Tang Lee Hiok v Yeow Guang Cheng (B-02(NCvC)(W)-1193-09/2020)

TANG LEE HIOK

LIM BOON KEONG

TAN MEE LIAN

LIM HIANG (K/P: 630807-10-7172) … PERAYU-PERAYU DAN YEOW GUANG CHENG … RESPONDEN (K/P: 701114-05-5141) (Dalam Perkara Mengenai Writ Saman No: BA-22NCvC-423- 07/2017 dalam Mahkamah Tinggi Malaya di Shah Alam) Antara YEOW GUANG CHENG (K/P: 701114-05-5141) … Plaintif 20/07/2022 21:13:25 B-02(NCvC)(W)-1193-09/2020 Kand. 53 TANG LEE HIOK K/P: 660510-10-6248) Dan 4 yang lain … Defendan-defendan) CORAM: LEE SWEE SENG, JCA CHE MOHD. RUZIMA BIN GHAZALI, JCA GUNALAN A/L MUNIANDY, JCA JUDGMENT INTRODUCTION [1] This is an appeal by the Appellants/Defendants [‘D1 – D4’] in the Court below against the decision of the Learned High Court Judge [‘LHCJ’] wherein the Respondent/Plaintiff’s claim against D1 – D4 was allowed with no order as to costs. [2] The Plaintiff’s pleaded claim was premised on the Appellants’ having carried on an illegal moneylending business in regard to the purported Sale and Purchase Agreement [‘SPA’] with the Respondent which was allegedly an unlawful loan agreement. BACKGROUND FACTS Plaintiff/Respondent’s case [3] On or about 15.8.2015, the Plaintiff borrowed RM600,000.00 (“1st Loan”) from CML Realty Sdn Bhd [“CML”]. Regarding the 1st Loan, the 1st Loan was an unlicensed moneylending business for which the Plaintiff handed the Issue Document of Title [“IDT”] to CML’s solicitors, Messrs Khor & Rafidah [“Messrs KR”], as collateral for the 1st Loan. [4] The Plaintiff and CML signed a Sale and Purchase Agreement dated 21.7.2015 [“SPA (CML)”] which was prepared by Messrs KR. According to the SPA (CML), the Plaintiff purportedly sold the Property to CML for RM600,000.00 and the Plaintiff paid monthly interest for the 1st Loan to CML. [5] The Plaintiff could not subsequently pay the Monthly Interest to CML. At the material time, the Plaintiff owed a total sum of RM780,000.00 to CML. Hence, to avoid the Land from being transferred to CML, the Plaintiff had to find another unlicensed moneylender to repay the Plaintiff’s Debt. [6] The 1st to 4th Defendants were unlicensed moneylenders who offered a loan to the Plaintiff on the following terms and conditions [2nd Loan”]:

(a) the 2nd Loan was for a sum of RM900,000.00;

(b) the 1st to 4th Defendants would pay the Plaintiff’s Debt to CML and the balance of RM120,000.00 would then be given by the 1st to 4th Defendants to the Plaintiff;

(c) the Plaintiff would pay interest for the 2nd Loan to the 1st to 4th Defendants at the rate of 12.5% per month; and

(d) the Plaintiff was required to execute the Sale and Purchase Agreement [“SPA”], Form 14A and Power of Attorney [“PA”] as a form of “security” for the 2nd Loan. The SPA, Form 14A and PA were prepared by the 5th Defendant, a partner in Messrs SR Tan, Cheng, Lim & Tee [“Messrs. SRT”]. [7] The Plaintiff accepted the 2nd Loan on the above terms and conditions. The Plaintiff signed the SPA, Form 14A and PA. Thereafter, the 1st to 4th Defendants handed RM120,000.00 in cash to the Plaintiff. [8] From March to September 2016, the Plaintiff had paid to the 1st to 4th Defendants a total of RM328,400.00 as Monthly Interest (2nd Loan). [9] Subsequently, the Plaintiff was unable to pay Monthly Interest (2nd Loan). The 4th Defendant sent “WeChat” messages and voice mails which threatened the Plaintiff that if he failed to pay Monthly Interest (2nd Loan), the Land would be transferred to the 1st to 4th Defendants. [10] The Transfer was registered without the Plaintiff’s knowledge. The Plaintiff only knew about the Transfer when he did a land search in April,

