Teo Yek Ming v 1. ) Lkw Petroleum Sdn Bhd (BL-B52NCC-30-10/2022)

AND LKW PETROLEUM SDN BHD (COMPANY NO: 200801028050 (829377-T)) … THE FIRST DEFENDANT

LEE KOK WAI (No. K/P: 710628-10-5593) … THE SECOND DEFENDANT

AND FULL PLATFORM SDN. BHD. (COMPANY NO: 201301032659 (1062488-P)) … THE FIRST THIRD PARTY

IWEALTH CAPITAL SDN. BHD. (COMPANY NO: 202001025740 (1382060-T)) … THE SECOND THIRD PARTY S/N cvlniCkdCUmwYK7qJM13ow GROUNDS OF JUDGMENT

The present case concerns a contentious tripartite commercial dispute arising from loan, guarantee and indemnity agreements between the Plaintiff and the Defendants, with collateral claims directed against the Third Parties alleged to have acted as proxies in the transaction. It centres on arrears of instalments claimed to constitute breach, and on assertion that the agreements contravene the Moneylenders Act 1951, thereby impugning their validity and enforceability.

Having evaluated the totality of the evidence before me, I find on a balance of probabilities that:

The Plaintiff has established his claim against the Defendants. I, therefore, allow the Plaintiff’s claim with costs.

(ii) The Defendants have failed to establish their counterclaim against the Plaintiff. I, therefore, dismiss the Defendants’ counterclaim with costs.

(iii) The First Defendant has failed to establish its third party claim against the Second Third Party. I, therefore, dismiss the First Defendant’s Third Party claim with costs.

My reasons for so finding are set out in the analysis below. S/N cvlniCkdCUmwYK7qJM13ow

The parties relevant to this action are as follows.

The Plaintiff is a registered Office Bearer of Yayasan Ekonomi Kewangan Antarabangsa [International Financial Economy Foundation]. It is a society registered in Malaysia under the Societies Act 1966, bearing registration number PPM-023-10- 10102019 (the Foundation).

The First Defendant is a company duly incorporated in Malaysia under the Companies Act 1965, engaged in the business of hardware and diesel supply. Its present status was altered subsequently by insolvency events that frame the procedural posture of this suit:

On 9.5.2024, a winding up order was granted against it by the High Court at Kuala Lumpur in Company Winding Up Petition No. WA-28NCC-736-07/2023, and Mr Andrew Heng together with Mr Kumarakuru A/L Jai Prakash Krishan were appointed as its Joint and Several Liquidators.

(ii) On 9.6.2024, the Plaintiff applied for leave pursuant to Section 471 of the Companies Act 2016 through the High Court at Kuala Lumpur in Post-Winding Up Application No. WA-28PW- 330-06/2024 to continue and/or proceed with this action against the First Defendant in light of its winding up and the ongoing liquidation.

(iii) On 29.10.2024, the High Court granted leave. S/N cvlniCkdCUmwYK7qJM13ow

The Second Defendant is a director and shareholder of the First Defendant. The Second Defendant also stands as guarantor to the First Defendant.

The First Third Party is a company duly incorporated in Malaysia under the Companies Act 1965.

The Second Third Party is a company incorporated in Malaysia under the Companies Act 1965.

In this judgment, the Plaintiff is referred to as the Plaintiff. And unless mentioned individually:

the First and Second Defendants are referred to collectively as the Defendants; and

(ii) the First and Second Third Parties are referred to collectively as the Third Parties. BRIEF FACTS

The brief facts, as gathered from the pleadings, the documentary and oral evidence, as well as the written submissions before me, are as follows. Loan, Guarantee and Indemnity Agreements

The Plaintiff and the First Defendant executed a Loan Agreement dated 18.8.2021 (the Loan Agreement), incorporating mutually agreed terms between the parties. S/N cvlniCkdCUmwYK7qJM13ow

13.

On the same date, the Second Defendant executed a guarantee and indemnity in favour of the Plaintiff, jointly and severally, both as guarantor and principal debtor, to secure the repayment of all outstanding debts owed by the First Defendant to the Plaintiff (the Guarantee and Indemnity).

Notwithstanding the partial payment made by the First Defendant to the Plaintiff, the Defendants did not pay the outstanding principal sum and accrued interest in full to the Plaintiff.

In view of the foregoing, the Plaintiff’s solicitors issued the following notices:

a notice dated 8.8.2022, issued to the Defendants, directing settlement of the arrears for March, April, May, June, and July 2022 (the First Notice).

(ii) a notice dated 26.9.2022, issued to the First Defendant, recording the continuing default and noting that the Maturity Date had passed (the Second Notice).

Despite the issuance of the respective letters to the Defendants, they failed to settle the arrears due to the Plaintiff. S/N cvlniCkdCUmwYK7qJM13ow

On 28.10.2022, the Plaintiff commenced action against the Defendants. The Statement of Claim was later amended pursuant to Sessions Court Order dated 25.4.2024.

The Plaintiff sought, as against the Defendants jointly and severally, the following relief:

Payment of the principal sum of RM600,000.00.

Payment of accrued and outstanding interest in the sum of RM131,138.00.

Payment of late interest quantified at RM8,305.41.

Costs. The Third Party Notice

On 1.12.2022, the Defendants issued a Third Party Notice against the Third Parties.

The Third Parties were alleged to have acted throughout as proxies for the receipt of advance interest payments, pleaded to be a device intended to mask the unlawful nature of the Loan. On this footing, the Defendants pursue indemnity or contribution against them for the full extent of the Plaintiff’s claims. S/N cvlniCkdCUmwYK7qJM13ow

On 2.12.2022, the Defendants through their defence denied their obligation to repay the Principal Loan Amount, the outstanding Loan Interest, and the Default Interest on the sole ground that the Plaintiff is an unlicensed moneylending entity. The defence was later amended pursuant to the Sessions Court Order dated 25.4.2024.

The Defendants advanced a counterclaim against the Plaintiff and the Third Parties in the following terms. As against the Plaintiff

A declaration that the Loan Agreement between the Plaintiff and the First Defendant is contrary to law, null and void, and unenforceable at law.

A declaration that the Letter of Guarantee and Indemnity between the Plaintiff and the Second Defendant is contrary to law, invalid, and unenforceable at law.

A declaration that the “Irrevocable Right of First Option to Purchase” in respect of the postal address situated at No. 8, Jalan Impian 2D, Ambang Botanic 2, 41200 Klang, Selangor is contrary to law, invalid, and unenforceable at law. S/N cvlniCkdCUmwYK7qJM13ow As against the Third Parties

An order that the First Third Party repay to the First Defendant the sum of RM30,000.00.

An order that the Second Third Party repay to the First Defendant the sum of RM30,000.00. As against both of them

Interest.

Costs.

On 19.1.2023, a Judgment in Default was entered against the First Third Party for its failure to enter an appearance.

On 2.5.2025, the Sessions Court was informed during case management proceeding that the parties were agreeable to mediation, and the matter was in the meantime pending mediation at the Mediation Centre Shah Alam.

On 28.5.2025, the Shah Alam Mediation Centre conducted the mediation, which did not result in a settlement. S/N cvlniCkdCUmwYK7qJM13ow

On 29.5.2025, the Sessions Court, through case management proceeding, directed that the First and Second Defendants’ pleading be served on the Second Third Party separately.

On 5.6.2025, the First Defendant served the Statement of Claim on the Second Third Party.

On 4.7.2025, learned counsel for the Defendants informed the Court through case management proceeding that:

the Second Defendant withdrew his Third Party claim against the Second Third Party; and

(ii) The First Defendant’s Third Party claim against the Second Third Party remains extant, and its statement of claim has been served.

The Sessions Court recorded the withdrawal of the Second Defendant’s Third Party claim against the Second Third Party, with costs of RM3,000.00.

On 19.6.2025, the Second Third Party through its defence denied any legal or other duty to indemnify or contribute to the First Defendant and is not privy to the Loan Agreement or any other agreement between the Plaintiff and the First Defendant. S/N cvlniCkdCUmwYK7qJM13ow

Before addressing the competing arguments, I find it convenient to set out below the well-established principles governing the burden of proof, to which I shall immediately turn. Statutory provisions

Elementary as it is, it is worth noting at the outset the burden and standard of proof, which is the legal burden on the balance of probabilities, as prescribed by sections 101, 102 and 103 of the Evidence Act 1950 (the Act). S. 101 of the Act reads: “101 Burden of proof

Whoever desires any court to give judgment as to any legal right or liability, dependent on the existence of facts which he asserts, must prove that those facts exist.

When a person is bound to prove the existence of any fact, it is said that the burden of proof lies on that person.”

Section 102 of the Act reads: “102 On whom burden of proof lies The burden of proof in a suit or proceeding lies on that person who would fail if no evidence at all were given on either side.” S/N cvlniCkdCUmwYK7qJM13ow

And section 103 of the Act reads: “103 Burden of proof as to particular fact The burden of proof as to any particular fact lies on that person who wishes the court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person.”

Guidelines have been developed over the years in precedents concerning the centrally relevant burden of proof. The Court of Appeal in Abu Bakar Pangis & Ors v. Tung Cheong Sawmill Sdn Bhd & Ors And Another Appeal [2014] 5 MLJ 384; [2015] 5 CLJ 753 explained the concept of proving a civil claim on the balance of probability. In delivering judgment of the Court of Appeal, Abdul Wahab Patail JCA observed: “[22] Objectively speaking, the nature of proof of a claim is not about believing one party or witness and not the other. Otherwise, justice in civil litigation falls prey to the uncertainty of who and what is believed or not by whoever presides in the court. It is to avoid this and to put the matter of proof upon an objective basis that the two fundamental concepts of the burden of proof and proof upon a balance of probabilities were developed. … S/N cvlniCkdCUmwYK7qJM13ow [24] To appreciate how burden of proof functions, it is necessary to bear in mind the process of determination of facts in civil litigation:

A plaintiff relying upon a cause of action carries the burden of proving the facts in support of it. He does so by setting out such facts in his pleadings, thereby giving the other party notice and an opportunity to check and verify that those facts are true and correctly stated, and the other party may, to enable him to do so, require further and better particulars.

In respect of those facts in support:

if not disputed by the defence, it is deemed to have been accepted and it is not necessary to prove it;

(ii) if a fact in support is disputed and the plaintiff had disclosed the nature of the evidence relied upon, then if conceded by the defence it is deemed to have been proved, and no further proof is necessary;

(iii) if a fact in support is disputed and the plaintiff had disclosed the nature of the evidence relied upon, and it remained disputed by the defence, but if after discovery and or interrogatory it was conceded by the defence, it is deemed to have been proved, and no further proof is necessary.

If not conceded, a disputed fact in support proceeds to trial stage where:

if as to a disputed fact no evidence is produced by the plaintiff in the form of oral testimony of a witness or documentary evidence in support thereof, then it is held to have been not proved; S/N cvlniCkdCUmwYK7qJM13ow

(ii) if as to the disputed fact evidence is produced in the form of oral testimony of a witness or documentary evidence, and such evidence is not challenged in cross-examination, then it is held to have been proved;

(iii) if as to the disputed fact evidence is produced in the form of oral testimony of a witness or documentary evidence produced, and such evidence is not demolished during cross-examination, and no evidence to support the cross-examination is adduced, or if adduced failed to support the basis of cross-examination, then the evidence is held to remain unshaken and the disputed fact have been proved;

(iv) if as to the disputed fact evidence is produced in the form of oral testimony of a witness or documentary evidence, and cross-examination succeeds to demolish that evidence, then the disputed fact is held to be not proved;

(iv) if as to a disputed fact evidence is produced in the form of oral testimony of a witness or documentary evidence, and despite cross-examination the version is maintained, it is for the court to assess what weight is to be given to such evidence in proof of the disputed fact.” (See also: Wong Thin Yit v. Mohamed Ali [1971] 1 LNS 151; [1971] 2 MLJ 175; Krishna Murthey & Anor. v. Law Lye Chua [1992] 2 CLJ Rep 668; Jafri Elias v. Khor Tang Seah [1992] 2 CLJ Rep 601; and MGI Securities Sdn Bhd v. Teong Teck Leng & Ors [2000] 5 CLJ 163; [2000] 1 MLJ 354) S/N cvlniCkdCUmwYK7qJM13ow ISSUES FOR DETERMINATION

The issues to be tried were filed independently [Enclosures 110, 112, and 120], reflecting the absence of consensus between the parties. I have examined these enclosures with care, seeking to reconcile their divergences, and have had the benefit of counsel’s measured and comprehensive submissions.

