XXXX v Kho Kok Hong (22NCVC-139-02/2012)

witness, namely Ng Chok Ling (PW1), who is the director of the Plaintiff and the Defendant called one (1) witness, namely Kho Kok Hong, the Defendant (DW1), who is the executor of the estate of the late Kho Ah Soon (KAS). [2] These are the witness statements (Witness Statements)- 20/04/2026 13:26:33 22NCVC-139-02/2012 Kand. 149 “WS-PW1” : PW1’s Witness Statement in Enclosure 126 “WS-DW1” : DW1’s Witness Statement in Enclosure 125 BRIEF FACTS Parties [3] The Plaintiff is a family holding company that owns properties and businesses, including construction and the manufacturing of building materials, through its subsidiaries, and was founded by Ng Kim Lim (NKL) and his wife, Tang Lin @ Tang Kam Wan (TL). NKL and TL also founded and owned another company, Ramanda Sdn Bhd (Ramanda). [4] The Defendant is the executor and trustee of the estate of the late KAS. On 07.06.2023, the Defendant filed an application to substitute KAS as the Defendant in this action, which was allowed on 08.09.2023. [5] The following facts are the Plaintiff’s version derived from its submission. [6] According to the Plaintiff, KAS had approached Ng Ah Ba @ Ng Looi Seng (NAB) and Tang Yeam Soon (TYS) to jointly acquire Lot Nos. 1152, 1154, 1236 and 1237, Mukim 14, Province Wellesley Central (Properties), which were adjoining lands measuring a total land area of approximately 60 acres (KAS, NAB and TYS collectively referred to as the “Beneficial Owners”). To acquire the Properties, the Beneficial Owners were required to pay a deposit of 10% of the purchase price. [7] To raise money, KAS offered to sell one of the Properties, Lot No. 1152, to NKL, for which NKL paid a deposit of RM325,396.70 through Ramanda. [8] Ramanda was nominated by NKL to enter into a formal agreement dated 04.11.1991 (Agreement dated 04.11.1991) with the Beneficial Owners for the purchase of Lot 1152. [9] The Beneficial Owners formed Soonshyan Properties Sdn Bhd (Soonshyan) to apply for a loan to acquire the Properties. Soonshyan then took a loan from OCBC Bank (Malaysia) Berhad (OCBC Bank) to finance the acquisition, and the Properties were charged as security. [10] Soonshyan was nominated by the Beneficial Owners to enter into a supplemental agreement dated 07.04.1993 (Supplemental Agreement dated 07.04.1993) with Ramanda for the sale of Lot No. 1152. [11] Subsequently, Soonshyan defaulted in servicing the loan, resulting in OCBC Bank taking action to foreclose the Properties and the auction proceedings were scheduled on 02.07.1997. [12] KAS then approached NKL on 03.06.1997 (Meeting on 03.06.1997), where KAS sought NKL’s help to lend him a sum of RM5,000,000.00 for him to redeem the Properties from OCBC Bank. [13] According to the Plaintiff, KAS also told NKL that if NKL were to help him with the money, his repayment to NKL would be double, in which he would repay NKL the principal sum of RM5,000,000.00 and another RM5,000,000.00 as guaranteed profit within a year (Loan). Moreover, KAS would further pay NKL a monthly interest of RM27,000.00 throughout the Loan period. [14] KAS undertook to pledge to NKL the documents of title of the Properties when they were retrieved from OCBC Bank and create a charge of all his undivided share of the Properties in favour of NKL for the loan granted. KAS further irrevocably grants NKL a power of attorney to take over all his undivided shares in the Properties in the event the Court’s decision in Suit No. 22-244-1993 (Suit 244) is against him. [15] Suit 244 was actually a prior case filed in the Penang High Court regarding the dispute over ownership and/or entitlement to Lot Nos 1152, 1154, 1236, and 1237 among the Beneficial Owners of Soonshyan Properties Sdn Bhd. KAS lost the suit 244 and failed to obtain those lands, and thus, all contractual obligations were extinguished. [16] According to the Plaintiff, it was all recorded in the record of the meeting dated 03.06.1997 (Minutes dated 03.06.1997) and two (2) letters to the Plaintiff requesting the loan on

23.06.1997, both being the 1st Letter and the 2nd Letter dated 23.06.1997. [17] The Plaintiff then agreed to provide the Loan requested by KAS on a friendly basis, arising from an existing transaction between Soonshyan and Ramanda for the acquisition of Lot No