[11] The Plaintiff’s then solicitors, Messrs Veera & Co. [“Messrs VC”], sent a demand dated 21.4.2017 to the 5th Defendant and Messrs SRT which stated that the SPA was a sham to conceal the unlicensed moneylending business between the 1st to 4th Defendants on the one part and the Plaintiff on the other part. [12] Messrs VC sent a letter dated 22.5.2017 to Messrs SRT which requested from Messrs SRT on an urgent basis for all documents, letters, correspondence and receipts of payments. [13] The 1st to 4th Defendants prevented the Plaintiff from having access to the Property. Consequently, the Plaintiff suffered loss as follows:

(a) the Plaintiff had to stop his bird’s nest business which was carried on in the upper floors of the Property; and

(b) the Plaintiff could not rent out rooms in the first floor of the Property to his tenants. Defendants/Appellant’s Case [14] The 1st, 3rd and 4th Defendants gave evidence as follows:

(a) CML was “willing” to terminate SPA (CML) subject to a “compensation sum” of RM780,000.00 to be paid by the Plaintiff on or before 15.12.2015.

(b) upon receipt of RM780,000, Messrs KR undertook to forward the IDT to Messrs SRT.

(a) an “Acknowledgement” dated 8.12.2015 which stated the Plaintiff had elected not to be legally represented in respect of the SPA and in consideration of Messrs SRT’s consent to attend to the execution of the SPA by the Plaintiff, the Plaintiff “expressly state that [the Plaintiff] will not make any allegation against [Messrs SRT] nor make any complaints or claims against [Messrs SRT] in any Court of law … whatsoever pertaining to the transaction herein”.

(b) the Plaintiff’s letter dated 9.12.2015 to Messrs SRT which stated that the Plaintiff “shall” not hold Messrs SRT liable for whatever losses in relation to the Plaintiff’s authorization for Messrs SRT to release a payment of RM780,000.00 (from the Price) to Messrs KR (on behalf of CML).

(a) CML and the Plaintiff entered into a “Deed of Revocation” dated 4.1.2016 [“Revocation Deed”] which revoked SPA (CML); and

(b) Messrs KR handed the IDT to Messrs SRT.

(a) a Sale and Purchase Agreement dated 15.12.2015 whereby the Plaintiff purportedly sold the Property to the 1st to 4th Defendants at a price of RM900,000.00;

(b) an instrument under NLC to transfer the Land from the Plaintiff to the 1st to 4th Defendants; and

(c) a power of attorney regarding the Land executed by the Plaintiff in favour of the 1st to 4th Defendants;

(a) execute all the required documents to re-transfer the Land to the Plaintiff; and

(b) deliver the “Issue Document of Title” of the Land to the Plaintiff;

(a) damages for unlawfully occupying the Property (which will be assessed by the court); and

(b) rent for the ground floor of two units of the Property which have been let out by the Plaintiff. [18] On 5.8.2022, the LHCJ allowed the Respondent’s claim against the Appellants without order as to costs and dismissed the Appellants’ counterclaim. [19] The LHCJ found that the Appellants had carried on a moneylending business contrary to Section 5 of the MLA by granting the loan of RM900,000.00 to the Respondent without a moneylender’s license pursuant to Section 10OA of the MLA, and ordered the completed transfer of the Property registered in the Appellants’ names to be cancelled and re-vested with the Respondent. [20] The Appellants submitted amongst others that:

(a) The Learned Judge had erred in law and/or in fact in finding and deciding that the Appellants are carrying out moneylending business under the MLA. [refer to pg 6 R/P RRT – Ground 1 of the MOA];

(b) The Learned Judge had erred in law and/or in fact in finding and deciding that there was a contravention of Section 5(1) of Moneylenders Act 1951. [refer to pg. 6 R/P RRT – Ground 2 of the Memorandum of Appeal];

(c) The Learned Judge had erred in law in invoking the rebuttable presumption under Section 10OA of the Moneylenders Act

[refer to pg. 6 R/P RRT – Ground 3 of the Memorandum of Appeal];

