Mak Hon Leong v Kirkley Teh Yee Ben (WA-22NCC-254-04/2025)

P to recover a remaining sum of a friendly loan amounting to RM 1,467,116 from the Defendants. P had granted a loan of RM 1.6 million loan to the Defendants, who are the friends of his brother, in order to assist them in their business.

Judgment in default of appearance was entered against the 2nd Defendant on 15.10.2025.

P filed an application dated 27.8.2025 in Enclosure 23 for summary judgment against the 1st D D1 . Enclosure 23 is made under Order 14 of the Rules of Court 2012.

On 4.11.2025, I allowed Enclosure 23 and entered summary judgment against D1. It is my finding that D1 does not have a valid that this is a plain and obvious case where summary judgment ought to be granted. Here are the grounds of my decision.

case is this. The Defendants are friends of his brother. They were introduced to him as business entrepreneurs.

The Defendants requested P to provide an interest free loan for them to fund their business, i.e. a company named MB Recycle Sdn Bhd MB Recycle The Defendants required a sum of RM 1.6 million.

P agreed to provide the loan subject to the terms and conditions of an agreement that would be prepared subsequently, which the Defendants accepted.

As per the request of the Defendants, P prepared the following cheques and the cash of RM 256,200, all of which were passed to . Cheque No. Amount 061608 RM 428,400 061609 RM 65,000 061610 RM 428,400 061611 RM 42,000 061612 RM 45,000 061613 RM 96,000 061614 RM 216,000 062563

Thereafter, the Defendants executed an agreement dated 28.6.2021 loan agreement . The relevant extract of the loan agreement reads :

The Borrower(s) have requested the Lender to borrow them a loan of

The Lender agrees to grant the said Loan to the Borrower(s) on the terms and conditions stipulated herein. Now it is hereby agreed as follows :-

In consideration of the said Loan paid to the Borrower(s) by the Lender (the receipt of which the Borrower(s) hereby acknowledges), the Borrowers(s) hereby agrees, covenants and undertakes to repay the Lender the said Loan on or before the date stipulated in Clause 2 below.

The said Loan must be settled by the Borrower(s) within fifteen

months from the date of this Agreement. However the Lender reserves the rights to anytime to ask the Borrower(s) to repay the said Loan or any part

Subsequently, the 2nd Defendant made a part payment of RM 132,884 to P via MB Recycle towards the loan.

Notwithstanding the part payment, the Defendants have failed to make payment for the outstanding sum of RM 1,467,116, after the lapse of the period stipulated in the loan agreement. Undisputed facts

The undisputed facts are these. In the amended statement of defence dated 1.8.2025 and affidavit in reply affirmed on 17.9.2025, D1 admitted that :

He has executed the loan agreement. By such execution, he acknowledged receipt of the full amount of the loan.

He was the director of MB Recycle at the material time.

A total sum of RM 1,343,800 has been deposited into MB

In the Petaling Jaya Sessions Court Civil Suit No. : BB - A 52 NCvC - 162 - 08 / 2024 PJ Sessions Court suit , MB Recycle produced an indemnity agreement dated 6.7.2022 between itself and the 2nd Defendant indemnity agreement court.

The indemnity agreement evidences that the sum of RM 1.6 million has been received as the fund of MB Recycle.

At all material times prior to the filing of this suit, D1 did not dispute the loan agreement and the loan. The law on summary judgment

Summary judgment under Order 14 of the Rules of Court 2012 may be granted where the issue is unarguable or not triable. Especially where the issue raised is solely a question of law or where the facts are clear and undisputed.

The Supreme Court in Bank Negara Malaysia v Mohd Ismail & Ors [1992] 1 CLJ (Rep) 14 at 19 - 20; [1992] 1 MLJ 400 at 408 held : 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. Where the issue raised is solely a question of law without reference to any facts or where the facts are clear and undisputed, the court should exercise its duty under O 14. If the legal point is understood and the court is satisfied that it is unarguable, the court is not prevented from granting summary judgment merely because

Not all issues raised are capable of being a triable issue. The Federal Court in Voo Min En & Ors v Leong Chung Fatt [1982] 2 MLJ 241 at 243 held : not enough for the respondent in answer to the to raise an issue, or any issue. He must, however, raise such issue as would require a trial in order to determine it. In other words, the issue raised must be an arguable issue. But where the issue raised is irrelevant and ineffective, or to use the words of Lord Greene, M.R. in Cow v Casey [1949] 1 KB 474, the court is satisfied that it is really summon - in -

Summary judgment should be granted in a plain and obvious case that ought not to go for trial. Especially one that involves construction of unsubstantial documents. And where no further facts could emerge which would throw any light upon the matter.

