DATO' AHMAD AZRAF BIN AZMAN v 1. ) RIZMAN RUZAINI CREATIONS (M) SDN. BHD. 2. ) RIZMAN BIN NORDIN 3. ) WAN MOHD RUZAINI BIN WAN JAMIL
Catchwords
Court’s Assessment [21] A close study of the FLA and Letter of Guarantee was undertaken by this Court. Consideration was also made to the factual matrix and the conduct of parties including the payments made and when they were made by the 1st Defendant. [22] It is the finding of this Court that the payment of RM300,000.00, under Clause 6 of the FLA that the Defendants claimed made the whole FLA illegal and unenforceable, was not an “interest”. It was a consideration for the Plaintiff to extend the time to the 1st Defendant for its contractual obligation to repay the exact sum borrowed. [23] If the 1st Defendant had chosen to pay the borrowed sum by 12.4.2023, no further or additional figure on that exact sum borrowed would have been imposed. Thus, it cannot be said to be interest in that sense that the Defendants had submitted to be unlawful. [24] That payment of RM300,000.00 was only for when the 1st Defendant had opted for an enlargement of time for repayment. It is not interest and it was not meant to go towards the repayment for the said sum borrowed. These facts distinguished those in the Federal Court cases referred to by the Defendants. [25] In examining the pleadings, the payments and the sequences thereof are undisputed. A contention by the Defendants was that the sums paid which totalled to RM1,200,000.00 were for the repayments of the borrowed sum, and not that under Clause 6 of FLA for extension of time for repayment. However, the FLA is clear on this. Their agreement had stipulated the timeframe for repayment which was six months and that the friendly loan was to be repaid by 12.4.2023. This is clear as day. [26] Thus, this Court finds that those payments were for the consideration for the invocation of the cycles under Clause 6 of the FLA. The Defence filed in short, amounted to merely a denial. Enclosure 9 did not provide any triable issues nor any fact to render Clause 6 FLA as interest payment. [27] In the case of Triple Zest (supra), when the borrower failed to repay the amount borrowed, it was liable for that amount plus the “agreed profit” (the term used by the parties). The agreed profit was the same amount as that borrowed, thus the borrower was required to pay double the borrowed sum. The Federal Court determined this as an illegality by categorising the “agreed profit” as interest which would attract the requirement under section 5 of the Moneylenders Act 1951 of a license under the Act. There was no extension of time granted by the lendor for the payment of the agreed profit, the agreed profit was to be paid on top of the amount borrowed upon default. This court find the facts in the present case to be distinguished from Triple Zest (supra) as the payment of the RM 300,000 (which constituted approximately 23.08% of the borrowed sum) was consideration for the granting of the extension of time to repay the borrowed sum by six months. [28] The Defendants averred in Enclosure 9 that the 1st Defendant had not received RM1,300,000.00 from the Plaintiff but only RM982,486.00. Yet, none of the Defendants had raised this complaint to the Plaintiff at any time until after proceedings had been initiated by the Plaintiff to recover the borrowed sum. The parties are bound by the agreement (FLA) that they had consented to and executed (this agreement was duly stamped). The Defendant could not be allowed to veer and disclaim terms already agreed to. Moreover, this Court found that the Defendants were inconsistent and unreliable in their stance and position as they had adduced document where they stated the loan amount as being RM1,000,000.00 in their Affidavit-in-Reply (Enclosure 9). [29] It is paramount that parties are always bound by their pleadings. This fact was absent from the Defence. See Lee Ah Chor v Southern Bank Bhd [1990] 2 MLRA 6 and Itramas Technology Sdn Bhd v Maju Holdings Sdn Bhd & Ors [2021] MLRHU 559.
