ZHONG E SDN BHD 1. ) FLOWCRETE MALAYSIA SDN BHD 2. ) THEN LIAT NYAP 3. ) NG LEONG MUNG 4. ) CHAW FONG TENG 5. ) HENG FOOK CHOON

ZHONG E SDN BHD 1. ) FLOWCRETE MALAYSIA SDN BHD 2. ) THEN LIAT NYAP 3. ) NG LEONG MUNG 4. ) CHAW FONG TENG 5. ) HENG FOOK CHOON

On the evidence the transactions were sham paper trades disguising loans: defence produced cogent money‑trail evidence, documentary anomalies and implausible commercial practices which plaintiff failed to rebut. The Plaintiff thereby acted as an unlicensed moneylender; under Moneylenders Act 1951 s15 and Contracts...

Source-derived case information.

Citation
BA-22NCvC-430-10/2019 (Mahkamah Tinggi)
Parties
Plaintiff: Zhong E Sdn Bhd; Defendant (1st): Flowcrete Malaysia Sdn Bhd; Defendant (2nd): Then Liat Nyap; Defendant (3rd): Ng Leong Mung; Defendant (4th): Chaw Fong Teng; Defendant (5th): Heng Fook Chan
Court
High Court
Jurisdiction
Malaysia
Judgment Date
21 March 2025
Case Number
BA-22NCvC-430-10/2019 (Mahkamah Tinggi)
Procedural Posture
Civil Commercial Claim for Debt/guarantee / Final Judgment at Trial
Outcome
Claim against 4th and 5th Defendants dismissed; Supplemental Guarantee held void and unenforceable
Legal Topics
Guarantee and Indemnity, Sham Transaction Doctrine, Unlicensed Moneylending, Enforceability of Agreements, Void Contracts, Evidence and Burden of Proof
Contract Law Moneylending Law Commercial Law Company/insolvency Law Guarantee and Indemnity Sham Transaction Doctrine Unlicensed Moneylending Enforceability of Agreements +2 more

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Parties

Zhong E Sdn Bhd

Plaintiff

Flowcrete Malaysia Sdn Bhd

Defendant (1st)

Then Liat Nyap

Defendant (2nd)

Ng Leong Mung

Defendant (3rd)

Chaw Fong Teng

Defendant (4th)

Heng Fook Chan

Defendant (5th)

Procedural Posture

Civil Commercial Claim for Debt/guarantee / Final Judgment at Trial

Legal Issues

  1. 1 Whether the transactions were genuine sales of goods or sham transactions disguising moneylending
  2. 2 Whether the Plaintiff was an unlicensed moneylender and thus the lending transactions void
  3. 3 Whether the Supplemental Guarantee and Indemnity executed by the 4th and 5th Defendants is enforceable

Ratio Decidendi

On the evidence the transactions were sham paper trades disguising loans: defence produced cogent money‑trail evidence, documentary anomalies and implausible commercial practices which plaintiff failed to rebut. The Plaintiff thereby acted as an unlicensed moneylender; under Moneylenders Act 1951 s15 and Contracts Act 1950 s24 the underlying lending transactions are void and any security or guarantee given to secure those illegal transactions (including the Supplemental Guarantee executed by the 4th and 5th Defendants) is void and unenforceable. The Plaintiff's claim against the 4th and 5th Defendants therefore fails.

Court Disposition

Claim against 4th and 5th Defendants dismissed; Supplemental Guarantee held void and unenforceable

Orders

  • Claim against 4th and 5th Defendants dismissed
  • Plaintiff to pay costs of RM 40,000.00 to the 4th and 5th Defendants