Further, the Loan was always intended solely to assist KAS in redeeming the Properties from OCBC Bank. As mentioned in the Minutes dated 03.06.1997, NKL treated KAS as a friend and trusted that KAS would honour the promises made. Further, the Plaintiff also intended to procure all the Properties successfully redeemed. [18] The Plaintiff contended that, in order to obtain the funds to assist KAS–

The Plaintiff had to approach and source the funds from Bonia Sdn. Bhd. (Bonia). The Plaintiff entered into a joint venture agreement dated 26.06.1997 (JVA) with Bonia; and

Pursuant to the JVA, Bonia prepared two (2) bank drafts for a total sum of RM5,000,000.00. The two (2) bank drafts were then used by the Plaintiff to extend the Loan to KAS for the purpose of redeeming the Properties. [19] The above was made known to KAS by way of a letter dated 26.06.1997, in which NKL informed KAS, among others, that, for the purpose of assisting KAS in redeeming the Properties scheduled for auction on 02.07.1997, the Plaintiff sourced funds of RM5,000,000.00 from a 3rd party. KAS unconditionally and irrevocably undertook that, should he fail to repay the Loan, he shall be deemed liable for all monies due. KAS defaulted on repayment of the Loan and variation of the loan agreement [20] According to the Plaintiff, KAS defaulted on the Loan repayment. By way of a letter dated 18.12.1998, the Plaintiff wrote to KAS, among others, reminding him that the Loan was given for the purpose of redeeming the Properties from OCBC Bank and not for KAS to simply spend the money. However, KAS had failed to comply with the terms as agreed. Thus, the Plaintiff had to charge the interest that was agreed upon. [21] Further, by way of a letter dated 10.03.2003, the Plaintiff wrote to KAS, among others, that KAS had failed to repay the Loan after 5 years had elapsed, and yet the Plaintiff had extended help to KAS to save the Properties from being auctioned on 02.07.1997. [22] KAS had chosen to avoid seeing, writing or calling the Plaintiff, and the Plaintiff demanded that KAS return the Loan Sum with all agreed costs and expenses incurred not later than 90 days from the date of receipt of the letter, failing which, the Plaintiff was compelled to initiate legal proceedings against KAS to enforce payment. [23] As KAS still failed to repay the Loan Sum, the Plaintiff issued a letter dated 27.06.2003 (Letter dated 27.06.2003) to KAS that –

KAS had no excuse for defaulting in the repayment of the Loan Sum plus guaranteed profit of RM5,000,000- 00 and monthly interest of RM27,000-00 within 1 year;

KAS’ procrastination in repaying the Loan Sum had caused the Plaintiff to incur tremendous loss as the Plaintiff had to pay 10% per annum interest to the 3 rd party;

since KAS had defaulted in the repayment of the Loan, the Plaintiff had no choice but to impose a minimum interest rate of 10% per annum on the Loan Sum commencing from the date of the Loan received by KAS; and

demanded that KAS pay up without further delay. [24] The Letter dated 27.06.2003 varied the terms set out in the 1st and 2nd Letters dated 23.06.1997. [25] From 2003 to 2006, the Plaintiff sent its statements of account (Statements of Account) to KAS on the amount due and owing by KAS to the Plaintiff, including the Loan Sum, guaranteed profit of RM5,000,000.00 and interests at the rate of 10% per annum. [26] At all material times, KAS has never disputed the Statements of Account. In fact, KAS had made part payments totalling RM1,765,000.00 (Part Payments) as follows-Date Amount 17.11.1998 RM600,000.00 03.12.2003 RM100,000.00 16.02.2004 RM100,000.00 18.02.2004 RM250,000.00 04.03.2004 RM100,000.00 10.06.2004 RM50,000.00 21.12.2004 RM180,000.00 24.02.2005 RM150,000.00 15.04.2005 RM70,000.00 23.07.2005 RM50,000.00 10.09.2005 RM30,000.00 25.09.2005 RM20,000.00 03.01.2006 RM25,000.00 27.01.2006 RM10,000.00 06.03.2006 RM20,000.00 19.05.2006 RM10,000.00 Total RM1,765,000.00 [27] As averred by KAS in his affidavit in reply, affirmed on 08.01.2008 and filed in Suit 244, the 1 st and 2nd Letters dated 23.06.1997 were varied by the Letter dated 27.06.2003 and the Statements of Account. [28] Therefore, based on the 1 st and 2nd Letters dated 23.06.1997, Letter dated 27.06.2003 and the Statement of Accounts (Loan Agreement), the Plaintiff contended that the Defendant is liable to pay the Plaintiff the following-

