Wong How Hua v Teoh Teng Guan (BA-22NCvC-536-12/2020)

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1 DALAM MAHKAMAH TINGGI MALAYA DI SHAH ALAM 1 DALAM NEGERI SELANGOR DARUL EHSAN 2 (GUAMAN SIVIL NO : BA-22NCVC-536-12/2020) 3 4 ANTARA 5 6 WONG HOW HUA 7 (NO. K/P. : 620715-03-5133/6805536) ...PLAINTIF 8 9 DAN 10 11 TEOH TENG GUAN 12 (NO. K/P. : 681023-07-5651/A1119195) ...DEFENDAN 13 14 15 GROUNDS OF JUDGMENT 16 17 18 Introduction 19

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(1) This case best illustrates how money can come between a 20 friendship and ruin it in the process. 21 22

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(2) The dispute leading to this case arose as a result of the Plaintiff and 23 the Defendant entering into a friendly loan agreement whereby it was 24 agreed that the Defendant would lend to the Plaintiff the sum of RM1.98 25 million free of interest. 26 27

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(3) The crux of the Plaintiff’s claim is simply that he did not receive a 28 single cent of the said sum of RM1.98 million at all material times. 29 28/07/2022 11:07:41 BA-22NCvC-536-12/2020 Kand. 64 S/N 13GUDgxhfUWAmmifsi818Q

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(4) As a result of that the Plaintiff has brought the present action against 1 the Defendant with a view of having the agreement dated 24.7.2019 2 declared null and void for want of consideration and is no longer 3 enforceable. 4 5

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(5) The Defendant on the other hand has maintained that the friendly 6 loan was received by the Plaintiff even before they signed the friendly loan 7 agreement. The Defendant has responded with a counterclaim against 8 the Plaintiff denying the claim and seeking a refund of the money lent 9 together with interest and costs. 10 11 Background Facts 12

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(6) The Plaintiff is a businessman from Kota Bharu, Kelantan. 13 14

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(7) The Defendant is a director of Pusat Pakaian Hari-Hari Sdn Bhd, a 15 company which is in the business of garment and fashion retail industry 16 and has a number of branches all over Malaysia. 17 18

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(8) The Plaintiff and the Defendant were long time friends having known 19 each other since 2010. 20 21

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(9) The Plaintiff encountered some financial difficulties in his business 22 sometime in early 2019. He approached the Defendant and invited him to 23 invest in one of his housing development projects. The Defendant 24 declined but offered to help the Plaintiff by lending him the sum of RM1.98 25 million as an interest free friendly loan. 26 27

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(10) According to the Defendant the sum of RM1.98 million in cash was 28 advanced to the Plaintiff. 29 S/N 13GUDgxhfUWAmmifsi818Q

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(11) On 24.7.2019 the Plaintiff and the Defendant entered into a Deed of 1 Arrangement. The agreement was prepared by the law firm Messrs Lee & 2 Tee acting for both parties. The Deed of Arrangement encompasses the 3 terms for which the friendly loan was given. 4 5

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(12) In essence the agreement specifies that the purpose of the friendly 6 loan is to assist the Plaintiff financially. It provides that the loan shall be 7 repaid within one year from the date of the agreement which is on or 8 before 24.7.2020. Payment is either by way of monthly instalments or by 9 a lump sum payment. 10 11

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(13) Clause 2 of the agreement specifies that the Plaintiff has received 12 the friendly loan from the defendant. It states as follows : 13 14 “2. IN CONSIDERATION of the Borrower to repay the said Sum in the 15 manner as described in Section 5 of the First Schedule and within the 16 time as set out in the Section 6 of the First Schedule, the Lender hereby 17 lend the said Sum to the Borrower (the receipt of which the Vendor 18 hereby duly acknowledge).” 19 20

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(14) It will be noted that there is a misdescription of the Plaintiff who is 21 named as the “vendor” when he should be named as the “borrower”. 22 23

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(15) The Plaintiff has alleged that he did not receive the sum of RM1.98 24 million from the Defendant notwithstanding the existence of Clause 2 of 25 the agreement which specifies the acknowledgement of receipt of the 26 money by the Plaintiff. 27 28 29 S/N 13GUDgxhfUWAmmifsi818Q

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(16) The Plaintiff claims that he verbally reminded the Defendant a 1 number of times through telephone calls to disburse the money to him but 2 to no avail. Hence after the one year was up he had no alternative but to 3 issue a solicitor’s letter to the Defendant on 22.9.2020 stating that the 4 agreement was null and void for want of consideration. 5 6

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(17) The Defendant responded with his solicitor’s letter dated 19.10.2020 7 denying the Plaintiff’s claim and made a demand for recovery of the 8 friendly loan. 9 10 The Trial 11

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(18) The trial commenced and was completed in one day with a total of 12 5 witnesses called, all of whom gave sworn testimonies. Apart from 13 himself the Plaintiff (PW 1) called Ms Tee En Peng (PW 2), the lawyer 14 who prepared the friendly loan agreement. 15 16