Taken together with the pleadings and the evidence, eighteen issues emerge from the intricate factual matrix of the case, which I shall now set out in accordance with the thematic groupings below: A. THE PLAINTIFF’S STATUS, RELATIONSHIP WITH THE DEFENDANTS, CHARACTER OF THE TRANSACTION, AND THE PRESUMPTION UNDER SECTION 10OA OF THE

Whether the Minutes of the Committee Meeting dated 3.7.2021 are admissible to establish the First Defendant’s admission.

(ii) Whether the relationship between the Plaintiff and the First Defendant constitutes that of an organisation and its members.

(iii) Whether exemption from the membership fee for the first year affects or denies the First Defendant’s status as a member of the Plaintiff

(iv) Whether the Plaintiff is an organisation engaged in welfare activities. S/N cvlniCkdCUmwYK7qJM13ow

Whether the Loan of RM600,000.00 was granted to the First Defendant for purposes consistent with the Plaintiff’s objectives under its constitution.

(vi) Whether there exists any system, continuity, or repetition of similar loans to other persons that could support the conclusion that the Plaintiff is carrying on the business of moneylending.

(vii) Whether the Plaintiff has advertised, announced, or held itself out as a moneylender.

(viii) Whether the post-dated cheques were requested or accepted by the Plaintiff as a form of security for the Loan.

(ix) Whether the Irrevocable Right of First Option to Purchase (the OTP) in respect of the property situated at No. 8, Jalan Impian 2D, Ambang Botanic 2, 41200 Klang, Selangor is enforceable at law

Whether the Plaintiff employed thugs or debt collectors to coerce the Defendants into making payment of the Loan.

(xi) Whether the Plaintiff appointed any third party as a proxy and compelled the Defendants to pay advance interest of RM60,000.00, being RM30,000.00 to each proxy on its behalf

(xii) Whether the Plaintiff has successfully rebutted the statutory presumption under section 10OA of the Moneylenders Act 1951. S/N cvlniCkdCUmwYK7qJM13ow B. DEFAULT, TERMINATION, AND ENFORCEMENT

(xiii) Whether the First Defendant failed to make the monthly instalment payments to the Plaintiff

(xiv) Whether the Defendants have defaulted on and breached the terms of the said loan agreement.

(xv) Whether the Plaintiff is entitled to terminate the Loan agreement.

(xvi) Whether the First Defendant consented to the Loan Interest rate of 5% per month and the Default Interest of 10% per month, and that such terms are enforceable

(xvii) Whether the Plaintiff is contractually entitled to enforce the Guarantee and Indemnity dated 18.8.2021 against the Second Defendant to recover the full outstanding debt of RM739,443.41 jointly and severally. C. INDEMNITY OR CONTRIBUTION CLAIM AGAINST THE SECOND THIRD PARTY

(xviii) Whether the First Defendant has established its claim for indemnity or contribution against the Second Third Party. S/N cvlniCkdCUmwYK7qJM13ow SUBMISSION OF NO CASE TO ANSWER

Before setting out the events that unfolded at trial, I begin with the legal framework governing a submission of no case to answer. In Mohd Nor Afandi Mohamed Junus v Rahman Shah Alang Ibrahim & Anor [2008] 2 CLJ 369, the Court of Appeal having cited with approval Storey v. Storey [1961] P 63 observed: “[6] It is trite that when a submission of no case is undertaken, it means that a defendant at the close of the plaintiff's case (in this case the appellant's) either had not made out a case in law, or the evidence was unsatisfactory or unreliable for the court to hold that the burden had been discharged.”

In this context, the Federal Court in Syarikat Kemajuan Timbermine Sdn Bhd v Kerajaan Negeri Kelantan Darul Naim [2015] 2 CLJ 1037 reminded that: “[56] … the fact that the defendant led no evidence or called no witnesses did not absolve the plaintiff from discharging its burden in law…”

In a similar vein, Empire Holdings Ltd (Seychelles Company) v. Ithmaar Development Company Ltd & Ors [2024] CLJU 2343 underscores that: “… The evidential burden of proof is only shifted to the other party once that party has discharged its burden of proof.” S/N cvlniCkdCUmwYK7qJM13ow

The account that follows is drawn from the Court’s Transcribed Notes of Proceedings, the Defendants’ Submission dated 29.8.2025, and the Second Third Party’s Written Submission dated 29.8.2025.

Upon the close of the Plaintiff’s case at trial, Mr Shahabudin B Shaik for the Defendants informed the Court that the Defendants elected to proceed on a submission of no case to answer and would not be calling any witnesses. When questioned by the Bench on the consequences of not calling witnesses, he confirmed that position. And I recorded the election. That election carries legal consequence. In Jaafar Bin Shaari & Anor (Suing as Administrators of The Estate of Shofiah Bte Ahmad, Deceased) v. Tan Lip Eng & Anor [1997] 3 MLJ 693; [1997] 4 CLJ 509, the Federal Court established: “The defendants had however chosen to close the case at the end of the plaintiff's case, they were entitled to do so though they would be in peril of not having the evidence of their most important witness and of having any adverse inference drawn against them for failing to call any such evidence should the circumstances appropriately call for such an adverse inference or for the presumption of avoiding unfavourable evidence by the defence to be invoked against the defendants. … For, once a defendant in civil proceedings elects not to call evidence, then all the evidence led by the plaintiff must be assumed to be true.” S/N cvlniCkdCUmwYK7qJM13ow

In Yoong Sze Fatt v Pengkalen Securities Sdn Bhd [2011] 4 MLJ 805, the Court of Appeal observed: “[46] Suffice for me to say that when a submission of no case to answer has been made and coupled with the submission that no witnesses will be called, it gives rise to these unrebuttable implications:

the outcome to the question of whether there is a case to answer would be that all evidence led by the plaintiff must be presumed to be correct; and

so the burden falls on the first defendant to call evidence to rebut the plaintiff's case and the first defendant's failure to do so in the absence of reasonable explanation will trigger an adverse inference to be drawn against the first defendant under s. 114(g) of the

Similarly, in Subry Hamid v Husaini Tan Sri Ikhwan & Anor [2006] 6 MLJ 22, the Court of Appeal observed: “[32] … This is a full trial and the principle of law is that if the allegation made by the plaintiff against the defendants on essential issue remains unrebutted, then the allegation made by the plaintiff must be presumed to be true. In the present case, the failure to call the first defendant to rebut the plaintiff's evidence would result in an adverse inference be invoked against the defendants' case.” S/N cvlniCkdCUmwYK7qJM13ow

Applying these authorities, the Defendants’ election leaves the Plaintiff’s evidence unrebutted, presumed to be correct, and an adverse inference may arise. And I further add in this judgment that this position is not displaced by the fact that the Defendants cross-examined the Plaintiff’s witnesses. As is trite, cross-examination does not constitute the calling of evidence (see: Ng Neoh Ha & Ors. v. Maniam Suppiah & Ors. [1994] 2 CLJ 412)

In response, Ivy Poo Long Yii for the Plaintiff, applied to place on record the non-admission of the witness statements filed by the Defendants. And I recorded the position.

Turning to the First Defendant’s Third Party claim, Angeline Low Lu-Yen for the Second Third Party enquired whether, in light of the Defendants’ election to submit no case to answer, the claim should be regarded as withdrawn, given that no evidence had been adduced against the Second Third Party. She submitted that, as the First Defendant acts as plaintiff in the third party proceedings, the failure to lead evidence may be treated as a waiver of its claim pursuant to Order 16 Rule 3(3) of the Rules of Court 2012.

Mr Shahabudin B Shaik responded that the claim was not withdrawn. He submitted that if the Plaintiff were to succeed following the election of no case to answer, the Defendants’ claim against the Third Party would fall. He further submitted that if the Defendants succeed in establishing the illegality, the Plaintiff “must be ordered to pay the costs of the third party proceeding against the Second 3rd party.” S/N cvlniCkdCUmwYK7qJM13ow

Against that backdrop, I now turn to outline the legal framework provided by the Act which frames the Defendants’ challenge, before addressing the issues that arise for determination. MONEYLENDING FRAMEWORK UNDER THE MONEYLENDERS ACT 1951

The central dispute, which underpins the Defendants’ challenge to the Plaintiff’s claims, arises from the Defendants’ pleaded defence that the Plaintiff engaged in the business of moneylending in contravention of the Moneylenders Act 1951 (the Act), thereby rendering the agreements between the Plaintiff and the Defendants invalid and unenforceable.

It is therefore necessary to examine the key provisions of the Act, which define the legal framework for evaluating the allegations raised, the conduct of the parties, and the enforceability of the loan, guarantee and indemnity agreements.

Section 2 of the Act defines the relevant terms as follows: "2 Interpretation In this Act, unless the context otherwise requires- … "interest" does not include any sum lawfully charged in accordance with this Act by a moneylender for or on account of stamp duties, fees payable by law and legal costs but, save as aforesaid, includes any amount by whatsoever name called in excess of the principal paid or payable to a moneylender in consideration of or otherwise in respect of a loan; … S/N cvlniCkdCUmwYK7qJM13ow "moneylender" means any person who carries on or advertises or announces himself or holds himself out in any way as carrying on the business of moneylending, whether or not he carries on any other business; "moneylending" means the lending of money at interest, with or without security, by a moneylender to a borrower;”

Section 5 of the Act establishes the fundamental requirement for licensure. It reads: “5 Licence to be taken out by moneylender …

No person shall carry on or advertise or announce himself or hold himself out in any way as carrying on the business of moneylending unless he is licensed under this Act.”

Further, section 10OA of the Act introduces a statutory presumption in respect of the business of moneylending which reads: “10OA Presumption as to the business of moneylending Where in any proceedings against any person, it is alleged that such person is a moneylender, the proof of a single loan at interest made by such person shall raise a presumption that such person is carrying on the business of moneylending, until the contrary is proved.”

Viewed together, these provisions provide the essential lens through which the Defendants’ pleaded assertion must be assessed, establishing both the statutory duties of a moneylender and the presumption applicable in any challenge to a purported loan transaction. S/N cvlniCkdCUmwYK7qJM13ow

That being the setting, it appears clear to me that the Defendants’ reliance on Section 10OA of the Act is correct in law. Statutorily, proof of a single loan at interest raises a presumption that the lender is carrying on the business of moneylending until the contrary is shown. This presumption applies squarely here, as there is no dispute that interest was contractually imposed on the Loan advanced to the First Defendant. What now demands assessment is whether the Plaintiff has successfully rebutted that presumption.

And in so assessing, I take guidance from the Federal Court case of Triple Zest Trading & Suppliers & Ors v. Applied Business Technologies Sdn Bhd [2023] 10 CLJ 187, which makes clear that once the statutory presumption under s. 10OA is triggered, the burden rests firmly on the Plaintiff to rebut it on the balance of probabilities by proving that “…it was not engaging in an act of lending of money at interest, with or without security, by a moneylender to a borrower, which is the meaning ascribed to the word moneylending by s. 2...”. A harmonious reading of “interest”, “moneylender” and “moneylending” and permits the presumption to be rebutted where, notwithstanding the presence of interest, the Plaintiff was not in the true character of the transaction, a moneylender, and the transaction did not amount to moneylending within the meaning of the Act. The focus remains on substance rather than labels, and the legal burden of rebutting the presumption rests throughout on the Plaintiff.

Against that backdrop, I proceed to consider the eighteen issues, evaluated in light of the pleadings, the evidence adduced at trial, the written submissions, and the clarification responses advanced before this Court, seriatim. S/N cvlniCkdCUmwYK7qJM13ow FIRST ISSUE: WHETHER THE MINUTES OF THE COMMITTEE MEETING DATED 3.7.2021 ARE ADMISSIBLE TO ESTABLISH THE

Learned counsel for the Plaintiff submitted that the Minutes are admissible evidence of membership under Sections 5 and 16 of the Evidence Act 1950. She further argued that they align with Paragraphs 7 and 8 of the Amended Statement of Claim, recording the First Defendant’s application and formal admission.

Learned counsel for the Defendants submitted that the Minutes were never pleaded by the Plaintiff in its pleadings. According to him, they were only raised during trial and therefore fall outside the pleaded case, and should be disregarded. Also, he relied on paragraphs 2.3 and 4.1 of the Minutes, contending that there was no indication in the Minutes whether the Committee members had in fact accepted the membership application.

Having considered the preceding positions, I am persuaded by the argument advanced for the Plaintiff.

