Shim Vui Geh Dayang Masturah Bt Sahari

Shim Vui Geh Dayang Masturah Bt Sahari

The Court held Shim was not carrying on the business of moneylending on the evidence and had rebutted the statutory presumption under s10OA; the loans were therefore friendly and enforceable, but the mechanism used to take security (outright transfers and sale agreements held in escrow) defeated the Sabah Land Ordinance and Contracts Act and were void; accordingly the transfers are set aside and the borrowers must repay the acknowledged loan sums, default interest at 1.5% p.m. is struck down and the court awarded interest at 5% p.a. from 17.3.2023 to date of realisation; counterclaims for injurious falsehood and abuse of process failed.

Citation
S-01(NCvC)(W)-139-03/2022 (Mahkamah Rayuan)
Parties
Appellant / 1st Defendant: Shim Vui Geh; Respondent / Plaintiff: Dayang Masturah bt Sahari; Respondent / Plaintiff: Mohd Harun Indra Bin Pg Elias; 2nd Defendant (nominal): Registrar of Land Titles of Sabah; 3rd Defendant (nominal): Director of Lands and Survey Department Sabah
Court
NCvC
Jurisdiction
Malaysia
Judgment Date
17 March 2023
Case Number
S-01(NCvC)(W)-139-03/2022 (Mahkamah Rayuan)
Procedural Posture
Civil Appeal / Court of Appeal Judgment (appeal Heard and Determined)
Outcome
Appeal allowed in part; High Court orders otherwise affirmed where consistent with this decision
Legal Topics
Moneylending, Friendly Loan, Presumption Under S10 OA, Security for Loan, Option to Purchase, Sale and Purchase Agreement as Security, Set Off, Indefeasibility of Title, Void Contracts, Default Interest, Tort of Injurious Falsehood, Abuse of Process
Source Language
Malay/English
Contract Law Property / Land Law Statutory Moneylending Regulation Equity Civil Procedure Moneylending Friendly Loan Presumption Under S10 OA +9 more

Case Brief

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Parties

Shim Vui Geh

Appellant / 1st Defendant

Dayang Masturah bt Sahari

Respondent / Plaintiff

Mohd Harun Indra Bin Pg Elias

Respondent / Plaintiff

Registrar of Land Titles of Sabah

2nd Defendant (nominal)

Director of Lands and Survey Department Sabah

3rd Defendant (nominal)

Procedural Posture

Civil Appeal / Court of Appeal Judgment (appeal Heard and Determined)

Legal Issues

  1. 1 Whether the loans constituted illegal moneylending under the Moneylenders Act 1951
  2. 2 Whether proof of a single loan at interest raises the presumption that the lender carries on the business of moneylending (s10OA) and whether that presumption was rebutted
  3. 3 Whether lender may charge default interest and the permissible measure of interest the court may award

Ratio Decidendi

The Court held Shim was not carrying on the business of moneylending on the evidence and had rebutted the statutory presumption under s10OA; the loans were therefore friendly and enforceable, but the mechanism used to take security (outright transfers and sale agreements held in escrow) defeated the Sabah Land Ordinance and Contracts Act and were void; accordingly the transfers are set aside and the borrowers must repay the acknowledged loan sums, default interest at 1.5% p.m. is struck down and the court awarded interest at 5% p.a. from 17.3.2023 to date of realisation; counterclaims for injurious falsehood and abuse of process failed.

Court Disposition

Appeal allowed in part; High Court orders otherwise affirmed where consistent with this decision

Orders

  • Judgment entered against Dayang Masturah bt Sahari for RM1,230,000.00 with interest at 5% per annum from 17.3.2023 to date of realisation
  • Judgment entered against Mohd Harun Indra Bin Pg Elias for RM1,152,240.00 with interest at 5% per annum from 17.3.2023 to date of realisation