Faizal Bin Zainal Rashid v Kedah Agro Holdings Berhad (KA-22NCvC-21-06/2023)

KEDAH AGRO HOLDINGS BHD.

SHUBERT DELOS REYES ANCHETA

AHMAD QUSYAIRI BIN AHMAD ZAINI (NRIC NO.:870202-02-5353) (AS THE REPRESENTATIVE OF THE ESTATE OF DATO' HAJI AHMAD ZAINI BIN JAPAR (THE DECEASED)) --- DEFENDANTS 11/04/2026 02:40:16 KA-22NCvC-21-06/2023 Kand. 118 GROUNDS OF JUDGMENT (After trial) Introduction 1. This case involves a seemingly straightforward RM1,500,000.00 corporate loan claim that dramatically unravels mid-trial, exposing allegations of a corrupt backdoor investment scheme, and a fatal legal blunder of suing a deceased chairman's son who completely lacks the legal authority to be sued.

Before delving into the merits, it is imperative to establish the precise procedural footing of the parties. Firstly, the Plaintiff withdrew his claim against Kedah Agro Holdings Berhad (“Kedah Agro”), which is the first Defendant, on the first day of the trial, without any liberty to file afresh. Secondly, Shubert Delos, the Second Defendant (“Shubert”), failed to enter an appearance and was a no-show throughout the proceedings. Hence, the dispute remains between Faizal bin Zainal Rashid (“Plaintiff”) and Ahmad Qusyairi bin Ahmad Zaini (“Third Defendant”). Lastly, it is noted for the record that the Plaintiff failed to file a written reply to the Third Defendant's written submission, citing an oversight, and instead elected to rely solely on their oral reply at the hearing. The Court has considered these oral reply submissions accordingly. Brief Facts of the Case 3. The sequence of events began when the Plaintiff was approached by the late Dato' Haji Ahmad Zaini Bin Japar (“Dato’ Zaini”), who was then serving as the Chairman of Kedah Agro.

While the Plaintiff's official court pleadings formally claimed he provided a RM1.5 million "loan" directly to Kedah Agro, the actual contemporaneous documents generated during the deal, including the Guarantee Agreement (“the Guarantee Agreement”), explicitly labelled the transaction as an "investment fund".

The defence strongly maintained that this arrangement was not a friendly loan, but rather a disguised, potentially illegal scheme intended to secure projects from Kedah Agro.

Following negotiations held around April and May 2018, the arrangement moved forward when Dato' Zaini issued an instruction letter on Kedah Agro's official letterhead, directing the Plaintiff to disburse the RM1.5 million to Shubert, a 3rd party to the transaction.

This instruction letter (“Surat D1”) immediately creates an insurmountable documentary contradiction for the Plaintiff. The Plaintiff's own Statement of Claim relies on Surat D1, which explicitly states that the RM1.5 million was provided as proof of fund (bukti keupayaan modal).

Acting on this, the Plaintiff released the funds into Shubert's account. Dato' Zaini then allegedly executed a Guarantee Agreement and a letter pledging his personal properties as collateral to secure the funds.

However, the Third Defendant (Dato' Zaini's son) challenged the authenticity of these core documents, pointing out that they were unstamped and formally alleging that his late father's signatures on them were forged.

A massive turning point in the timeline occurred during the trial itself regarding who actually borrowed the money. Even though the Plaintiff's Statement of Claim anchored the lawsuit on the assertion that the loan was given to Kedah Agro, the Plaintiff himself admitted in court that the money was actually given to Dato' Zaini in his personal capacity.

Based on the amended Statement of Claim, the Plaintiff was seeking the following from the Defendants, jointly and severally: a) The principal sum of RM1,500,000.00; b) Interest at a rate of 5% per annum on the RM1,500,000.00, calculated from the date of judgment until full settlement; c) A declaration that the Plaintiff holds an "equitable charge" over a specific property, granting them the right to apply for an order for sale; and d) Costs. Issues to be Determined by the Court 12. The parties have identified and agreed on the following core issues for determination:

Whether the Plaintiff's withdrawal against the Kedah Agro causes the claim against the Third Defendant to collapse, and whether the Plaintiff has fatally departed from his pleadings.

Whether the Third Defendant has the requisite locus standi to be sued under Order 15 Rule 6A, and whether he is privy to the Guarantee Agreement.