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(19) The Defendant (DW 1) gave evidence on his own behalf and called 17 two other witnesses. Mr Hong Woon Kwee (DW 2) and Mr. Tan Weng 18 Teong (DW 3) are the Chartered Accountant and Company Secretary 19 respectively of Pusat Pakaian Hari-Hari Sdn Bhd. 20 21 The Plaintiff’s Case 22

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(20) It is the Plaintiff’s case that the Defendant had breached the 23 agreement when the friendly loan was not disbursed to the Plaintiff. It was 24 contended that the agreement is unenforceable, null and void for want of 25 consideration. 26 27

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(21) Alternatively, it was argued that the Defendant’s breach went to the 28 root of the contract giving rise to a total failure of consideration. 29 S/N 13GUDgxhfUWAmmifsi818Q

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(22) The Plaintiff has in his testimony steadfastly maintained that he had 1 not received the friendly loan from the Defendant. The Plaintiff stated that 2 he had initially offered an opportunity to the Defendant to invest in one of 3 his company’s housing development projects after his company 4 encountered financial difficulties. The Defendant declined and instead 5 offered him an interest free friendly loan. The Plaintiff accepted the offer. 6 7

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(23) As a result, the Defendant instructed PW 2 to prepare an agreement 8 and the Plaintiff presented himself at PW 2’s office on 24.7.2019 to sign 9 the agreement. Although the agreement is termed as a Deed of 10 Arrangement, there is no dispute that it was essentially a loan agreement 11 between friends. 12 13

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(24) The Plaintiff in his evidence did not deny that he had read the 14 clauses in the loan agreement. He admitted he fully understood and 15 agreed to all the terms stated in the loan agreement, in particular he said 16 he understood the implication of Clause 2 of the agreement. 17 18

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(25) The Plaintiff said he signed the agreement without hesitation in spite 19 of that particular clause as he trusted the Defendant. Furthermore, the 20 Defendant had given him the assurance that the money would be given 21 to him after he signed the agreement. The Plaintiff testified that after the 22 agreement was signed the Defendant failed to give him the friendly loan 23 as promised despite his numerous reminders to the Defendant via phone 24 calls. In view of his financial difficulties, the Plaintiff said that he was left 25 with no choice but to dispose off some of his properties in order to settle 26 his debts. The Plaintiff agreed that he had no documentary proof to 27 sustain all of what he had said in his evidence in court. 28 S/N 13GUDgxhfUWAmmifsi818Q

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(26) A year later after the date upon which repayment for the loan fell 1 due, the Defendant had still not given the friendly loan as promised. As 2 such the Plaintiff instructed his lawyer to issue a notice of demand dated 3 22.9.2020 to the Defendant informing him that the agreement is null and 4 void for total failure of consideration with strict instructions to obtain a court 5 order for a declaration to that effect. 6 7

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(27) Via his solicitors, the Defendant replied and denied the Plaintiff’s 8 assertions and demanded for the full repayment of the friendly loan. 9 10

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(28) PW2, the solicitor in charge of preparing the Friendly Loan 11 Agreement testified that she prepared the agreement based on the 12 instructions of both the Plaintiff and the Defendant. She stated that they 13 executed the friendly loan agreement in her presence. She said she 14 explained the contents of the loan agreement to the Plaintiff before he 15 signed the agreement. The Plaintiff understood her explanation and did 16 not raise any issues with her in regard to the terms of the agreement. PW 17 2 agreed that she did not witness the handing over of any cash between 18 the parties. She confirmed that according to the agreement time is of 19 essence and that it was a term of the agreement that if the Plaintiff did not 20 repay the Defendant on or before 24.7.2020, it would be construed as a 21 breach of the terms thereof. 22 23 The Defence and Counterclaim 24

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(29) The Defendant testified that the Plaintiff requested for a friendly loan 25 to help with his financial problems. In light of their close friendship the 26 Defendant agreed to assist him. The Defendant said that the Plaintiff 27 came to his head office at Balakong in early July 2019 to personally collect 28 the friendly loan from him. It was in the evening and no one else was 29 S/N 13GUDgxhfUWAmmifsi818Q present with them at the material time. Soon after that both of them signed 1 the friendly loan agreement at the office of PW 2. The Defendant stated 2 that the money was given in cash at the request of the Plaintiff. He said 3 he was able to give in cash because his company received large amounts 4 of cash through its daily transactions at all its branches. 5 6

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(30) To prove that he had lent the money to the Plaintiff, the Defendant 7 produced the company’s audited report for the year 2018 – 2019 as well 8 as the Director’s Resolution which showed the money lent was taken from 9 the company. 10 11

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(31) When questioned the Defendant stated that he tried to contact the 12 Plaintiff after the expiry of the agreement but the Plaintiff did not answer 13 or return his telephone calls. The Defendant also said he travelled to 14 Kelantan twice to look for the Plaintiff but he could not locate him. 15 16

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(32) SD 2 testified that he prepared the audited report of the company 17 for the year ended 2018 and 2019. SD 2 was not cross-examined on his 18 testimony. 19 20

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(33) SD 3, the final witness produced the Directors’ Circular Resolution 21 dated 10.6.2019 passed by the company and approved by all its directors 22 to wit certifying that the amount of RM1.98 million belonging to the 23 Company had been advanced to the Defendant. He agreed that he had 24 no personal knowledge of how the money was paid to the Plaintiff. He also 25 agreed the company did not issue any cash vouchers to show that the 26 money came out from the Company’s account. 27 28 29 S/N 13GUDgxhfUWAmmifsi818Q Issues To be Tried 1

