Cosmopolitan Avenue Sdn Bhd v Nadayu Properties Berhad (BA-22C-25-07/2024)

Enclosure 44 is an application by the Defendant pursuant to O14, Rules of Court 2012 to enter final judgment against the Plaintiff in respect of its Counterclaim (“the Application”).

The relevant cause papers in the Application are :-

the Defendant’s supporting affidavit affirmed by Yeow Fong San on 13.6.2025 (“Defendant’s Enclosures 45- 48”);

the Plaintiff’s affidavit in reply affirmed by Cheah Joi Yong on 14.7.2025 (“Plaintiff’s Enclosures 51- 52”);

the Defendant’s affidavit affirmed by Ong Tsuey Yun on 7.8.2025 (“Defendant’s Enclosure 56”) .

On 19.11.2025 I allowed the Application with costs of RM5,000.00 subject to stay of execution of the Order against the Plaintiff pending the disposal of the Plaintiff’s Claim against the Defendant.

Not satisfied with my decision, the Plaintiff lodged an appeal on 26.11.2025. I set below my grounds for allowing the Application.

The material facts in this case, which are largely not in dispute are as follows :-

The Plaintiff is the owner of a piece of land and was at the material time undertaking the development known as Empire City, Fasa 2 (“the Plaintiff’s Project”) in Damansara, Petaling Jaya, Selangor;

(ii)

(iii) Pelaburan Hartanah Berhad (“PHB”) is the registered owner of several parcels of land adjoining Empire City (“PHB Lands”);

(iv) The Defendant was the developer appointed to build a hospital building, assisted living units and ancillary structures (“the PHB Buildings”) on part of the PHB Lands;

For purposes of ingress and egress to the PHB Lands where the PHB Buildings would be built, the Defendant and PHB required a road to be constructed which “tapped” into the Elevated Ramp No. 6, the costs of which was to be borne by the Defendant;

(vi) For the Plaintiff’s Project, in or around 2015, the Plaintiff had applied for and obtained financial assistance from the Public Partnership Unit, Prime Minister’s Department for the sum of RM22,279,000.00 (“the Grant”) to fund its development of the Plaintiff’s Project. Part of the Grant has been disbursed to the Plaintiff, while the remaining RM11,500,000.00 was to be disbursed after certain milestones of the Plaintiff’s Project was achieved (“Balance of Grant”);

(vii) Pending the disbursement of the Balance of Grant, the Defendant and PHB have agreed to each advance RM6,000,000 to the Plaintiff, totalling RM12,000,000 (“Cash Advance”), to assist the Plaintiff in defraying the costs of construction of the Elevated Ramp in accordance with an Amended ER Plan. The Amended ER Plan would be the final updated plan for the Elevated Ramp No. 6 incorporating the change in alignment due to the proposed construction of a new highway (i.e. the Damansara Shah Alam Expressway) AND the road “tapping” into the Elevated Ramp (No.6) for the ingress and egress to the PHB Lands, approved by LLM.

To cater for the advances to be made, the Plaintiff, the Defendant and PHB entered into a Cash Advance Agreement dated 30.6.2018 (“the CAA-1”) incorporating the above.

The term for the repayment of the Defendant’s Cash Advance is at Article 6 of the CAA-1 (verbatim): “6.1 Repayment

Subject always to Article 6.1(b) below, the Borrower shall repay the Cash Advance and the Profit Chargeable for Advances accrued thereto which are due and payable by the Borrower to PHB and Nadayu in equal amounts under this Agreement in one (1) bullet repayment no later than on the Repayment Date.

In the event that the Government of Malaysia through BPMB decides not to provide the Grant to the Borrower or that the Government of Malaysia through BPMB delays the release of the Balance Facilitation Fund into the Escrow Account by the Repayment Date, the Cash Advance by the Lenders together with the Profit Chargeable for Advances accrued thereon up to the Repayment Date (such aggregate sum shall hereinafter be referred to as “the Outstanding Indebtedness”) and shall be a debt due and payable by the Borrower. The Borrower shall repay the Outstanding Indebtedness to the Lenders in full within six (6) months from the Repayment Date PROVIDED ALWAYS that a further Profit Chargeable for Advances at the Profit Chargeable for Advances Rate shall be charged and payable on the Outstanding Indebtedness on and from the Repayment Date calculated on monthly rests from the date next after the Repayment Date to the day of full payment by the Borrower of the Outstanding Indebtedness, and such further Profit Chargeable for Advances shall be paid by the Borrower simultaneously with the full payment of the Outstanding Indebtedness.”