Whether the Third Defendant successfully discharged the burden of proving forgery. and

Whether the transaction is an illegal sham and void ab initio under Section 24 of the Contracts Act 1950 and the doctrine of ex turpi causa non oritur actio. Decision and Findings of the Court 13. After perusing all evidentiary documents, testimonies of the witnesses, and the written and oral submissions by all parties, this Court finds that the Plaintiff failed to prove his claim on a balance of probabilities. Specifically, the Plaintiff failed to maintain consistency with his own pleaded case regarding the borrower's true identity, resulting in a fatal departure from the pleadings. Furthermore, the Plaintiff failed to establish that the Third Defendant possesses the requisite locus standi to be sued as the lawful administrator of Dato’ Zaini's estate. Consequently, the Plaintiff's claim is fundamentally flawed, unsustainable in law, and must be dismissed.

At this juncture, before embarking on the Court's analysis and findings, it is apposite first to summarise the core legal and factual arguments raised in the respective submissions.

First, the Plaintiff submitted that the RM1,500,000.00 transaction was a friendly loan given to Dato' Zaini, and not an investment. To support this, the Plaintiff pointed to Clause 3.1.1 of the Guarantee Agreement, which obligated Dato' Zaini to issue a "Security Cheque" to guarantee the full repayment of the capital. Relying on the cases of Muhammad Najmi Mohd Sani v Ahamad Asmadi Sakat [2019] MLRHU 673 and Manivanan Kuppusamy v Datuk Ganesan Subramaniam [2025] MLRHU 77, the Plaintiff argued that requiring a guaranteed fixed return of funds is fundamentally inconsistent with the nature of a genuine investment, which inherently carries the risk of loss and uncertainty of profitability.

Furthermore, citing Leong Yeu Moi (F) v Neo Ai Si (F) [2019] 6 MLJ 622, the Plaintiff asserted that a lender has no legal duty to prove the actual purpose of the loan, and the absence of such proof cannot defeat the existence of the loan itself.

The Third Defendant also premised that the core documents were invalid and legally inadmissible because they were unstamped, and further alleged that his late father's signatures on them were forged.

In response, the Plaintiff rebutted that under the Evidence Act 1950, the burden of proving forgery lies strictly on the Third Defendant, who failed to produce any expert or police reports. Regarding the stamping issue, the Plaintiff relied on the Stamp Act 1949 and relevant case law to argue that the prohibition against admitting unstamped documents is not absolute and does not render the documents void.

The crux of the Third Defendant’s submission is that the Plaintiff had fatally departed from his own pleaded case. The Third Defendant highlighted that the Plaintiff withdrew his claim against Kedah Agro because the Plaintiff (PW1) openly admitted during cross-examination that the loan was actually given to Dato' Zaini personally, not Kedah Agro. Relying on Federal Court authority in Samuel Naik Siang Ting v Public Bank Bhd [2015] 6 MLJ 1, the Third Defendant argued that parties are strictly bound by their pleadings. The Third Defendant submitted that since the Plaintiff failed to prove the foundational fact pleaded, that Kedah Agro was the borrower, the secondary claim against Dato' Zaini's estate must automatically collapse.

In response, the Plaintiff submitted that he pleaded in his Statement of Claim that the RM1.5 million loan was given directly to Kedah Agro, and that Kedah Agro directed the funds to be disbursed to Shubert.

The Plaintiff maintained that, regardless of Kedah Agro's removal from the suit, Dato' Zaini remained personally liable because he had executed the Guarantee Agreement and the collateral letter pledging his properties strictly in his personal capacity, explicitly promising and guaranteeing to repay the loan.

Furthermore, the Plaintiff alleged that the RM1.5 million was distinctly a personal loan given to Dato' Zaini for his own private use. While acknowledging that Dato' Zaini had utilised Kedah Agro's official letterhead to issue the disbursement instructions, the Plaintiff claimed ignorance as to why Dato' Zaini chose to do so, insisting that the transaction was never an investment or a loan to Kedah Agro, but rather a direct personal loan to Dato' Zaini.

The Plaintiff then submitted that the Third Defendant was rightfully sued to answer for Dato' Zaini's debt. The Plaintiff relied on WhatsApp conversation transcripts showing that the Plaintiff had contacted the Third Defendant regarding the repayment of the loan, and that the Third Defendant had engaged in the discussion by offering excuses about a lack of funds, rather than denying the debt or his involvement.

The following is a detailed discussion on each of these issues raised by the parties.

The Court notes that in Paragraphs 14 and 15 of the Statement of Claim, the Plaintiff explicitly pleaded that the RM1,500,000.00 was a loan given to Kedah Agro, and the disbursement to Shubert was made upon Kedah Agro's instruction.

