MAK HON LEONG v 1. ) KIRKLEY TEH YEE BEN 2. ) WANG PHANG YEE

Case Significance

Illustrates the enforcement of a friendly loan by Order 14 summary judgment where the borrower admitted executing the loan agreement and acknowledging receipt, the court rejecting unparticularised and inconsistent defences of sham, undue influence and contravention of the Moneylenders Act 1951.

This High Court decision concerns an application for summary judgment under Order 14 of the Rules of Court 2012 to recover the outstanding balance of a friendly loan. The plaintiff had lent RM1.6 million, interest-free, to the two defendants — friends of his brother introduced to him as business entrepreneurs — to fund their company, providing the money by a series of cheques and cash, and the defendants had executed a loan agreement acknowledging receipt and undertaking to repay within fifteen months. After a part payment, the outstanding balance of RM1,467,116 remained unpaid, and the plaintiff sued; judgment in default of appearance was entered against the second defendant, and this application sought summary judgment against the first defendant. The first defendant admitted in his pleadings that he had executed the loan agreement, thereby acknowledging receipt of the full loan, and that he was a director of the company into which most of the money had been paid, but resisted summary judgment by contending that the loan agreement was a sham, that he had executed it under undue influence, and that it contravened the Moneylenders Act 1951. The court held that the defendant's admissions of execution and receipt were decisive, and that his defences did not raise any bona fide triable issue: they were unsupported and inconsistent with the contemporaneous documents, and the court noted the rule against alternative pleadings of fact, that a party may not assert two inconsistent versions of the facts where he knows one to be false. Concluding that the action was simply about the recovery of a loan the first defendant had signed for, with no meritorious defence or triable issue, the court entered summary judgment for RM1,467,116 with interest at 5% and costs of RM8,000. The judgment illustrates the enforcement of a friendly loan by summary judgment against unparticularised defences of sham and moneylending.