My reasons are these. S/N cvlniCkdCUmwYK7qJM13ow

I begin with the undisputed fact that the Minutes were admitted into evidence as Exhibit P1 during trial. No objection was raised by learned counsel for the Defendants at the time, which indicates procedural acceptance for the purposes of trial. As I see it, this circumstance does not create admissibility in law, but it forms part of the forensic setting in which the document was received and relied upon. While it is a trite principle that inadmissible evidence does not acquire admissibility merely because no objection is raised (see: Popular Industries Ltd v. Eastern Garment Manufacturing Sdn Bhd [1989] 3 MLJ 360; [1990] 1 CLJ 133; [1990] 2 CLJ (Rep) 635, and Mui Bank Bhd Johore v. Tee Puat Kuay [1993] MLJU 438; [1993] 4 CLJ 69), the present case turns not on silence, but on active forensic engagement with the document as part of the evidential record.

Here, the Minutes were received without challenge, and the parties engaged substantively and without reservation with the manner in which the Minutes were presented during trial, thereby signalling clear acceptance. To my mind, that engagement assumes relevance and proof, and confirms that the Minutes were treated as evidence properly before the Court. I consider it a legitimate expectation that the admissibility of the Minutes was settled and not open to revival by a later forensic shift. To permit their disavowal at this stage, founded on an assertion of non-pleading never taken during trial, would undermine the orderly conduct of proceedings and offend basic procedural fairness. Seen through that lens, I find the Defendants’ objection lacks foundation. S/N cvlniCkdCUmwYK7qJM13ow

Turning next to the evidence, I note that Teo Yek Ming, who testified in his capacity as the Office Bearer of the Plaintiff (PW1), and Lee Kong Hing, who testified in his capacity as the Manager of the Plaintiff (PW2), gave evidence both as to the substance of the Minutes and the manner in which they were handled. As is apparent, the maker was present, and the original copy was produced before me. PW1 confirmed his personal knowledge of the Minutes, bringing the evidence squarely within the ambit of section 73A of the Evidence Act 1950. On that footing, I am satisfied that the Minutes are properly admissible and admit them in evidence as Exhibit P1.

For completeness, however, I proceed to address the Defendants’ challenge predicated on the assertion that the Minutes were unpleaded. In that regard, I recognise the argument advanced for the Plaintiff that sections 5 and 16 of the Evidence Act 1950 provide the governing principles, and it is to those principles that I now turn.

Section 5 of the Evidence Act 1950 reads: “5 Evidence may be given of facts in issue and relevant facts Evidence may be given in any suit or proceeding of the existence or non-existence of every fact in issue and of such other facts as are hereinafter declared to be relevant, and of no others.”

Section 16 of the Evidence Act 1950 reads: “16 Existence of course of business when relevant When there is a question whether a particular act was done, the existence of any course of business, according to which it naturally would have been done, is a relevant fact.” S/N cvlniCkdCUmwYK7qJM13ow

Proceeding from that statutory footing, I turn to the pleaded factual context. Paragraphs 7 and 8 of the Plaintiff’s Amended Statement of Claim disclose a clear sequence: “B. DEFENDAN PERTAMA MERUPAKAN AHLI KEPADA

Pada 03.07.2021, D1 telah memohon untuk menjadi ahli kepada Yayasan tersebut.

Selepas D1 menjadi ahli kepada Yayasan tersebut, D2 sebagai pengarah dan pemegang saham kepada D1 telah membangkitkan isu kewangan D1 kepada Plaintif dan ingin meminjam wang dengan Yayasan.”

In the circumstances, I find the Minutes relevant and admissible. Section 5 of the Evidence Act 1950 authorises their reception to establish a fact in issue, namely the First Defendant’s admission. And Section 16 complements this by showing that the process recorded in the Minutes reflects the Plaintiff’s ordinary course of business in admitting members.

On the balance of probabilities, I am satisfied that the Minutes of the Committee Meeting dated 3.7.2021 are admissible as Exhibit P1 and serve to establish the First Defendant’s admission.

And in my judgment, the answer to the First Issue must be in the affirmative. S/N cvlniCkdCUmwYK7qJM13ow SECOND ISSUE: WHETHER THE RELATIONSHIP BETWEEN THE PLAINTIFF AND THE FIRST DEFENDANT CONSTITUTES THAT OF

Learned counsel for the Plaintiff submitted that the Plaintiff has produced the Minutes of the Committee Meeting dated 3.7.2021, (Exhibit P1), which demonstrate that the Committee members deliberated and approved the First Defendant’s membership application. According to her, this evidence establishes that the First Defendant was duly admitted as a member of the Plaintiff.

Learned counsel for the Defendants submitted that there was no evidence demonstrating that the First Defendant’s membership application had been approved by the Plaintiff.

Having considered the preceding positions, I am persuaded by the argument advanced for the Plaintiff.

My reasons are these.

I commence with the viva voce evidence of membership. PW1 explained that the First Defendant’s application was submitted to the Plaintiff, reviewed at a committee meeting, and formally approved by the committee members through a hands-raising process. He, having himself attended the relevant meeting at which his name appeared in the Minutes (Exhibit P1), emphasised that membership S/N cvlniCkdCUmwYK7qJM13ow is not automatic but requires deliberate consideration and approval by the Plaintiff’s committee.

For clarity, his evidence runs: “6. Q: Please explain how did D1 become a member of the Plaintiff. A: On or around July 2021, our manager ie Mr Lee Kong Hing had introduced D2 that Plaintiff is a charitable organization where likeminded members of the Plaintiff can join and participate in the activities organized by the Plaintiff. Upon that time, D2 was interested to join as a member of the Plaintiff. So, after that, D2 had filled up the membership form on behalf of D1 and even put D1’s company stamp on the Plaintiff’s membership form shown in page 87 of the CBD 2. After D1 filled up and submitted the membership form and provided its relevant documents to the Plaintiff, the Plaintiff then reviewed it at the committee meeting via the approach of hands raising by all the Plaintiff's committee members to indicate approval and acceptance of D1 to become a member of the Plaintiff which can be shown in the minutes of meeting in page 85 and 86 of the CBD 2. Therefore, not everyone can become a member of the Plaintiff. Those who are interested to become a member of the Plaintiff need to be reviewed and approved by the Plaintiff's committee members in the first place.” S/N cvlniCkdCUmwYK7qJM13ow

In that regard, PW1’s evidence is consistent with that of PW2. Both witnesses confirmed that the membership form, bearing the First Defendant’s company stamp and accompanied by relevant documents, was submitted and considered by the Plaintiff’s committee. In my evaluation, this consistency supports the reliability of the evidence regarding membership approval. It shows that admission did not depend on who completed the form, but on the committee’s deliberation and approval, which I regard as the operative act admitting the First Defendant as a member.

The documentary evidence corroborates this testimonial account. The First Defendant’s Membership Application Form (Exhibit P6) bears the signature and company stamp of the First Defendant, confirming that an application was duly submitted in accordance with the Plaintiff’s procedures. Moreover, the Minutes (Exhibit P1) confirm that, following assessment and voting, the First Defendant was admitted as a member. As recorded in the Minutes: “2.3 Ahli jawatan kuasa memutuskan bahawa persetujuan menerima satu syarikat bernama LKW Petroleum Sdn Bhd sebagai ahli untuk Yayasan Ekonomi Kewangan Antarabangsa.”

I, therefore, find it apparent that membership is not open to all comers. Admission is subject to careful scrutiny and formal approval by the committee, and it is clear to me that the First Defendant’s status was the product of a deliberate and structured process. S/N cvlniCkdCUmwYK7qJM13ow

As regards the Defendants’ reliance on paragraphs 2.3 and 4.1 of the Minutes (Exhibit P1), I agree with learned counsel for the Plaintiff that the contention that they lack an express indication of acceptance was never put to the Plaintiff’s witnesses in cross-examination. To my mind, it cannot be raised for the first time in submissions. The point is, therefore, foreclosed by settled principle. (see: YK Fung Securities Sdn Bhd v James Capel (Far East) Ltd [1997] 2 MLJ 621; and Chua Beow Huat v PP [1970] 2 MLJ 29; Brown v Dunn (1893) 6 The Reports 67).

For completeness, however, I note here this observation. So far as material, the paragraphs read: “2.3 Ahli jawatan kuasa memutuskan bahawa persetujuan menerima satu syarikat bernama LKW Petroleum Sdn Bhd sebagai ahli untuk Yayasan Ekonomi Kewangan Antarabangsa. …

4.1 Ahli Jawatankuasa membincangkan tentang menerima LKW Petroleum Sdn Bhd sebagai ahli baru untuk Yayasan Ekonomi

From my standpoint, paragraphs 2.3 and 4.1 of the Minutes (Exhibit P1) record the Committee’s decision and discussion on the First Defendant’s admission and, when read as a coherent whole with the entire Minutes, are clear in their effect. I further note that any perceived ambiguity in these paragraphs is resolved when considered in conjunction with the viva voce evidence and the overall Minutes, which collectively provide a coherent and unbroken evidential narrative confirming the First Defendant’s membership and the Plaintiff’s lawful exercise of its committee functions. S/N cvlniCkdCUmwYK7qJM13ow

In respect of the Defendants’ assertion that the First Defendant was not notified of its membership approval and the Plaintiff’s membership list was not produced, I make the following observation. I find that the assertion of non-notification is contradicted by PW2, who confirmed under oath that he informed the Second Defendant, as director of the First Defendant. I further find that, when viewed against the totality of the evidential record, the non-production of the membership list does not diminish the strength of the evidence establishing membership approval.

Upon cumulative reflection, I find that the Defendants’ argument falls away in the face of the evidence, as the First Defendant was duly admitted as a member.

On the balance of probabilities, I am satisfied that the relationship between the Plaintiff and the First Defendant is that of an organisation and its members.

And in my judgment, the answer to the Second Issue must be in the affirmative. S/N cvlniCkdCUmwYK7qJM13ow THIRD ISSUE: WHETHER EXEMPTION FROM THE MEMBERSHIP FEE FOR THE FIRST YEAR AFFECTS OR DENIES THE FIRST

Learned counsel for the Plaintiff submitted that PW1 led evidence that the First Defendant was exempt from the first year’s membership fee due to the limited number of members at the time. Bolstering her argument, she submitted that the Defendants’ challenge during the trial concerned only the payment of the membership fee and not the fee exemption.

Learned counsel for the Defendants submitted that Article 4 (3) and

of the Plaintiff’s Constitution required the First Defendant to pay a membership fee. He, nevertheless, contended that the Plaintiff led no evidence to show that the First Defendant had paid the fee when the application was approved. He further stated that the Plaintiff’s Constitution contains no waiver for such an exemption.

Having considered the preceding positions, I am persuaded by the argument advanced for the Plaintiff.

My reasons are these. S/N cvlniCkdCUmwYK7qJM13ow

Article 4 of the Plaintiff’s Constitution reads: “FASAL 4 KEAHLIAN …

Tiap-tiap pemohon yang permohonannya telah diluluskan seperti yang tersebut di atas, hendaklah setelah membayar bayaran masuk dan yuran pertama seperti yang ditetapkan hendaklah diterima menjadi ahli Pertubuhan dan hendaklah ia sebagai ahli. …

Tiap-tiap pemohon yang permohonannya telah diluluskan seperti yang tersebut di atas, hendaklah setelah membayar bayaran masuk dan yuran pertama (sekiranya berkaitan) seperti yang ditetapkan hendaklah diterima menjadi ahli Pertubuhan dan hendaklah ia sebagai ahli.”

As I see it, the Defendants’ argument, predicated on a supposed failure to comply with Articles 4(3) and (6), falters when measured against the evidential record. While Article 4 stipulates that membership follows the payment of entry and annual fees, I am satisfied on the evidence led by PW1 that at the time the First Defendant applied for membership, the Plaintiff, being at an early stage of formation, deliberately exercised its discretion to waive the first year’s fee to facilitate its charitable objectives.

From my standpoint, it is apparent from the Plaintiff’s Constitution that payment of fees is a condition for membership. Be that as it may, Article 4(6) expressly states “sekiranya berkaitan”, which means the payment is required only where applicable. I therefore hold that the Plaintiff’s decision to exempt the First Defendant S/N cvlniCkdCUmwYK7qJM13ow constitutes positive and lawful exercise of its constitutional discretion. And I shall make myself clear lest it be considered that I am straying into conjecture, for I am not speculating but construing the Plaintiff’s Constitution according to its express words.