During cross-examination, the Plaintiff himself (PW1) completely departed from his pleadings by admitting that the loan was actually given to Dato' Zaini in his personal capacity, not to Kedah Agro and consequently, the Plaintiff withdrew his claim against Kedah Agro on the first day of trial. [See NOP, pp.24 & 25] Setuju. Jadi, saya nak tanya adakah board resolution itu? Yang melulusakan pinjaman Encik Faizal nak bagi kepada Kedah Agro? Ada tak? Pinjaman saya bukan kepada Kedah Agro, kepada Dato’ Zaini. … Jadi, Encik Faizal kena tahu muka surat 14 ini apa Encik Faizal tulis, pada semua masa material Plaintif telah memberi suaru pinjaman kepada Defendan Pertama. Setuju atau tidak? Encik Faizal memberi pinjaman kepada Defendan Pertama. Setuju atau tidak? Tidak setuju. Tidak setuju. Jadi, setuju dengan saya muka surat 14 ini bertentangan dengan apa yang Encik Faizal tuntut. Setuju atau tidak? Betul. [Emphasis added]

It is a trite and cardinal rule of civil litigation that parties are strictly bound by their pleadings. The Court cannot decide a suit on an issue that is not pleaded. I am guided by the principles in Samuel Naik Siang Ting (supra), where Ramly Ali FCJ envisaged that: “[29] It is a cardinal rule in civil litigation that parties are bound by their pleadings and are not allowed to adduce facts and issues which they have not pleaded (see State Government of Perak v Muniandy [1986] 1 MLJ 490; and Anuar bin Mat Amin v Abdullah bin Mohd Zain [1989] 3 MLJ 313). In Blay v Pollard & Morris [1930] 1 KB 628, Scrutton LJ ruled that: ‘Cases must be decided on the issues on the record; and if it is desired to raise other issues there must be pleaded on the record by amendment’.” [Emphasis added]

Furthermore, the judgment in Projek Lebuh Raya Utara-Selatan Sdn Bhd v Kim Seng Enterprise (Kedah) Sdn Bhd [2013] 5 MLJ 360 could not be clearer when Abdul Malik Ishak JCA ruled as follows: “ [17] ... I must categorically state that the parties are bound by their pleadings. The parties are required to state the issues of fact and frame the questions of law to give notice of the case intended to be set up and to prevent either party to be taken by surprise at the trial. The material facts must be pleaded, but the legal consequences need not be pleaded... What this amounts to is that the court is not entitled and should not decide a suit on an issue which is not pleaded. In short, the trial of the suit must be confined to the pleadings... and the pleadings operate to effectively define and delimit with absolute clarity and precision the real matters in controversy between the parties. In this way, the parties could prepare their respective cases, and the court too will adjudicate on those issues and no more.” [Emphasis added]

In his oral submissions, the learned counsel for the Third Defendant rightly highlighted the severe prejudice and surprise caused by the Plaintiff’s sudden shift in narrative mid-trial. Relying on the Federal Court's pronouncement in Anjalai Ammal v Abdul Kareem [1969] 1 MLJ 22, the defence correctly submitted that the very object of pleadings is to prevent surprise and to delimit issues so that both parties come to trial fully prepared.

The Plaintiff's tactical manoeuvre to completely abandon his pleaded case against Kedah Agro and pivot liability onto the deceased in his personal capacity without amending the Statement of Claim is highly prejudicial to the Third Defendant, who prepared a defence strictly based on the pleaded records.

This Court finds the Plaintiff's stance untenable. The object of pleadings is to prevent surprise. The Plaintiff is attempting to approbate and reprobate. On one hand, he pleads that this was a personal 'friendly loan'. On the other hand, he inextricably intertwined Kedah Agro's corporate machinery with Dato' Zaini's personal capacity. The law does not permit a litigant to blow hot and cold. Once the Plaintiff withdrew the suit against Kedah Agro on Day 1, the entire factual matrix supporting the disbursement evaporated. Furthermore, relying on the principle in Trip4Asia Sdn Bhd & Anor v Destini Bhd [2021] 6 MLJ 820, the Third Defendant was never a party to the Guarantee Agreement. The Plaintiff cannot attach personal contractual liability to the Third Defendant for a corporate or personal investment agreement to which he was never privy.

It is undisputed that the Plaintiff at no point sought to amend his Statement of Claim before, or even after, the withdrawal of the principal claim against the pleaded borrower (Kedah Agro). Consequently, the secondary claim against the guarantor, Dato' Zaini's estate, automatically collapses. This discrepancy alone is fatal to the Plaintiff's entire case.