(d) The Learned Judge had erred in law and/or in fact in finding and deciding that the sale of the property held under PM 1745, Lot. No. 7112, Pekan Sungai Pelek, Daerah Sepang, Negeri Sembilan [‘the Property’] by the Respondent to the Appellants is unenforceable under Section 15 of the Moneylenders Act 1951 [‘MLA’]. [24] For the purposes of our analysis, the following relevant provisions of the MLA are reproduced below: Moneylending Act 1950 Section 1 “moneylender” means any person who carries on or advertises or announces himself or holds himself out in any way as carrying on the business of moneylending, whether he carries on any other business. Section 5 Licences to be taken out by money-lender “5. (1) No person shall carry on or advertise of announce himself or hold himself out in any way as carry on or advertise or announce himself or hold himself out in any way as carrying on the business of money/ending unless he is licensed under this Act” Section 15 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”. Section 10OA Presumption as to the business of moneylending “10OA. 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”. [25] In the Court below, the premise of the Plaintiff’s claim was primarily that the agreed terms of the SPA executed on 15.12.2015 were blatantly not complied with. Instead, the events that followed were something very different from the said express terms. The material events are these:

(a) The SPA was in fact signed by the parties respectively on 8.12.2015 and not on 15.12.2015;

(b) The deposit of RM120,000.00 was only paid by the Appellants to the Respondent on 15.12.2015 in cash;

(c) The remaining ‘purchase price’ of RM780,000.00 was paid by the Appellants to the Respondent way earlier before the deposit had been paid to the Respondent;

(d) The Appellants have alleged that the RM120,000.00 which has been paid to the Respondent on 15.12.2015 was a payment for the balance of the ‘purchase price’ and not a deposit; and

(e) Hence, the deposit had been paid in advance and is part of the ‘purchase price’ of RM789,000.00. [26] We are inclined to agree with the Respondent’s contention that the entire actions of the Appellants did not reflect the express terms the SPA at all material times and instead their actions have clearly shown that the Appellants only wished to complete the disbursement of the loan sum to the Respondent without adhering to the terms and/or clauses under the duly signed SPA. [27] This fact of non-compliance with the SPA was amply supported by the Appellants’ witnesses’ evidence together with their own documentary evidence in regard to the payment of deposit. In was explicitly stipulated in the SPA that the deposit was required to be paid by the Appellants as the purchasers on or before 8.12.2015, i.e., the date of execution of the SPA but the same was received by the Respondent only on 15.12.2015 and that too not as a deposit but as the balance purchase price [‘BPP’] which was wholly contrary to the clear and explicit terms of the SPA. The major portion of the purchase price in the sum of RM780,000.00 was paid well before the deposit as agreed upon was even due for payment. [28] It was submitted by the Respondent that, as found by the LHCJ, the explanations given by the Appellants for the manner of payment as alluded to were not credible and that there were too many discrepancies which clearly proved that the SPA dated 15.12.2015 is not a legally valid agreement and Appellants’ arrangement is not a common practice followed in any genuine real estate SPA transaction. [29] We accept it as settled law that parties to a written contract are strictly bound by the agreed terms and conditions as expressly stipulated. A leading authority in point is Polygram Records Sdn Bhd v The Search Anor [1994] 3 MLJ 127 where it was held that: [2] “A party who signs a written contract is bound by the terms of the contract, except in the limited cases where fraud, undue influence or misrepresentation may be established. Therefore, the argument by the group that the first contract was not binding on them since they did not “agree to the terms” could be dismissed summarily.” [30] In urging us to affirm the LHCJ’s decision, the Respondent impressed upon us that there was a glaring failure by the Appellants to disregard the agreed terms of the SPA right from the payment of the deposit that was wholly inconsistent with the said express terms. As such, that the LHCJ’s finding that the agreement is void in accordance with the provisions under the existing law and established principles is absolutely a right decision. [31] The Appellants, on the contrary, contended that the LHCJ’s decision was erroneous in the following respects:

(a) Completely misconstrued the factual matrix and evidence presented of the Appellants’ SPA transaction here with the Respondent (i.e. the 2nd SPA), and particularly: i. There was insufficient judicial appreciation of the evidence of circumstances before him; ii. The Learned Judge was plainly wrong and had completely overlooked the inherent probabilities (or improbabilities) of the case; iii. The course of events affirmed by the Learned Judge could not have occurred; and iv. The Learned Judge had made unwarranted deductions based on faulty judicial reasoning from admitted or established facts.