Seen against the evidence, I am satisfied based on the Plaintiff’s testimony and documentary evidence, that the fee exemption does not affect or deny the First Defendant’s membership, which was conferred through the proper application and approval process and stands unaffected by this discretionary concession.

To my mind, this is not a case where any informal admission has taken place, nor is this a case where the Plaintiff failed to lead evidence regarding the exemption, and nor even is this a case where the fee exemption operates to negate the First Defendant’s membership. As rightly submitted for the Plaintiff, the tenor of the cross examination was directed only at the non-payment of the membership fee and not at the legitimacy of the exemption itself. From my assessment, the Plaintiff’s evidence that no fee was paid was not in dispute, and the exemption justification was left unchallenged. Viewed in this context, the argument advanced for the Defendants crumbles against the weight of the evidential record.

On the balance of probabilities, I am satisfied that the membership fee exemption does not affect or deny the First Defendant’s status as a member of the Plaintiff.

And in my judgment, the answer to the Third Issue must be in the negative. S/N cvlniCkdCUmwYK7qJM13ow FOURTH ISSUE: WHETHER THE PLAINTIFF IS AN ORGANISATION

Learned counsel for the Plaintiff submitted that the Plaintiff’s conduct, documents, and public engagements demonstrate a welfare mission confined to its membership and not to any enterprise of lending to the public, rendering the allegation of a moneylending business untenable.

The Defendants’ position, as reflected in the pleading and the tenor of cross-examination, was that the Plaintiff’s welfare activities and Facebook postings were designed to project a charitable image. The Defendants’ election of no case to answer and no evidence places the matter within the principles stated in Jaafar Shaari, Yoong Sze Fatt, Subry Hamid and Ng Neoh Ha.

Having considered the preceding positions, I am persuaded by the argument advanced for the Plaintiff.

My reasons are these. S/N cvlniCkdCUmwYK7qJM13ow

PW1 and PW2 led consistent evidence establishing that the Plaintiff is a society registered under the Societies Act 1966. The overall force of the evidence shows that it operates as a welfare-based organisation, aiding exclusively its own members. Membership is by invitation, extended to those interested in charitable activities and business development. Members are also encouraged to engage with one another and participate in events organised by the Plaintiff.

Exhibit P9, adduced by the Plaintiff, demonstrates the nature and character of the Plaintiff’s activities, providing tangible proof of sustained welfare outreach rather than commercial enterprise. The entries, recorded chronologically, illustrate the Plaintiff’s consistent engagement in charitable activities: Date Activity Page 29.11.2021 Nursing home visit for disabled 117 23.3.2022 3 Orang Asli Villages visiting at Pulau Indah, Tanjung Harapan dan Bagan Hylam 118 29.9.2023 Sunshine Special Disability Centre Home Visit 119 9.12.2024 Providing help and donations for flood victim in Kedah 120 & 121 10.12.2024 Providing help and donations to flood victim in Kelantan 122 10.12.2024 Providing help and donations to flood victim in Terengganu 123 13.1.2025 Providing help and donations to flood victim in Kelantan 124 S/N cvlniCkdCUmwYK7qJM13ow

Evaluated against this evidential backdrop, I find that the Plaintiff’s conduct reflects a sustained pattern as a welfare-based organisation rather than a commercial lender, which upon assessment is consistent with its pleaded case.

In cross-examination, the Defendants sought to portray the Plaintiff’s activities as contrived, designed to project a charitable image. The Plaintiff, however, led clear and credible evidence showing that its operations are consistently confined to welfare-oriented activities. The consistency of this conduct, both documentary and oral, reinforces the authenticity and credibility of the Plaintiff’s charitable mission.

On the balance of probabilities, I am satisfied that the Plaintiff is an organisation engaged in welfare activities.

And in my judgment, the answer to the Fourth Issue must be in the affirmative. S/N cvlniCkdCUmwYK7qJM13ow FIFTH ISSUE: WHETHER THE LOAN OF RM600,000.00 WAS GRANTED TO FIRST DEFENDANT FOR PURPOSES CONSISTENT WITH THE PLAINTIFF’S OBJECTIVES UNDER ITS

Learned counsel for the Plaintiff submitted that the Loan of RM600,000.00 was granted to the First Defendant as a member of the Plaintiff for purposes consistent with the Plaintiff’s Constitution. Asserting further, she contended that the Loan was exclusively reserved for members and was never held out or offered to the public.

The Defendants submitted that the Plaintiff led no evidence that the First Defendant had been admitted as a member, and therefore the Loan extended beyond the scope of membership. He further contended that Article 3(4) of the Plaintiff’s Constitution, which delineates the purpose and aim of the Plaintiff’s moneylending activities, suggested that the Plaintiff, operating without a licence, would fall within the definition of an unlicensed moneylender. Concluding his argument, he asserted that pursuant to section 15 of the Act, the Loan Agreement in the present case is unenforceable.

Having considered the preceding positions, I am persuaded by the argument advanced for the Plaintiff.

My reasons are these. S/N cvlniCkdCUmwYK7qJM13ow

PW1 and PW2 led clear and consistent evidence establishing that the First Defendant voluntarily joined the Plaintiff as a member and thereafter exercised the exclusive rights of membership to obtain the Loan from the Plaintiff.

Clause 2.1 of the Loan Agreement (Exhibit P3) reads: “2. Loan 2.1 Grant of Loan. At the request of the Borrower being a member of the Lender as a foundation, the Lender grants to the Borrower the Loan, in a principal amount equal to the Loan Sum as described in Item 3 of Schedule 1 hereto. The Borrower is principally involved in the business as described in Item 1 of Schedule 1 hereto and intends to utilise the Loan for the expansion and working capital requirements of its business which is in line with the objective of the Lender under its constitution.” (Emphasis added)

From my assessment, the language of Clause 2.1 of the Loan Agreement (Exhibit P3) is clear and leaves no room for ambiguity. It demonstrates that the Loan was granted in response to a member’s request, strictly for business expansion and working capital within the scope of membership, and not for public lending. The First Defendant’s business, as described in Item 1 of Schedule 1, forms the factual matrix against which the Loan was sought and approved. On the whole, I find based on the Plaintiff’s documentary and oral evidence, that the Loan was granted within the Plaintiff’s legitimate constitutional framework. S/N cvlniCkdCUmwYK7qJM13ow

With that in mind, I observe that the Defendants themselves admitted at paragraph 31 of their Amended Statement of Defence and Amended Counterclaim that the Plaintiff approved the First Defendant’s application for membership. As I assess it, that amounts to a judicial admission in a pleading, standing on a higher footing than an evidentiary admission. [see: Yam Kong Seng & Anor v. Yee Weng Kai [2014] 6 CLJ 285]. And to my mind, this judicial admission not only undermines any attempt to characterise the present transaction as one between an unlicensed moneylender and a borrower, but in the same breadth affirms that the transaction was conducted squarely within the confines of membership. As is trite, the parties are bound by the statements in their pleadings and are governed thereby. [see: Samuel Naik Siang Ting v Public Bank Bhd [2015] 6 MLJ 1; [2015] 8 CLJ 944; and Narayanan v Kannamah [1993] 3 MLJ 730].

Seen in that light, it appears clear to me that the First Defendant was not an outsider or casual applicant, but rather a member operating from within the Plaintiff’s framework, invoking and benefiting from the very status it now seeks to disavow.

Over and above that, PW1 and PW2 led clear and consistent evidence showing that the provision of financial aid to members is not the Plaintiff’s business, but a member-focused support mechanism to assist when the need arises, as expressly set out in Article 3(4) of the Plaintiff’s Constitution. S/N cvlniCkdCUmwYK7qJM13ow

Article 3(4) of the Plaintiff’s Constitution creates a capital loan service reserved strictly for members. From my observation, the language of that Article admits of no uncertainty regarding the internal and member-restricted nature of that facility. So far as material, it reads: “FASAL 3 TUJUAN/ MATLAMAT …

mewujudkan sistem perkhidmatan pinjaman permodalan (Money Lending) (dengan faedah atas budi bicara mutlak Pertubuhan) bagi ahli-ahli termasuk tetapi tidak terhad kepada permulaan sesebuah pelaburan, pembangunan atau bantuan untuk perniagaan, terutamanya dalam mendapatkan dana bagi pelbagai sektor termasuk perkhidmatan dan keusahawanan.” (Emphasis added)

Taken cumulatively, this constitutional framework, together with the evidence led, situates the Plaintiff’s act of lending firmly within a closed, self-contained and member-only ecosystem. To my mind, the Loan to the First Defendant fits squarely within the architecture of the Plaintiff’s founding purpose.

Beyond that, the Plaintiff’s offer letter dated 8.11.2021 (Exhibit P2), issued in response to the First Defendant’s request for a credit facility, expressly described the assistance as a “Facilities offered as Member’s Benefit (Facility)”. P2 further states “… your requests to us being our privilege member to apply for facilities”. This strengthens that the transaction arose from membership rights, not public lending. S/N cvlniCkdCUmwYK7qJM13ow

This evidential framework is further reinforced by the Defendants’ judicial admission at paragraph 30 of their Amended Statement of Defence and Amended Counterclaim that the First Defendant’s business suffered severe disruption during the Covid-19 pandemic and required financial assistance, engaging the application of Yam Kong Seng in full force. Their narrative diverges, however, where they pleaded that the Loan was conditioned upon the First Defendant’s formal membership, a claim I hold to have been left wholly unsubstantiated by the evidence.

In response to a query from the Bench during trial regarding his evidence on the scope of the Loan under clause 3(4) of the Plaintiff’s Constitution, PW2 confirmed that the facility was strictly “for members only”.

At this juncture, I am mindful of Muhibbah Teguh Sdn Bhd v. Yaacob Mat Yim [2005] 4 CLJ 853, which establishes that the mere existence of one or two loans, even for significant amounts, is insufficient to characterise a party as a moneylender under the Act. The Court held: “It is axiomatic that one or two moneylending transactions (even in consideration of a larger sum) does not make the lender a moneylender within the purview of the definition of 'moneylender' in s. 2 of the Act. It is also axiomatic that the Act is intended to apply to moneylenders exclusively and not to moneylending transaction per se.” S/N cvlniCkdCUmwYK7qJM13ow

In A. Kanapathi Pillay v. Joseph Chong [1981] 2 MLJ 117, the Court rejected the allegation that the plaintiff was a moneylender because the defendants failed to show lending to anyone else apart from themselves. The Court held: "There is no evidence to show that he was carrying on a business of lending money nor is there any evidence to show that he had lent money to other people. The allegation that he was a money-lender is simply confined to the transactions between him and the appellant, which he maintained but was denied by the respondent to be a loan. …if the transactions between them were held to be a loan, they are not to be struck down under the Moneylenders Act because the respondent was not a money-lender within the meaning of the Act for the reasons stated above. There is simply no evidence to prove this."

The decision in Sundaram Subramaniam v. Alamrio Properties Sdn Bhd & Ors [2016] 10 CLJ 645 is instructive. The Court found that: “[20] … Nowhere in evidence to show that he was going around looking for clients to offer moneylending. At the risk of repetition this court found that instead, it was DW1 who prompted the plaintiff to lend the money. It was more of a relationship between friends where one seeks help from the other. DW1 needed financial help to start up his construction business and it was on that basis the plaintiff agreed to render his assistance through giving of the friendly loan. It was not the plaintiff who went to look out for moneylending business opportunity.” S/N cvlniCkdCUmwYK7qJM13ow

Taken in its setting, I regard the present case as mirroring this reasoning. The force of the evidence establishes that the Loan arose not from commercial solicitation or public offering, but from the First Defendant applying for the Plaintiff’s member credit facility via the I.F.E Foundation Member Credit Facility Application Form (Exhibit P7), bearing the signature and company stamp. From my scrutiny, this reflects a member accessing an internal support mechanism rather than engaging with a public lender, and is wholly inconsistent with a profit-driven lending enterprise.

Turning now to the Defendants’ reliance on section 15 of the Act, I note that its operation is confined, as explained in Barisan Tenaga Perancang (M) Sdn Bhd v. Dr Mansur bin Hussain & Ors [2017] 2 MLRH 177, to agreements entered into by an unlicensed moneylender carrying on a moneylending business. Through the evidence of PW1 and PW2, supported by the contemporaneous documents, the Plaintiff established that it operates as a welfare-based organisation and does not carry on any moneylending business. The Loan arose from an internal, member-specific facility authorised by its Constitution and granted for business support purposes. On this evidential footing, the statutory mischief to which section 15 is directed is not engaged, and the Defendants’ argument on unenforceability does not hold water.

