Tang Ser Chiew & Ors v Lee Mei Kim

Appellant(s):

• Tang Ser Chiew
• Lim Yar Ting

Respondent(s): Lee Mei Kim

• YA Datuk Ravinthran a/l Paramaguru
• YA Dato' Ahmad Kamal Bin Md. Shahid
• YA Datuk Azhahari Kamal bin Ramli

• The respondent provided funds to a company related to the first appellant to settle stamp duty for a land purchase, leading the parties to execute two Sale and Purchase Agreements (SPAs) for properties owned by the first and second appellants.
• The SPAs contained unusual terms, including a "buy-back" option, no requirement for deposit or earnest money, and a late payment interest rate of 5% per month (60% per annum) on all refundable monies.
• When the first and second appellants failed to transfer the properties or repay the funds, the respondent sought to enforce the SPAs and obtained an injunction to prevent the transfer of the properties to a subsequent purchaser, who is the third appellant.

• Whether the SPAs were genuine commercial transactions or sham agreements intended to camouflage unlicensed moneylending activities in contravention of the Moneylenders Act 1951.
• Whether the High Court erred by failing to address the pleaded defense of illegality and the statutory presumption under Section 10OA of the Moneylenders Act 1951.
• Whether the respondent, as an unlicensed lender, could enforce the agreements or maintain a claim against the subsequent purchaser of the properties.

• The Court allowed the appeals, holding that the SPAs were sham transactions designed to circumvent the Moneylenders Act 1951, as evidenced by the exorbitant interest rates and the absence of standard conveyancing terms like deposit payments.
• The Court found that the respondent failed to rebut the statutory presumption under Section 10OA of the Moneylenders Act 1951, which shifted the burden to her to prove she was not a moneylender once the defense was pleaded.
• Consequently, the agreements were declared unenforceable under Section 15 of the Moneylenders Act 1951, and the respondent was found to have no beneficial interest in the properties to justify an injunction against the third appellant.