Upon a holistic evaluation of the evidence, this Court finds that the Plaintiff’s case is fatally compromised by a fundamental departure from the pleadings. The Plaintiff’s trial testimony—which shifted the identity of the borrower from a corporate entity to the Deceased personally—constitutes a procedural and substantive collapse. This departure violates the sacrosanct principle that parties are bound by their pleadings, leaving the claim against the remaining Defendants without a sustainable legal or factual foundation.

To further, the Plaintiff’s case suffers from a profound and irreconcilable self-contradiction. By officially pleading that the sum was a loan advanced to Kedah Agro, the Plaintiff strictly framed the late Dato’ Zaini’s liability as that of a guarantor to a corporate debt. It is a fundamental principle of contract law that a guarantee is a secondary and derivative obligation; it cannot exist in a legal vacuum. When the Plaintiff withdrew the principal suit against the primary borrower, the legal foundation for the secondary claim was entirely obliterated.

This legal reality is further compounded by the express terms of the purported agreements themselves. A meticulous examination of the Guarantee Agreement and the Collateral Letter reveals the glaring absence of any 'jointly and severally liable' clause. The Plaintiff's decision to drop the Kedah Agro (the purported principal debtor) while pursuing the Third Defendant (the purported guarantor) is a legal impossibility in this context. Under Section 81 of the Contracts Act 1950, while liability is generally co-extensive, this specific Guarantee Agreement lacks a 'principal debtor' clause that would allow the Plaintiff to treat the guarantor as the primary target. Having voluntarily withdrawn the claim against the primary borrower without establishing a default, the Plaintiff is legally precluded from selectively enforcing a secondary obligation that has no established primary debt to rest upon. The Plaintiff cannot elect to selectively enforce a secondary obligation when he has abandoned the primary one.

Furthermore, the Collateral Letter executed by the late Dato' Zaini expressly conditions the enforcement of the security upon a specific triggering event, stating it applies only if “… the investment is to be aborted and/ or terminated, ….” It is trite law that a guarantor’s liability does not exist in a vacuum; it is strictly contingent upon the established default of the principal debtor. Since the Plaintiff voluntarily withdrew his claim against Kedah Agro on the first day of trial, no default by the principal has been, or can ever be, legally established by this Court. If there is no default proven against Kedah Agro, the liability of the guarantor is never triggered. There is nothing to establish that the triggering event has ever happened. How then could the lender have any cause of action against the guarantor? Consequently, the isolated action against the Third Defendant is entirely incompetent.

Furthermore, the claim remains legally premature. A meticulous construction of the Guarantee Agreement (Clause 7.6.1) and the Collateral Assurance letter reveals that the refund obligation is a conditional liability. It is triggered strictly 'within seven (7) days from the date of the written notice' that the investment is aborted or terminated. In the absence of any pleaded or proven notice, the cause of action has not yet accrued; the Plaintiff is effectively suing on a debt that has not yet legally matured. The absence of that notice means the cause of action has not yet accrued.

The Plaintiff initiated this suit against the Third Defendant specifically in his capacity as the personal representative of the late Dato' Zaini's estate.

The Third Defendant, DW1, testified unequivocally that he is merely the deceased's son and is not the legally appointed administrator of the estate; his mother is.

During oral submissions, the learned counsel for the Plaintiff made a striking concession, admitting that the Plaintiff initiated the suit against the Third Defendant simply because they "did not know who the actual administrator was". The Plaintiff further attempted to fault the Third Defendant for failing to produce the letter of administration to prove his mother was the lawful administrator. This Court finds such an argument to be a fundamental misconception of the law. The burden to identify and sue the correct legal entity rests entirely on the Plaintiff, not the Defendant.

Besides, the Plaintiff’s learned counsel forcefully argued during oral submissions that the defence had failed to cross-examine PW1 regarding the WhatsApp conversations, thereby invoking the rule in Browne v Dunn (1893) 6 R 67 to assert that the contents of the messages, where the Third Defendant allegedly promised to settle the debt, must be deemed admitted.

While the Court notes the defence's omission to cross-examine on this specific documentary exhibit, this procedural point ultimately does not assist the Plaintiff. The rule in Browne v Dunn (supra) operates on matters of fact, not on matters of strict law. In law, informal WhatsApp exchanges, promises to pay, or familial negotiations cannot unilaterally bypass the Probate and Administration Act 1959, nor can they confer legal capacity (locus standi) upon a beneficiary who was not named as the administrator in the letter of administration. Consent or informal conduct via WhatsApp cannot cure a nullity.