And as respects the Defendants’ argument on the absence of a named proposer or seconder in the I.F.E. Foundation Member Credit Facility Application Form (Exhibit P7), I accept that the Constitution contemplates such endorsements, and their absence reflects an irregularity. That said, the decisive inquiry lies in how the parties on the evidence conducted themselves. The Plaintiff’s S/N cvlniCkdCUmwYK7qJM13ow evidence shows that the membership was approved, that this approval was communicated to the First Defendant, that the loan application was processed and the funds disbursed to the First Defendant, that the Loan was guaranteed by the Second Defendant, and that instalments were paid according to the agreed schedule until default intervened. On this footing, the Defendants cannot rely on a procedural omission to deny the status they themselves accepted and from which they clearly benefited.

Taking the Plaintiff’s evidence in the round, I find that the Loan originated from a request made by a member pursuant to an internal credit facility expressly contemplated by the Plaintiff’s Constitution. The oral testimony, the Loan Agreement, the offer letter, and the application documents together disclose a transaction rooted in member support and business assistance, and not in public or commercial lending. On that evidence, it appears clear to me that the transaction falls squarely within the Plaintiff’s constitutionally authorised framework and accords with its stated objectives.

On the balance of probabilities, I am satisfied that the RM600,000.00 loan was granted to the First Defendant for purposes consistent with the Plaintiff’s constitutional objectives.

And in my judgment, the answer to the Fifth Issue must be in the affirmative. S/N cvlniCkdCUmwYK7qJM13ow SIXTH THERE EXISTS ANY SYSTEM, CONTINUITY, OR REPETITION OF SIMILAR LOANS TO OTHER PERSONS THAT COULD SUPPORT THE CONCLUSION THAT THE

Learned counsel for the Plaintiff submitted that the Loan to the First Defendant was a one-off transaction, entirely devoid of any system, continuity, or repetition of similar loans capable of supporting a conclusion that the Plaintiff is carrying on the business of moneylending.

Learned counsel for the Defendants submitted that, given PW1’s admission that it was a one-off transaction, the presumption in Section 10OA of the Act is clearly invoked against the Plaintiff. According to him, the Plaintiff has failed to rebut it, as the oral and documentary evidence clearly points to the Plaintiff engaging in unlicensed moneylending activities.

Having considered the preceding positions, I am persuaded by the argument advanced for the Plaintiff.

My reasons are these.

On the evidence, PW1 established that the Plaintiff is not an unlicensed moneylender, that the lending to the First Defendant was a one-off transaction, and that the Plaintiff has never carried on moneylending as its business. S/N cvlniCkdCUmwYK7qJM13ow

PW2 reinforces the preceding evidence establishing that “… the Loan given to D1 was a singular financial assistance given by the Plaintiff exclusively to its members which was negotiated and agreed freely by the parties.”

These strands of evidence establish that the Loan to the First Defendant was a single, isolated transaction, entirely devoid of system, continuity, or repetition of similar loans capable of supporting a conclusion that the Plaintiff is carrying on the business of moneylending. From my perspective, this coheres with the Plaintiff’s role as a member-focused organisation extending assistance to its own members, rather than operating a commercial lending enterprise.

This conclusion is reinforced by established authorities. In Ngui Mui Khin & Anor v. Gillespie Bros & Co. Ltd [1980] 2 MLJ 976, the Federal Court emphasised that a person can only be regarded as a moneylender if it is proven that he has lent money as part of his business: “At the outset we wish to observe that the Moneylenders Ordinance, 1951 does not apply to moneylending but only to moneylenders. It does not make every moneylending transaction illegal and unenforceable. It is only a moneylending transaction of a moneylender which is the subject-matter of the Ordinance and must comply with its provisions on pain of being declared illegal and unenforceable by the Court. We make this simple and obvious observation because it was canvassed very strongly before us by Counsel for the appellants that since the transactions between the respondents and the client are S/N cvlniCkdCUmwYK7qJM13ow moneylending transactions, the respondents must be a moneylender and the guarantee which the appellants signed is therefore unenforceable. This submission overlooks the fact that the party to a transaction who thereby becomes the creditor may or may not be a moneylender. He is a moneylender if within the meaning of s. 2 of the Ordinance he can be said to be a person "whose business is that of moneylending". To prove business requires some sort of continuity or system or repetition of similar transactions.” (Emphasis added)

Similarly, in Fima Logistics Sdn Bhd & Anor v. Perniagaan Sin-Kung Sdn Bhd [1999] 5 MLRH 94 the Court observed that the first plaintiff had only lent to the defendant and that all loans were isolated, given for similar purposes within a short time frame. The Court concluded: “The first plaintiff has also stated that it had never given any loans to anybody else except the defendant. I also note that all the 3 loans given were for similar purposes and within a close proximity of time, within a ten-month period. On these grounds alone I am satisfied that the first plaintiff was not involved in the business of moneylending. There certainly is no question of any continuity or system or repetition of similar loans to any other person that can lead to the conclusion that the first plaintiff is in the moneylending business.” (Emphasis added)

In APE Electrical Sdn Bhd v. Chandra Segar L Marullamulth & Anor [2022] 1 LNS 2175, having cited with approval another Court of Appeal case of Larut Matang Supermarket Sdn Bhd v. Liew S/N cvlniCkdCUmwYK7qJM13ow Fook Yung [1994] 4MLRH 392, observed that even if interest was charged, without system or continuity, a lender who only provided the loan in question cannot be said to be a moneylender: “Put in another way, the defendant failed miserably to elicit valuable and cogent evidence through Ramakrishnan and Dato' Cheong Kok Leong (SP6) ('Dato' Cheong'), that the plaintiff had, on previous occasions, occasionally lent money at a special rate of interest and with some degree of system and continuity. I venture to say that even if (and there is no evidence to support it) there is evidence that the plaintiff had occasionally lent money at a remunerative rate of interest, that would not be enough to establish that the plaintiff is engaged in the moneylending business.”

Taken in its entirety, the authorities establish that a solitary transaction, unaccompanied by any pattern, system, or repetition, cannot be elevated into a business of moneylending. The evidence before me discloses precisely such a one-off loan, entirely consistent with the Plaintiff’s internal, member-focused support, and plainly inconsistent with the operation of a commercial lending enterprise.

On the balance of probabilities, I am satisfied that there exists no system, continuity, or repetition of similar loans to other persons capable of supporting a conclusion that the Plaintiff is carrying on the business of moneylending.

And in my judgment, the answer to the Sixth Issue must be in the negative. S/N cvlniCkdCUmwYK7qJM13ow SEVENTH ISSUE: WHETHER THE PLAINTIFF HAS ADVERTISED,

Learned counsel for the Plaintiff submitted that the Plaintiff clearly demonstrated, through evidence, that it has never advertised, announced, or held itself out as a moneylender in any manner.

The Defendants’ position, as reflected in the pleading and the tenor of cross-examination, was that the Plaintiff provided loans in a public capacity without a licence, thereby acting contrary to the statutory scheme of the Act. The Defendants’ election of no case to answer and no evidence places the matter within the principles stated in Jaafar Shaari, Yoong Sze Fatt, Subry Hamid and Ng Neoh Ha.

Having considered the preceding positions, I am persuaded by the argument advanced for the Plaintiff.

The Plaintiff led clear and consistent evidence establishing that it has never advertised, announced, or held itself out as a moneylender. On the evidence, it appears obvious that the financial assistance is provided exclusively to members, on a one-off and discretionary basis, without any public solicitation or outreach. Seen in that light, the Plaintiff’s conduct aligns with its internal, welfare-focused purpose. S/N cvlniCkdCUmwYK7qJM13ow

In Chou Kwong Hing, the High Court observed: “The moneylending transaction between the Plaintiff and the Defendant, in particular, the interest-bearing loan (1st loan), does not seem to suggest that there was some degree of system and continuity in the so-called business of moneylending. Furthermore, at no time prior to the moneylending transaction that the Plaintiff had ever advertised or held himself out in any way as carrying on a moneylending business.” (Emphasis added)

Viewed against the totality of the evidence, I find it evident that the Plaintiff has never promoted itself, advertised, or held itself out as a moneylender. The evidential record before me demonstrates that all financial assistance was confined to members, granted on a singular and discretionary basis, and gave no indication of any public-facing lending activity.

On the balance of probabilities, I am satisfied that the Plaintiff has never advertised, announced, or held itself out as a moneylender.

And in my judgment, the answer to the Seventh Issue must be in the negative. S/N cvlniCkdCUmwYK7qJM13ow EIGHTH ISSUE: WHETHER THE POST-DATED CHEQUES WERE REQUESTED OR ACCEPTED BY THE PLAINTIFF AS A FORM OF

Learned counsel for the Plaintiff submitted that the post-dated cheques were voluntarily furnished by the First Defendant to assure the Plaintiff in releasing the Loan sum of RM600,000.00 to him. She further emphasised that the Plaintiff never requested or accepted these cheques as a form of security. According to her, the Defendants failed to lead any evidence to prove that the post-dated cheques were requested by the Plaintiff and stood as a form of security.

Learned counsel for the Defendants submitted that although the Loan Agreement (Exhibit P3) identifies the personal guarantee as security, the Plaintiff still requested and accepted post-dated cheques from the First Defendant.

The Defendants’ further position, as reflected in the pleadings, was that they were forced to pay all interest under the Agreement but, facing no viable alternative, they ceased payment on the cheques issued to repay the Loan. The Defendants’ election of no case to answer and no evidence places the matter within the principles stated in Jaafar Shaari, Yoong Sze Fatt, Subry Hamid and Ng Neoh Ha. S/N cvlniCkdCUmwYK7qJM13ow

Having considered the preceding positions, I am persuaded by the argument advanced for the Plaintiff.

My reasons are these.

The Plaintiff led clear and consistent evidence establishing that the post-dated cheques were voluntarily furnished by the First Defendant in connection with the release of the Loan. PW1 and PW2 confirmed that the Plaintiff did not request these cheques nor treat them as a form of security. To my mind, this constitutes affirmative evidence of the voluntary nature of the cheques, firmly supported by the contemporaneous record.

This is reinforced by Question 7 of the Plaintiff’s Witness Statement (PSP1), which was not challenged and records that the First Defendant delivered the post-dated cheques and that several were dishonoured. The documentary evidence, taken together with the oral testimony, provides a direct foundation demonstrating that the cheques were not relied upon as security: “D1 had also forwarded the following cheques to the Plaintiff but all of which were returned dishonoured upon presentation: - No. Cheque No Date Amount (RM) Page in CBD 1 1 ABB 952394 18.11.2021 30,000.00 66 2 ABB 952396 18.01.2022 30,000.00 67 S/N cvlniCkdCUmwYK7qJM13ow 3 ABB 952397 18.02.2022 600,000.00 67 The notices of dishonoured cheques can be found at page 68, 69 and 70 of CBD 1.”

Evaluated cumulatively, I find it apparent that the evidence demonstrates unambiguously that the Plaintiff neither requested nor accepted the post-dated cheques as security. The consistent oral and documentary record before me confirms that the Loan was handled internally and that the cheques were voluntarily provided, without compulsion or coercion, affirming the integrity of the transaction.

On the balance of probabilities, I am satisfied that the post-dated cheques were neither requested nor accepted by the Plaintiff as a form of security for the Loan.

And in my judgment, the answer to the Eighth Issue must be in the negative. S/N cvlniCkdCUmwYK7qJM13ow NINTH ISSUE: WHETHER THE IRREVOCABLE RIGHT OF FIRST OPTION TO PURCHASE (THE OTP) IN RESPECT OF THE PROPERTY SITUATED AT NO. 8, JALAN IMPIAN 2D, AMBANG BOTANIC 2, 41200

Learned counsel for the Plaintiff submitted that the Defendants have produced no evidence to substantiate their allegation that the Plaintiff compelled the First Defendant to provide the OTP as added security. She took the position that the OTP makes plain that the offer originated from D1, while the Plaintiff neither accepted nor signed it.

Learned counsel for the Defendants submitted the Plaintiff had taken from the First Defendant another added form of security for the loan repayment in the form of the OTP. Expanding his argument, he asserted that the OTP was intended to enable the Plaintiff to purchase the First Defendant’s property for RM1,790,000.00 in the event of default in repayment.

Having considered the preceding positions, I am persuaded by the argument advanced for the Plaintiff.