(b) The LJ had in fact also misapplied the test of proof of moneylending and rebuttable presumption in Section 10OA of the MA. [32] At the core of this appeal is the Appellants’ submission that the LHCJ had critically erred in making the presumption of moneylending in this case (the first limb of Section 10OA, MLA) as the Respondent had not made out or provided any proof of a transaction of a “loan with interest” said to have been provided by the 1st to 4th Appellants. [33] Reference was made to Section 10OA of the MLA, which, in the Appellants’ submission, contains the following requirements:

(a) At the outset the establishment of proof of a loan given with interest based on the facts and evidence to lead to the presumption that such a person is carrying on the business of moneylending; and

(b) Then only once such proof is provided will there be a need to raise a rebuttal to the presumption of moneylending. [34] Central to the Respondent/Plaintiff’s claim in the Court below was that the 2nd SPA that he had entered into with the Appellants was in fact a security for an unlicensed moneylending transaction involving the Appellants, and is thus a sham, and ought to be declared null and void. In support thereof, the Respondent alleged:

(a) He entered into a moneylending transaction for the sum of RM600,000.00 with one CML Realty and had deposited the title of the Disputed Property with CML Realty as security for that loan.

(b) He then took another loan of RM900,000.00 from the 1st to 4th Respondents to pay the CML Realty Loan, and this 2nd Loan carried an interest at a whopping rate of 12.5% per Month.

(c) He made interest payments to the 1st to 4th Appellants between March and September 2016, then defaulted.

(d) The 1st to 4th Appellants harassed and threatened him for payment. [35] It was the Appellants’ position that the CML moneylending transaction as above was completely different and distinct from the transaction with the Appellants who had no connection with the former. The Respondent had purportedly failed to provide any cogent evidence in support of his allegations as above which had been unequivocally denied and disputed by the Appellants who had given consistent testimonies on the issue at hand. The Respondent, on the other hand, was said to have been evasive on the alleged illegality and to have given evidence that was contradictory on material facts. [36] Amongst others, that he did not understand the Amended Statement of Claim and did not know whether the 1st and 2nd SPAs were against the law for being in breach of the MLA. Despite making grave allegations as to the SPAs being sham agreements and illegal, the Respondent’s testimony was purportedly filled with inconsistencies that were not resolved. Moreover, it was alleged that 2 law firms, had participated in and profited from the alleged illegal agreements/transactions, i.e., the 1st and 2nd SPA respectively. Reference was made to Sections 101 and 102 of the Evidence Act, 1950 that placed the onus of proof on the party that raises a particular fact or issue against another party. [See Nanyang Development (1966) Sdn Bhd v How Swee Poh [1970] 1 MLJ 145 at p. 145H] [37] According to the Appellants, apart from the Respondents’ bare allegation of the CML SPA being a moneylending transaction, there was in fact no other evidence of moneylending business nor pattern of conduct which ties the Appellants to any moneylending business. However, the LHCJ had purportedly omitted to take the critical step of evaluating the Respondent’s completely contradicting and illogical testimony and failed to conclude that such contradicting, illogical and equivocal assertions by the Respondent had completely failed to establish even prima facie proof of a “loan given at an interest”. [38] We were urged to take note, in particular, in contrast to the CML loan transaction (1st loan), the following:

(a) It is the Respondent’s own pleaded case and sworn assertion in his witness statement that the purported 2nd Loan of RM900,000.00 carried interest of “12.5% per month”.

(b) On a simple calculation, such interest as pleaded by the Respondent would amount to RM112,500.00 per month (RM900,000.00 x 12.5% per month).

(c) The Respondent’s concession that, contrary to his pleading, the interest rate charged was not 12.5% per month.

(d) The Respondent’s concession that the alleged interest rate of 12.5% p.m. as pleaded was incorrect.

(e) The contradiction in respect of the interest rates chargeable for the loan affected the key component of the presumption of illegal moneylending.