Loan Sum of RM5,000,000.00;

guaranteed profit of RM5,000,000.00 (Guaranteed

interests at the rate of 10% per annum from the date of Loan received by KAS (Interests). Filing of this action [29] On 21.02.2012, the Plaintiff filed this action and claimed against KAS-

a total sum of RM12,074,754.93 as of 31.07.2006. This sum is derived from the Loan Sum, Guaranteed Profit and Interests less Part Payments.

interest calculated at the rate of 10% per annum on the sum of RM3,235,000.00 from 01.08.2006 until 21.02.2012 amounting to RM1,800,191.77;

continuing interest at the rate of 10% per annum from 22.02.2012 on the sum of RM3,235,000.00 until settlement;

interest at the rate of 4% per annum on the judgment sum from the date of judgment until settlement; and

costs. [30] Thereafter, the Plaintiff obtained a judgment in default (JID) against KAS on 06.06.2012. [31] On 03.10.2019, KAS passed away, and subsequently, on 08.09.2023, Kho Kok Hong, as the executor and trustee of the estate of the late KAS, was substituted as the Defendant. [32] Later, on 10.07.2023, the Defendant filed an application to set aside the JID, which was allowed by Justice Kenneth on 12.06.2024. [33] On 25.06.2024, the Defendant filed his Defence and Counterclaim, alleging that the Loan was an illegal moneylending transaction, as the Plaintiff is not a licensed moneylender, and that this action is time-barred. [34] Further, the Defendant counterclaims against the Plaintiff for the following-

a declaration that the loan of RM5,000,000.00 granted by the Plaintiff to KAS is null and void;

a declaration that the guaranteed profit of RM5,000,000.00 claimed by the Plaintiff against KAS is null and void;

any illegal interest that is and has been imposed by the Plaintiff on KAS is null and void;

the Plaintiff to repay the amount of RM1,765,000.00 to the executor and trustee of the estate of KAS; and

interest on the judgment sum at the rate of 5% per annum from the date of filing of the Counterclaim until the date of full and final settlement of the judgment sum. PARTIES’ CONTENTION Plaintiff’s Contention [35] The Plaintiff contended that it is not disputed that the Loan Sum carried interest, which does not turn the said transaction into a moneylending transaction prohibited under the Moneylenders Act 1951 (MA 1951). [36] The Plaintiff also contended that the sum of RM5,000,000.00 advanced to KAS constitutes a valid and enforceable loan transaction, the terms of which were clearly set out in the contemporaneous documents, in particular the letter dated 23.06.1997, subsequent correspondence, and the statements of account rendered to KAS from time to time. [37] The Plaintiff further contended that the Loan was extended pursuant to a request made by KAS himself, who approached Ng Kim Lim for financial assistance in order to redeem the Properties from foreclosure by OCBC Bank. It is emphasised that the terms of repayment, including the obligation to repay the principal sum, the payment of a guaranteed profit of RM5,000,000.00, and the imposition of a monthly interest of RM27,000.00, were expressly proposed by KAS and voluntarily agreed to by the parties. [38] The Plaintiff submitted that the Loan was not an illegal moneylending transaction within the meaning of the MA 1951. Although the loan carried interest, the Plaintiff asserts that the mere imposition of interest does not, in law, render the transaction unlawful. Rather, the critical issue is whether the Plaintiff was carrying on the business of moneylending, which the Plaintiff emphatically denies. [39] In this regard, the Plaintiff submitted that even if the statutory presumption under section 10OA of the MA 1951 is triggered by reason of the loan carrying interest, such presumption has been successfully rebutted on a balance of probabilities. The Plaintiff relied on several key factors to support this contention. [40] First, the Plaintiff asserted that the Loan was extended in the context of an existing relationship between the parties since 1991, and not as part of any commercial moneylending enterprise. It is further contended that the Plaintiff agreed to assist KAS out of sympathy, trust, and a genuine intention to help him redeem the Properties and avoid the impending auction. [41] Secondly, the Plaintiff contended that there was no system, continuity, or pattern of moneylending transactions on its part. The Plaintiff is an investment holding company whose primary business activities relate to property ownership and other commercial ventures, and there is no evidence that it engaged in moneylending as a regular or systematic activity. [42] Thirdly, the Plaintiff contended that it has never held itself out, advertised, or represented itself as a moneylender. There is no evidence that the Plaintiff operated as a moneylending entity or solicited borrowers in any manner. [43] Fourthly, the Plaintiff contended that the interest imposed was not exorbitant in nature. It is emphasised that the terms relating to the 5% interest per annum at monthly rest and guaranteed profit were proposed by KAS himself which subsequently agreed by parties through the 2 nd letter dated 23.6.1997. The Plaintiff further contends that the interest is in fact lower than the fixed deposit rate of about 7.54% and average lending rate of about 10.85% set by Bank Negara Malaysia. [44] The Plaintiff submitted that they did not initially intend to enforce the RM27,000.00 interest of RM27,000.00 strictly. The interest was imposed only after KAS defaulted in repayment and failed to honour his obligations, despite repeated demands through letters dated 1812.1998, 10.3.2003 and 27.6.2003. [45] The Plaintiff further relied on the contemporaneous documentary evidence, including the letters dated 23.06.1997, subsequent correspondence, and statements of account, which, according to the Plaintiff, clearly demonstrate the existence of the loan agreement and the obligations arising therefrom. The Plaintiff emphasised that these documents were largely unchallenged during cross-examination and ought to be accepted by this Court. [46] The Plaintiff also contended that the Defendant’s evidence is inadmissible, being largely hearsay and based on personal opinion. The Plaintiff submitted that the Defendant himself agreed that he does not possess any qualifications in law and thus cannot offer expert opinion, which is admissible under Section 45 of the Evidence Act 1950. It is thus the contention of the Plaintiff that the Defendant, as executor of the estate, lacks first-hand knowledge of the transaction and is therefore unable to effectively challenge the Plaintiff’s case. [47] On the issue of limitation, the Plaintiff contended that the claim is not time-barred. It was submitted that KAS made part payments totalling RM1,765,000.00, the last of which was made on 19.05.2006. These payments constitute an acknowledgement of the debt and give rise to a fresh accrual of the cause of action, thereby rendering the present action, filed on 21.02.2012, within the limitation period. [48] However, the Plaintiff submitted that, should the Court find that the Loan is illegal and void, the Plaintiff further submitted that the Defendant should repay RM3,235,000.00, as the Defendant has been enriched at the Plaintiff's expense. The Defendant must make restitution to the Plaintiff based on the doctrine of unjust enrichment. The amount is derived from the following-Amount paid by Plaintiff to KAS – Part Payments made by KAS RM5,000,000.00 – RM1,765,000.00 = RM3,235,000.00 [49] On the Defendant’s counterclaim, the Plaintiff contended that the counterclaim is devoid of merit on the following basis-

