAs and the instruments of transfer were fraudulently procured to deprive the borrowers of their land without following the means allowed by the law even assuming that the lenders were licensed moneylenders, which they are not. The lenders were fully aware what they were up against and so they went to great lengths to disguise the transactions as a foolproof SPA but alas they all had difficulties explaining the unusual features discussed above and to allay the suspicion raised. [241] In Letchumanan Chettiar Alagappan @ L Allagappan (As Executor to Alameloo Achi Alias Sona Lena Alamelo Acho, Deceased) & Anor v Secure Plantation Sdn Bhd [2017] 4 MLJ 697 Jeffrey Tan FCJ had dealt with the nefarious manifestations of fraud as follows: "What amounts to 'fraud'? 'It is not easy to give a definition of what constitutes fraud in the extensive signification in which the term is understood by Civil Courts of Justice. The courts have always avoided hampering themselves by defining or laying down as a general proposition what shall constitute fraud. Fraud is infinite in variety (Reddaway & Co and Another v Banham & Co and Another [1896] AC 199 at p 221). The fertility of man's invention in devising new schemes of fraud is so great, that the courts have always declined to define it, or to define undue influence, which is one of the many varieties, reserving to themselves the liberty to deal with it under whatever form it may present itself (AIIcard v Skinner (1887) 36 Ch D 145 at p 183). Fraud, in the contemplation of a Civil Court of Justice, may 75 of 88 be said to include properly all acts, omissions and concealments which involve a breach of a legal or equitable duty, trust or confidence, justly reposed, and are injurious to another, or by which an undue or unconscientious advantage is taken of another (Story, Eq Jur 187). All surprise, trick, cunning, dissembling and other unfair way that is used to cheat any one is considered fraud (Finch 439). Fraud in all cases implies a wilful act on the part of any one, whereby another is sought to be deprived, by illegal or inequitable means, of what he is entitled to (Green v Nixon

(a) in cases of fraud or misrepresentation to which the person or body, or any agent of the person or body, was a party or privy; or

(b) where registration was obtained by forgery, or by means of an insufficient or void instrument; or

(c) where the title or interest was unlawfully acquired by the person or body in the purported exercise of any power or authority conferred by any written law.” (emphasis added) 81 of 88 [255] In ‘Tenure and Land Dealings in the Malay States’ by David SY Wong, at p 364 the learned author explained the meaning and scope of ‘insufficient or void instrument’ for the purpose of s 340(2)(b) of the NLC as follows: “(iv) ‘Insufficient or void instrument’ Section 340(2)(b) also provides that a registered title is defeasible where registration was obtained ‘by means of an insufficient or void instrument’. Unlike ‘forgery’, the expression ‘insufficient or void instrument’ is so wide as to defy comprehensive enumeration of the circumstances in which a purportedly executed instrument of dealing may be regarded by the court as ‘insufficient’ or ‘void’. Some general observations may indicate how wide its domain may be. The reference to the insufficiency and voidness of an instrument could pertain to all sorts of circumstances and matters relating to the execution of the instrument. Where the instrument is executed in pursuance of a contract of dealing, the invalidity of contract (ie where the contract is void) would plainly entail that the instrument is void accordingly. The instrument may also be ‘insufficient’ or ‘void’ for reasons relating to the capacity of the parties concerned, or by reason of some formal defect or irregularity. In addition, non-compliance with relevant statutory requirements may also result in the instrument being regarded as ‘insufficient’ or ‘void’.” (emphasis added) [256] The transfers and titles of the lender in Lim Len Tat are clearly and indisputably void and must be set aside and cancelled with the effect of the titles in Tan Bok Eng’s Appeal and Pushpavalli’s Appeal reverting to its original owners. 