Fun See Hoon v Lee Kok Yong (JB-12BNCvC-17-07/2025)

KOW CHEK GIAP

LEE KOK YONG (I/C NO.: 681130-01-5259) ...RESPONDENTS GROUND OF JUDGMENT Introduction [1] This is an appeal against the decision of the Sessions Court which dismissed the Appellant's claim arising from a loan transaction and allowed the Respondents' counterclaim. [2] The appeal raises significant questions relating to the burden of proof in civil claims, the effect of documentary admissions, the doctrine of estoppel, and the applicability of the Moneylenders Act 1951. Facts [3] The Appellant's case is that he advanced a sum of RM750,000 to the Respondents pursuant to a Loan Agreement dated 22 April 2019. [4] It is not disputed that: i. the Loan Agreement was executed; ii. a Guarantee was executed by the Respondents; iii. accounting records evidencing the transaction were produced; and iv. partial repayments were made by the Respondents. [5] The Respondents' defence is twofold: i. that no loan was in fact disbursed; and/or ii. that the transaction contravenes the Moneylenders Act 1951. Issues [6] The issues for determination are: i. whether the Appellant had proven the loan on a balance of probabilities; ii. whether the Respondents are precluded from advancing inconsistent defences; iii. whether the Moneylenders Act 1951 applies; iv. whether estoppel arises; v. whether the Sessions Court erred warranting appellate interference; and vi. whether the counterclaim should stand. Applicable Law Burden of Proof and Prima Facie Case [7] It is trite that the legal burden lies on the plaintiff. However, once a prima facie case is established, the evidential burden shifts. [8] In Cheah Theam Kheng v City Centre Sdn Bhd (in liquidation) and other appeals [2012] 1 MLJ 761, the Court of Appeal held that a party cannot adopt inconsistent positions to the prejudice of the other. This can be seen as follows :- [105] We categorically say that the liquidator cannot blow hot and cold to suit him whenever he feels like it. He cannot approbate and reprobate in the same breath. On the one hand, he claims that the High Court order dated 26 July 2001 overrides or displaces a statute which render the said order invalid and yet he has the audacity to continue to act as a liquidator by virtue of the said order. In the words of Sir Nicolas Browne-Wilkinson VC in Express Newspapers plc v News (UK) Ltd and others [1990] 3 All ER 376, at pp 383-384: There is a principle of law of general application that it is not possible to approbate and reprobate. That means you are not allowed to blow hot and cold in the attitude that you adopt. A man cannot adopt two inconsistent attitudes towards another: he must elect between them and, having elected to adopt one stance, cannot thereafter be permitted to go back and adopt an inconsistent stance. Estoppel [9] In Boustead Trading (1985) Sdn Bhd V Arab-Malaysian Merchant Bank Bhd [1995] 3 MLJ 331, the Federal Court stated that a party who induces another to act cannot later resile from that position. This can be seen as follows :- In Lim Teng Huan v Ang Swee Chuan [1992] 1 WLR 113, an appeal from Brunei Darussalam, the Privy Council said that the decision in the Taylor Fashions case: ... showed that, in order to found a proprietary estoppel, it is not essential that the representor should have been guilty of unconscionable conduct in permitting the representee to assume that he could act as he did: it is enough if, in all the circumstances, it is unconscionable for the representor to go back on the assumption which he permitted the representee to make (per Lord Browne-Wilkinson at p 117). The essential nature of the doctrine does not appear to be any different in American equity jurisprudence. This is reflected by the following passage in the opinion of the Supreme Court of the United States in Dickerson v Colgrove (1880) 100 US 578 at p 580 (25 L Ed 618) delivered by Swayne J: The estoppel here relied upon is known as an equitable estoppel, or estoppel in pais. The law upon the subject is well settled. The vital principle is, that he who, by his language or conduct, leads another to do what he would not otherwise have done, shall not subject such person to loss or injury by disappointing the expectations upon which he acted. Such a change of position is sternly forbidden. It involves fraud and falsehood, and the law abhors both. This remedy is always so applied as to promote the ends of justice. Moneylenders Act 1951 [10] The court must determine whether the lender was "carrying on the business of moneylending". A single isolated transaction is insufficient. Appellate Intervention [11] An appellate court may interfere where there is misdirection in law or a plainly wrong evaluation of evidence. Analysis and Findings Whether the loan was proven [12] The Appellant relies on documentary evidence and admissions: i. Loan Agreement; ii. Guarantee; iii. accounting records; and iv. partial repayments. [14] These constitute strong evidence of indebtedness. [13] The Respondents admitted execution of the documents and repayment. [15] Accordingly, a prima facie case was clearly established. [16] The evidential burden shifted to the Respondents. [17] The Respondents failed to discharge this burden. Their defence is a bare denial unsupported by credible evidence. [18] therefore find that the loan was proven on a balance of probabilities. Inconsistent defences [19] The Respondents' position that no loan existed, while simultaneously asserting illegality under the Moneylenders Act, is contradictory. [20] Applying Cheah Theam Kheang (Supra), such inconsistent defences are impermissible. [21] This inconsistency fatally undermines their credibility. Moneylenders Act 1951 [22] There is no evidence that the Appellant was carrying on a business of moneylending. [23] This is a single transaction. [24] The defence under the Act therefore fails. Estoppel [25] The Respondents: i. executed the documents; ii. accepted the funds; iii. made repayments; and iv. raised no contemporaneous objection. [26] These facts give rise to estoppel by representation and acquiescence. [27] The Respondents are precluded from denying the loan. [28] Even if the contract were defective, equity would intervene. [29] The Respondents received and benefitted from the funds. [30] It would be unconscionable to permit retention without repayment. Appellate interference [31] The Sessions Court failed to: i. properly evaluate documentary evidence; ii. appreciate admissions; iii. apply the correct burden of proof; and iv. correctly address estoppel. [32] These constitute material misdirections. [33] Appellate intervention is therefore justified. Counterclaim [34] The counterclaim is unsupported by any independent evidence and is founded entirely on a defence that has been rejected. Accordingly, it cannot be sustained.

[35] Having regard to the foregoing, the appeal is allowed. The decision of the Sessions Court is set aside. Costs are awarded to the Appellant according to the scale. DATED ON 14th APRIL 2026 YA DATUK ZAMRI BIN BAKAR JUDICIAL COMMISSIONER HIGH COURT (1) MUAR Appellant's Counsel: MERSS ZUBIN, TAO & PARTNERS Respondent's Counsel: MERSS CHRISS LEE & PARTNERS