the Loan, Guaranteed Profit and Interests are not null and void, and there is no basis for the Defendant to ask for repayment of the Part Payments to the

there is no legal basis to demand the return of the repayment of RM1,765,000.00 paid. [50] The Plaintiff also contended that even if the Court were to find that the loan agreement is void or unenforceable, the Defendant is nevertheless obliged to restore the benefit received. In this regard, the Plaintiff submitted that KAS had received the sum of RM5,000,000.00 and had only repaid RM1,765,000.00, leaving a balance of RM3,235,000.00, which must be returned to the Plaintiff to avoid unjust enrichment. Defendant’s Contention [51] The Defendant asserted that the Plaintiff’s claim ought to be dismissed in its entirety as it is premised on an illegal moneylending transaction prohibited under the MA 1951. [52] The Defendant contended that the Plaintiff is claiming to recover a sum exceeding RM18,000,000.00 for an initial advance of RM5,000,000.00 lent to the Defendant’s late father. [53] The Defendant submitted that the initial purpose of the Plaintiff lending money to KAS with interest was to redeem some lands and make a profit when the lands are sold, if the Defendant succeeds in Suit 244. However, it is an agreed fact that KAS lost the Suit 244 and thus failed to obtain the lands (Lot No. 1152, 1154, 1236 & 1237). [54] It was the Defendant's submission that, when KAS failed to obtain the Properties and the Plaintiff failed to make a profit from them, the Plaintiff insisted on claiming interest, together with the Guaranteed Profit (an additional 100% interest), on the monies lent. [55] The Defendant further submitted that, either way (whether by making a profit from the sale of the Properties if KAS succeed in Suit 244 or by charging interest if KAS fails), the Plaintiff is clearly lending money for profit and treating his moneylending to KAS as a business. [56] It is the contention of the Defendant that if the Plaintiff does not treat their lending to KAS as a business, they would have a claim back only the principal sum of RM5,000,000.00 plus any sum lawfully charged under MA 1951 and minus the RM1,765,000.00 which KAS paid to them, which would only leave RM3,235,000.00 amount owed. However, it is heavily disputed as there is now a difference of RM14,765,000.00 from the actual amount owing of RM3,235,000.00 and the amount the Plaintiff is claiming (RM18,000,000.00). [57] The Defendant submitted that these charges fall squarely within the statutory definition of interest, regardless of the terminology used by the Plaintiff, and that the transaction therefore triggers the presumption under section 10OA of the MA 1951 that the Plaintiff was carrying on the business of moneylending. [58] The Defendant further contended that the Plaintiff has failed to rebut the presumption as to the business of moneylending. Further, the Defendant argues that the Plaintiff’s conduct throughout the transaction demonstrates that it was lending money for profit and treating the transaction as a commercial venture rather than a friendly loan. [59] The Defendant also submitted that the Plaintiff’s insistence on claiming interest and guaranteed profit, notwithstanding the failure of KAS in obtaining the Properties or making any profit from them, clearly shows that the Plaintiff’s primary objective was to make a profit from the monies advanced. [60] The Defendant further submitted that it is not for the Plaintiff to refer to letters and calculate interest as they see fit. The Defendant placed significant reliance on the terms of the letter dated 23.06.1997, in particular the clause that provides that, in the event that the decision in Suit 244 is against KAS, all the terms therein shall be treated as cancelled. Since KAS has lost the said suit, all contractual obligations, including any obligation to repay the alleged loan, interest, or guaranteed profit, were extinguished upon the occurrence of that event. [61] The Defendant then submitted that the Plaintiff’s claim here, being profit-driven and interest-bearing, is therefore equally tainted by illegality and unenforceable in law. [62] The Defendant further referred to the Federal Court case of Triple Zest Trading & Suppliers & Ors v Applied Business Technologies Sdn Bhd [2023] 10 CLJ 187, which held that the one-time interest of 100% named as “Agreed Profit” is illegal. In this case, the Plaintiffs are charging the same 100% one-time “Guaranteed Profit” and an additional 10% per annum. The comparison of the interest in the case referred above and with the present case here is as follows–

