LUA THIANG POH v 1. ) KABIR SINGH A/L JAGIR SINGH 2. ) JASMINDER KAUR A/P JASBIR SINGH 3. ) MANJEET SINGH A/L DARSHAN SINGH 4. ) KAWALJEET KAUR A/P DARSHAN SINGH 5. ) YOKIN RESOURCES SDN. BHD.

wa-22ncc-283-06-2022 High Court (Mahkamah Tinggi) 20 April 2025 • WA-22NCC-283-06/2022 • 41 min read

10 cases cited (0 SG, 10 foreign)

Catchwords

MONEYLENDING LAW: Unlicensed moneylending – Promissory notes alleged to be investment agreements – Whether transactions constituted genuine investment arrangements or disguised moneylending transactions – Whether presumption under section 10OA of Moneylenders Act 1951 successfully rebutted – Whether promissory notes void and unenforceable under section 15 of Moneylenders Act 1951 – Whether court should look beyond labels to examine substance of transaction CONTRACT LAW: Validity of promissory notes – Consideration – Whether valid consideration existed when funds paid to company while individual defendants signed as makers – Whether consideration must move to promisors – Whether corporate personality of company distinct from directors and shareholders for purposes of consideration STAMP ACT 1949: Stamping requirements – Whether promissory notes duly stamped when physical stamps affixed after execution – Whether promissory notes can be stamped after execution – Whether stamps must bear proper endorsement by Inland Revenue Board – Whether unstamped or insufficiently stamped instruments admissible in evidence EVIDENCE: Adverse inference – Whether adverse inference should be drawn under section 114(g) of Evidence Act 1950 for failure of defendant to testify – Whether medical certificate providing legitimate reason for non-attendance – Whether testimony would materially alter case outcome BREACH OF CONTRACT: Notice requirements – Whether failure to provide requisite written notice before enforcement rendered action premature – Whether defendant's prior breach entitled plaintiff to treat himself as discharged from notice obligations

Practice Areas

Contract Evidence Moneylending Revenue Law

Judges (1)

Atan Mustaffa Yussof Ahmad Delivered

Counsel (4)

Choo Dee Wei Firm Mann & Associates Firm Pramjit Kaur Counsel Defendant See Tian Xin Counsel Plaintiff

Parties (6)

YOKIN RESOURCES Sdn Bhd Defendant Jasminder Kaur a/p Jasbir Singh Defendant Kabir Singh a/l Jagir Singh Defendant Kawaljeet Kaur a/p Darshan Singh Defendant Lua Thiang Poh Plaintiff Manjeet Singh a/l Darshan Singh Defendant

Case Significance

Holds that Promissory Notes framed as investment agreements were in substance unlicensed moneylending: void for want of consideration to the makers, unenforceable under sections 10OA and 15 of the Moneylenders Act 1951, and inadmissible for late stamping under the Stamp Act 1949.

This High Court (Kuala Lumpur, Commercial Division) decision determines a claim to enforce Promissory Notes said by the plaintiff to represent legitimate investment agreements, against defences that they were disguised unlicensed moneylending. The plaintiff claimed RM2,300,000 as principal allegedly invested, together with RM2,784,000 as the alleged return on investment, under several Promissory Notes. The defendants asserted that the Promissory Notes constituted illegal moneylending transactions, void and unenforceable under the Moneylenders Act 1951 (MLA 1951).

Having considered the evidence, submissions and applicable principles, the court found in favour of the defendants. Its conclusions, drawn together in the order, were as follows. First, the Promissory Notes were not duly stamped as required by the Stamp Act 1949, being physically stamped after execution without proper endorsement by the Inland Revenue Board, rendering them inadmissible in evidence and unenforceable. Second, the Promissory Notes were void for lack of consideration, since there was no consideration moving to the makers of the notes, the funds having been paid to a company while the individual defendants signed as makers, and consideration must move to the promisors. Third, the transaction between the parties was in substance a loan arrangement rather than an investment.

Fourth, the plaintiff had failed to rebut the presumption under section 10OA of the Moneylenders Act 1951 that he was carrying on the business of moneylending, so that the loan agreement was void and unenforceable under section 15 of that Act. Fifth, even had the Promissory Notes otherwise been valid and enforceable, the plaintiff had not complied with the requisite notice requirement, rendering the enforcement act premature. The court also declined to draw an adverse inference under section 114(g) of the Evidence Act 1950 against a defendant who did not testify, accepting a medical reason for non-attendance and holding that the testimony would not have materially altered the outcome. The judgment is a thorough application of the moneylending, stamping and consideration principles to instruments dressed up as investment agreements.

What did the plaintiff claim and the defendants say?

The plaintiff claimed RM2,300,000 principal plus RM2,784,000 return under Promissory Notes said to be investment agreements; the defendants said the notes were disguised unlicensed moneylending, void under the Moneylenders Act 1951.

Why did the plaintiff fail?

The notes were void for lack of consideration to the makers, the transaction was a loan not an investment, the plaintiff did not rebut the section 10OA presumption of moneylending (void under section 15 MLA 1951), the notes were inadmissible for late stamping, and the notice requirement was unmet.