82 of 88 Whether this Court should order restitution in that there would be unjust enrichment if even the balance principal sum is not repaid [257] To begin with the lenders had not pleaded this in their respective Statement of Claims. We cannot give a relief not pleaded especially when the case was not fought on the alternative plea that if it is a moneylending transaction then the Court should grant judgment for the principal balance sum not paid. [258] Parties are bound by their pleadings and they cannot approbate and reprobate. See Samuel Naik’s case (supra). Having gone for broke as it were in confidently asserting that it was a sale and purchase transaction, it is then too late to now want to claw back on the high moral ground of unjust enrichment. [259] In the Singapore Court of Appeal’s case of Ochroid Trading Limited & Anor v Chua Siok Liu (trading as Vie Import & Export) & Anor [2018] SGCA 5 where a specially convened panel of 5 Judges of Appeal sat to deliberate on this same issue in the light of Patel v Mirza [2017] AC 467 watershed decision by the UK Supreme Court on illegality and restitution, the lender there had pleaded in the alternative a repayment of the balance principal sum not paid and the Court of Appeal had dismissed that, affirming the decision of the High Court that the joint venture investment agreement was null and void and unenforceable under the Singapore Moneylenders Act. [260] At any rate we have given careful consideration to this plea though not pleaded in the Statement of Claim of the lenders and we are of the view that to allow restitution would be to allow the lenders to mock 83 of 88 the law prohibiting illegal moneylending under the Moneylenders Act 1951. [261] It would embolden the illegal moneylenders or “alongs” as they are pejoratively stigmatised, giving them a gush of wind beneath their wings that they may fly higher with their newfangled and fraudulent schemes structured to look regular and respectable. [262] We can almost hear them rejoicing with glee with the refrain, “catch me if you can” and “even if you can I’ll still get back the balance principal loan!” It would be to give the alongs the best of both worlds and the public policy as reflected in the ever increasing fines and penalties and the greater powers given to the police to investigate and collect evidence would be stymied and stultified in the Moneylenders (Amendment) Act 2003 and the Moneylenders (Amendment) Act 2011. [263] The majority in Patel’s case (supra) had propounded a “range of factors” test as a defence to a claim in unjust enrichment. The minority seemed to suggest that restitution should always be available and that one should leave it to the criminal law to take care of the criminality aspect of the legislation. Our task is made easier by the clear words of section 15 of the Moneylenders Act 1951 which reads:

“Contract by unlicensed moneylender unenforceable No moneylending agreement in respect of money lent after the coming into force of this Act by an unlicensed moneylender shall be enforceable.” (emphasis added) 84 of 88 [264] Additionally any claim for restitution must also satisfy the requirement of section 66 of the Contracts Act 1950 which provides as follows: “Obligation of person who has received advantage under void agreement, or contract that becomes void 66. When an agreement is discovered to be void, or when a contract becomes void, any person who has received any advantage under the agreement or contract is bound to restore it, or to make compensation for it, to the person from whom he received it.” [265] Here is a case where the lenders had carried out their illegal act to the end in the Tan Bock Eng’s Appeal and Pushpavalli’s Appeal where the Property had been registered in the name of the lender or his nominee. It is not a case where the unlicensed moneylender was not aware of the illegality for otherwise he would not be engaged in such a convoluted transaction simmering beneath the thin veneer of respectability. It is a case where the agreements were void ab initio and not one where they become void subsequently or are discovered to be void. Section 66 of the Contracts Act 1950 is not available to illegal moneylenders or their nominees in Li Chee Loong and Lim Len Tat here in these appeals. [266] It is not for nothing that the whole agreement is made unenforceable. The House of Lords in UK in Boissevain v Weil [1950] AC 327 had introduced the stultifying principle where to allow a claim