One off interest at 100%, RM800K One off interest at 100%, 5 Million

Named as “Agreed profit” Named as “Guaranteed profit”

No additional Interest On top of the one-off interest, additional Unilateral Interest of 10% p.a. instead of RM27K per month till Realisation.

Defendant had not paid a single cent. Defendant had paid RM1,765,000.00 [63] The Defendant reiterated that KAS has repaid RM1,765,000.00, although he failed to obtain the Properties and did not earn any profit. Without making any profit, KAS is unable to pay any alleged profit, and it is unfair that the Plaintiff stands to gain profit without any share of loss. [64] On the issue of limitation, the Defendant submitted that the Plaintiff’s claim is time-barred, having been commenced beyond the statutory limitation period. The Defendant contends that this action is founded on contract and thus is strictly subject to Section 6(1) of the Limitation Act

Further, the Defendant contended that the Plaintiff is guilty of inordinate delay and that the claim is barred by the equitable doctrines of laches and acquiescence. [65] The Defendant submitted that Plaintiff’s own sworn statement on 20.02.2008 and admitted the RM1,765,000.00 is an excess payment for Lot 1152 and not a repayment of the loan. Thus, the Defendant submited that there has been no repayment of the money lent from 1997 to the present. [66] The Defendant also challenged the reliability and validity of the Plaintiff’s statements of account (not an invoice), contending that they were unilaterally prepared, inconsistent, and not supported by any agreement signed by KAS. [67] In respect of the counterclaim, the Defendant contended that the Loan, the guaranteed profit, and the interest are illegal, null, and void. As such, the Plaintiff is not entitled to recover any sum, whether principal or interest. [68] The Defendant further submitted that the sum of RM1,765,000.00 paid by KAS to the Plaintiff must be returned to the estate, as it was paid pursuant to an illegal transaction. ISSUES [69] This Court finds that the central issue is whether the Plaintiff could offer the Loan to the Defendant under the Loan Agreement. [70] The question remains whether the transaction contravenes the MA