The Federal Court in Fadzil Mohamed Noor v Universiti Teknologi Malaysia [1981] CLJ (Rep) 53 at 59 held : 1 MLJ 168, I pointed out that in an O. 14 case, where it turned on the construction of few documents, and the Court was only concerned with what, in its judgment, was true construction, there could be no reason to go formally to trial where no further facts could emerge which would throw any light on the documents that had to be construed. We think

In respect of the burden of proof, the onus is on the defendant to show that there are triable issues. The Federal Court in Cempaka Finance Bhd v Ho Lai Ying (trading as KH Trading) & Anor [2006] 3 CLJ 544 at 551; [2006] 2 MLJ 685 held : [5] In an application under O. 14, the burden is on the plaintiff to establish the following conditions: that the defendant must have entered appearance; that the statement of claim must have been served on the defendant; that the affidavit in support must comply with r. 2 of O. 14 in that it must verify the facts on which the claim is based and must state the deponent s belief that there is no defence to the claim. Once those conditions are fulfilled, the burden then shifts to the defendant to raise triable issues

With the above principles in mind, I consider the issues raised by D to be unarguable or not triable. I reject the bare assertions of D, which I find to be ineffective and inconsistent with the contemporaneous documents. I am satisfied that this suit is a plain and obvious case that ought not to go to trial. Here is my explanation.

Summary judgment ought to be entered against D1 for the following reasons :

There is a breach of the loan

There is an admission by D1 that he had received the full amount of the loan.

amended defence only consists of bare denials and afterthoughts, which can be summarily dismissed based on the contemporaneous documents exhibited via the affidavits herein.

amended defence has failed to raise any issue to be tried.

Given the undisputed facts as mentioned earlier, I consider that P has successfully established his claim against D1. I find that defence has failed to show any defence with merits or triable issue.

amended defence can be summarized as follows :

The loan agreement is a sham agreement, entered into without any intention to be bound.

D1 executed the loan agreement under an undue influence.

The loan agreement contravenes the Moneylending Act 1951.

It bears emphasis that D1 has admitted that he executed the loan agreement. At all material times prior to the filing of this suit, D1 has not disputed the loan agreement. According to P, D1 is an educated person who understands English and the legal effect of an agreement.

In the circumstances, D1 bears the burden of proving why he should not be bound by the loan agreement. In this respect, D1 has very limited grounds.

I refer to the High Court case of Polygram Records Sdn Bhd v The Search & Anor [1994] 3 MLJ 127 at 147, which said : no principle of law which states that where a party does not fully understand certain terms of a contract, the contract may be vitiated. The general principle of law, of course, is that 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. This rule is so strict that even if a party to a contract has not read the contents of a contract, he is held to be bound by its terms. In 934] 2 KB 394, Scrutton LJ pronounced (at p 403) : When a document containing contractual terms is signed, then, In the absence of fraud, or, I will add, misrepresentation, the party signing it is bound, and it is wholly immaterial whether he has read the

The question then is whether D1 has raised any valid defence that constitutes an exception to the general principle of law that D1, having signed the loan agreement, is bound by its terms. My answer is in the negative. Not a sham agreement

is this. The loan agreement is a sham agreement. It is not intended to be legally binding on him. T between P and the Defendants was an investment by P in MB Recycle. There is no intention to legally bind the parties with the terms of the loan agreement.

I consider such assertions as mere afterthoughts. They do not prove that the loan agreement is a sham.

A sham agreement is an agreement whereby both signatories signed with a common intention to use the said agreement to give a false impression of rights and obligations contained in the said agreement to third parties. As observed by the Court of Appeal in Global Globe Property (Melawati) Sdn Bhd v Jangka Prestasi Sdn Bhd [2020] 6 MLJ 333 at 357, he parties must have intended to create different rights and obligations from those appearing from the relevant document, and in addition they must have intended to give a false impression of those rights and obligations to third parties .