Parties to the CAA-1 have subsequently entered into further agreements between them to regulate the then current status of the construction of the Elevated Ramp in accordance with the Amended ER Plan. The subsequent agreements are as follows:-

a Supplemental Cash Advance Agreement dated 24.7.2018 (“the Supplemental Agreement”); and

(ii) a Second Supplemental Cash Advance Agreement dated 16.4.2021 (“CAA-3”)

The only relevance CAA-3 has to the Application are the following agreed amendments and/or variations made to the CAA-1 (verbatim) :- “1.

1.1 Definitions

Words and expressions defined in the Cash Advance Agreement and Supplemental Agreement shall, unless the context otherwise requires or where specifically defined herein, shall have the same respective meanings when used therein.

Amendments To The Cash Advance Agreement and the

2.1 Amendment to Recital A Recital A in the Cash Advance Agreement shall be deleted and replaced by the following : A. …The final updated plan for the Elevated Ramp arising from a change in alignment due to the proposed construction of a new highway in the vicinity, the Damansara Shah Alam Elevated Expressway has been approved by the Lembaga Lebuhraya Malaysia (“LLM”) vide letter dated 10th day of November 2020. The cost of construction of the Elevated Ramp in accordance with the Amended ER Plan (as hereinafter defined) is estimated to amount to Ringgit Malaysia Thirty Three Million Nine Hundred and Forty Nine Thousand Four Hundred and Ninety Eight and Sen Eighty Five (RM33,949,498.85) only.

2.2 Amendment to Recital B Recital B in the Cash Advance Agreement shall be deleted and replaced by the following : B. …The Elevated Ramp is required by PHB and Nadayu for the ingress and egress to the Building and the PHB Development Lands, and for this purpose, Nadayu, shall at its own cost and expense, complete the construction of the road to permit PHB, PHB’s tenants, licensees (including PHB’s tenants’ licensees) and all those lawfully requiring uninterrupted and unrestricted access in perpetuity, without any cost, to and from the PHB Development Lands to Lebuhraya Damansara-Puchong through the Elevated Ramp.

2.3 Amendment to Recital E Recital E in the Cash Advance Agreement shall be deleted and replaced by the following : E. The Borrower shall appoint the Contractor to undertake and/or oversee the construction of the Elevated Ramp in accordance with the Amended ER Plan and … For the avoidance of doubt, the completion of the construction of the Elevated Ramp in this recital and in this Agreement (“Completion”) shall mean the completion of the construction of the Elevated Ramp in accordance with the Amended ER Plan together with the seamless and complete connectivity of the road constructed by Nadayu tapping into the Elevated Ramp for the ingress and egress to the PHB Land and/or PHB Development Lands… and that both PHB and Nadayu shall not be involved in any way with the construction of the Elevated Ramp.

2.6 Replacement of Definitions The following definitions shall replace the previous definitions of the same name set out in the Cash Advance Agreement under Article 1.1 of the Cash Advance Agreement : Repayment Date means a date falling six (6) months from the Completion or the date of release of the Balance Facilitation Fund by the Government of Malaysia through BPMB to the Borrower, whichever is the earlier.”

10.

The Elevated Ramp (No. 6) together with a road “tapping” into it, to allow ingress and egress to the PHB Lands and PHB Buildings (“the Connection Road”), were constructed by the Plaintiff in accordance with the Amended ER Plan duly approved by the relevant authority.

The Elevated Ramp No. 6 inclusive of the Connection Road was accepted by LLM and opened to traffic on 31.8.2022. As such, according to the CAA-3 the Repayment Date was on 28.2.2023 and the Plaintiff did not repay the Defendant the Defendant’s Cash Advance for reasons explained below.

It is trite that O14 r 5, Rules of Court 2012 allows the Defendant to seek summary judgment against the Plaintiff on its Counterclaim on the ground that the Plaintiff has no defence thereto.

Once the Defendant has complied with the requirements for summary judgment in that the Counterclaim has been served onto the Plaintiff and that the supporting affidavit of the Application has stated that the Plaintiff has no defence to the Counterclaim, the burden is on the Plaintiff to satisfy the Court that it has triable issues on the Counterclaim that warrants a trial. - “the burden then shifts to the defendant to satisfy the court why judgment should not be given against him” per the Federal Court in National Company For Foreign Trade v Kayu Raya Sdn Bhd (1984) 1 CLJ Rep 283.