Practice Areas
Court’s Assessment 21 A close study of the FLA and Letter of Guarantee was undertaken by this Court. Consideration was also made to the factual matrix and the conduct of parties including the payments made and when they were made by the 1st Defendant. 22 It is the finding of this Court that the payment of RM300,000.00, under Clause 6 of the FLA that the Defendants claimed made the whole FLA illegal and unenforceable, was not an “interest”. It was a consideration for the Plaintiff to extend the time to the 1st Defendant for its contractual obligation to repay the exact sum borrowed. 23 If the 1st Defendant had chosen to pay the borrowed sum by 12.4.2023, no further or additional figure on that exact sum borrowed would have been imposed. Thus, it cannot be said to be interest in that sense that the Defendants had submitted to be unlawful. 24 That payment of RM300,000.00 was only for when the 1st Defendant had opted for an enlargement of time for repayment. It is not interest and it was not meant to go towards the repayment for the said sum borrowed. These facts distinguished those in the Federal Court cases referred to by the Defendants. 25 In examining the pleadings, the payments and the sequences thereof are undisputed. A contention by the Defendants was that the sums paid which totalled to RM1,200,000.00 were for the repayments of the borrowed sum, and not that under Clause 6 of FLA for extension of time for repayment. However, the FLA is clear on this. Their agreement had stipulated the timeframe for repayment which was six months and that the friendly loan was to be repaid by 12.4.2023. This is clear as day. 26 Thus, this Court finds that those payments were for the consideration for the invocation of the cycles under Clause 6 of the FLA. The Defence filed in short, amounted to merely a denial. Enclosure 9 did not provide any triable issues nor any fact to render Clause 6 FLA as interest payment. 27 In the case of Triple Zest (supra), when the borrower failed to repay the amount borrowed, it was liable for that amount plus the “agreed profit” (the term used by the parties). The agreed profit was the same amount as that borrowed, thus the borrower was required to pay double the borrowed sum. The Federal Court determined this as an illegality by categorising the “agreed profit” as interest which would attract the requirement under section 5 of the Moneylenders Act 1951 of a license under the Act. There was no extension of time granted by the lendor for the payment of the agreed profit, the agreed profit was to be paid on top of the amount borrowed upon default. This court find the facts in the present case to be distinguished from Triple Zest (supra) as the payment of the RM 300,000 (which constituted approximately 23.08% of the borrowed sum) was consideration for the granting of the extension of time to repay the borrowed sum by six months. 28 The Defendants averred in Enclosure 9 that the 1st Defendant had not received RM1,300,000.00 from the Plaintiff but only RM982,486.00. Yet, none of the Defendants had raised this complaint to the Plaintiff at any time until after proceedings had been initiated by the Plaintiff to recover the borrowed sum. The parties are bound by the agreement (FLA) that they had consented to and executed (this agreement was duly stamped). The Defendant could not be allowed to veer and disclaim terms already agreed to. Moreover, this Court found that the Defendants were inconsistent and unreliable in their stance and position as they had adduced document where they stated the loan amount as being RM1,000,000.00 in their Affidavit-in-Reply (Enclosure 9). 29 It is paramount that parties are always bound by their pleadings. This fact was absent from the Defence. See Lee Ah Chor v Southern Bank Bhd 1990 2 MLRA 6 and Itramas Technology Sdn Bhd v Maju Holdings Sdn Bhd & Ors 2021 MLRHU 559.
Judges (1)
Case Significance
DATO' AHMAD AZRAF BIN AZMAN v 1. ) RIZMAN RUZAINI CREATIONS (M) SDN. BHD. 2. ... is a High Court (Mahkamah Tinggi) decision dated December 15, 2025 (citation: wa-22ncvc-420-07-2025). The case was decided by Roz Mawar binti Rozain.
What was the outcome of DATO' AHMAD AZRAF BIN AZMAN v 1. ) RIZMAN RUZAINI CREATIONS (M) SDN. BHD. 2. ...?
DATO' AHMAD AZRAF BIN AZMAN v 1. ) RIZMAN RUZAINI CREATIONS (M) SDN. BHD. 2. ... is a High Court decision dated December 15, 2025. The case was heard by Roz Mawar binti Rozain. See the full judgment for details.