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(34) As I see it the only issue for consideration before the court is 2 whether the Plaintiff had received the friendly loan of RM1.98 million in 3 cash pursuant to the agreement. 4 5

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(35) If the answer is in in the affirmative then the Plaintiff’s claim will be 6 allowed and the Counterclaim will fail. If not, the Defendant’s counterclaim 7 will succeed and the Plaintiff’s claim falls. 8 9 Findings of this Court 10

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(36) In coming to the decision in this case, the Court has carefully 11 weighed the evidence adduced through all the witnesses for both parties 12 together with any documentary evidence tendered therein. 13 14

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(37) It is trite that in a civil claim the party that desires the court to give 15 judgement as to its rights is the one who bears the burden of proof. Here 16 the Plaintiff bears the burden of proving his claim. The Plaintiff must prove 17 his case against the Defendant on a balance of probabilities (see 18 Selvaduray v Chinniah [1939] 1 LNS 107). 19 20

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(38) There are two conflicting versions in this case. On the one hand the 21 Plaintiff claims that he did not receive any of the monies from the 22 Defendant notwithstanding him having executed the friendly loan 23 agreement which contained a clause acknowledging receipt of the cash. 24 On the other hand, the Defendant’s position is that he had given the 25 friendly loan in cash personally to the Plaintiff prior to the execution of the 26 friendly loan agreement. There are no other human witnesses to this 27 transaction. 28 S/N 13GUDgxhfUWAmmifsi818Q

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(39) In this regard the correct approach to take when faced with 1 conflicting versions would be to test the entirety of the evidence produced 2 against the probabilities of the case and then decided which of the two 3 versions is more probable. 4 5

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(40) In dealing with conflicting evidence the Court finds guidance in the 6 case of Guan Teik Sdn Bhd v Haji Mohd Noor bin Haji Yakob & Ors 7 [2000] 4 CLJ 324 where the Court of Appeal held as follows : 8 9 " In cases where conflicting evidence are presented before a court, it is 10 the duty of the court not only to weigh such evidence on a balance 11 of probabilities but it is also incumbent upon the court to look at 12 all the surrounding factors and to weigh and evaluate 13 contemporaneous documents that may tend to establish the truth 14 or otherwise of a given fact. In this instance the learned trial judge 15 discredited the evidence of the appellant, accepted the evidence of the 16 respondents wholeheartedly and disregarded the contemporaneous 17 documents totally. We say that he had erred as he had failed to direct 18 his mind as to the probative effect of the contemporaneous 19 documents. He should, after accepting the respondents' evidence, 20 weighed it against the contemporaneous documents and evaluate 21 whether such documents support the respondents' oral 22 testimony. We say that this evaluation exercise is most crucial for it 23 must be remembered that the respondents were testifying to events that 24 happened eighteen years ago whilst the contemporaneous documents 25 speak of matters then existing at the time such documents, were 26 issued." (emphasis added) 27 28

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(41) Therefore, in order to decide whose version is more inherently 29 probable the prime consideration for the Court would be to look into the 30 inherent probabilities or otherwise of the case when assessing the 31 S/N 13GUDgxhfUWAmmifsi818Q credibility of the witnesses when he is giving evidence in the witness box. 1 It would be of material assistance if the consistency of the witness’s 2 evidence with other evidence is weighed. The whole of other evidence 3 such as contemporaneous documents and objective circumstances of the 4 case are factors to be evaluated in order to determine which version is 5 inherently probable or improbable. 6 7

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(42) Having considered the totality of the evidence including the 8 testimonies of the Plaintiff and the Defendant and having tested that with 9 the available contemporaneous documents tendered I am satisfied and I 10 have come to the finding that the Plaintiff’s version is inherently 11 improbable. I find that the Plaintiff has fallen far short of the standard of 12 proof required to prove his case on a balance of probabilities. 13 14

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(43) The circumstances surrounding the events leading to and after the 15 friendly loan agreement was executed have significantly contributed to my 16 finding that the Plaintiff’s version is not probable. 17 18

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(44) On top of my list of reasons for this finding would be the fact that the 19 Plaintiff had acknowledged in writing that he had received the friendly loan 20 of RM1.98 million from the Defendant upon signing of the agreement. 21 When cross-examined the Plaintiff readily admitted that he had read the 22 contents of the friendly loan agreement, was aware of and understood that 23 Clause 2 contained the words that the loan had already been disbursed 24 to him. The Plaintiff fully understood and agreed to all the terms in the 25 friendly loan agreement and raised no objections whatsoever. 26 27