In Bank Negara Malaysia v Mohd Ismail & Ors (1992) 1 MLJ 400, the Supreme Court held at page 408 : “Under an O 14 application, the duty of a judge does not end as soon as a fact is asserted by one party, and denied or disputed by the other in an affidavit. Where such assertion, denial or dispute is equivocal, or lacking in precision or is inconsistent with undisputed contemporary documents or other statements by the same deponent, or is inherently improbable in itself, then the judge has a duty to reject such assertion or denial, thereby rendering the issue not triable. In our opinion, unless this principle is adhered to, a judge is in no position to exercise his discretion judicially in an O 14 application. Thus, apart from identifying the issues of fact or law, the court must go one step further and determine whether they are triable. This principle is sometimes expressed by the statement that a complete defence need not be shown. The defence set up need only show that there is a triable issue. …”

In resisting the Application, the Plaintiff advanced 2 issues :-

that the Defendant’s Cash Advance was to be utilised towards the costs of construction of the road which “tapped” into the Elevated Ramp (No.6) in accordance with an Amended ER Plan, the costs of which was to be borne by the Defendant. As such, the Defendant’s Cash Advance would be set-off against such costs;

(ii) that the CAA-1 was in essence a moneylending agreement as the Plaintiff was required to repay the Defendant’s Cash Advance together with the Profit Chargeable for Advances.

I shall deal with the issues in turn.

Set-Off

The relationship between the Plaintiff and the Defendant has been explained in paragraph 5 above.

It is not disputed that the Defendant and PHB required access to the PHB Buildings and/or the PHB Lands. They approached the Plaintiff, who had obtained the LLM’s Development Order to construct several elevated ramps leading to the Plaintiff’s Project, to request the modification of the Elevated Ramp No. 6 so as to allow the construction of the Connection Road.

According to the Plaintiff, after several negotiations between the parties, the Plaintiff agreed to construct the Elevated Ramp No. 6 together with the Connection Road subject to the following :-

the Defendant will bear the cost and expense of the construction of the Connection Road;

(ii) the Defendant will share the additional costs of construction of the Elevated Ramp No. 6 as the original Elevated Ramp Plan needed to be modified, revised and resubmitted for approval to cater for the Connection Road;

(iii) the Defendant and PHB will provide cash advance to the Plaintiff for the construction of the Elevated Ramp No. 6 and the Connection Road.

It is also a contention of the Plaintiff that parties have reached an accord that a Cost Sharing Agreement was to be entered by the parties to formalise their agreement on the sharing of cost of the construction of the Elevated Ramp No. 6 and the Connection Road.

As early as 17.12.2018, the Plaintiff has sent a letter to the Defendant on the issue of cost sharing where the Defendant was informed that the estimated cost to be borne by the Defendant for the Elevated Ramp No. 6 and the Connection Road was RM9,392,667.00. The Plaintiff has also indicated that a draft Cost Sharing Agreement will be forwarded to the Defendant in due course. (Plaintiff’s Enclosure 52, Exhibit CJY-6, pages 721-722)

The Plaintiff has also issued another letter dated 14.1.2019 to the Defendant where the Plaintiff has informed the Defendant that the estimated cost to be borne by the Defendant for the Elevated Ramp No. 6 and the Connection Road was RM9,392,667.00. The Defendant was also informed that a draft Cost Sharing Agreement will be forwarded to the Defendant once settled by the Plaintiff’s solicitors. (Plaintiff’s Enclosure 52, Exhibit CJY-6, pages 723-724)

In response to the Plaintiff’s letter dated 14.1.2019, the Defendant vide its letter dated 11.9.2019 informed the Plaintiff that whilst the total estimated development cost of the Elevated Ramp (No. 6) was RM33,929,331.00, the Defendant was only agreeable to cover the cost of the Elevated Ramp No. 6 of RM5,476,000.00. (Plaintiff’s Enclosure 52, Exhibit CJY-7, pages 726- 727)

From the Minutes of Meetings for the construction of the Elevated Ramp No. 6 (and by extension, the Connection Road), the construction of the Elevated Ramp No. 6 commenced on 22.1.2019 with site work commencing early March 2019. (Plaintiff’s Enclosure 52, Exhibit CJY-, page 473)

The Defendant has averred that the Defendant’s Cash Advance was released periodically to the Plaintiff from June 2019 to March 2021.

Needless to add, that despite the Plaintiff’s numerous requests and follow up (vide Plaintiff’s letters dated 17.12.2018,

14.1.2019, 7.11.2019, 16.10.2020 and the Plaintiff’s Solicitors’ letter dated 19.3.2021) parties did not enter into a Cost Sharing Agreement.