As previously emphasised, if the Plaintiff was genuinely ignorant of the administrator's identity, the mandatory cure was to apply under Order 15 Rule 6A of the Rules of Court 2012, which the Plaintiff wholly failed to do. The Plaintiff’s Counsel has also made only a limited submission regarding this representative issue.

It is abundantly clear that the Plaintiff failed to produce any grants of probate or letters of administration naming the Third Defendant as the legal representative throughout the trial. It is also worth noting that an action commenced against a person as a representative of an estate before letters of administration have been extracted is incompetent and a complete nullity ab initio. The Court is bound by the principles established in Comptroller of Income Tax v Yan Tai Min [1965] 1 MLJ 255 at p.256 (para G-I): "…In the circumstances of the present case, it must similarly be held that the action against the defendant was incompetent since its inception as the writ was clearly a nullity... it cannot alter the fact that the proceeding against him was incompetent from the outset. There can, therefore, be one consequence only, and that is that the action must be dismissed with costs." [Emphasis added]

This principle is further fortified by the High Court in Lee Kim Lian & Anor v Tan Cheang Hang & Anor [2018] 1 LNS 254, where Azmi Abdullah JC (as he then was) envisaged that: "[21] ...It is trite that only an administrator can sue or be sued in relation to an estate of a deceased person."

Furthermore, guided by the Court of Appeal's decision in Trip4Asia Sdn Bhd (supra), this Court finds that the Plaintiff was fundamentally a stranger to the Third Defendant in respect of the alleged transaction. The Court of Appeal in Trip4Asia (supra) reaffirmed the strict application of the doctrine of privity of contract, emphasising that a party who is not privy to an agreement incurs no liability to be sued upon it.

Applying this principle to the present facts, there is absolutely no privity of contract, nor any legal or factual nexus, that binds the Third Defendant in his personal capacity to the alleged debts of Kedah Agro or the late Dato’ Zaini.

The Plaintiff then vehemently argued that the meeting at Lygon Bistro on 07.12.2019 proved the Third Defendant's knowledge of the debt. It is crucial to note here that mere knowledge does not amount to an acceptance of liability. Legally speaking, a proper novation would be the requisite for such assumption of liability by another party.

Even if this Court accepts this evidence in its entirety, it does not assist the Plaintiff in establishing locus standi. As will be discussed in the next section of this judgment on the true nature of the transaction, the contents of these WhatsApp logs expose the scheme's underlying illegality. Informal discussions or promises to pay between individuals cannot legitimise an agreement that is fundamentally void, nor can they magically confer representative capacity bypassing the Probate and Administration Act 1959.

The Third Defendant received no consideration or benefit from the RM1.5 million transaction and had no involvement or control in the management of Kedah Agro. Consequently, stripped of both representative capacity under probate laws and any contractual nexus under the doctrine of privity, the Plaintiff's attempt to attach liability to the Third Defendant is entirely baseless and must fail.

Although on the 2 issues discussed earlier alone, the Plaintiff’s claim shall be dismissed in total, for completeness, this Court shall discuss the other 2 issues raised by the parties. C. The True Nature of the Transaction

The Plaintiff insists the transaction was a "friendly loan" and relies on the Guarantee Agreement's repayment clause to support this. The Court observes that the contemporaneous documents forming the bedrock of the Plaintiff's claim, the Guarantee Agreement and instruction letters, explicitly and exclusively use the term "Investment Fund". The word "loan" or "pinjaman" is completely absent.

The documentary evidence severely undermines the Plaintiff's credibility and contradicts his oral testimony. The arrangement, which disburses a massive sum to an unknown third party (Shubert) using the letterhead of a state-linked company, together with the documents' express wording, strongly suggests a commercial "investment" or influence-peddling scheme rather than a simple friendly loan.

In evaluating credibility, this Court is guided by the standards in Muhammad Najmi Mohd Sani (supra) and Leong Yeu Moi (supra), critically testing oral evidence against contemporaneous documents. The Plaintiff urged this Court to reject the Third Defendant's testimony entirely, citing Selvaraju a/l Sithamparam lwn Kanthimathi a/p Sithambaram [2023] MLJU 2533 and producing photographic evidence (Exhibit P6) to allege the Third Defendant knew Shubert. However, mere photographic proximity does not establish a contractual nexus.

