DALAM MAHKAMAH TINGGI DI KUALA LUMPUR

(BAHAGIAN DAGANG)
GUAMAN SIVIL NO. D6-22-1163-2008
ANTARA
ZALWADI FARMS (M) SDN BHD
(dahulunya dikenali sebagai Innovasi Permai Sdn Bhd)
(No. Syarikat: 709759-K)

PLAINTIF

DAN
1.

PRUDENT GATEWAY SDN BHD

(No. Syarikat: 441427-V)

2.

ALI BIN ARIFIN

(No. K/P: 530815-02-5283)

3.

HARUN BIN HASHIM MOHD

(No. K/P: 490723-10-5223)

DEFENDAN
-DEFENDAN

WRITTEN SUBMISSION OF THE DEFENDANTS IN OPPOSSING THE

PLAINTIFFS SUMMONS IN CHAMBERS FOR SUMMARY JUDGMENT
May it pleases Your Honour,
We append below the Defendants written submission in opposing the Plaintiffs
application for summary judgments against the Defendants.
PRELIMINARIES IN BRIEF
1.

The Plaintiffs claim is premised on the following:-

2.1

that the 1st Defendant and the Plaintiff had entered into a 3 rd Party
Secutiry agreement, whereby the Plaintiff would provide the 1 st
Defendant with facilities or funds up tp RM 2,000,000-00 as
security. The

2nd

and

3rd Defendant had

guaranteed

the

performance of the 1st Defendant under the said 3 rd Party Security

Agreement (the Agreements);
2.2

pursuant to the agreement, the Plaintiff alleged it had provided a

sum of RM1,393,000-00, deposited in a fixed deposit account at
Malayan Banking Berhad (MBB) allegedly as security to enable
the 1st Defendant to obtain a bank guarantee. The Plaintiffs fixed
deposit account with MBB is no. 214011011471 exhibited as
seperti ZF-2 in the Afidavit Sokongan Plaintif. The said fixed

deposit was in the Plaintiffs name.;

2.3

Plaintiff alleges that MBB informed the 1 st Defendant that there was
a call on the bank guarantee which MBB had to meet and in turn
MBB had debited the Plaintiffs fixed deposit. In support of this. The
Plaintiff relied on MBBs letter dated 26.3.2007 in exhibit ZF-4 in
the Afidavit Sokongan Plaintif dated 26.5.2009;

2.4

According to the Plaintiff as a result of the above it has suffered a

loss of RM 1,393,000-00;; and

2.5

The Plaintiff claims from the Defendants the following;

a.

The deposit paid

b.

Interest on the deposit at 8% interest

- RM 1,393,000-00;

On the balance from 27.3.2007 to

c.

26.02.2008

-RM

111,440-00;

Adminstrative fees

-RM

139,300-00

DEFENCE AND TRIABLE ISSUE

A) THE 3RD PARTY SECURITY AGREEMENT VIOLATES THE
( MONEYLENDERS ACT 1951) ( THE ACT ).

1.1

According to section 3 of the Act stipulates that :-

[ moneylender means any person who lends a sum of

money to a borrower in consideration of a larger sum
being repaid to him]
[moneylending agreement means an agreement made
in writing between a moneylender and a borrower for the
repayment, in lumpsum or instalments, of money
borrowed by the borrower from the moneylender;]

[interest does not include any sum lawfully charged in

accordance with this Act by a moneylender for or on
account of stamp duties, fees payable by law and legal
costs but, save as aforesaid, includes any amount by
whatsoever name called in excess of the principal paid or
payable to a moneylender in consideration of or
otherwise in respect of a loan.]
(Please refer to the Defendants Bundle of Authorities
page 1-2)

1.2

Section 15 of the Act stipulates that:-

No moneylending agreements in respect of moneylent

after the coming into force of this Act by an unlicensed
moneylender shall be enforceable
1.3

The Defendant seek leave to refer

kepada Afidavit Balasan

Defendan- Defendan which they averred that:a. The 1st Defendant through the 2nd and 3rd Defendan met with
officials of the Plaintiff for a loan of RM1,393,000-00;
b. The loan was requested because the 1 st Defedant were required
to procure a performance bond for onr of the 1 st Defendants
project. And the Bank required a deposit fund in the form of a
fixed deposit;
c. The Plaintiff agreed to provide the funds;
d. As consideration the 1st Defendant were required to pay an
interest of 10% of the loan provided by the Plaintiff;
e. The 1st Defendant was also required to pay a further 8% per
annum on monthly rests on the principal sum if there was default
by the 1st Deefndant.
f. Finally it was proposed that the 2 nd and 3rd Defendant be made
to gurantee the loan;
g. The 2nd and 3rd Defendant had no alternative but to agree to the
proposal of Plaintiff as the situation was pressing and a written
agreement in the form of exhibit ZF-1 was prepared by the
Plaintiffs solicitors to be executed by all parties;

h. The Defendants were not legally represented at the time of the

preparation of the agreements and they were aware the terms
and conditions in totalilty ;
i. Despite the execution of the Agreements the Plaintiff did not
actually transfer money to the Plaintiff but oponned a fixed
deposit account with MBB in its own name.

2.