(f) The Respondent’s oral evidence was completely contradictory with his own documentary evidence as to how he arrived at the figure of RM348,400.00. [39] In essence, the Appellants’ contention was that the Respondent’s case as presented in his oral evidence had breached the trite principle that parties in establishing their claim are strictly bound by their pleadings. The Court of Appeal in Joseph Paulus Lantip v Tnio Chee Chang and another appeal [2020] 5 MLJ 708 recently re-stated this cardinal principle when it remarked that it would be most damaging to our administration and system of justice if parties are allowed to plead a certain complaint, lead evidence on another and the court decides on something entirely different. [40] We would pause her to scrutinise the LHCJ’s reasoning in making his finding on the presumption of moneylending business under S.10OA, MLA. He had no hesitation in finding that: “… there was a rebuttable presumption the 1st to 4th Defendants had carried on a moneylending business by granting the 2nd Loan to the Plaintiff without a moneylender’s license) has arisen pursuant to S.100A MLA (Rebuttable Presumption). The Rebuttable Presumption arises because there are undisputed contemporaneous documents in the form of the Plaintiff’s personal cheques, Plaintiff’s Bank Statements and WeChat Messages which proved that the Plaintiff had paid Monthly Interest (2nd Loan) to the 1st to 4th Defendants. It is to be noted that S.2 MA has given a wide interpretation of “interest” as follows: “interest does not include any sum lawfully charged in accordance with this Act by a moneylender for or on account of stamp duties, fees payable by law and legal costs but, save as aforesaid, includes any amount by whatsoever name called in excess of the principal paid or payable to a moneylender in consideration of or otherwise in respect of a loan”. [41] It is important for us to note here that the LHCJ had made an affirmative finding of fact after a full consideration of all the evidence that on the facts, the Respondent was entitled to invoke a rebuttable presumption under S.10OA MLA that the 1st to 4th Defendants had carried on a moneylending business by giving the 2nd Loan to the Plaintiff without a moneylender’s licence granted by the Registrar of Moneylenders under S.5B(1) MLA. It was apparent that the LHCJ made the finding on sound basis, essentially, on the undisputed facts before him, particularly, the contemporaneous documents and communication between the parties at the material time. As such, as the decision was on the facts and arrived at following a trial, we would in principle not interfere with the finding unless it is demonstrated to us that it is plainly wrong or baseless on the facts and evidence. [42] Thereafter, the LHCJ had correctly dealt with the crucial issue as to whether the Appellants [Defendants 1 – 4] had successfully rebutted the above presumption. He took the correct position that once the Rebuttable Presumption arises under S.10OA MLA, the 1st to 4th Defendants have the evidential onus to displace the Rebuttable Presumption on a balance of probabilities – see Barisan Tenaga Perancang (M) Sdn Bhd v Dr Mansur bin Hussian & Ors [2017] 2 MLRH 177, at [48(2)]. [43] The LHCJ then, after due consideration of the material facts and documents found as a fact that the 1st to 4th Defendants had failed to rebut the Rebuttable Presumption on a balance of probabilities. This decision is due to the following evidence and reasons:

(a) CML had made a profit of RM180,000.00 from the Respondent within a span of 5 months as compensation for the revocation of the CML SPA.

(b) The CML SPA and the Revocation Deed were contrived to camouflage the 1st loan as a sale of the disputed property.

(c) There was undisputed documentary evidence that the Respondent had paid monthly interest. Amongst these were the Respondent’s bank statements showing the transfer of sums of money to D4 account purportedly as repayment of a loan granted by D4’s husband whereas the alleged debt had not been proved.

(d) The Respondent’s payment to D1’s husband was also not proved to be settlement of a debt owed to the latter.

(e) If the SPA, Form 14A, PA and Transfer were genuine, there was no reason why the Plaintiff who had sold the Property for RM900,000.00, would still need to borrow money from the D1’s Husband, D3 and D4’s Husband.

(f) The WeChat Messages between the parties corroborated the Plaintiff’s oral and documentary evidence (Plaintiff’s cheques and Plaintiff’s Bank Statements) regarding the Plaintiff’s payment of Monthly Interest (2nd Loan).

(g) Several provisions of the SPA indicate that it is a sham, particularly in relation to the payment of the deposit on the date of the SPA [15.12.2015] and the payment schedule of the Balance Purchase Price when D1 – D4 had paid in full the entire purchase price even before the date of the SPA.