Conversely, the commercial absurdity of the Plaintiff's own case is irrefutably exposed by the bank statements in the Common Bundle. The Plaintiff disbursed RM1.5 million into Shubert's personal RHB Bank account. A granular review of these bank statements reveals that the funds were immediately depleted on petty personal expenses, including fast food (Dunkin, Texas Chicken), groceries (Village Grocer), and random cash transfers of significant sums to individuals such as 'Maria Lyn Caballero'. It strains commercial credulity to suggest that a RM1,500,000.00 'corporate investment' would be utilized for such mundane personal sustenance; such evidence further peels back the veneer of a legitimate business transaction. Such a granular trail of petty personal sustenance and random third-party transfers irrebuttably proves that the funds were never utilised for Kedah Agro’s corporate business. Siphoning RM1.5 million meant for a state-linked entity into a personal account for frivolous daily living expenses demonstrates the absolute sham nature of the transaction.

This taint of illegality is not merely presumed by the Court but was actively corroborated by the evidentiary record. As astutely pointed out by the Third Defendant's counsel during oral submissions, while the Plaintiff (PW1) remained highly evasive and claimed ignorance ('saya tidak tahu') regarding the exact purpose of the funds, the Third Defendant (DW1) explicitly testified that the Plaintiff admitted the funds were for a 'project'—a term which, in the context of this illicit arrangement, is synonymous with a lobbying or 'influence-peddling' endeavor. DW1 correctly deduced that bypassing the company to pay a foreign third party was 'something fishy' and a covert 'lobbying project' or bribery ('merasuah'). When an agreement promising an RM3 million 'facilitation fee' is factually intertwined with an illicit 'lobbying project' involving state assets, the claim fundamentally violates public policy. Based on the principles in Norihan Talib & Ors V. Mohd Nasir Hassan & Ors and Another Appeals [2018] 2 CLJ 66, the Court will not lend its aid to grant relief on a claim founded on such blatant illegality.

The documentary timeline in the common bundle provides the final, undeniable context. The Guarantee Agreement guaranteeing an unconscionable RM3 million return (a 200% gain) in six weeks was signed on 6 May 2018. Three days later, on 9 May 2018, the 14th General Election (PRU-14) took place. The Federal Government Gazette confirms that Dato' Zaini contested and lost the N.05 Bukit Kayu Hitam state seat on that exact day. It is inherently probable that this transaction was illicit political funding or an illegal gamble on the election outcome. Guided by Section 24(e) of the Contracts Act 1950 and the strict application of the ex turpi causa doctrine as established in Tinsley v Milligan [1994] 1 AC 340, the object of this agreement is fundamentally opposed to public policy and is void ab initio.

This Court accepts the WhatsApp communications. However, they operate as a fatal double-edged sword against the Plaintiff. During oral submissions, the content of the WhatsApp logs was read onto the record, explicitly stating: 'my dad now works something with Tan Sri Vincent Tan... ada few land belong to Kedah State yang kita boleh minta'. By demanding that the Court accept these logs as absolute truth, the Plaintiff has successfully proven that the underlying purpose of the 'Investment Fund' was an illicit attempt to secure state land through political influence. Informal demands for payment cannot legitimise an agreement that is fundamentally void for illegality.

During oral submissions, the Plaintiff attempted to defeat the illegality defence by arguing that the Third Defendant never lodged a police or MACC report regarding the alleged bribery. This Court must critically dismantle this deeply flawed proposition. The learned counsel for the Plaintiff fundamentally misconceives the doctrine of public policy and the strict application of the maxim ex turpi causa non oritur actio. The application of this maxim does not hinge upon whether a defending party has lodged a police or MACC report. The Court's refusal to enforce an illegal, immoral, or public-policy-offending contract is not done to protect or reward the defendant, but rather to protect the very integrity of the judicial system.

In this regard, the Court of Appeal in Norihan Talib (supra) explicitly relied on Lord Mansfield's timeless judicial pronouncement: "No Court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act... It is upon that ground the Court goes; not for the sake of the defendant, but because they will not lend their aid to such a plaintiff".

This Court's finding that the transaction is tainted by illegality under Section 24 of the Contracts Act 1950 does not rest merely on the oral assertions of the Third Defendant. Rather, the illicit nature of the scheme is irrefutably established by the Plaintiff's own evidence and the inherent commercial absurdity of the contemporaneous documents.