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(45) The Plaintiff in his evidence admitted to the following : 28 S/N 13GUDgxhfUWAmmifsi818Q “LCH : Setujukah saya katakan bahawa Mr Wong bersetuju kepada 1 segala kandungan terma di dalam perjanjian tersebut? 2 PW1 : Ya. 3 4 LCH : Saya rujuk secara spesifik Mr. Wong kepada muka surat 2, 5 perenggan kedua. Setujukah saya katakan bahawa semasa Mr. 6 Wong menandatangani perjanjian ini Mr. Wong faham penuh akan 7 kandungan dan terma-terma di dalam perjanjian ini? 8 PW1 : Ya. 9 10 LCH : Di perenggan dua, adakah Mr. Wong faham maksud 11 kandungan di perenggan dua? 12 PW1 : Faham. 13 14 LCH : Setujukah saya katakan bahawa Mr. Wong tidak mempunyai 15 apa-apa bantahan di dalam mana-mana terma-terma di dalam 16 perjanjian ini? 17 PW2 : Ya.” 18 19 Pg 9 of the NOP : - 20 21 “LCH : Saya rujuk secara spesifik Mr Wong kepada muka surat 5 22 dokumen ini, Ikatan B1. Item nombor 6. Setuju saya katakan Mr Wong 23 di bawah perjanjian ini, item 6, bersetuju untuk membayar balik 24 wang pinjaman dalam masa 1 tahun dari tarikh perjanjian bertulis 25 ini iaitu pada atau sebelum 24.7.2020. Setuju atau tidak Mr Wong? 26 PW1 : Setuju.” 27 28 Pg 14 of the NOP : - 29 30 “LCH : Sila Mr Wong rujuk kepada terma di perenggan dua perjanjian 31 tersebut. Di bahagian pernyataan di perenggan dua, diizinkan Yang Arif 32 untuk saya merujuk secara specific terma tersebut. 33 34 S/N 13GUDgxhfUWAmmifsi818Q “The Lender hereby lend the said sum to the Borrower (the receipt 1 of which the vendor hereby duly acknowledge).” 2 3 Setujukah saya katakan bahawa Mr Wong telah mengakui terima 4 wang pinjaman tersebut daripada Defendan di bawah terma di 5 perenggan dua tersebut? Setuju atau tidak? 6 PW1 : Saya setuju tapi saya tak terima duit.” 7 8

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(46) It is quite important to note from the above testimony that the Plaintiff 9 did not object to any of the terms and conditions of the friendly loan 10 agreement prior to, during and after the agreement was executed. Before 11 signing the agreement, the Plaintiff did not inform SP 2 that he had not 12 received the cash in spite of the acknowledgement of receipt stated in 13 Clause 2. SP 2 confirmed that she explained the contents of the 14 agreement to the Plaintiff before he signed it. She stated that he did not 15 tell her or say anything about not having received the money yet. 16 17

Subsection

(47) The Plaintiff remained silent and signed the agreement without 18 raising any query. If the Plaintiff disputed that the money had yet to be 19 paid, he should have raised the matter with SP 2 or he would have told 20 her that although he had not received the money he nevertheless was 21 willing to sign the agreement because the Defendant had promised to pay 22 him after he signed the agreement. This would have been an appropriate 23 reaction to expect of any reasonable person when faced with a similar 24 situation. 25 26

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(48) I take into consideration the amount in dispute is a huge one. 27 Therefore, it did not stand to reason and it is difficult to fathom why the 28 Plaintiff did not at all raise the matter with PW 2. The fact that the Plaintiff 29 proceeded to sign the agreement without so much as a query diminishes 30 S/N 13GUDgxhfUWAmmifsi818Q his argument that he signed because the Defendant had promised him 1 that the money would be given to him thereafter. In such an event the 2 Plaintiff would certainly not have kept that information to himself. He would 3 have immediately informed PW 2 of that fact as it was not a secret that he 4 had to keep. 5 6

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(49) I am well aware that notwithstanding a receipt clause where receipt 7 of payment is acknowledged, the law would still nevertheless allow a party 8 to prove that in fact no payment was received (see Ganam Rajamany v 9 Somoo Sinniah [1984] 1 CLJ (Rep) 123). In the case herein the Plaintiff 10 has similarly averred that while he signed the agreement acknowledging 11 receipt of payment, he did not in fact receive the cash money. 12 13

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(50) In any event having considered the testimonies of the witnesses 14 together with the documentary evidence I was satisfied that the Plaintiff 15 has failed to discharge his burden to prove that the money was not 16 received. The Plaintiff’s mere denial of receipt is insufficient to dispel the 17 clear words found in Clause 2 of the agreement. 18 19

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(51) I find no evidence to show that the Plaintiff had taken any steps to 20 deny or refute the non receipt of the money from the Defendant. The 21 Plaintiff failed to offer any evidence be it oral or documentary to show that 22 he had protested or made any complaint and/or demand to the Defendant. 23 24

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(52) The Plaintiff did not take any assertive steps to cancel the 25 agreement at any time during the duration of the one year after the signing 26 of the friendly loan agreement. 27 28 S/N 13GUDgxhfUWAmmifsi818Q

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(53) Even after the Agreement was stamped on 15.11.2019, which was 1 4 months later the Plaintiff did nothing positive to place on record that he 2 had not yet received the money from the Defendant. To my mind the 3 silence on the part of the Plaintiff reaffirmed my view that he had received 4 the money from the Defendant contrary to his assertions. 5 6