[71] If the Loan Agreement is enforceable and a valid instrument that does not contravene the MA 1951, the next question is whether the Defendant has breached the terms of the Loan Agreement by failing to pay the Loan sum together with interest? [72] If the instrument is unlawful, unenforceable, and in violation of the MA 1951, then the Plaintiff is not entitled to any remedy. In such a situation, is the Defendant entitled to a refund of the Part Payments that were made as claimed in the Defendant’s counterclaim? ANALYSIS AND FINDINGS Burden of proof [73] It is trite law that the onus lies on the Plaintiff to prove his claim to succeed against the Defendant under Sections 101 and 102 of the EA 1950 (See Datuk Mohd Ali bin Hj Abdul Majid & Anor v. Public Bank Berhad [2014] 4 MLRA 397; [2014] 4 MLJ 465; [2014] 6 CLJ 269; [2014] 4 AMR 301 and Tenaga Nasional Berhad (Formerly Lembaga Letrik Negara Tanah Melayu) v. Perwaja Steel Sdn Bhd (Formerly Perwaja Terengganu Sdn Bhd) [1995] 3 MLRH 196; [1995] 4 MLJ 673; [1995] 4 CLJ 670). [74] The facts of this case are clear and undisputed. There was a Loan Agreement between the Parties, under which the sum of RM5M was paid to the Defendant, and Part payments were made as repayment of the Loan. Now, the question arises: Is the whole transaction an illegal moneylending transaction? [75] In this Suit, there were two contradictory views of the Loan transaction, by both the Plaintiff and the Defendant. The Plaintiff contended that the Loan is a friendly loan, with interest, agreed upon by the Defendant. Whereas, the Defendant is denying such contention. Instead, the Defendant submitted that it was an illegal moneylending transaction. It was therefore not disputed that the Loan existed between the two parties. [76] The Defendant contended that the Plaintiff’s justification for claiming such an amount with interest, despite the fact that the Plaintiff does not have a moneylender’s license, is as follows-

The principal amount lent was RM5,000,000.00 (para 3 of SOC).

Para 16.i. SOC: - RM12,074,754.93 as of 31.7.2006;

Para 16.ii. SOC:- RM1,800,191.77 from 1.8.2006 till 21.2.2012;

Para 16.iii. SOC: - interest of 10% per annum on the amount of RM3,235,000.00 from 22.2.2012 until full settlement. 2012 – 2025 = 13 years 13 years x RM323,500.00 = RM4,205,500.00 as of 21.2.2025 [77] Thus, Plaintiff’s total claim is RM12,074,754.93 + RM1,800,191.77 + RM4,205,500.00 = RM18,080,446.70 as of 21.2.2025 (and still continuing). [78] It was never disputed that the Loan Sum carried interest. In this context, Section 10OA of the MA 1951 provides- “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.”. [79] Further, in Triple Zest Trading & Suppliers v Applied Business Technologies Sdn Bhd [2024] 1 MLRA 144; [2023] 6 MLJ 818 [2023] 10 CLJ 187; [2023] 8 AMR 225, the Federal Court held– “[44] It is a rebuttable presumption, a legal principle that presumes something to be true unless proven otherwise. Section 10OA of the MA51 imposed on the respondent the legal (as opposed to evidential) burden of proving, on the balance of probabilities, that it was not carrying on the business of ‘moneylending’ when it lent the RM800,000 to the appellants at a profit of RM800,000. The presumption is that it was carrying on the business of moneylending, ‘until the contrary is proved’.” [80] It was always the contention of the Defendant that the initial purpose of the Plaintiff lending money with interest to KAS was to redeem the Properties and make profits when the Properties are sold; if the Defendant succeeds in obtaining those Properties in Suit 244. [81] The Defendant relied on the Statements of Agreed Facts filed in this Court that KAS lost the Suit 244 and failed to obtain the Properties (Lot No. 1152, 1154, 1236 & 1237, Mukim 14, Seberang Perai Tengah, Negeri Pulau Pinang). [82] When KAS failed to obtain the Properties, and the Plaintiff failed to make a profit from them, the Plaintiff insisted on claiming interest, together with Guaranteed Profit (an additional 100% interest), on the monies lent. [83] Either way (whether by making a profit from the sale of lands if KAS succeeds or by charging interest if KAS fails), the Plaintiff is clearly lending money for profit and treats his lending money to KAS as a business. [84] The Plaintiff on the other hand, contended that the Loan is not an illegal moneylending transaction and the Defendant is liable to pay the amount claimed by the Plaintiff in this action pursuant to the Loan Agreement, which constituted the Loan Sum, Guaranteed Profits and Interests from the date the Loan was received by KAS. However, the Plaintiff submitted that the Defendant repay RM3,235,000.00 to the Plaintiff out of the RM5,000,000.00 Loan, if the Court finds that the Loan is illegal and void. On this point, this Court is guided by the Triple Zest (supra) and, as such, this Court will not allow any such amount to be refunded. [85] This Court is of the considered view that not only this is an illegal transaction, but also a serious crime under Section 5(2) of the MA 1951 as clearly decided by the Federal Court in Triple Zest (supra), - [21] We must say with all due respect to the learned judge that the proposition is as untenable as it is dangerous. First of all, under s. 5(2) of MA51, any person who carries on the business of moneylending without a valid licence commits an offence and shall be liable on conviction to a fine of not less than RM200,000 but not more than RM1 million or to imprisonment for a term not exceeding five years or to both fine and imprisonment and in the case of a second or subsequent offence shall also be liable to whipping. [22] Going by the penalty provided for under s. 5(2) of the MA51, the crime of moneylending without licence is by no means a trivial offence. [25] It makes a mockery of the MA51 and the Financial Services Act