(a) it is forbidden by a law;

(b) it is of such a nature that, if permitted, it would defeat any law; … 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”. [50] Having made a finding of fact that the 2nd loan was granted by D1 – D4 in contravention of S.5(1) MLA, the LHCJ held that this loan was void under S.15 MLA read with: “(1) S.24(a) CA [the 2nd Loan is “forbidden” by S.5(1) MA] and/or.

(a) Scenario 1, according to Clause 2 (Second Schedule), this SPA should be considered completed since January 2016 because the Appellants had successfully obtained permission to charge property title from the land office on 13.1.2016;

(b) Scenario 2, according to Part 12 of the First Schedule, the SPA is considered complete on 15.12.2016; and

(c) Scenario 3, according to Clause 2.1 of the SPA, the agreement is deemed perfect when the Respondent receive the balance purchase price for the property. In this case, the Respondent had received the balance sum of the purchase price amounting to RM120,000.00 from the 4th Appellant at his residence on 15.12.2015. [58] It bears reiteration that the crux of the appeal before us is against the LHCJ’s decision that the Appellants were at the material time carrying out a moneylending business under the MLA in contravention of S.51(1) of the MLA and in invoking the rebuttable presumption under S.10OA of the MLA in arriving at his decision to allow the Respondent’s claim for the declarations and the orders sought. Also against the decision that the sale of the subject property was in contravention of law and thus, unenforceable under S.15 of the MLA. [59] It would be instructive at this point for us to place on record certain leading authorities that we have considered in the determination of this appeal. [60] We would first adopt with approval the Court of Appeal judgment of Global Globe Property (Melawati) Sdn Bhd v Jangka Prestasi Sdn Bhd [2020] 6 CLJ 1 where Lee Swee Seng, JCA quoting Hitch And Others v Stone (Inspector of Taxes) (2001) STC 214 which referred to Snook v London And West Riding Investments Ltd [1967] 2 QB 786 pronounced on the applicable test in determining a sham agreement at [105]: “[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 [1996] 1 QB 650 at 683-684 per Diplock LJ, which was cited by Mr Price). [69] Fifth, the intention must be a common intention (see Snook)”. [61] The Respondent brought to our attention another COA decision in point, Lee Heng Yak & Anor v Li Chee Loong & Anor [2018] MLRAU 359 which pronounced that: “[36] We were persuaded to consider the habitual act of the 1st Defendant in lending out loans and then transfer the borrowers’ houses to him with the assistance of the 2nd Defendant. The Plaintiffs’ counsel referred to the Court of Appeal case Tan Ah Moai & Ors v Li Chee Loong [2018] MLRAU 21 and also the rest of other similar cases in Johor Bahru. It was contended that, the same law firm is involved in moneylending scheme through the modus operandi of a sale and purchase transaction. Counsel submitted that the case of Tan Ah Moai had referred to the Federal Court case of Bandar Eco-Setia Sdn Bhd v Angelane Eng [2016] 1 MLRA 103; [2016] 1 MLJ 764; [2016] 3 CLJ 173; [2016] 1 AMR 425 in which it was held by the Court that the Court will consider the conduct of the party who seeks to enforce the contract and the relevant circumstances before granting the specific performance”. [62] In our considered view, the determination of the crucial question as to whether a SPA is in a given factual situation in fact a moneylending transaction is essentially fact based from an evaluation of the material evidence, including the credibility of the parties involved and their respective versions given under oath. [63] The Respondent’s position which found favour with the LHCJ was that the Appellants were the parties who wanted to execute the SPA but when looking at the background or the reasons why the SPA was signed by both parties, it was contrary to Sections 5 MLA 1951 because there was an interest sum paid by the Respondent and the payment received by the Appellants was in full even though the Appellants never obtained a licence to provide moneylending services with interest. [64] Likewise, that, the Respondent had paid interest fees for RM120,000.00 to the Appellants from March 2016 to September 2016 whereby the total payment so far was RM348,400.00 which was duly received by the Appellants from the Respondent. [65] The LHCJ was satisfied that the aforesaid repayment together with interest charges through online banking facilities and in cash had been supported by documentary evidence. Importantly, we must stress that this was purely a finding of fact at the conclusion of the trial. [66] We would now proceed to look at the law on appellate interference against a decision by the trial Court which had heard first-hand the witnesses for the litigants and considered their evidence in its totality. The principles relating to appellate intervention of a trial Court’s