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(54) The Plaintiff has not given any reasonable explanation as to why he 7 failed to promptly respond and place on record at the first available 8 opportunity of the non receipt of the loan money. I find that his actions are 9 not consistent with someone who had been misled by the promise of the 10 other party. 11 12

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(55) I am of the view the Plaintiff is thereby bound by the terms of the 13 agreement that he signed. He cannot resile from that position or excuse 14 himself with the reason that he believed and trusted that the Defendant 15 would pass to him the friendly loan after signing the agreement. In my 16 considered view when a party puts his signature to a document, he is in 17 effect saying that the contents of the document are true. The Plaintiff and 18 the Defendant must have intended what Clause 2 intended i.e. that the 19 money had been received. 20 21

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(56) The Court of Appeal in Project Lebuhraya Utara-Selatan Sdn Bhd 22 v Kim Seng Enterprise (Kedah) Sdn Bhd [2013] 6 CLJ 958 accepted 23 the dicta in Serangoon Garden Estate Ltd v Marian Chye [1958] 1 LNS 24 77 where it was held as follows : 25 26 “I think it is quite clear that when a party signs a contract knowing it to 27 be a contract which governs the relations between them, then, to use 28 the words of Denning J, in the case of Curtis v Chemical Cleaning and 29 S/N 13GUDgxhfUWAmmifsi818Q Dyeing Co [1951] 1 All ER 631, ‘his signature is irrefragable evidence of 1 his assent to the whole contract, including the exempting clauses, unless 2 the signature is shown to be obtained by fraud or misrepresentation.’ In 3 L'Estrange v F. Graucob Ltd [1934] 2 KB 394, Scruttion LJ said ‘When 4 a document containing contractual terms is signed, then, in the absence 5 of fraud, or I will add, misrepresentation the party signing it is bound, 6 and it is wholly immaterial whether he has read the document or not.” 7 8

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(57) In this instant case the Plaintiff has never alleged that there was 9 fraud and misrepresentation on the part of the Defendant. There was 10 never any allegation of him having signed the agreement under a mistake. 11 At all material times the Plaintiff agreed that he was aware and fully 12 understood all the terms of the friendly loan agreement yet he went ahead 13 and signed it anyway. 14 15

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(58) The Plaintiff is not a novice who is ignorant of his rights. The Plaintiff 16 is a well educated person and a businessman of considerable acumen. In 17 his evidence he alluded to the fact that apart from being a businessman 18 he is also a housing developer. Upon this basis it is my view that it is quite 19 unreasonable and improbable for him to put his signature to the friendly 20 loan agreement to acknowledge receipt of a large amount of cash without 21 actually having received it from the Defendant. 22 23

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(59) It is a basic rule that what has been agreed by the contracting parties 24 should be given effect to. They are presumed to have intended what they 25 signed for. In my considered view the Plaintiff is precluded from disputing 26 the terms stated in the agreement by adducing any oral evidence to vary 27 or contradict it. 28 29 30 S/N 13GUDgxhfUWAmmifsi818Q

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(60) The friendly loan agreement acknowledges and confirms that the 1 Plaintiff received the money. The Court has to give effect to what the 2 parties agreed to. 3 4

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(61) In Dato Sivananthan a/l Shanmugam v Artisan Fokus Sdn Bhd 5 [2015] 2 CLJ 1062 it was decided as follows : 6 7 “In law, parties are bound by the terms of the contract that they have 8 entered into and likewise in this case, the rights and obligations of the 9 parties are governed by the agreement. The intentions of the parties are 10 to be gathered from the language used. They are presumed to have 11 intended what they said…The duty of the court is to give effect to the 12 clear intention of the parties as expressed in the agreement. If the words 13 are clear, unambiguous and in unmistakeable language, there is very 14 little the court has to do. The court must give effect to the plain meaning 15 of the words however much it may dislike the result.” 16 17

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(62) I should also make mention that I was of the view there is no 18 evidence to support the Plaintiff’s testimony that he made numerous 19 complaints to the Defendant via phone calls to remind him to disburse the 20 loan. In any event the Plaintiff did not see it fit to write to the Defendant to 21 place his objections on record that he had not received the friendly loan. 22 Even if the Plaintiff did not instantaneously raise an objection, he should 23 have done so within a reasonable period of time especially when the 24 Defendant was uncontactable as alleged. As highlighted earlier the 25 Plaintiff did not tell SP 2 that he had yet to receive the money. That would 26 have been his first opportunity to place on record that he had still not 27 received the friendly loan. 28 29 30 S/N 13GUDgxhfUWAmmifsi818Q

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(63) As such I am of the view that the Plaintiff’s assertions remain as 1 nothing more than a bare assertion. 2 3

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(64) Neither did he raise the issue before the agreement was sent for 4 stamping. This is a factor I cannot ignore as according to Clause 10 of the 5 friendly loan agreement the Plaintiff is the party responsible for paying all 6 fees and disbursements including stamping fees. At this point in time, the 7 Plaintiff still did not see it fit to raise any objections. Instead he proceeded 8 to pay the stamping fees and the agreement was duly stamped. 9 10