Firstly, the Guarantee Agreement (Exhibit P3) completely lacks the word 'loan' or 'pinjaman', exclusively utilising the term 'Investment Fund', whilst promising an unconscionable 200% return within six weeks. Secondly, the Plaintiff inexplicably disbursed the RM1.5 million to the personal bank account of a foreign stranger, Shubert (Encl. 95, PWS1, Q&A 12), an act that defies all legitimate commercial logic for a purported 'friendly loan'.

When these objective facts are viewed holistically against the backdrop of Dato' Zaini's position as the Chairman of Kedah Agro and former ADUN of Bukit Kayu Hitam (Encl. 80 Plaintiff’s Case, para 9), alongside the GE14 elections, the Court is driven to the inescapable conclusion that this was not a loan, but a covert influence-peddling scheme.

It is a well-established principle of law that contemporaneous documentary evidence must be given primacy over a witness's oral testimony. While the Plaintiff relied on Leong Yeu Moi (F) v Neo Ai Si (F) [2019] 6 MLJ 622 for the proposition that a lender need not prove the purpose of a loan, this Court finds that principle cannot be applied in a vacuum. Where the contemporaneous agreements explicitly and exclusively label the transaction as an 'Investment Fund,' the Court is duty-bound to prioritise the written contract over a belated linguistic re-characterisation. D. Validity of the Guarantee Agreement (Forgery and Non-Stamping)

The Third Defendant challenged the Guarantee Agreement and collateral letters, claiming his late father's signatures were forged and pointing out that the documents were unstamped.

Regarding the severe allegation of forgery, it is trite law under Sections 101 and 103 of the Evidence Act 1950 that the burden of proof lies strictly on the party making the assertion. In discharging this burden, the Third Defendant wholly failed to adduce an expert report from the Chemistry Department, nor did he lodge any police report. I find the decision in AmBank (M) Bhd lwn Mofiz Automobile Sdn Bhd [2017] 11 MLJ 49 of assistance, which established that a bare denial of a signature is legally insufficient. The court ruled that a defendant's failure to produce objective corroborating evidence, specifically, the failure to submit an expert report from the Chemistry Department to confirm the forgery, coupled with the failure to lodge a police report, means that the defendant has completely failed to discharge their evidentiary burden. Applying this principle, the Third Defendant's allegation of forgery in the present case remains a mere bare denial and cannot be sustained.

Furthermore, during cross-examination, when confronted directly with the signature, the Third Defendant hesitated and conceded: 'Saya tak pasti. Kalau ikut tandatangan itu, ya... Betul'. Consequently, the Third Defendant failed to discharge the strict burden of proving forgery.

On the issue of unstamped documents, this Court considers the Federal Court decision in Malayan Banking Bhd v Agencies Service Bureau [1982] CLJ (Rep) 217. Under Section 52(1) of the Stamp Act 1949, non-stamping does not render a document automatically void; it is merely a curable defect. This is further elucidated in Tang Vee Luen @ Phillip v Titan Energy Sdn Bhd [2021] MLRHU 493, where it was held that non-stamping does not invalidate the document or mean its contents are untrue. (See also, Chai Shan Foo v Tai Ooi Cheng [2021] 1 LNS 2706 & Emi Suhardi Mohd Fadzil V. Zainap Abu & Anor; Shaffie Md Hassan (Third Party) [2026] CLJU 211.) Therefore, the documents are technically admitted into evidence.

However, the Plaintiff's victory on these evidentiary points of forgery and stamping is entirely pyrrhic. Admissibility does not equate to enforceability. Even if the signatures are genuine and the documents are admitted, the claim collapses entirely on the paramount, superseding grounds of defective pleadings, lack of locus standi, and statutory illegality.

The Plaintiff’s prayer for a declaration of an equitable charge and an order for sale is unequivocally dismissed. The properties listed in the Collateral Assurance letter (Geran Mukim 308, 1769, and 259) are gazetted as Malay Reservation Land ('Rezab Melayu'). It is trite law that a mere private letter of intent arising from a tainted transaction cannot bypass the strict statutory procedures of the National Land Code to create a valid equitable charge, nor can it circumvent the restrictions of the Kedah Malay Reservation Enactment to justify an order for sale.

Furthermore, the Plaintiff’s claim for an equitable charge is decimated by the undisputed evidence regarding land ownership. The Third Defendant (DW1) testified, and the title searches confirm, that two of the aforementioned properties (Lot 1642 and Lot 47) are registered in the name of one Azamah binti Arshad, a third party who is not a litigant in these proceedings. It is a fundamental tenet of land law that a party cannot grant a security interest over property in which they hold no legal or beneficial title. The late Dato’ Zaini lacked the 'nemo dat quod non habet' capacity to pledge lands owned by a non-party. A court of equity cannot assist a Plaintiff in encumbering the property of a third party who is a total stranger to the contract.