decision premised on findings of fact are well settled. [67] In the leading case of Lam Soon Oil & Soap Manufacturing Ltd v Impex Syndicate Ltd [1964] 1 MLRA 741, the Federal Court decided as follows: “The appellants now seek to reverse the judgment of Ambrose J. I can do no better than to refer to a passage in the judgment of the Privy Council delivered on 14 January 1964 in the Singapore case of Tay Kheng Hong v Heap Eng Moh Steamship Co. Ltd [1964] MLJ 87, 91, 92 for a statement of the principles upon which an appellate Court should act in reviewing the decision of a Judge of first instance: “There is a heavy onus on a party who seeks to displace the conclusion formed by the trial Judge on questions of fact. The principles upon which an appellate Court should act in reviewing the decision of a Judge of first instance were stated by Lord Thankerton in Watt or Thomas v Thomas: “I. Where a question of fact has been tried by a Judge without a jury, and there is no question of misdirection of himself by the Judge, an appellate Court which is disposed to come to a different conclusion on the printed evidence, should not do so unless it is satisfied that any advantage enjoyed by the trial Judge by reason of having seen and heard the witnesses, could not be sufficient to explain or justify the trial Judge’s conclusion; II. The appellate Court may take the view that, without having seen or heard the witnesses. It is not in a position to come to any satisfactory conclusion on the printed evidence; III. The appellate Court, either because the reasons given by the trial Judge are not satisfactory, or because it unmistakably so appears from the evidence, may be satisfied that he has not taken proper advantage of his having seen and heard the witnesses, and the matter will then become at large for the appellate Court.’ Later his Lordship quoted with approval a passage from the speech of Lord Shaw in Clarke v Edinburgh & District Tramways Co. Ltd: “In my opinion, the duty of an appellate Court in those circumstances is for each Judge of it to put to himself, as I now do in this case, the question, Am I – who sit here without those advantages, sometimes broad and sometimes subtle, which are the privilege of the Judge who heard and tries the case – in a position, not having those privileges, to come to a clear conclusion that the Judge who had them was plainly wrong/ If a cannot be satisfied in my own mind that the Judge with those privileges was plainly wrong, then it appears to me to be my duty to defer to his judgment.’ Before the Court of Appeal in Singapore was entitled to reject the trial Judge’s estimate of the credibility of the appellant and Goh Leh they would have to be satisfied that the trial Judge’s view was plainly wrong and that any advantage which he enjoyed by having seen and heard the witnesses was not sufficient to explain his conclusion”. [68] The above judgment speaks for itself on the meaning and scope of the plainly wrong test which the Appellants must satisfy in a case like the present which went to full trial at the conclusion of which the trial judge entered judgment for the Respondent supported by lengthy and elaborate reasoning. [69] We concur with the Appellant that the charging of unlawful interest is the key element to the establishment of the unlawful act or offence of illegal moneylending under the MLA. This element is the sub-stratum of the Respondent’s claim the proof of which is the subject of this appeal. In a nutshell, the Appellants’ position was principally that the LHCJ had misdirected himself and arrived at an erroneous conclusion when he failed to judicially appreciate that the Respondent’s evidence on the alleged payment of interest was dubious, highly questionable and contradictory in several respects. [70] With respect, we are not inclined to agree with the Appellants’ contention as above having carefully scrutinized the LHCJ’s grounds of judgment and noted that the LHCJ had adequately and thoroughly evaluated and analysed the evidence as a whole, including the issue of the witnesses’ credibility before concluding on the issues that had arisen for determination. He had in fact carried out an elaborate assessment of the facts and evidence before the court on the critical issues, which he had sufficiently addressed. We do not agree that he had critically failed to take into account essential and material evidence that led to findings that were plainly wrong. [71] Of primary consideration before the LHCJ was whether the impugned SPA of the disputed property was a sham document and was not genuine and lawful. It required a careful analysis of the facts and evaluation of all the material evidence adduced by both parties. We are satisfied that the LHCJ had carried out this exercise adequately and diligently. For completeness, we would refer to the observation on this vital point in the Court of Appeal case of Dr Mansur Hussain & Ors v Barisan Tenaga Perancang (M) Sdn Bhd & Ors [2019] MLRAU 170 which applied