LING SIEW LIAN v CHIN CHI MING

Case Significance

Instructive on the shifting evidential burden in a friendly-loan claim once receipt of the money is admitted, and on the adverse inference under section 114(g) of the Evidence Act 1950 from a failure to call a material witness.

This High Court decision at Johor Bahru is an appeal from a Magistrate's Court that had allowed a claim for the repayment of a friendly loan. The respondent had claimed against the appellant for a friendly loan advanced through two separate transfers, and the Magistrate, after a full trial, allowed the claim for the total sum with interest at 5% per annum. The appellant appealed against the entirety of that decision. The court, per Dr Noradura binti Hamzah JC, dismissed the appeal and affirmed the Magistrate's judgment. On the burden of proof, it applied the principle that where a defendant admits receipt of the money the evidential burden shifts to the defendant to establish that it was not a friendly loan, having regard to sections 101 and 102 of the Evidence Act 1950 and the authority of Tan Aik Teck. The appellant's version, that the money received was to repay a loan the respondent owed to a money-lender, was unsupported by documentary evidence and was in truth hearsay, and the contemporaneous documents contradicted that narrative. The court also drew significance from the failure to call a material witness, holding that an adverse inference under section 114(g) of the Evidence Act 1950 could be drawn from that omission. It agreed with the Magistrate that the respondent was not required to prove that the money had been used for the appellant's personal purposes only, and that both transfers were established as a friendly loan on the evidence, the second sum being explained by the evidence relating to a company in which the respondent's spouse was a director. Finding no misdirection in the Magistrate's factual findings that would justify appellate interference, the court dismissed the appeal with costs of RM5,000. The judgment is instructive on the shifting evidential burden in a friendly-loan claim once receipt is admitted, and on the adverse inference from failing to call a material witness.