1. ) TIONG WANG HOCK 2. ) SYLVESTER SAN MUN KIN v 1. ) SIN KIM KUAN 2. ) LOO WOOI KEONG 3. ) OOI HOOI ENG 4. ) LAU YIEN TOH 5. ) TEOH ENG WAH 6. ) LIEW SI MOY 7. ) CHA KOK SOON 8. ) LEE HSIN KEAT 9. ) CHAI VUI FOO 10. ) LIM CHUNG PHIN 11. ) AMY LOI RONG RONG 12. ) OOI AH ENG 13. ) LEONG SHUI MEI 14. ) KHAW CHENG HOE 15. ) SIN KAH MENG 16. ) TAN CHAI TONG 17. ) OOI TOOI SEH 18. ) TAN KEIT LEE 19. ) GAN YU CHAI 20. ) MVK DATA PROCESSING SDN BHD

Case Significance

A RM4.4 million restitution claim in unjust enrichment defeated by the illegality and clean-hands defences and the absence of benefit, with restitution denied and costs against the plaintiffs.

This High Court decision concerns a large restitution claim in which two plaintiffs sought to recover sums totalling RM4,406,568.00 that they had paid or transferred to a group of defendants and into bank accounts held by them. The claim was framed in unjust enrichment and failure of consideration, and was supported by alternative allegations of dishonest assistance, knowing receipt and constructive trust, with a plea that the recipients held the monies on trust for the plaintiffs.

The defence raised a cluster of issues that ultimately proved decisive. Central among them was illegality: the defendants contended that the underlying transactions were tainted by unlicensed moneylending contrary to the Moneylenders Act 1951, engaging the principles ex turpi causa non oritur actio and in pari delicto and the public-policy bar on relief to a party who does not come with clean hands. Whether the payments were investments or disguised loans went to the heart of that question. The case also raised the standard of proof for fraud under sections 101 and 103 of the Evidence Act 1950, the locus standi of an undischarged bankrupt to sue without the sanction of the Director General of Insolvency, the effect of freezing orders over bank accounts under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001, and whether recipients who merely held or controlled third-party accounts, without deriving any benefit, could be said to have been enriched at all.

The Court dismissed the first plaintiff's claim against the defendants and struck out the second plaintiff's claim, denying restitution and ordering the plaintiffs to pay costs — RM20,000 by the first plaintiff and RM2,000 by the second plaintiff to each of the participating defendants. The judgment illustrates how the clean-hands doctrine and the illegality defence can defeat a restitutionary claim, and how the absence of benefit negates unjust enrichment.