My reasons are these. S/N cvlniCkdCUmwYK7qJM13ow

Paragraph 35 of the Defendants’ Amended Statement of Defence and Amended Counterclaim alleges that the Plaintiff compelled the First Defendant to pledge the property situated at No. 8, Jalan Impian 2D, Ambang Botanic 2D, 41200 Klang, Selangor (the “Property”) to the Plaintiff as security for the Loan by executing the

It is manifest, however, that the OTP constituted a unilateral offer extended solely by the First Defendant, intended to reassure the Plaintiff of repayment capacity. And manifestly too, the Loan Agreement (Exhibit P3) did not make any reference to the OTP. So far as relevant, the OTP reads: “To: YAYASAN EKONOMI KEWANGAN ANTARABANGSA (INTERNATIONAL FINANCIAL ECONOMY FOUNDATION) … Dear Sirs, RE: IRREVOCABLE RIGHT OF FIRST OPTION TO PURCHASE Property : All that one (1) unit of three storey semi-detached house held under HSD 136215, PT 130046, Mukim Klang. Daerah Klang, Negeri Selangor Darul Ehsan bearing postal address of No. 5, Jalan Impian 2D, Ambang Botanic 2D, 41200 Kilang, Selangor Vendor : LKW Petroleum Sdn. Bhd. Purchaser : Yayasan Ekonomi Kewangan Antarabangsa (International Financial Economy Foundation) We refer to the above matter and we wish to offer you the Property for a right of first option to purchase, on an as is where is basis, subject to the following terms and conditions:” (Emphasis added) S/N cvlniCkdCUmwYK7qJM13ow

On my reading of the preceding evidence, it is clear that the First Defendant extended the OTP, which was never accepted, as the Plaintiff elected not to execute it.

Bolstering this, PW1 led clear and consistent evidence establishing that the OTP constituted an offer made by the First Defendant and that the Plaintiff harboured no intention to accept or exercise it. It reads: “12. Q: The Defendants alleged that the Irrevocable First Option to Purchase (“Option”) given to the Plaintiff to purchase the property at No. 8, Jalan Impian 2D, Ambang Botanic 2, 41200 Klang, Selangor (“Property”) is void for similarly contravening the Moneylenders Act 1951 (paragraph 35 (d) of Amended Statement of Defence and Amended Counterclaim), what is your response? A: This is another malicious allegation from the Defendants, the Option was offered to the Plaintiff by the Defendants so that the Plaintiff had the option to purchase the Property in the event the Defendants became impecunious or unable to repay the Loan and interest under the Loan Agreement. As mentioned earlier, the Plaintiff is not an unlicensed moneylender and has never engaged in the business of moneylending. As such, the allegation of contravention of the Moneylenders Act 1951 does not arise. S/N cvlniCkdCUmwYK7qJM13ow The said Option to purchase was offered willingly as a means to persuade the Plaintiff to provide the Loan to D1. It is dishonourable for the Defendants to make such allegation after obtaining the Loan from the Plaintiff. In any event, the Plaintiff has not exercised the Option to purchase the Property.” (Emphasis added)

In cross-examination, PW1 confirmed that the OTP was never accepted, and that the Plaintiff never intended to exercise it. It thus emerges that the OTP remained unexecuted, free from any taint of coercion, and the Plaintiff consistently elected to pursue legal remedy rather than exercise or sign it.

Pertaining to the Defendants’ reliance on the letter dated 23.06.2022 to suggest that the Plaintiff intended to execute the OTP upon alleged default, I find this reliance unavailing. As is trite, cross-examination cannot constitute the adducing of evidence (see: Ng Neoh Ha), and the letter was never formally led. Even if considered, it must be read in the broader evidential context: the OTP was a unilateral offer, never accepted, and never enforced. That, in my view, renders the Defendants’ argument unpersuasive.

This preceding conclusion finds subsequent reinforcement in the clarification proceedings before the Bench on 24.10.2025, when learned counsel for the Defendants, Siti Nurazwani Zulkefli, conceded that the OTP was never accepted by the Plaintiff. This concession, considered alongside the contemporaneous correspondence and conduct of the parties, confirms that the OTP S/N cvlniCkdCUmwYK7qJM13ow remained a mere unaccepted offer, never ripening into a binding contractual instrument and incapable of crystallising into an enforceable obligation.

On the whole, I find that the evidence establishes that the OTP was a unilateral offer made by the First Defendant, never accepted, and never executed by the Plaintiff. PW1 consistently testified that the Plaintiff harboured no intention to exercise the same, and the contemporaneous documents, together with the Defendants’ own concession on 24.10.2025, confirm that the OTP remained a voluntary offer unconnected to any obligation or security. The evidential record before me leaves no basis to conclude that the Plaintiff compelled the First Defendant, or treated the OTP as additional security for the Loan or as a prelude to acquisition.

On the balance of probabilities, I am satisfied that the Irrevocable Right of First Option to Purchase is not enforceable at law.

And in my judgment, the answer to the Ninth Issue must be in the negative. S/N cvlniCkdCUmwYK7qJM13ow TENTH ISSUE: WHETHER THE PLAINTIFF EMPLOYED THUGS OR DEBT COLLECTORS TO COERCE THE DEFENDANTS

Learned counsel for the Plaintiff submitted that the allegations of thuggery and coercion are unsubstantiated and unsupported by any evidence, and thus cannot be upheld.

The Defendants’ position, as reflected in the pleading, was that the Plaintiff employed thugs and debt collectors to coerce the Defendants into repaying the Loan, threatening the Second Defendant at home and at the office and harassing the First Defendant’s employees at the factory, thereby causing fear and anxiety in the workplace. The Defendants’ election of no case to answer and no evidence places the matter within the principles stated in Jaafar Shaari, Yoong Sze Fatt, Subry Hamid and Ng Neoh Ha.

Having considered the preceding positions, I am persuaded by the argument advanced for the Plaintiff.

My reasons are these. S/N cvlniCkdCUmwYK7qJM13ow

PW1 and PW2 led clear and consistent evidence that the Plaintiff has not employed thugs or debt collectors to harass, intimidate, or coerce the Defendants.

In my assessment, their testimony convinces me that the Plaintiff remained strictly within lawful bounds. The records, together with their consistent accounts, show that every action was measured, authorised, and proper, leaving nothing from which one could infer coercion or impropriety.

On the balance of probabilities, I am satisfied that the Plaintiff did not employ thugs or debt collectors to coerce the Defendants into making payment of the Loan.

And in my judgment, the answer to the Tenth Issue must be in the negative. S/N cvlniCkdCUmwYK7qJM13ow ELEVENTH ISSUE: WHETHER THE PLAINTIFF APPOINTED ANY THIRD PARTY AS A PROXY AND COMPELLED THE DEFENDANTS TO PAY ADVANCE INTEREST OF RM60,000.00, BEING RM30,000.00

Learned counsel for the Plaintiff submitted that the Plaintiff never appointed the Third Parties as proxies to receive any advance interest payments on the Plaintiff’s behalf. Rebutting the contrary argument, she submitted that the Defendants elected to mount no case to answer and called no witnesses, and therefore failed to establish that the Plaintiff compelled the First Defendant to pay RM60,000.00 in advance interest to the Third Parties.

Learned counsel for the Defendants submitted that the Plaintiff appointed the third parties as proxies and compelled the Defendants to pay advance interest of RM60,000.00, being RM30,000.00 to each proxy on its behalf. He maintained that this advance payment reduced the actual loan received from RM600,000.00 to RM540,000.00, which contradicts the Loan Agreement (Exhibit P3) that expressly states the Loan sum as RM600,000.00.

Having considered the preceding positions, I am persuaded by the argument advanced for the Plaintiff.

My reasons are these. S/N cvlniCkdCUmwYK7qJM13ow

PW1 and PW2 led clear and consistent evidence establishing that the Plaintiff never instructed the First Defendant to remit any monies to third parties and never appointed any proxy to receive advance interest on its behalf.

Clause 9.1 of the Loan Agreement (Exhibit P3) stipulates that all payments of principal and interest shall be made into the Plaintiff’s CIMB account number 8010289555, without set-off or deduction, as follows: “9.

9.1 Payments by Borrower. All payments of principal and interest to be made by the Borrower under this Agreement, shall be made or caused to be made in Malaysian Ringgit, without setoff or deduction to the Lender by wire transfer/ cheque in accordance with the instructions provided by such Lender to the Borrower from time to time to the following bank account, or other bank account as may be elected by the Lender: Bank Name : CIMB BANK BERHAD Beneficiary Name : YAYASAN EKONOMI KEWANGAN ANTARABANGSA Beneficiary Account Number : 8010289555 Beneficiary Address : Lot 1249, Jalan Kapar, Batu 15, 42200 Klang, Selangor.” S/N cvlniCkdCUmwYK7qJM13ow

To my mind, this clause defines the operative payment obligation, directing that all remittances be made to the Plaintiff’s account, leaving no contractual basis for any diversion to third parties. It is apparent to me that the contractual text leaves no room for ambiguity or discretionary deviation in favour of the Defendants’ position.

And read together with the Plaintiff’s established evidence, it becomes evident to me that the Plaintiff neither authorised nor intended any payment to proxies. The contract and the factual record stand in unbroken alignment, a consistency that I find compelling, leaving the Defendants’ pleaded position entirely unanchored.

Against this backdrop, I find that the Defendants’ pleaded position that the First Defendant was compelled by the Plaintiff to pay advance interest of RM60,000.00, being RM30,000.00 each to the First and Second Third Parties, is wholly unsubstantiated and squarely inconsistent with both the express terms of the Loan Agreement and the weight of the Plaintiff’s evidence.

On the balance of probabilities, I am satisfied that the Plaintiff never appointed any third party as a proxy, nor compelled the Defendants to pay advance interest to any such third party on its behalf.

And in my judgment, the answer to the Eleventh Issue must be in the negative. S/N cvlniCkdCUmwYK7qJM13ow TWELFTH ISSUE: WHETHER THE PLAINTIFF HAS REBUTTED THE STATUTORY PRESUMPTION UNDER SECTION 10OA OF THE

Learned counsel for the Plaintiff submitted that the Plaintiff had successfully rebutted the presumption under Section 10OA of the Act by demonstrating that the Plaintiff was not engaged in the business of moneylending but merely extended financial assistance to its own members.

Learned counsel for the Defendants submitted that the Plaintiff failed to rebut the presumption under Section 10OA of the Act.

Having considered the factual matrix, I am satisfied that the evidence adduced by the Plaintiff, as set out in earlier segments of this judgment, collectively establishes on the balance of probabilities that the statutory presumption under Section 10OA of the Act has been rebutted. The following findings, established and supported by the evidence, collectively underpin this conclusion:

the Minutes of the Committee Meeting dated 3.7.2021 (Exhibit P1) constitute admissible evidence of the First Defendant’s admission;

(ii) the relationship between the Plaintiff and the First Defendant is that of an organisation and its members; S/N cvlniCkdCUmwYK7qJM13ow

(iii) the membership fee exemption does not affect or deny the First Defendant’s status as a member;

(iv) the Plaintiff is an organisation engaged in welfare activities;

the RM600,000.00 loan was granted to the First Defendant for business purposes consistent with the Plaintiff’s constitutional objectives;

(vi) there exists no system, continuity, or repetition of similar loans to other persons capable of supporting a conclusion that the Plaintiff is carrying on the business of moneylending;

(vii) the Plaintiff has never advertised, announced, or held itself out as a moneylender;

(viii) the post-dated cheques were neither requested nor accepted by the Plaintiff as a form of security for the Loan;

(ix) the Irrevocable Right of First Option to Purchase is not enforceable at law;

the Plaintiff did not employ thugs or debt collectors to coerce the Defendants into making payment of the Loan; and

(xi) the Plaintiff never appointed any third party as a proxy, nor compelled the Defendants to pay advance interest to any such third party on its behalf. S/N cvlniCkdCUmwYK7qJM13ow

Taken together, the evidence before me establishes on the balance of probabilities the transparency and propriety of the Plaintiff’s conduct, demonstrating that its actions were consistent with its role as a member-focused organisation rather than a commercial moneylender. The Plaintiff as the lender has thus rebutted the statutory presumption pursuant to section 10OA of the Act, satisfying the requirement “…to prove … that it was not carrying on the business of moneylending”, consistent with the principles established by the Federal Court in Triple Zest.

The precedents cited by the Defendants, where transactions were held unenforceable for breaching the Act and failing to rebut the statutory presumption, are clearly distinguishable in fact and context and offer no meaningful guidance.

What emerges below is a comparative analysis of the precedents cited for the Defendants in relation to the present case.