With regard to the intention of P in the present case, the evidence demonstrates that :

P has always intended to bind the Defendants by the terms of loan agreement. He even requested an advocate and solicitor to witness the signing of the loan agreement. There is no basis to suggest that the parties signed the loan agreement with a common intention to use the loan agreement to give a false impression.

The loan agreement was signed and kept by P at all material times. Neither P nor the Defendants showed the loan agreement to any third party for other purposes.

If the loan agreement is in fact a sham agreement, the parties would have used it for collateral purposes by giving a false impression to third parties. However, nothing in this case suggests that.

investment by P in MB Recycle, I find that :

outstanding sum to P.

Regardless of whether or not the loan is characterized as an investment, the terms that regulate the payment of the RM 1.6 million are as stipulated under the loan agreement.

By virtue of the loan agreement, :

The Defendants shall repay the loan sum of RM 1.6 million within the period stipulated in the loan agreement (i.e. within 15 months from the date of the loan agreement); and

(ii) D1 has agreed to the terms by executing the loan agreement, without any protest at all material times prior to the filing of this suit. The Plaintiff was not privy to the d

those are the discussions among the Defendants and . P was not privy to such discussions.

Further, the purported investment was a suggestion discussed among the Defendants and before the execution of the loan agreement.

P was never involved or participated in the internal discussion among the Defendants and with regards to such suggestion. Hence, the basis for D1 to contend that P has agreed to invest the sum of RM 1.6 million is unsustainable. id not materialize

Even if I were to accept by P in MB Recycle, his own evidence proves otherwise.

Defendants and investment shall be carried out as follows. P should have 50 % of the shares in MB Recycle and be appointed as the director. However, that did not happen.

The facts are these :

discussion between the Defendants and before the execution of the loan agreement.

never materialized.

Instead, P has set out his terms and conditions, via the loan agreement, that govern the payment of the RM 1.6 million loan sum to the Defendants in assisting them to fund their business.

D1 has executed the loan agreement without any protest at all material times.

In view of the foregoing, D1 cannot now cry foul and unilaterally claim that the loan agreement is a sham agreement. I conclude that the loan agreement is a valid and legitimate agreement that governs the liabilities of the parties in respect of the loan provided by P to the Defendants. D1 is therefore liable to repay the outstanding sum pursuant to the loan agreement.

Ultimately, so - called d not negate the legal effect of the loan agreement. On this aspect, the principle of objectivity, by which the rights and liabilities of the parties to a contract are determined, is noteworthy.

The Federal Court in The New Straits Times Press (M) Bhd v Aideah Communication Sdn Bhd [2025] 3 MLJ 240 cited the principle of objectivity as follows : The High Court of Australia in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd and Others (2004) 211 ALR 342 (HC) succinctly put the principles on pp 351 - 352 as follows : [40] This court, in Pacific Carriers Ltd v BNP Paribas (2004) 208 ALR 213, has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction. [67] The plaintiff asserts that the purported MGS particularly under cll 4.1 and 4.2 is merely a soft target and a projection whereas the defendant contends that these clauses constitute a guaranteed obligation. However, contractual relations are not determined by the subjective beliefs of the parties regarding their rights and liabilities. Instead, references to the common intention of the contracting parties must be understood in terms of how a reasonable person would interpret the language used in the 2013 agreement. In other words, the contract must speak for itself. [68] So much so that, in the ordinary course of events, extrinsic evidence is inadmissible and cannot be relied upon to show the real intention of the contracting parties. Lord Hutton in AIB Group (UK) Ltd v Martin and another [2002] 1 WLR 94 (HL) observed on pp 95 - 96 : [4] I would add one further observation. It is a general rule in the construction of deeds that the intention of the parties is to be ascertained from the words used in the deed and that, with certain limited exceptions, extrinsic evidence cannot be given to show the real intention of the parties. On occasions this rule may lead to the actual intention of the parties being defeated but the rule is applied to ensure certainty in legal affairs. [69] Our task is to ascertain the intentions of the parties as expressed in the language in which they have chosen to draft the 2013 agreement. Where the phrases and provisions in a commercial contract are open to different constructions, the court favours a commercially sensible construction which yields a reasonable result as that is likely to be what reasonable business people would intend, having regards to not only of the text but also its factual context and purpose. This is rather different from . [70] The promotion of certainty through an objective approach to contract interpretation was amplified by Lord Goff of Chieveley in India (President of) v Jebsens (UK) Ltd, The General Capinpin, Proteus, Free Wave and Dinara [1991] 1 Lloyd's Rep 1 (HL) where His Lordship enunciated : I must confess I am reluctant to speculate on the motives of a party for adopting a clause in any particular form. For once a clause is embodied in a commercial contract, it has simply to be construed in its context, from the objective point of view of reasonable persons in the shoes of the contracting parties. Of course it has to be construed sensibly, and regard has to be had to its practical effect. But the objective interpretation is of paramount importance in commercial affairs; commercial men have frequently to take important decisions with some speed, and it is of great importance that they all know that they can rely on Courts and arbitrators, if any dispute should later arise, to adopt the same objective approach as they themselves have to adopt in the daily administration of their contracts. No undue influence