When the Defendant demanded for the repayment of the Defendant’s Cash Advance vide its Solicitors’ letter dated 24.5.2024, the Plaintiff initiated this action against the Defendant for RM15,156,944.28 on the basis of quantum meriut and/or S. 71, Contracts Act 1950.

The Plaintiff’s position regarding the Defendant’s Cash Advance can be found at paragraphs 29(c) and 32 of the Amended

Paragraph 29(c) : “In fact, the Defendant has vide a letter dated 14/3/2023, demanded from the Plaintiff, the cash advance amount of RM6,000,000.00 and a “profit” of RM1,076,701.54 and at the same time, refused to bear, share and/or reimburse the Defendant’s Cost or any part thereof. At the material times, the Plaintiff is prepared and/or willing to set off RM6,000,000.00 from the Defendant’s Cost to be paid by the Defendant to the Plaintiff. However, the Defendant has refused to do so.”

(ii) Paragraph 32 : “For the avoidance of doubt, the Plaintiff is prepared and/or willing to set off the advanced sum of RM6,000,000.00 from the amount to be paid by the Defendant or any amount as may be determined by this Honourable Court.”

It is further noted that in its Reply to Defence and Defence to Counterclaim, the Plaintiff re-iterated their position vis-à-vis the Defendant’s Cash Advance at paragraphs 6 and 19(ii) :-

Paragraph 6 : “(i) The Plaintiff has rights under the laws to set off the construction costs of RM15,156,944.28, which the Defendant is liable to pay to the Plaintiff from the advances of RM6,000,000.00 made by the Defendant.

(ii) The Plaintiff vide amongst others, a letter dated 7/12/2021 has given notice to set off to the Defendant.

(iii) As such, there is no amount to be repaid to the Defendant. Consequently, the Defendant’s allegation that the “Repayment Date has since passed” and the “Plaintiff failed and refused to comply with the terms of the CAAs” in paragraphs 6 and 8 of the Defence & Counterclaim is misconceived and a non-starter.”

(ii) Paragraph 19(ii) : “Alternatively, the Plaintiff is entitled to set off the construction costs against the sum of RM6,000,000.00 from the Defendant. Consequently, there is no amount payable by the Plaintiff to the Defendant.” [these averments were repeated in the Plaintiff’s Enclosure 51]

The Plaintiff’s argument was that the amount of RM6,000,000.00 being the cash advancement and RM1,076,701.54 being the Profit Chargeable for Advances, in law and in fact, ought to be deducted, and therefore set off, against the amount of RM15,156,944.28 being the Defendant’s portion of the costs in the construction of the Elevated Ramp (No. 6) and the Connection Road which was due from the Defendant to the Plaintiff.

It must be noted that the Plaintiff did not in any way deny the receipt of the Defendant’s Cash Advance. In fact, the Plaintiff has admitted the receipt of the Defendant’s Cash Advance in the Plaintiff’s Amended Statement of Claim and the Plaintiff’s Reply to Defence and Defence to Counterclaim.

Consequently, I hold that based on the terms and conditions in the CAA-1 read together with the Supplemental Agreement and the CAA-3 and the fact of the admission made by the Plaintiff on the receipt of the Defendant’s Cash Advance, this is not a triable issue.

(ii) Moneylenders Act 1951 (“the MA”)

The Plaintiff has sought to avail itself the provision of S. 15 of the MA in that the CAA-1, the Supplemental Agreement and the CAA-3 were contracts which were unenforceable as the Defendant was not a licensed moneylender under the said Act. S.15 : No moneylending agreement in respect of money lent after the coming into force of this Act by an unlicensed moneylender shall be enforceable.

In other words, S.15 of the MA strikes down those agreements if, and only if, the lender is in the business of moneylending without licence.

A starting point to analyse the law relating to moneylending is found in the case of Yeep Mooi v Chu Chin Chua & Ors (1981) 1 MLJ 14 where the Federal Court observed : “We have on another occasion observed that the Moneylenders Ordinance, 1951 does not strike at money lending but at moneylenders and at the loans lent by them. The Ordinance is never intended to apply to an individual, or any member of the public who lends money even at interest, unless he does so as a business. (Ngui Mui Khin & Anor v. Gillespie Bros & Co Ltd [1979] 1 MLRA 313).” [Emphasis added]

In another Federal Court case of Triple Zest Trading & Suppliers & Ors v Applied Business Technologies Sdn Bhd [2023] 6 MLJ 818 Abdul Rahman Sebli CJ (Sabah and Sarawak) when declaring a loan agreement to lend RM 800,000 to be repaid within one month together with a further RM 800,000 as ‘agreed profit’ was an illegal agreement in breach of the MA 1951 stated that the MA 1951 is to protect the public from the menace of illegal moneylenders aka ‘Ah Long’.