Subsection

(65) Thereafter for more than one year the Plaintiff let the matter ride and 11 made no attempts to put on record that he had not received the money. 12 Paragraph 6 of the 1st Schedule to the Agreement specifies that “the 13 borrower shall repay the said sum within one (1) year from the date of this 14 Agreement”. Accordingly, the Plaintiff was required to repay the sum 15 owing on or before 24.7.2020. The Plaintiff only took action 4 months after 16 the expiry of the agreement and 16 months after the agreement was 17 executed. Only in November 2020 did he seek out the services of a 18 solicitor and a letter of demand was issued. There was an inordinate and 19 unexplained delay. Confronted with such a situation, if at all such a 20 situation existed, surely the Plaintiff as a reasonable business man would 21 have felt alarm and hastened to put his objections in writing in order to 22 protect himself from being falsely accused of defaulting in payment. 23 24

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(66) The Plaintiff had so many opportunities to protest or raise an 25 objection if indeed he had not received the cash but he did not. 26 27 28 29 S/N 13GUDgxhfUWAmmifsi818Q

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(67) Taken as a whole I find that the conduct of the Plaintiff in his silence 1 and inaction is a strong indicative factor that he was not frank and honest 2 in bringing this claim against the Defendant. 3 4

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(68) The testimony of the Plaintiff is not supported with any other 5 contemporaneous documentary evidence. The Plaintiff has not shown 6 proof of all those numerous phone calls he claimed to have made to reach 7 the Defendant. 8 9

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(69) I find it unacceptable and unreasonable for the Plaintiff to stand by 10 and not promptly take remedial steps to protect himself if indeed he did 11 not receive the loan money. I find it incredible that the Plaintiff allowed the 12 days to turn into weeks and the weeks to turn into months and through the 13 passage of time stretching into more than a year without so much as a 14 letter, email or text conversations documenting his attempts to get in touch 15 with the Defendant. 16 17

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(70) The Plaintiff knew where the Defendant’s office is located. He could 18 easily have gone to the Defendant’s office to look for him and/or could 19 have gotten information on how to get in touch with the Defendant. He 20 could even have left a message to the staff there to remind the Defendant 21 to disburse the friendly loan to him. 22 23

Subsection

(71) The Plaintiff wished the court to believe that he had to take 24 alternative measures to overcome and resolve his financial difficulties. 25 The Plaintiff explained that he had to dispose some of his own and also 26 some of his company’s properties. Here too he did not offer any 27 documentary proof to support those averments. Had these documents 28 been produced it would have afforded corroborative evidence that he 29 S/N 13GUDgxhfUWAmmifsi818Q indeed had to resort to selling off those properties because he did not 1 receive any financial assistance from the Defendant. Save for his bare 2 assertions there was not an iota of evidence to prove that he had to 3 dispose off those properties to overcome his financial problem. 4 5

Subsection

(72) For myself based on all the observations made above, I am 6 compelled to make the finding that those are indicative of the lack of truth 7 in the Plaintiff’s testimony. I am of the considered opinion keeping those 8 factors in mind that it would be safer to look for corroboration from 9 contemporaneous events or acts to draw reasonable inferences than to 10 believe the Plaintiff’s oral statements. This is particularly so since the 11 Plaintiff has his own purpose to serve. I would therefore prefer to rely on 12 the terms of the friendly loan agreement which both parties entered into 13 voluntarily. I find support in my view by referring to the Federal Court case 14 in Tindok Besar Estate Sdn Bhd v Tinjar Co. [1979] 1 LNS 119 where 15 Chang Min Tat FJ held : 16 17 “For myself, I would with respect feel somewhat safer to refer to and 18 rely on the acts and deeds of a witness which are contemporaneous with 19 the event and to draw the reasonable inferences from them than to 20 believe his subsequent recollection or version of it, particularly if he is a 21 witness with a purpose of his own to serve and if it did not account for 22 the statements in his documents and writings. Judicial reception of 23 evidence requires that the oral evidence be critically tested against the 24 whole of the other evidence and the circumstances of the case. 25 Plausibility should never be mistaken for veracity.” 26 27

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(73) Consequently, I hold that this court should and ought to give effect 28 to the terms of the agreement which clearly stated that the Plaintiff 29 acknowledged receipt of the money. I find the words used to construe the 30 S/N 13GUDgxhfUWAmmifsi818Q agreement are clear, unequivocal and unambiguous and in the absence 1 of any other contemporaneous evidence I am unwilling to accept the oral 2 evidence adduced by the Plaintiff to vary or contradict the clear intention 3 of the parties when they signed the agreement. I am inclined to believe 4 that the oral testimony given by the Plaintiff in denying the receipt of the 5 friendly loan amounts to nothing more than a bare assertion and an 6 afterthought. 7 8

Subsection

(74) Learned counsel for the Defendant also drew my attention to the 9 fact that the Plaintiff had failed to plead the fact that he had to dispose of 10 part of his own and part of his company’s properties to resolve his financial 11 problem. Under cross-examination the Plaintiff confirmed that he did not 12 seek help from anyone else save and except the Defendant alone to 13 resolve his financial problem. I agree that this is a material fact which if 14 true ought to have been pleaded. 15 16