Triple Zest In Triple Zest, the Federal Court allowed the borrowers’ appeal, setting aside the Court of Appeal’s decision. Abdul Rahman Sebli CJSS (as His Lordship then was) held that the lender engaged in an illegal moneylending transaction and failed to rebut the presumption under s. 10OA of the Act, relying solely on a single, one-off “friendly” loan. The RM800,000 “agreed profit” amounted to 100% interest, and His Lordship emphasised that recovery would reward illegal moneylenders, undermine the Act, and encourage exploitation akin S/N cvlniCkdCUmwYK7qJM13ow to “Ah Long” practices. Both the High Court and Court of Appeal had assumed the presumption was rebutted, effectively shifting the evidential burden onto the borrowers. The Federal Court observed that this was misplaced, as the presumption operates against the lender, who alone bears the burden of proving otherwise, and a single transaction cannot suffice to displace it. Unlike in Triple Zest, where the lender offered no evidence to challenge the statutory presumption and relied solely on a single, “friendly” transaction, but rested its case on the absence of evidence from the borrower to show that it held itself out as a moneylender, the present case presents a markedly different factual landscape. The Plaintiff has adduced clear and compelling evidence demonstrating the precise bases relied upon to discharge that burden. Through both documentary records and oral testimony, the Plaintiff has satisfied the evidential threshold to show it was not engaged in moneylending. Significantly, Triple Zest did not involve a no-case-to-answer motion and arose from a factual matrix entirely distinct from the present case.

(ii) Mahmood Ooyub v. Li Chee Loong & Other [2020] 6 MLJ 755; [2023] 8 AMR 225 In Mahmood Ooyub, the Court of Appeal allowed the defendants’ appeal, setting aside the High Court’s decision. Lee Swee Seng JCA (later FCJ) held that the transactions were illegal moneylending transactions disguised as sale and purchase agreements. This contrivance was a sham, designed to extract property or security improperly. The mandated procedures under the National Land Code for realising security through a court-supervised sale were S/N cvlniCkdCUmwYK7qJM13ow wholly disregarded, including requirements for valuation, notice, and conduct of a public auction. In contrast to Mahmood Ooyub, the Plaintiff in the present case has adduced clear and consistent evidence establishing the precise foundations relied upon to rebut the presumption under section 10OA of the Act. And on the evidence, the Plaintiff has shown that there was never any intention to execute the OTP, which was offered voluntarily by the First Defendant but remained unaccepted, with no evidence to indicate the contrary. Unlike Mahmood Ooyub, the present case involves a no-case-to-answer election and arises from a factual matrix entirely distinct from that precedent.

(iii) Global Globe Property (Melawati) Sdn Bhd v. Jangka Prestasi Sdn Bhd [2020] 6 CLJ 1 In Global Globe Property, the Court of Appeal allowed the appeal and set aside the High Court’s order. Lee Swee Seng JCA (now FCJ) held that the immediate replacement of the first SPA with a second, lower-deposit SPA was highly suspicious, revealing a deliberate attempt to disguise the true loan transaction. According to the Court of Appeal, by electing to treat the transaction as a sale and purchase, the lender failed to rebut the presumption under s. 10OA of the Act. And His Lordship further observed, “The plaintiff had not adduced any evidence to rebut the presumption and the stand taken by the plaintiff was that it was a sale and purchase of property transaction.” S/N cvlniCkdCUmwYK7qJM13ow As opposed to Global Globe Property, the Plaintiff here, in rebutting the presumption, has adduced consistent evidence showing that the transaction falls within the ambit of its constitutional objective, fully supported by documentary record, and carried out between clearly identifiable parties whose roles and capacities are confirmed by credible witness testimony. There is no attempt to disguise interest through manipulated agreements, nor any circumvention of statutory safeguards. Global Globe Property does not involve any motion for no case to answer and presents a factual matrix utterly unlike the present case.

(iv) Worldwide Platinum Records Sdn Bhd v Tan Sew Cheng [2025] 2 CLJ 406 In regard to learned counsel for the Defendants’ reliance on the majority decision of the Court of Appeal in Worldwide Platinum Records Sdn Bhd v Tan Sew Cheng [2025] 2 CLJ 406, I find the reliance to be wholly misplaced. The Federal Court, in Worldwide Platinum Records Sdn Bhd v Tan Sew Cheng [2025] CLJU(O) 16 [FC], had on 28.4.2025 expressly overruled that decision. Consequently, the legal proposition relied upon by the Defendants is no longer authoritative and cannot withstand scrutiny in this case. Summing-up

On the balance of probabilities, I find that the Plaintiff has rebutted the statutory presumption under Section 10OA of the Act.

And in my judgment, the answer to the Twelfth Issue must be in the affirmative. S/N cvlniCkdCUmwYK7qJM13ow THIRTEENTH ISSUE: WHETHER THE FIRST DEFENDANT FAILED TO

Learned counsel for the Plaintiff submitted that the Defendants were bound by the clear repayment terms of the Loan Agreement (Exhibit P3) and, having remitted only a fraction of the sum due, they failed to make the stipulated monthly instalments.

Learned counsel for the Defendants submitted that there was no failure on the part of the First Defendant, but that it ceased payment as it could not meet the oppressive interest.

Having considered the preceding positions, I am persuaded by the argument advanced for the Plaintiff.

My reasons are these.

PW1 and PW2 led clear and consistent evidence establishing that the First Defendant had repeatedly failed and was late in serving the monthly instalment to the Plaintiff. S/N cvlniCkdCUmwYK7qJM13ow

The repayment structure, as set out in the Loan Agreement, is manifestly clear. The Plaintiff advanced RM600,000.00 to the First Defendant in twelve instalments, with interest charged, producing a total repayment obligation of RM960,000.00. This sum encompasses both principal and interest, leaving no ambiguity as to the contractual expectation.

Furthermore, Clause 4.1 of the Loan Agreement (Exhibit P3) expressly obliges the Borrower to repay the entire principal together with any unpaid or accrued interest on or before the Maturity Date. It reads: “4. Repayment

4.1 General. The Borrower shall repay the entire principal amount together with any unpaid interest (if any) under the Loan and accrued interest immediately on or before the expiration of the Maturity Date after the Disbursement Date (“Maturity Date”) whereby the repayment of the Loan and/or interest of the Loan (whichever is applicable) shall be on the next calendar month on or before the expiration of the seventh (7ᵗʰ) day from the Payment Date in accordance to the method as described in Item 9 of Schedule 1 and Item 10 of Schedule 1 hereto respectively.” (Emphasis added) S/N cvlniCkdCUmwYK7qJM13ow

On the evidence, I find it evident that the First Defendant was under an unequivocal contractual duty to make the monthly instalment payments and discharge the total sum on or before the Maturity Date.

Clause 3.1 further reinforces this obligation, specifying that interest accrues on the outstanding principal from the date of advance until full repayment, at the rate stipulated in Item 5 of Schedule 12, namely 5% per month. The terms are clear, precise, and unqualified.

Clause 3.2 adds that the First Defendant is liable for default interest at 10% per month in the event of late payment. This provision serves to emphasise the financial consequence of non-compliance rather than impose a punitive measure.

Considered against these contractual obligations, I find it apparent that the evidence before me demonstrates a clear shortfall in payments. To my mind, the Defendants failed to discharge the total sum payable under the Loan Agreement (Exhibit P3), leaving their obligations unmet.

On the balance of probabilities, I am satisfied that the First Defendant failed to make the monthly instalment payments to the Plaintiff.

And in my judgment, the answer to the Thirteenth Issue must be in the affirmative. S/N cvlniCkdCUmwYK7qJM13ow FOURTEENTH DEFENDANTS HAVE DEFAULTED ON AND BREACHED THE TERMS OF THE LOAN

Learned counsel for the Plaintiff submitted that the Defendants failed to comply with the agreed instalment schedule, breached the repayment terms, and by their post-demand part payment, acknowledged both the debt and liability to the Plaintiff.

The Defendants’ position, as reflected in the pleading and the tenor of cross-examination, was that upon discovering the Loan to be unlawful under the Act, the First Defendant refused further payment, asserting that the Plaintiff was an unlicensed moneylender and that the Agreement was therefore unenforceable, with the consequence that no default or breach could arise. The Defendants’ election of no case to answer and no evidence places the matter within the principles stated in Jaafar Shaari, Yoong Sze Fatt, Subry Hamid and Ng Neoh Ha.

Having considered the preceding positions, I am persuaded by the argument advanced for the Plaintiff.

My reasons are these. S/N cvlniCkdCUmwYK7qJM13ow

PW1 and PW2 led clear and consistent evidence establishing that the Defendants had defaulted and breached the Loan Agreement.

The central plank of their evidence demonstrates that by letter dated 8.8.2022, the Plaintiff issued a first notice to the First Defendant directing settlement of the arrears for March, April, May, June, and July 2022 (the First Notice).

When the default persisted, the Plaintiff issued a second notice dated 26.9.2022 (the Second Notice), recording the continuing default and noting that the Maturity Date had passed, a matter I shall address in the subsequent segment of this judgment when considering the exercise of contractual rights.

Clause 10.1 reads: “10. Events of Default 10.1 The occurrence of any one or more of the following shall constitute an “Event of Default”:

Default in payment. The Borrower fails to pay timely any of the principal or any accrued interest (if any) due under this Loan Agreement on the date the same becomes due and payable; or”

For present purposes, I find it apposite to note that Clause 10.1 treats default in payment as an Event of Default, which is significant in its practical operation against the facts rather than in abstract theory. Weaving the threads together, the evidence before me shows that the First Defendant failed to comply with the repayment S/N cvlniCkdCUmwYK7qJM13ow obligations. The contemporaneous documents and sequence of demand establish that the Event of Default arose and remained unremedied.

In addition, the Plaintiff led clear and consistent and unchallenged evidence establishing that upon issuance of the First Notice, the First Defendant made a partial payment of RM5,000.00 to the Plaintiff on 5.9.2022. While modest in amount, I hold that this act assumes a distinct evidential character. It does not speak to the quantum discharged but rather to the First Defendant’s recognition of the subsisting obligation. From where I stand, this conduct falls squarely within the well-established principle that part payment after notice of default may serve as compelling evidence of recognition of indebtedness, as recognised in Multico (M) Sdn Bhd v Leong Kwok Hing [2020] 1 LNS 981, where the Court observed: “[22] Upon receipt of the said letter of demand by the Defendant, the Defendant did not dispute the Plaintiff’s claim and had even made a part payment of RM20,000.00 to the Plaintiff on 26.03.2018. … [31] Furthermore, the part payment of RM20 ,000 .00 made by the Defendant to the Plaintiff upon receipt of the Plaintiff’s letter of demand clearly shows that the Defendant has admitted the outstanding sum owing to the Plaintiff. If there was indeed a collateral representations between the Plaintiff and the Defendant as alleged, the Defendant would have objected or protested when the Plaintiff demanded for payment and would S/N cvlniCkdCUmwYK7qJM13ow not have paid RM20 ,000 .00 to the Plaintiff as part payment of the outstanding Hire Charges. [32] In the case of CCG Concrete Constructions (M) Sdn Bhd v. Rich Avenue Sdn Bhd [2000 ] 7 MLJ 46 , 55 & 56 “The evidence then shows that on 4 February 1998, the defendant paid a sum of RM231 ,000 to the plaintiff leaving a balance sum of RM1 ,423 ,501.09 which is the amount that the plaintiff is claiming in this action. There is nothing to show that part payment of RM231,000 was made under protest or with conditions attached. That being the case, I would agree with counsel for the plaintiff that by the defendant’s act in making part payment on the revised final certificate unconditionally and/or without objections, the defendant is estopped and/or precluded from stating that the said revised final certificate is now disputed as to its correctness or validity. That act of part payment to me would amount to an admission of the correctness of the amount stated in the revised final certificate.” (Emphasis added)

The same reasoning finds reinforcement Heckler & Koch GMBH v Zaikry Sany Bin Mohd Isa [2024] CLJU 2838, where the Court reinforced: “[14] The acknowledgment of debt and partial payments, in this context, serve as compelling indicators of liability. In Terranova Builders Sdn Bhd v. Repc Services Sdn Bhd [2018] LNS 2149, the High Court held that the defendant’s admission of liability in various letters and part payments rendered their denial of debt to be a “bare denial” and devoid of merit as follows: - S/N cvlniCkdCUmwYK7qJM13ow “[19] In MIBF Factors Sdn Bhd v. Keh Hua T/A JAG Trading [2004] 1 CLJ 409 at page 415, the Court held as follows: “In any event, the conduct of the defendant in making two direct part payments to the Plaintiff vide OCBC cheque and cash clearly militates and negates the defendant’s defence.” [20] I agree with learned counsel for the Plaintiff that D1 by their admission of liability in the various letters and part payments made had rendered the assertion by D1 that they did not owe any money to the Plaintiff to be inherently improbable and indeed is contradicted by the contemporaneous documents.” (Emphasis added)

That notwithstanding, I am mindful of the Defendants’ contention that Multico and Heckler are inapplicable on the footing that these cases did not concern allegations of unlicensed moneylending. Even so, I am not persuaded as the principle operates on an evidential footing rather than a classificatory one. I regard it as addressing what can reasonably be drawn from conduct when a formal demand is made, whatever the type of obligation.

