Million Cash Mortgage Sdn Bhd v Kiung Ngo Ing & Anor

Appellant(s): Million Cash Mortgage Sdn. Bhd.

Respondent(s):

• Kiung Ngo Ing (F)
• Ling Kuok Leh

• YA Datuk Wong Kian Kheong
• YA Dato' Dr Alwi Bin Abdul Wahab
• YA Datin Paduka Evrol Mariette Peters

• A licensed moneylender granted several loans to three sets of borrowers, secured in two cases by charges over land under the Sarawak Land Code, but in each case failed to deliver duly stamped moneylending agreements to the borrowers before disbursing the loans, breaching s 16(1) of the Moneylenders Act 1951 (MA).
• The moneylender filed three separate originating summonses seeking return of the outstanding principal sums, discharge of the charged properties upon repayment, post-judgment interest, and costs.
• The High Court dismissed all three claims, holding it was bound by Court of Appeal authority to refuse restitution where s 16(1) MA had been breached; the three appeals were heard together as they raised common questions of law.

• Whether breach of s 16(1) MA renders a moneylending agreement void (as opposed to merely unenforceable), and whether the moneylender may nonetheless recover the outstanding principal under s 66 of the Contracts Act 1950 or the equitable doctrine of unjust enrichment recognised in Dream Property Sdn Bhd v Atlas Housing Sdn Bhd.
• If restitution is available, whether the moneylender remains obliged to discharge the registered charges over the security properties upon repayment.
• Whether the moneylender is entitled to post-judgment interest under O 42 r 12 of the Rules of Court 2012 and to costs of the proceedings despite the statutory unenforceability of the underlying agreements.

• The Court held that s 16(1) MA, unlike s 17A(3) MA, only renders a non-compliant moneylending agreement unenforceable (not void), so s 66 of the Contracts Act (which applies only to void agreements) could not assist the moneylender, but the separate equitable doctrine of unjust enrichment as recognised in Dream Property could independently found a restitutionary claim for the outstanding principal sums, since the four Dream Property conditions were satisfied and the breaches were merely technical with no exploitation of the borrowers.
• The Court distinguished and declined to follow Mahmood bin Ooyub, Teja Singh, Shanmuganathan and Powernet Industries as they concerned unlicensed lending or did not consider Dream Property, and instead followed the recent Court of Appeal decision in Golden Wheel Credit Sdn Bhd v Dato' Siah Teong Din allowing restitution despite MA non-compliance.
• All three appeals were allowed, the High Court's decisions were set aside, and orders were made for the borrowers to repay the outstanding principal sums with 5% pa interest from the date of the Court's oral decision, for the moneylender to discharge the relevant charges upon repayment, and for costs of RM20,000 in each appeal to be paid by the respective borrowers.