Unlicensed moneylender went to court to get back loan: it went as well as you expected 😂

Unlicensed moneylender went to court to get back loan: it went as well as you expected 😂

TheRedDotNews·2018-01-24 12:19

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What do you do when someone owes you money and refuses to pay? Sue the person?

This was exactly what an unlicensed moneylender did, when they could not get back the principal sum from a borrower. While a trading company by nature, the court has found that the money loaned were not an investment but rather, illegal loans.

Earlier last year, Ochroid Trading and its director Ole Prytz Rasmussen had sued Ms Chua Siok Lui and Mr Sim Eng Tong of VIE Import & Export for breach of contract.

Ochroid Trading had claimed that VIE Import & Export had owed them $8.9 million in principal sum, and a total of $10.25 million if alleged profits are calculated into the sum. The money was supposed to be "loans", to be repaid with interest at a later date.

However, the High Court had found that the primary aim of Ochroid Trading was not investment but rather lending money at high interest rates. It dismissed their claims.

Ochroid Trading had made an appeal to the Court of Appeal on the basis that the borrowers would benefit unfairly if they do not even pay back the principal sum.

The Judges of Appeal for the case had five judges - Chief Justice Sundaresh Menon as presiding judge and Andrew Phang, Judith Prakash, Tay Yong Kwang and Steven Chong. It was a rare sitting of five judges as compared to the usual three.

Ochroid Trading had been unable to prove to the Judges of Appeal that the transactions were not loans. Hence they were found to be unlicensed moneylenders under the Moneylenders Act.

The Judges of Appeal made clear that the Moneylenders Act does not just cover loansharks who prey on the vulnerable poor but also those who do not have a license to conduct moneylending as a business.

Ochroid Trading does not have the right to sue for restitutional recovery nor breach of contract if the contract in question is illegal and prohibited in the first place.

According to the Judges of Appeal, using its authority to allow such a company to recover the principal sum loaned to a borrower would be making a nonsense of the Moneylenders Act, as well as encouraging illegal moneylending.

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