in restitution upon a finding of illegality would be to indirectly allow an enforcement of an illegal loan, albeit severing the illegal interest element from the principal. Lord Radcliffe issued his disapproval at page 341 as follows: 85 of 88 “[I] this claim based on unjust enrichment were a valid one, the court would be enforcing on the respondent just the exchange and just the liability, without her promise, which the Defence Regulation has said that she is not to undertake by her promise. A court that extended a remedy in such circumstances would merit rather to be blamed for stultifying the law than to be applauded for extending it. (emphasis added). [267] Boissevain case (supra) was a claim based on a total failure of consideration for the recovery of a loan which had been made in violation of exchange control regulations under the Defences (Finance) Regulations 1939 (UK). The House or Lords was clear that to allow the claim would be to allow an indirect enforcement of an illegal loan. [268] Indeed to allow even the lenders to claim the principal would be to stultify the public policy behind the Moneylenders Act 1951. It would be to negate all the efforts put in place by Parliament to try to contain the menace of illegal moneylending with its horror stories of being stripped bare to one’s tunic. [269] It is too late in the day to separate the good from the bad; it is a case where a “little leaven leavens the whole lump” and that a contaminated fountain cannot pour forth both clear and brackish water. If the source is contaminated the spring and stream would be contaminated as well. Pronouncement [270] We are more than satisfied that the transactions in the 3 Appeals before us are illegal moneylending transactions disguised as sale and purchase transactions. 86 of 88 [271] We allowed all the 3 appeals and set aside the 3 respective judgments of the High Court. [272] We allowed judgment to be entered for the appellant/defendant in Mahmood’s Appeal (Appeal 463) as prayed in prayer 17 (a) & (b) at page 34 of the Appeal Record in the Amended Defence and Counterclaim for a declaration that the SPA is null and void and unenforceable and that the caveat lodged by the respondent Li Chee Loong be removed and with agreed costs of RM10,000.00 to paid to the appellant subject to allocatur. [273] We allowed judgment to be entered for appellant/plaintiff in Tan Bok Eng’s Appeal (Appeal 1603) in prayer 77(i)-(vi) of the Statement of Claim at pages 53-54 of the Appeal Record which includes a declaration that the SPA is null and void and unenforceable, that the transfer of the title of the plaintiff/appellant Tan Bok Eng to the first defendant/first respondent Lim Len Tat is unlawful and void, that the Registrar of Land Titles do give effect to this order of the Court, that title to the Property be returned by Lim Len Tat to Tan Bok Eng, that the transfer of the title to Lim Len Tat be set aside and cancelled and that vacant possession be given back by Lim Len Tat to Tan Bok Eng. We also ordered costs of RM10,000.00 to be paid to the plaintiff/appellant subject to allocatur. [274] As for Pushpavalli’s Appeal (Appeal 2049) we allowed judgment to be entered for the appellant/plaintiff as per prayer 40(1)-(4) of the Statement of Claim at page 36 of the Appeal Record which includes a declaration that the SPA is null and void and unenforceable, that the title to the Property be returned by the first defendant/first respondent Lim Len Tat to the plaintiffs/appellants, that the transfer of the title to the first 87 of 88 defendant/first respondent be set aside and cancelled and that the Registrar of Land Titles do give effect to this order of the Court. [275] We also ordered costs of RM10,000.00 to paid to the appellant subject to allocatur. Dated: 19 Jun 2020. Sgd. LEE SWEE SENG Judge Court of Appeal Malaysia For Civil Appeal J-02(NCVC)(W)-463-03/2018 Chang Tau Sian for Appellant Messrs Henry Soong & Chang Lim Chon Sin for Respondent Messrs Lim Wong & Partners For Civil Appeal J-02(NCVC)(W)-1603-08/2018 GK Sritharan for Appellant Messrs GK Sritharan & Co. 88 of 88 David Leow for Respondents Messrs Tng, Liew, David Leow & Co. For Civil Appeal J-02(NCVC)(W)-2049-10/2018 G Ravi and Aida Hasan for Appellants Messrs G. Ravi David Leow for Respondents Messrs Tng, Liew, David Leow & Co. Date of Decision: 9 January 2020.