The Defendants humbly submits that the above transactions, despite the
sanitary nomenclature used in the Agreements to mask the actual intent,
are moneylending transactions that violate the Act and therefore
unenforeable. The Defendants submits that:2.1

The financial facility provided by the Plaintiff ought to be held as a

moneylending transaction under the Act;

2.2

Plaintiff charges what is term an administrative fee in an amount

representing 10% of the total security made available and the 1 st
Defendant are required to pay such sum;

2.3

On top of that the 1st Defendant is required to pay interest at 8% at

any outstanding sum on a monthly rest;

2.4

The above clearly indicates that the 1 st Defendant is required

to pay a sum larger than that was supposed to have been
made available by the Plaintiff.

2.5

The Planitff had failed to show what type of administrative skill it

took in managing a fund that was deposited in an interest bearing
fixed deposit and in its own name.

2.6

Neither did the Plaintff show in its Afidavit Sokongan Plaintiff or the
Afidavit Sokongan Kedua Plaintf what administrative costs have it
incurred in aminstrating the said fixed deposit in MBB.

2.7

The irresistible conclusion would be that these pseudo

administrative fees and agreed liquidated damages are nothing
more than interests charged on a loan to be masked by less
disapprobative names.

2.8

The provisions of the Act currently in force no longer allow an

exception whereby a one-off unlicensed moneylending transaction
can be enforced if the Plaintiff can show they are not in the
business of moneylending.

2.9

The Act in its current position prohibits any unlicenced money

lending transaction by any person save and except if the person
had obtain an exemption from the Minister for local government
which in our case is found wanting from the Plaintffs supporting
affidavits.

3.

The Defendants invite the Court to refer to Seascope Sdn Bhd v Syed
Izhar Syed Syed Salleh [2005] 8 CLJ 624, a case decided prior to the
cuurent Act whereby the High Court refused to lend a hand in enforcing a
sham call option share transaction against the defendant because it was
an unlicensed moneylending transaction in contravention of the old act.

4.

Given the Act currently in force, the Defendants humbly submits that the
fact that the Plaintiff is not ordinarily engaged in a moneylending business
is immaterial. The Plaintff was and is by virtue of the Act defined as a
unlicensed moneylender for having given out a loan to the Defendant for a
larger sum to be repaid.

5.

Thus by virtue of section 15 of the Act the Agreements are unenforceable.

B)

THE PLAINTIFF FAILED TO PROVE OR PROVIDE EVIDENCE THAT IT

HAS SUFFERED LOSS OR DAMAGES.

1.

The Plaintiff has failed to show in the Afidavit Sokongan Pertama Plaintif
dated 26.5.2009 and the Afidavit Sokongan Kedua Plaintf 2.92009 by way
of documentary evidence how did the Plaintiff lost RM 1,393,000-00 as a
result of MBBs action other than bare averments in the supporting
affidavits.

2.

Exhibit ZF-4 of the Afidavit Sokongan Pertama Plaintif, a letter from

MBB addressed to the 1st Defendant only mentioned that MBB would debit
RM1,392,891.00 from the 1st Defendants into

the 1st Defedant for

payment. MBB would also uplift a fixed deposit for settlement but the MBB
made no mention which fixed deposit was uplifted.

3.

The Plaintff did not show any notices from MBB (if there any) to the
Plaintiff that MBB would uplift the Plaintiffs account no.

no.

21401101147 exhibited in ZF-2 of the Afidavit Sokongan

Pertama Plaintff with

regard to the 1st Defendant. There

is no nexus shown between the

letter in exhibit ZF-4

with the Plaintffs deposit exhibited in ZF-2.

The

Plaintiff also has failed to explain this discrepancy in

its reply in

Afidavit

Sokongan

Kedua

Plaintiff

or

provide evidence of its alleged loss.

4.

The iresitable conclusion is that the Plaintiff could not

prove ithe loss

of the deposit. Given the paucity of

the Plaintiffs documentary

evidence,

summary

judgment ought not be given.

No proof of damages to claim for agreed liquidated damages.
5.

The Plaintff also claims for agreed liquidated damages at 8% per annum
on monthly rest of the outstanding balance totalled RM 111,440-00.

6.

The plaintf has failed to show proof or evidence of how it has suffered
damages. The provisions of section 75 of the Contracts Act cannot be
contracted out.

7.

According to Johor Coastal Development Sdn Bhd v Constrajaya Sdn

Bhd [2009] 4 CLJ 569, the Federal Court affirms the principle in Selva
Kumar Murugaiah v Thiarajah Retnasamy [1995] 2 CLJ 374 that the
Plaintiff must prove actual damage or reasonable compensation in
accordance with the principles set out in Hadley and Baxendale.

8.

Therefore the Plaintiff failed to provide evidence of damages suffered and

the claim for RM 111,440-00 ought not to be allowed..

CONCLUSION
The Agreements are just a cloak to mask an unlicensed moneylending
transactions to give the same a venner of legaility.
Given the foregoing, it is hmbly submitted that the defendants have successfully
raise tirable issues against the Plaintiffs claim .
The Defendants humbly pray that the Plaintiff application under order 14 fpr
summary judgment be dismissed with costs and the defendants be allowed leve
to defend the claim.
Dated this day

,2009

__________________________
MAK JUN YEEN
Peguam Defendan Kedua

ini difailkan oleh Tetuan Tetuan J Y Mak & Co, Peguambela dan Peguamcara bagi
Defendan Kedua yang beralamat di No.63-2B, Jalan Mega Mendung, Batu5, Off Jalan
Kelang Lama, 58200 Kuala Lumpur
[ Tel & Fax : 03-7982 8096 / 019 318 0715]
(Ruj :

MJY.CASB.L-006.2005)