In Triple Zest, whilst the Federal Court accepted that the proof of a single loan at interest is made by a person, S10OA of the MA raises the presumption that such person to be carrying on the business of moneylending, this presumption is “until the contrary is proved.” Such presumption is rebuttable by the person with hard evidence and not on conjecture unrelated to evidence.

In Toe Hong Choo v Piong Choong Fah [2024] MLJU 2405, the High Court held that the types of evidence relevant to rebut the presumption under S.10OA of the MA would be :

an existing relationship between the lender and borrower that shows that the lender is not carrying on a business of moneylending [see Pan Global Equities Sdn Bhd v Taisho Company Sdn Bhd (2005) 3 CLJ 734; Shim Vui Geh v Dayang Masturah bt Sahari and another appeal (2024) 1 MLJ 755 and Wong Thian Choy & Anor v Goodnite Sdn Bhd & Anor

CLJU 1391]

(ii) the absence of a system and continuity in moneylending transactions on the part of the lender [see Sandhu Singh v Sellathurai [1955] 1 MLJ 117; Shim Vui Geh v Dayang Masturah bt Sahari and another appeal

1 MLJ 755; Larut Matang Supermarket Sdn Bhd v Liew Fook Yung [1995] 1 MLJ 375 and Chou Kwong Hing v Ling Yu Ngie [2017] 1 LNS 765]

(iii) the lender has never carried or advertised himself as a moneylender [See Wong Thian Choy & Anor v Goodnite Sdn Bhd & Anor (2019) CLJU 1391]

(iv) the interest charged is not at an exorbitant rate. In Triple Zest the Federal Court held that an ‘interest’ rate of 100% is an exorbitant rate and unless the presumption that the lender is carrying on the business of moneylending is rebutted by the lender such a lender will be considered as carrying on a moneylending business which requires a licence under the MA 1951.

In this case, when the Plaintiff alleged that the Defendant was carrying on a business of a moneylender without licence as it lent RM6,000,000.00 to the Plaintiff at the Profit Chargeable for Advances, S.10OA of the MA imposes on the Defendant the legal burden of proving on a balance of probabilities that it was not carrying on the business of moneylending.

The Defendant denied that it was carrying on a business as a moneylender but that of an investment and construction holding company and proceeded to disclose the following documents :-

the audited financial statements for the financial years ending December 2012 to December 2024;

(ii) the non-trade other receivables for the financial years ending December 2012 to December 2024

I am satisfied that based on the documents produced by the Defendant, there is a singular lack of evidence that the Defendant was in the business of moneylending and coupled with the following I found that the Defendant has in fact rebutted the presumption placed on it under S10OA of the MA :

that there was a relationship between the Plaintiff and the Defendant where the Defendant, in a bid to have ingress and egress to the PHB Land and the PHB Buildings, has requested for the modification of the Elevated Ramp (No. 6) to allow the construction of the Connection Road thereto. The CAA-1, the Supplemental Agreement, the CAA-3 and all the letters issued between parties collectively evidenced this relationship;

(ii) that there is an absence of any evidence of a system and continuity in moneylending transactions by the Defendant where from the evidence in this case the only lending of money was to the Plaintiff;

(iii) that there is also no evidence that the Defendant was carrying on or advertised itself in any way as a business of moneylending;

(iv) that the Profit Chargeable for Advances was not exorbitant.

This issue is, likewise, unmeritorious and I therefore reject the same as triable.

Based on the above facts and analysis, the Court is unable to find any issues that is triable that necessitated a trial on the Defendant’s Counterclaim. Therefore, Enclosure 44 is allowed with costs of RM5,000.00.

However, although the Court allowed the Defendant’s application for summary judgment under Enclosure 44 with costs of RM5,000.00, to preserve the Plaintiff’s suit against the Defendant for quantum meriut and/or S. 71 of the Contracts Act, 1950 the Court has pursuant to O14 r 3 (read with O14 r5) of the Rules of Court 2012 ordered a stay of execution of the summary judgment until the disposal of the Plaintiff’s claim against the Defendant. Dated : 16th December 2025 t.t ………………………………………. Shahriza Zalina Binti Abdul Shukor Judicial Commissioner High Court of Malaya Shah Alam For the Plaintiff : Alvin Lai & Cheryl Leong (Messrs. Justin Voon Chooi & Wing) For the Defendant : Yap Jun Cheng & Chia Rong En (PDK) (Messrs. Rahmat Lim & Partners)