While banks and licenced moneylending companies need to obtain licences and abide by strict monetary regulations, unlicensed moneylenders need only to use the term "agreed profit" in place of "interest" as "consideration" in carrying on their illegal moneylending activities. [26] This not only goes against the object of the MA51 which is for the ''regulation and control of the business of money/ending, the protection of borrowers of monies lent in such business, and matters connected therewith" (see the preamble to the MA51) but is also against the trite principle that a loss lies where it falls when an agreement is found to be illegal. [27] Such an agreement is also void by statute. Under s. 24 of the Contracts Act 1950 ("the Contracts Act’), an agreement is void if the object or consideration of the agreement is unlawful. The section reads as follows: 24 What considerations and objects are lawful, and what not The consideration or object of an agreement is lawful unless:

it is forbidden by law;

it is of such a nature that, if permitted, it would defeat any law;

it is fraudulent;

it involves or implies injury to the person or property of another; or

the court regards it as immoral, or opposed to public policy. In each of the above cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void. [28] The consideration of RM800,000 as "agreed profit" for the RM800,000 loan in the present case would be caught by paras (a), (b) and (e) of the above provision. The court will not render assistance to those who come before it with unclean hands and the remedy of restitution under s. 66 of the Contracts Act will not avail such litigants. [86] Since the Plaintiff is charging interest on the principal amount lent, it automatically triggers the presumption under S.10OA of the MA51. Limitation [87] The Defendant contended that the Plaintiff’s cause of action arose since 27.06.1998 and the last date for the Plaintiff to seek relief lapsed on 27.06.2004. [88] In this regard, Section 26(2) of the Limitation Act 1953 provides- “Where any right of action has accrued to recover any debt or other liquidated pecuniary claim, or any claim to the personal estate of a deceased person or to any share or interest therein, and the person liable or accountable therefor acknowledges the claim or makes any payment in respect thereof, the right shall be deemed to have accrued on and not before the date of the acknowledgment or the last payment: Provided that a payment of a part of the rent or interest due at any time shall not extend the period for claiming the remainder of the rent or interest then due, but any payment of interest shall have effect, for the purposes of this subsection only, as if it were a payment in respect of the principal debt.” [89] Accordingly, this Court is of the view that the Plaintiff’s claim is not time-barred based on the fact that in the present case, there were Part Payments totalling RM1,765,000.00 towards the Loan Sum. This was admitted by the Defendant in paragraph 25.2 of his Defence & Counterclaim. The last payment was made on 19.05.2006. Therefore, there was a fresh accrual of cause of action on 19.05.2006. The last date for the Plaintiff to commence action against KAS was 19.05.2012; the action was filed on 21.02.2012 and is therefore not time-barred. The Counterclaim [90] This Court finds that both the Plaintiff and the Defendant are in this together. Both have agreed to the loan transaction despite it being illegal. Thus, no restitution or refund is allowed. Reference is made to the Court of Appeal case of Dr Mansur Hussain & Ors v Barisan Tenaga Perancang (M) Sdn Bhd & Ors [2020] 5 MLRA 307; [2019] MLJU 1552; [2019] 1 LNS 661, where the Court of Appeal held- “[54] … Suffice for us to say here that if an agreement is void ab initio for illegality, no restitution can happen. No court will lend its hands to unwind a void agreement that was illegal ab initio by restoring each party to its original position as though the illegal agreement never took place. Restitution, on the other hand, is a remedy that is aimed at restoring an innocent party to the position he was at be if not for the conduct of another. It presupposes innocence on the part of the injured party and that to allow the injury to remain unaddressed, would unjustly enrich the guilty party. As such, when both parties before the court are in pari delicto or where both parties are at equal fault, the court will not involve itself in resolving one side's claim over the other and whoever is in possession of whatever is in dispute continues to do so in the absence of a superior claim. The court will let the estate lie where it falls...” [91] Further, this Court is inclined with the submission of the Plaintiff that the Defendant is not entitled to the repayment of the amount of RM1,765,000.00 based on these two (2) Court of Appeal cases–