Subsection

(75) In any event I found the evidence of the Defendant to be credible 17 and his version probable. I took into consideration the evidence both 18 parties agreed to i.e. that they were old friends and the fact that the 19 Defendant is a director of Pusat Pakaian Hari-Hari Sdn Bhd. The Plaintiff 20 knew the Defendant’s financial status was solid and secure and that he 21 had the financial means to lend the money to him. It would therefore not 22 be far fetched to accept that such a long standing friendship between them 23 would lead the Defendant to advance the friendly loan in cash even before 24 the formalization of the agreement and then follow that up with a written 25 agreement. 26 27

Subsection

(76) On the evidence that emerged before me, I would reject the 28 Plaintiff’s assertion that he did not receive the money from the Defendant. 29 S/N 13GUDgxhfUWAmmifsi818Q I find that the Plaintiff has failed to prove his claim on a balance of 1 probabilities. I make the finding that the Plaintiff is bound by the terms of 2 the agreement which he did not deny or dispute. The Plaintiff and the 3 Defendant had clearly indicated their intention to be bound by the 4 agreement by signing on it. I find on a balance of probabilities that the 5 agreement is a true reflection of the intention of the parties and that it 6 formalised the friendly loan that had been advanced to the Plaintiff. It is 7 my finding after weighing not only the evidence on a balance of 8 probabilities but also looking at the surrounding factors including weighing 9 and evaluating the contemporaneous documents that there was sufficient 10 evidence to prove that the loan sum was indeed disbursed and received 11 by the Plaintiff. 12 13 The Counterclaim 14

Subsection

(77) I turn now to the Counterclaim filed by the Defendant. 15 16

Subsection

(78) On an examination of the totality of the evidence before me, I find 17 with no hesitation that the Defendant has succeeded in proving his 18 pleaded case in this counterclaim i.e. that he had advanced the cash of 19 RM1.98 million to the Plaintiff prior to the execution of the friendly loan 20 agreement. 21 22

Subsection

(79) The Defendant’s counterclaim is proven by the existence of the 23 friendly loan agreement signed by both parties. Hence both the Plaintiff 24 and the Defendant are bound by the terms and conditions of the friendly 25 loan agreement. 26 27

Subsection

(80) Having considered the documentary evidence adduced I am 28 convinced that the Defendant possesses the financial capability to 29 S/N 13GUDgxhfUWAmmifsi818Q disburse the friendly loan in cash to the Plaintiff. I took note of the following 1 documentary evidence which the Defendant relied on to substantiate his 2 counterclaim : 3 - the Plaintiff had acknowledged receipt of the friendly loan from the 4 Defendant when he signed the agreement. The Plaintiff was fully 5 aware, understood and agreed to all the terms stated in the 6 agreement including Clause 2 thereof. He confirmed this through his 7 testimony in Court. 8 - the letter of confirmation issued by DW 3, the company secretary 9 which confirms the Defendant’s position as one of the directors of 10 the company from 4.7.1997 until todate. 11 - the Auditor’s report of the Defendant’s company from the years 2016 12 to 2019 which clearly shows the healthy financial state of the 13 company’s finances. The audited report of the Defendant’s 14 company for the year end 31.10.2019 showed that the company had 15 a retained profit of RM41,040,237 at the material time. 16 - the Corporate Information as of 31.10.2019 and the Company 17 Profile showed that there were about 79 branches throughout 18 Malaysia in the year 2019. 19 20

Subsection

(81) All of the above combined proved that the Defendant was financially 21 sound and was able to disburse cash at the amount requested by the 22 Plaintiff. It would be difficult to deny that most if not all the documents 23 referred to above amount to clear contemporaneous documents which 24 substantially support the version of the Defendant. 25 26

Subsection

(82) It was urged upon the court that the Defendant’s evidence of giving 27 the loan in cash was inherently improbable as there was no documentary 28 proof to show that the Defendant was in fact in possession of such a 29 S/N 13GUDgxhfUWAmmifsi818Q substantial amount of money. It was also contended in view of the large 1 sum that the Defendant or his company could have issued a cheque 2 instead of handing over the cash. I am of the view that this argument is 3 untenable and lacks merits. The facts simply do not support that 4 contention. 5 6

Subsection

(83) It is my considered view that the Defendant had amply proven that 7 he in fact possessed substantial, continuous and ready sources of cash 8 daily. The Defendant had explained in his evidence that his head office 9 received cash from sales obtained from the other branches channelled to 10 his office daily. The cash was easily available to the Defendant. The 11 documents adduced in Paragraph 80 supported his averment that he was 12 in fact more than capable financially to assist the Plaintiff. I find his 13 reasons acceptable and his explanation credible. 14 15

Subsection

(84) It would be pertinent to observe here that the Defendant was 16 unshaken in cross examination when questioned on when and how 17 payment was effected. The Defendant was able to specifically describe 18 details of how the money was given to the Plaintiff including the 19 denomination of the cash given. 20 21