D1 also raised the defence of undue influence. He claims that he had executed the loan agreement because of the undue influence by brother, due to their friendship existing for a long time.

Regardless of whether or not the above averment is true, it does not constitute undue influence in law.

Section 16 (1) of the Contracts Act 1950 reads : A contract is said to be induced by undue influence where the relations subsisting between the parties are such that one of the parties is in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other.

The question then is whether in the contractual relationship between P and D1 under the loan agreement, P was in a position to dominate the will of D1 and used that position to obtain an unfair advantage over D1. My answer is in the negative.

First of all, the loan agreement is between P and the Defendants. It was not with . The wrongdoer, if at all, is brother. But there is no contract between D1 and , which requires to be treated as void.

The party who is in a position to dominate must be a contracting party. This is the prerequisite of section 16 (1) of the Contracts Act 1950. (See the High Court case of Lesley Chan Siew Yoke v RHB Bank Bhd [2020] MLJU 242).

It was alleged that D1 was undue influenced by into signing the loan agreement. However, is not a party to the loan agreement. Thus, D1 has failed to satisfy the prerequisite of the defence of undue influence under section 16 (1) of the Contracts Act 1950.

Second, I accept that P has never been in a position to dominate the will of D1. From the evidence, D1 is an educated person who understands English and the legal effect of an agreement.

If D1 was unwilling to execute the loan agreement, he had every right and discretion to refuse to do so. It is not a situation that D1 had been left with no choice but to execute the loan agreement against his will.

More importantly, at all material times, D1 has never raised any protest against the terms of the loan agreement to P. The contention of undue influence was first raised after P initiated this action.

In the circumstances, I find the defence of undue influence to be untenable. No illegal money lending

Lastly, D1 says that the RM 1.6 million is in fact a loan. And that the loan has contravened the Moneylending Act 1951.

D1 alleges that P only paid to the Defendants a sum of RM 1,343,800. And that the remaining sum of RM 256,200 is an interest for the loan.

D1 also alleges that he has not received any amount of money from P pursuant to the loan agreement. As the true purpose of the loan is , rather than a loan to the Defendants for funding their business venture, i.e. MB Recycle.

It is my finding that such allegations are inconsistent with the incontrovertible facts here. As mentioned earlier, it is irrefutable that D1 has acknowledged receipt of the full amount of RM 1.6 million, as stated in the loan agreement.

Additionally, there is an internal document of MB Recycle which manifest that the Defendants acknowledged a sum of RM 1.6 million has been paid into MB Recycle. To wit, the indemnity agreement.

The contemporaneous documents prove the payment of the full sum of RM 1.6 million. In other words, P did not impose any interest.

An interest - free friendly loan does not contravene the Moneylending Act 1951. Therefore, this defence is a non - starter.

As regards D1 denial that he has received any part of the loan, this contention is devoid of merit. I reiterate the relevant undisputed facts in this regard :

D1 admitted that the sum of RM 1.6 million is meant for funding the business of MB Recycle.

D1 admitted that he was a director of MB Recycle at the material time.

D1 admitted that a sum of RM 1,343,800 has been deposited

In the PJ Sessions Court suit, MB Recycle produced the indemnity agreement as evidence in court.

The indemnity agreement demonstrates that the sum of RM 1.6 million has been received as the fund of MB Recycle.

Based on the undisputed facts and the indemnity agreement, it is apparent that the full sum of RM 1.6 million has been paid to MB Recycle.