the principle in the case of Hitch and others v Stone (Inspector of Taxes) [2001] STC 214 and stated that the applicable test to ascertain a sham document, first must take into consideration on the followings: “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 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 … that for acts or documents to be a ‘sham’, with whatever legal 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. No unexpressed intention of a ‘shammed’ affect the rights of a party against whom he deceived”. [72] We do not find any plain error or failure by the LHCJ in regard to this pivotal issue in properly and sufficiently analysing the material facts and issues raised by the parties before concluding that the impugned SPA was a sham document designed to disguise an illegal moneylending transaction. Importantly, the trial Court in determining whether there was a common intention among the parties to the agreement not to create legal rights and obligations as expressed in the document is not restricted to examining just the 4 corners of the document itself. It may additionally examine extraneous and circumstantial evidence such as the parties’ explanation and subsequent conduct. Having thoroughly examined the pertinent facts, surrounding circumstances and conduct of the parties at the material time, the LHCJ came to a firm finding of fact that the disputed SPA was in fact intended to be a sham agreement and was purely an illegal loan agreement. [73] Lastly, we concur with the Respondent’s concluding submission that the decision pronounced by the LHCJ was arrived at based on the facts and evidence produced and presented before the LHCJ during the process trial as well as pursuant to the advantage enjoyed by the trial judge by reason of having seen and heard the witnesses. [74] There was sufficient justification in fact and law for the conclusion that was reached bereft of any serious misdirection that would warrant interference on appeal against what were essentially findings of fact by a Trial Court. CONCLUSION [75] The central question that arose for our deliberation and determination in these appeals was rather straightforward, namely, whether the LHCJ had made a decision that was plainly wrong that the Appellants’ purchase of the Disputed Property was not a genuine sale and purchase transaction but a purported moneylending transaction in which the Appellants were the purported unlicensed moneylenders and the Disputed Property was merely a collateral and not intended for sale. [76] At the conclusion of these appeals, we pronounced our judgment as follows: “We have anxiously and carefully considered the evidence of the discrepancies in the SPA said to be nothing less than what could be explained as still a normal valid innocuous SPA. Taking the discrepancies together which include the full payment of purchase price without taking vacant possession and even asking for the keys, the long delay in the property being registered in the 4 purchasers’ name and the various payments made by the Vendor Plaintiff at the express instruction of some of the Defendants, we are more than satisfied that the learned Judge was not plainly wrong in concluding that the transaction was an illegal moneylending transaction. Therefore, the instrument used to effect the transaction and the SPA is a sham transaction and being illegal, the natural consequence of it being null and void is inevitable as provided under the MLA. The 1st to the 4th Defendants cannot claim restitution under S.66 or S.71 Contracts Act, 1950 as they were aware of the illegality and cannot plead ignorance. To allow the 1st to the 4th Defendant to claim restitution would be to allow them to benefit from the transaction that they had devised to camouflage their nefarious intention and that can only embolden unlicensed moneylenders. There are no merits in the appeal of the 1st to the 4th Defendants and so their appeal is hereby dismissed with costs of RM20,000 to the Respondent subject to allocator. As for the 5th Defendant’s appeal in R33 (Appeal No. 33), she is not strictly an aggrieved party as no order for damages was made against her and in fact the Plaintiff’s claim against her was dismissed though no order for costs was made in her favour. The LHCJ was careful to use the expression “might have committed a misconduct” which is certainly not to be equated with a finding of misconduct. The last statement made in para 67 of the GOJ was more of a general statement to caution all solicitors involved in similar transactions to conduct themselves professionally and without reproach. We would therefore would dismiss the appeal of the 5th Defendant with no order as to costs.” Dated: 15 July 2022 - sgd - GUNALAN A/L MUNIANDY Judge Court of Appeal Putrajaya Counsel for the Appellants: Lim Koon Huan (together with Siew Ka Yan) [Messrs. Skrine] Counsel for the Respondent: Alex Gan Yi Yong (together with Vilasiny a/p Gannasen and Siow Kim Leong) [Messrs. Siow Kim Leong]