Subsection

(85) I further took note that the Plaintiff had full knowledge of the 22 Defendant’s financial stability which can be seen from his answers under 23 cross-examination : 24 25 “LCH : Ok. Setuju saya katakan bahawa Mr. Wong juga tahu 26 pekerjaan Defendan? 27 PW 1 : Tahu. 28 29 S/N 13GUDgxhfUWAmmifsi818Q LCH : Ok. Setuju saya katakan bahawa Mr. Wong juga tahu dan 1 mempunyai pengetahuan berkenaan kemampuan kewangan 2 Defendan serta latar belakang perniagaannya? Setuju atau tidak? 3 PW 1 : Setuju.” 4 5

Subsection

(86) I refer now to the Plaintiff’s attempt to discredit the Defendant’s 6 testimony in regard to the method of payment. It is the Plaintiff’s 7 contention that the court should find the Defendant’s version that the 8 plaintiff had refused to accept a cheque instead of cash to be dubious and 9 inconsistent with the pleadings and the purpose for the execution of the 10 friendly loan agreement. During re-examination the Defendant had 11 alluded to the reason why the Plaintiff preferred cash instead of a cheque. 12 The Defendant stated that the Plaintiff did not want his wife to know that 13 he wished to give a portion of the cash to his girlfriend. This according to 14 counsel contradicted the very reason why the Plaintiff had borrowed the 15 money in the first instance and further contended that the Defendant as 16 any right thinking businessman would refuse to lend money for such an 17 illicit purpose. 18 19

Subsection

(87) I am respectfully of the view that nothing really turns on this. I did 20 not find it dubious or inconsistent with the pleadings or Defendant’s 21 version in explaining the reason for disbursing the friendly loan in cash to 22 the Plaintiff. From the evidence I formed the opinion that the overall 23 intention at all material times was to assist the Plaintiff with his financial 24 difficulties. That purpose for the friendly loan was reflected in and is in 25 accordance with the terms in the friendly loan agreement. How the Plaintiff 26 wished to utilize the cash did not matter naught as the Agreement had 27 already spelt out the respective parties rights and obligations. 28 29 S/N 13GUDgxhfUWAmmifsi818Q

Subsection

(88) The fact remains that the friendly loan agreement upon its execution 1 had recorded the parties acknowledgement of the receipt of the cash by 2 the Plaintiff. There was no dispute to the Defendant’s evidence that the 3 friendly loan was given to assist the Plaintiff’s financially but not to resolve 4 his company’s financial hardship. The Defendant had stated in his 5 evidence as follows : 6 7 “Pada sekitar tahun 2019, Plaintiff telah meminta daripada saya satu 8 pinjaman persahabatan (friendly loan) sebanyak RM1,980,000.00 bagi 9 meringankan masalah kewangan yang dihadapai oleh Plaintiff.” 10 11

Subsection

(89) Nowhere in his evidence did the Defendant state that the friendly 12 loan was used to resolve the Plaintiff company’s financial hardship. I find 13 that the Defendant’s credibility remained intact and unscathed. 14 15

Subsection

(90) It was also suggested that if the Defendant had really given the 16 friendly loan to the Plaintiff he would have immediately commenced legal 17 action to recover the friendly loan when the agreement expired on 18 24.7.2020. Since he did not it was therefore contended that the Defendant 19 had never advanced the friendly loan to the Plaintiff. I do not find there 20 was any inordinate delay by the Defendant to take action against the 21 Plaintiff. The Defendant had acted well within the 6 years period 22 prescribed under the Limitation Act 1953. I find it entirely reasonable for 23 the Defendant to file the counterclaim as a result of the filing of the civil 24 suit against him. The same cannot be said for the Plaintiff’s position. As I 25 had explained in the earlier part of my judgment and I do reiterate here 26 again, the Plaintiff’s conduct by his silence and inaction on his part will 27 constitute and amount to effective acceptance of the terms of the friendly 28 loan agreement particularly in respect of Clause 2 thereof. 29 S/N 13GUDgxhfUWAmmifsi818Q

Subsection

(91) In my judgment, I make the finding that the Plaintiff received the 1 cash from the Defendant and he failed to repay the friendly loan given to 2 him by the Defendant by 24.7.2020 which is the due date for repayment 3 of the friendly loan. In the circumstances the Plaintiff has breached the 4 agreement for failure to repay the friendly loan by the date of repayment. 5 6

Subsection

(92) I therefore make the finding that the Defendant has proven his 7 counterclaim against the Plaintiff on a balance of probabilities. He has 8 credibly adduced evidence to prove the source of the friendly loan, that it 9 was disbursed to the Plaintiff and receipt of it was acknowledged by the 10 Plaintiff. 11 12 Conclusion 13

Subsection

(93) Based on the above considerations, the Plaintiff’s claim is dismissed 14 with costs and the Defendant’s counterclaim is allowed with costs. 15 16 Dated 4 July 2022. 17 18 19 20 (JULIE LACK) 21 Judge 22 High Court of Malaya 23 Shah Alam, Selangor Darul Ehsan 24 25 26 27 28 29 S/N 13GUDgxhfUWAmmifsi818Q Counsel 1 For the Plaintiff : 2 Ang Kai Whei with Lau Teck Bee 3 (MESSRS. YEAP & ANG) 4 5 For the Defendant : 6 Loh Chun Hoo with Fong Yi On 7 (MESSRS. CHUN HOO & PARTNERS) 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 S/N 13GUDgxhfUWAmmifsi818Q