On the balance of probabilities, I am satisfied that the Defendants defaulted on and breached the terms of the Loan Agreement.

And in my judgment, the answer to the Fourteenth Issue must be in the affirmative. S/N cvlniCkdCUmwYK7qJM13ow FIFTEENTH ISSUE: WHETHER THE PLAINTIFF IS CONTRACTUALLY

Learned counsel for the Plaintiff submitted that there was no premature termination, suggesting that the letter dated 8.8.2022 served as a formal reminder of subsisting arrears. Asserting further, she stated that the continued non-payment triggered Clauses 10.1 and 10.2 of the Loan Agreement, entitling the Plaintiff to issue the letter dated 26.9.2022 and recover the entire indebted amount as a matter of contractual right. She emphasised that the First Defendant did not respond to that notice, and any denial now advanced bears the hallmarks of an afterthought.

The Defendants’ Position, as reflected in the pleading and the tenor of cross-examination, was that the Defendants dispute the termination letter dated 26.9.2022. They pleaded that the earlier letter dated 8.8.2022 amounted to a premature termination, on the footing that the Loan had not reached its Maturity Date of 18.8.2022. The Defendants’ election of no case to answer and no evidence places the matter within the principles stated in Jaafar Shaari, Yoong Sze Fatt, Subry Hamid and Ng Neoh Ha. S/N cvlniCkdCUmwYK7qJM13ow

Having considered the preceding positions, I am persuaded by the argument advanced for the Plaintiff.

My reasons are these.

PW1 and PW2 led clear and consistent evidence establishing that the Defendants had breached the Loan Agreement, thereby entitling the Plaintiff to terminate the Agreement and claim the full Outstanding Sum.

Further, PW2 who testified in his capacity as the Plaintiff’s Manager confirmed that the Plaintiff had not taken any premature action to terminate the Loan Agreement (Exhibit P3), leaving the contractual rights fully intact.

Clause 10.2 sets out the consequences of default and provides the Plaintiff with a clear contractual framework to act upon persistent non-payment. It reads: “10. Events of Default …

10.2 Immediate due and payable. Upon the occurrence of any Event of Default, the Lender shall have the option, by written notice to the Borrower not less than seven (7) days’ notice to treat this Agreement as having been repudiated and to declare that the principal amount of this Agreement together with accrued interest thereon to be due and payable, and the S/N cvlniCkdCUmwYK7qJM13ow principal amount of this Agreement with such interest shall thereupon immediately become due and payable, and exercise all its rights and remedies at law and in equity.”

Read in context, Clause 10.2 confers a formal election that arises only upon an Event of Default, which must be exercised by written notice of not less than seven days. From my perspective, its operation is not automatic, and the mere existence of arrears does not trigger acceleration of repayment or confer any other contractual remedy. My assessment follows.

The First Notice dated 8.8.2022 explicitly refers to a “Notice of Termination” and declares that the Agreement “shall be treated as repudiated” unless the default is remedied within seven days. In my view, the literal force of this language cannot be ignored. Nonetheless, context governs effect. Issued before the Maturity Date of 18.8.2022, the contractual rights under Clause 10.2 had not at that stage arisen, and the notice, though emphatic, remained conditional and dormant. Its function was to alert the Borrower and preserve the Plaintiff’s rights rather than to effect immediate termination or acceleration of repayment. Even if the First Notice did not fully comply with Clause 10.2, this deficiency did not prevent the Plaintiff from issuing a subsequent notice once the conditions for default had arisen.

The Second Notice, issued on 26.9.2022, post-dated the Maturity Date and followed persistent non-payment. In that temporal context, the identical language assumed operative force. It marked the formal exercise of the Plaintiff’s contractual election under Clause S/N cvlniCkdCUmwYK7qJM13ow

10.2, accelerating repayment and invoking the full spectrum of remedies. Evaluated in this continuum from the First Notice as a preliminary warning to the Second Notice as the operative exercise of rights, it becomes apparent that the Plaintiff’s conduct was measured and entirely within the contractual framework. Consequently, the Defendants’ contention that the First Notice amounted to premature termination is untenable. To my mind, it is the occurrence of default and the lapse of the Maturity Date rather than the literal content of the notices alone that governs when contractual rights may be exercised.

Reinforcing the Plaintiff’s position, the Debtor Account Statement issued to the First Defendant on 7.9.2022 (Exhibit P10) provides contemporaneous confirmation of the outstanding indebtedness. After crediting all payments properly attributable to the Loan, the First Defendant remained indebted in the sum of RM739,443.41, comprising the principal, unpaid interest, and default interest. I find that this contemporaneous record validates both the warning function of the First Notice and the formal exercise of rights in the Second Notice, demonstrating that the Plaintiff’s steps were sequential, consistent, and firmly anchored in contractual authority. The breakdown follows. No. Details Amount (RM) 1 Outstanding Loan Amount RM600,000.00 2 Unpaid Loan Interest RM131,138.00 3 Late interest / default interest RM8,305.41 Total claim RM739,443.41 S/N cvlniCkdCUmwYK7qJM13ow

In Maybank Finance Bhd v. Mohd Jafari Ariffin [2003] 6 CLJ 262, the Court underscored the enforceability of contractual rights following default: “It was crystal clear under cl. 9.01(a) of exh. P5, that in the event of default by the defendant, the plaintiff could exercise its discretion to terminate its commitments and all or any of its obligations, whether formally demanded or not (Southern Bank Bhd v. Shin Huat Joo Enterprise Sdn Bhd & Ors [1998] 3 CLJ 941). Here, as said earlier the plaintiff had clearly fulfilled its commitments and obligations under the agreement, by releasing the whole amount of the facility as requested by the defendant. Thereafter, it was the defendant’s obligation to observe the terms and conditions stipulated in the agreement, failure of which the plaintiff could exercise all or any of its rights and remedies provided for in the agreement.” (Emphasis added)

From my standpoint, this principle illuminates the present facts. While the First Notice issued before the Maturity Date could not formally trigger Clause 10.2 rights, the Second Notice, issued after default and the lapse of the Maturity Date, constituted a proper exercise of contractual entitlement. The Plaintiff’s actions, viewed sequentially, reflect both prudence and fidelity to the Agreement, leaving no foundation to suggest premature termination.

By and large, the Second Notice constituted the proper exercise of contractual rights. It also marked the point at which the Defendants could reasonably be taken to have been placed on clear notice of the Plaintiff’s position. I recognise that silence, standing alone, does S/N cvlniCkdCUmwYK7qJM13ow not give rise to estoppel. Be that as it may, the Defendants’ failure to respond to the notice of demand dated 26.9.2022 significantly undermines the credibility of their subsequent denial. MCC Overseas (M) Sdn Bhd v. Damai City Sdn Bhd [2025] CLJU 122 establishes that a non-reply to a solicitor’s letter of demand does not, of itself, amount to an admission of liability. It may, however, materially weaken the credibility of their subsequent denial. [see also: Granstep Development Sdn Bhd v. Tan Chong Heng & Ors [2020] CLJU 2191].

For completeness, I note one final dimension. As regards the First Notice, the record shows that the Defendants elicited a response through a letter, which appears in Part C of the Common Bundle of Documents. That notwithstanding, I observe that this response does not form part of the evidential matrix before me, as the Defendants elected to proceed by way of a submission of no case to answer, and the document was neither tendered nor admitted in evidence. As for the Second Notice, the position is starker, with no response ever forthcoming.

On the balance of probabilities, I am satisfied that the Plaintiff was contractually entitled to terminate the Loan Agreement.

And in my judgment, the answer to the Fifteenth Issue must be in the affirmative. S/N cvlniCkdCUmwYK7qJM13ow SIXTEENTH FIRST DEFENDANT CONSENTED TO THE LOAN INTEREST RATE OF 5% PER MONTH AND THE DEFAULT INTEREST OF 10% PER MONTH, AND THAT

Learned counsel for the Plaintiff submitted that the First Defendant consented to the Loan Interest rates, and that such terms are enforceable. Building on this position, she stressed that the Defendants are estopped from challenging the issue of Loan Interest.

Learned counsel for the Defendants relied on Section 17A of the Act, submitting that the imposition of interest above the prescribed rate constitutes a clear contravention of the statutory provision. It was further contended that, as the Plaintiff was an unlicensed moneylender, any attempt to enforce such a loan would be wholly unenforceable at law.

Having considered the preceding positions, I am persuaded by the argument advanced for the Plaintiff.

My reasons are these. S/N cvlniCkdCUmwYK7qJM13ow

I begin by observing that, while the Act applies to moneylending carried on as a business, it does not extend to isolated or incidental loans that fall outside its statutory ambit. The Federal Court in Ngui Mui Khin & Anor v. Gillespie Bros & Co Ltd [1979] CLJU 60 aptly noted: “The Act was intended to apply only to persons who are carrying on the business of moneylending as a business, not to persons who lend money as an incident of another business or to a few old friends by way of friendship.”

This principle was reinforced by the Federal Court in Yeep Mooi v. Chu Chin Chua & Ors [1981] 1 MLJ 14, which observed: “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.”

The essential character of what constitutes a business is illuminated by the more than a century-old English authority of Edgelow v. MacElwee [1918] 1 KB 205, under the English Moneylenders Act 1900, which established: “There must be a business of money-lending, and the word "business" imports the notion of system, repetition, and continuity.” S/N cvlniCkdCUmwYK7qJM13ow

Building on these established authorities, and having found in the earlier segment of this judgment that the Plaintiff has rebutted the presumption under section 10OA of the Act on the balance of probabilities, it was therefore not carrying on moneylending as a business.

Section 17A of the Act reads: “17A Interest for secured and unsecured loans

For the purposes of this Act, the interest for a secured loan shall not exceed twelve per centum per annum and the interest for an unsecured loan shall not exceed eighteen per centum per annum.

Notwithstanding subsection (1), interest shall not at any time be recoverable by a licensee of an amount in excess of the sum then due as principal unless a Court, having regard to all the circumstances, otherwise decrees.

Where in a moneylending agreement the interest charged for a secured loan or an unsecured loan, as the case may be, is more than that specified in subsection (1), that agreement shall be void and have no effect and shall not be enforceable.”

It is critical to note that Section 17A applies “for the purposes of this Act”, signalling that its operation is confined to loans falling within the statutory scope. The present Loan falls beyond that scope, and consequently the statutory ceiling on interest is inapplicable, rendering the Defendants’ challenge to the agreed rates without merit. S/N cvlniCkdCUmwYK7qJM13ow

Next, I turn to the substantive terms of the Loan Agreement (Exhibit P3), particularly those provisions dealing with interest, which are central to the Defendants’ challenge.

First, Clause 3.1 which provides the First Defendant’s liability to pay interest on the outstanding principal sum from the date of advance until full repayment, at the rate specified in Item 5 of Schedule 12, namely 5% per month. It reads: “3.1 Interest Rate. The Borrower shall pay to the Lender interest on the unpaid principal amount of Loan for the period from and including the date of the making of such Loan to and ending on the date that the amount is paid in full, at the rate as described in Item 5 of Schedule 1 hereto. …

Interest rate : … (5.0%) per month”

Second, Clause 3.2 which underscores the First Defendant’s additional liability to pay default interest at 10% per month in the event of non-payment on the stipulated dates. This clause underscores the contractual consequences of delayed repayment rather than imposing a punitive measure. It reads: “3.2 Default Interest. If default is made in the repayment upon the Payment Date as described in Item & of Schedule 1 hereto of any sum of instalment payable to the Lender under this Agreement, whether in respect of any part of the principal or S/N cvlniCkdCUmwYK7qJM13ow interest, the Lender shall be entitled to charge late payment interest on the unpaid sum of the outstanding instalment which shall be calculated at the rate as described in Item 6 of