In Ideal Advantage Sdn Bhd v Perbadanan Pengurusan Palm Spring @ Damansara & Another Appeal [2019] CLJU 894; [2020] 4 MLJ 93; [2019] 5 AMR 201, the Court of Appeal held- “[81] …Taking the argument on the illegality point, it is trite that the effect of any illegal transaction will result in the ‘loss will lie where it falls’. A party that suffers loss due to an illegal contract, cannot sue the other contracting party to recover losses. The law will not afford relief to those who claim entitlements from an illegal act, although there had been exceptions practiced by the courts in certain situation premised on inter alia, public policy, seriousness of conduct, centrality to the contract, whether the illegality was intentional, proportionality and unjust enrichment (see Tinsley v Milligan [1993] 3 All ER 65; St John Shipping Corporation v Joseph Rank Ltd [1957] 1 QB 267; Nelson v Nelson (1995) 184 CLR 538).”; and

In Dr Mansur Hussain & Ors v Barisan Tenaga Perancang (M) Sdn Bhd & Ors [2020] 5 MLRA 307; [2019] MLJU 1552; [2019] 1 LNS 661, the Court of Appeal held- “[54] … Suffice for us to say here that if an agreement is void ab initio for illegality, no restitution can happen. No court will lend its hands to unwind a void agreement that was illegal ab initio by restoring each party to its original position as though the illegal agreement never took place. Restitution, on the other hand, is a remedy that is aimed at restoring an innocent party to the position he was at be if not for the conduct of another. It presupposes innocence on the part of the injured party and that to allow the injury to remain unaddressed, would unjustly enrich the guilty party. As such, when both parties before the court are in pari delicto or where both parties are at equal fault, the court will not involve itself in resolving one side's claim over the other and whoever is in possession of whatever is in dispute continues to do so in the absence of a superior claim. The court will let the estate lie where it falls...” [92] Additionally, based on the case of Triple Zest (supra), this Court finds that the Loan is illegal and void, that the losses will lie where they fell, and that the Defendant cannot recover the Part Payments totalling RM1,765,000.00. [93] Also, the case of Yeow Guang Cheng v Tang Lee Hiok [2020] [2020] MLRHU 1539; [2020] MLJU 1936; CLJU 1696, which was affirmed by the Court of Appeal, does not in any way support the Defendant’s submission that the Part Payments ought to be ordered to be returned to the Defendant. In that case, the Court has ordered “no restitution and/or damages of the Original Action”. [94] Therefore, the Counterclaim is also dismissed with costs. [95] Finally, to address the questions posed, this Court is of the view that the Loan constitutes an illegal moneylending transaction between the Parties. Thus, the Loan Agreement is unenforceable as it contravenes the MA 1951. It is this Court's finding that on a balance of probabilities, the Plaintiff has failed to rebut the presumption under section 10OA of the MA. This Court is guided by the Triple Zest case (supra). Therefore, the Plaintiff's claim is dismissed with costs. [96] Accordingly, the issue of breach of the Loan Agreement does not arise. [97] As the Loan Agreement is unlawful, unenforceable, and in violation of MA 1951, the Plaintiff is not entitled to any remedy. In such a situation, the Defendant is also not entitled to a refund of the Part Payments as claimed in the Defendant’s counterclaim. [98] On the Counterclaim, this Court finds that the Defendant’s reliance on the case of Yeow Guang Cheng (supra) is misconceived and therefore agrees with the submission of the Plaintiff on the reliance of the Court of Appeal cases of Dr Mansur Hussain (supra) and Ideal Advantage (supra). CONCLUSION [99] Based on the facts and circumstances of the case and the totality of the evidence, this Court is of the considered view on a balance of probabilities that the Plaintiff has failed to prove its claim. Thus, the claim is dismissed with costs. Likewise, this Court finds, on a balance of probabilities, that the Defendant has failed to prove his counterclaim; and therefore, the counterclaim is dismissed with costs. DATED: 11 APRIL 2026 -SGD- (SUZANA BINTI MUHAMAD SAID) Judicial Commissioner of The High Court High Court 3 Pulau Pinang PARTIES For the Plaintiff: Alex Tan Chie Sian (together with Cheah Kha Mun and Chin Jia Yi (Pupil in Chambers)) Messrs. Alex Tan Chie Sian For the Defendant: Hong Chong Hang Messrs. Hong Chew King & Co.