While D1 maintains that he did not receive a single cent from the RM

1.6 million, he did not deny that the RM 1.6 million is always meant for funding MB Recycle, in which he was a director at the material time.

management of MB

Not only that, MB Recycle was sued in the PJ Sessions Court suit. Interestingly, the solicitors who represent MB Recycle therein is in suit.

To sum up :

pleaded case that the Defendants have requested a friendly loan of RM 1.6 million to fund their business in MB Recycle.

personally does not negate his liability to repay the sum of RM

1.6 million. This is because P has fully paid the said sum in accordance with the request of the Defendants and the terms and conditions of the loan agreement.

Further, D1 has never disputed his liability under the loan agreement, even after receipt of the letter of demand issued by commencement of this action.

Insofar as the full payment of the RM 1.6 million is concerned, I consider that :

D1 admitted that a sum of RM 1,343,800 has been deposited

However, D1 conveniently turned to dispute the payment of the remaining sum, i.e. RM 256,200, which was made by cash as per the Defendants

Nonetheless, such dispute can be summarily dismissed by referring to the indemnity agreement produced in the PJ Sessions Court suit.

The indemnity agreement evidences that the sum of RM 1.6 million has been fully paid to MB Recycle.

In short, P has proved that the payment of RM 1.6 million was made pursuant to the loan a repay the loan sum in the stipulated time amounts to a breach of the loan agreement. Inconsistent defences

Lastly, I would point out that the defences raised by D1 are internally inconsistent. The table below demonstrates the inconsistent positions taken by D1. Defence No. 1 Defence No. 2 Defence No. 3 It is not a loan. It is an investment. It is not a loan. It is only a funding for MB Recycle. The loan agreement is void because of undue influence. It is a loan. The loan is illegal because it contravenes the Moneylending Act 1951.

It is plain that D1 has sought to rely on different version of facts in an attempt to raise triable issues.

On the law of alternative pleadings of facts, a party is barred from asserting two inconsistent versions of the facts where he knows or must know that one version is false. This is because the alternative versions of the facts cannot offend common sense and justice. (See the High Court case of Toe Hong Choo v Piong Choong Fah [2024]

Apart from the violation of the law on alternative pleading of facts, I find Conclusion

In conclusion, this action is simply about a loan recovery. There was a default of the loan. Based on the loan agreement that D1 signed, P sought to enforce such contractual obligation under the loan agreement. I see no meritorious defence nor issue to be tried in this case.

For the reasons above, I allowed in Enclosure 23. I entered summary judgment against D for the sum of RM 1,467,116.

I awarded interest on the judgment sum at the rate of 5 % per annum from the date of judgment until full settlement. I awarded costs of RM 8,000 to P. Dated 24 November 2025 Quay Chew Soon Judge High Court of Kuala Lumpur (Commercial Division NCC 2 & Admiralty 9) Counsel for the Plaintiff : Lock Jun Qi (Messrs. Tang Hong & Lock) Counsel for the 1st Defendant : Chew Beng Han Randy and Ahmad Ismail bin Azhar (Messrs. Randy Chew & Co.) Case reference :

Bank Negara Malaysia v Mohd Ismail & Ors [1992] 1 CLJ (Rep) 14; [1992] 1 MLJ

Voo Min En & Ors v Leong Chung Fatt [1982] 2 MLJ 241 3. Fadzil Mohamed Noor v Universiti Teknologi Malaysia [1981] CLJ (Rep) 53 4. Cempaka Finance Bhd v Ho Lai Ying (trading as KH Trading) & Anor [2006] 3 CLJ 544; [2006] 2 MLJ 685 5. Polygram Records Sdn Bhd v The Search & Anor [1994] 3 MLJ 127 6. Global Globe Property (Melawati) Sdn Bhd v Jangka Prestasi Sdn Bhd [2020] 6 MLJ 333 7. The New Straits Times Press (M) Bhd v Aideah Communication Sdn Bhd [2025] 3 MLJ 240 8. Lesley Chan Siew Yoke v RHB Bank Bhd [2020] MLJU 242 9. Toe Hong Choo v Piong Choong Fah [2024] MLJU 2405 Legislation reference :

Moneylending Act 1951 2. Section 16 (1) of the Contracts Act 1950 3. Order 14 of the Rules of Court 2012