Procedurally, the prayer for an order for sale is also hopelessly premature. The Collateral Assurance letter explicitly grants a power of sale only 'after six (6) months from the date of the said [termination] notice'. As no such notice was pleaded or proven to have been served, the contractual waiting period never commenced. A court cannot grant an equitable remedy for a right that has not yet matured.

For the avoidance of doubt, the Plaintiff is strictly barred from seeking any equitable restitution or statutory relief under Section 66 of the Contracts Act 1950. Applying the ratio of the Federal Court in Cheah Theam Kheng v City Centre Sdn Bhd (In Liquidation) & Other Appeals [2012] 1 MLJ 761, the Plaintiff was an active participant in an arrangement he himself suspected was meant for 'merasuah' and is therefore in pari delicto (equally at fault). The Court will not assist him in recovering funds lost in an illicit scheme. To grant relief in a claim founded on such blatant commercial absurdity and influence-peddling would be to allow the Court to be utilised as a tool for validating shadow transactions.

For the reasons extensively deliberated above, the Court makes the following orders:

The Plaintiff's claim against the Third Defendant is hereby dismissed with costs of RM30,000.00, subject to allocator.

(ii) The Plaintiff's prayer for a declaration of an equitable charge and an Order for Sale over the subject lands is dismissed. Dated: 10th April, 2026 -------------------------------------------------------------------- YA Dr. Hj. JOHN LEE KIEN HOW @ MOHD JOHAN LEE JUDGE HIGH COURT OF MALAYA ALOR SETAR Table of Authorities Cases AmBank (M) Bhd lwn Mofiz Automobile Sdn Bhd dan lain-lain [2017] 11 MLJ 49 Anjalai Ammal & Anor v Abdul Kareem [1969] 1 MLJ 22 Anuar bin Mat Amin v Abdullah bin Mohd Zain [1989] 3 MLJ 313 Browne v. Dunn (1893) 6 R 67 Chai Shan Foo v Tai Ooi Cheng [2021] 1 LNS 2706 Cheah Theam Kheng v City Centre Sdn Bhd (In Liquidation) & Other Appeals [2012] 1 MLJ 761 Solicitor for the Plaintiff : Ahmad Hazieq Roshali & Muhammad Zulfaqar Zikry Wahidir Messrs. Ahmad Hazieq & Associates Advocates & Solicitors Solicitors for the Third Defendant : Muhammad Faiz Kamal Jaafar Messrs. Shahrin Satheer Kamal & Co Advocates & Solicitors Comptroller of Income Tax v Yan Tai Min [1965] 1 MLJ 255 Emi Suhardi Mohd Fadzil V. Zainap Abu & Anor; Shaffie Md Hassan (Third Party) [2026] CLJU 211 Lee Kim Lian & Anor v Tan Cheang Hang & Anor [2018] 1 LNS 254 Leong Yeu Moi (F) v Neo Ai Si (F) [2019] 6 MLJ 622 Malayan Banking Bhd v. Agencies Service Bureau Sdn. Bhd. & Ors [1982] CLJ (Rep) 217 Manivanan Kuppusamy v Datuk Ganesan Subramaniam [2025] MLRHU 77 Muhammad Najmi Mohd Sani v Ahamad Asmadi Sakat [2019] MLRHU 673 Norihan Talib & Ors v. Mohd Nasir Hassan & Ors and Another Appeals [2018] 2 CLJ 66 Projek Lebuhraya Utara-Selatan Sdn Bhd v Kim Seng Enterprise (Kedah) Sdn Bhd [2013] 5 MLJ 360 Samuel Naik Siang Ting v Public Bank Bhd [2015] 6 MLJ 1 Selvaraju a/l Sithamparam lwn Kanthimathi a/p Sithambaram [2023] MLJU 2533 Tang Vee Luen @ Phillip v Titan Energy Sdn Bhd [2021] MLRHU 493 Tinsley v Milligan [1994] 1 AC 340 Trip4Asia Sdn Bhd & Anor v Destini Bhd [2021] 6 MLJ 820 Statutes Contracts Act 1950 Evidence Act 1950 Kedah Malay Reservation Enactment National Land Code Probate and Administration Act 1959 Rules of Court 2012 Stamp Act 1949