1. ) East West College Sdn Bhd v Ambank (M) Berhad (WA-12ANCC-41-06/2023)

EAST WEST COLLEGE SDN BHD [No. Syarikat: 199901011455 (486355-P)]

EASTWEST EDU SDN BHD [No. Syarikat: 200701016918 (774927-M)]

NUR DIYANAH BINTI ABDUL MURAD (No. K/P: 880728-05-5070)

HABIBAH BINTI MOHD JONED (No. K/P: 630806-05-5550)

SHABISMI BINTI MOHD SHARIF … PERAYU - (No. K/P: 550404-05-5232) PERAYU DAN AMBANK (M) BERHAD (No. Syarikat: 8515-D) … RESPONDEN Page 2 of 14 (DALAM MAHKAMAH SESYEN DI KUALA LUMPUR DI DALAM WILAYAH PERSEKUTUAN, MALAYSIA GUAMAN SIVIL NO.: WA-B52NCC-765-10/2022 ANTARA AMBANK (M) BERHAD (No. Syarikat: 8515-D) … PLAINTIF

EAST WEST COLLEGE SDN BHD [No. Syarikat: 199901011455 (486355-P)]

EASTWEST EDU SDN BHD [No. Syarikat: 200701016918 (774927-M)]

NUR DIYANAH BINTI ABDUL MURAD (No. K/P: 880728-05-5070)

HABIBAH BINTI MOHD JONED (No. K/P: 630806-05-5550)

SHABISMI BINTI MOHD SHARIF … DEFENDAN - (No. K/P: 550404-05-5232) DEFENDAN Page 3 of 14 GROUNDS OF JUDGMENT (Enclosure 1: Appeal)

This was an appeal by the Appellants against the decision of the Sessions Court delivered on 26.5.2023, which allowed the Respondent’s application for Summary Judgment under Order 14 of the Rules of Court 2012.

By that decision, the learned Sessions Court Judge entered judgment for the Respondent, AmBank (M) Berhad, against the Appellants jointly and severally in the sum of RM384,530.98 together with interest and costs of RM3,000.

The Appellants have filed this appeal against the said Sessions Court decision (“this Appeal”). A]

On 16.3.2017 the 1st Appellant obtained from the Respondent a Term Loan Facility of RM347,000.00 for its business, subject to the terms in the Letter of Offer.

As security, the 2nd Appellant executed a Corporate Guarantee and the 3rd to 5th Appellants executed individual Guarantees and Indemnities on 9.5.2017.

At the 1st Appellant’s request, the facility was rescheduled by a Supplemental Letter of Offer dated 8.4.2020 and Page 4 of 14 subsequently restructured under the Letter of Restructuring dated 13.4.2021 into Account No. 88820006677413.

The Appellants defaulted in payment. A Certificate of Indebtedness dated 19.9.2022 certified the outstanding balance of RM384,530.98. A letter of demand dated 30.5.2022 was issued but went unanswered. The Respondent thereafter filed the summary judgment application. B]

Three principal issues arise in this appeal: i) Whether the Appellants had fully settled the loan by the letter dated 25.3.2021; ii) Whether the Certificate of Indebtedness constitutes conclusive proof of the debt; and iii) Whether the Respondent was required to first exhaust recovery under the Credit Guarantee Corporation (CGC) scheme before suing the Appellants. iv) Whether the Respondent had lawfully restructured and opened a new loan account and whether such restructuring was undertaken with the Appellants’ consent. Page 5 of 14 C]

The Appellants argued that the 1st Appellant had fully settled the loan on 25.3.2021 and produced a letter of that date purportedly confirming “full settlement”. They contended that the Respondent’s subsequent action amounted to unjust enrichment.

They further alleged that the Certificate of Indebtedness was inaccurate and not binding, citing Soon Peng Yam & Anor v. Bank of Tokyo-Mitsubishi (M) Bhd [2003] 2 MLRA 363 and Citibank Bhd v. Titik Juta Sdn Bhd [2008] 5 MLRH 774.

The Appellants also relied on Clause 11 of the 2017 Offer Letter, arguing that CGC had guaranteed 70% of the facility, and that the Respondent should have first claimed that portion from CGC before commencing proceedings.

The Appellants further submitted that the Respondent had acted unilaterally in closing the earlier account (No. 88820002902433) and opening a new account (No. 88820006677413) without their consent. They contended that the approval to close the old account implied that the facility had been fully settled, and that the creation of a new account amounted to a mala fide restructuring inconsistent with the Respondent’s earlier letter of 25.3.2021. Page 6 of 14 D]

The Respondent submitted that the 25.3.2021 letter was conditional and expressly stated that it would not apply if the cheque for settlement was returned by the bank. The cheques issued were undated and returned under letters dated 6.5.2022 and 20.5.2022; hence no full settlement occurred.

The Respondent contended that the old account was closed only because the balance was transferred to the new account after restructuring, and not because of settlement. The Appellants had in fact admitted the existence of the new account in their own affidavit.

On the Certificate of Indebtedness, the Respondent argued that the Appellants were bound by the “conclusive evidence” clause in the facility agreement and had not shown any manifest error (Bangkok Bank Ltd v. Cheng Lip Kwong [1990] 2 MLJ 6; Cempaka Finance Berhad v. Ho Lai Ying [2006] 3 CLJ 544).

Regarding CGC, the Respondent submitted that the guarantee was a separate arrangement between the Bank and CGC; the Appellants were not privy to it and the Bank was under no obligation to recover from CGC before suing (Malayan Banking Bhd v. Four Winds Maritime Sdn Bhd & Ors [2012] MLJU 1093; Mayban Finance Bhd v. Mohd Jafari Ariffin Page 7 of 14 [2003] 6 CLJ 262; Goh Wee Peng v. Standard Chartered Bank Malaysia Bhd [2017] MLJU 1396).

In any event, under the Credit Enhancer Scheme Guideline, the Bank may only claim from CGC after all legal actions against borrowers are exhausted and the guarantee does not extend to restructured loans. E] ISSUE 1: ALLEGED FULL SETTLEMENT BY LETTER

The Appellants relied heavily on the Respondent’s letter of 25.3.2021 which they say confirmed that the loan was fully settled. However, the same letter expressly states: “This letter shall not be applicable should your cheque for the settlement of the loan be returned by your banker for any reason.” (own emphasis added)

The undated cheques were subsequently returned by the Respondent under letters dated 6.5.2022 and 20.5.2022. The Appellants did not deny receipt of these letters nor produce any proof of actual payment.

The Restructuring Letter dated 13.4.2021 and the Statement of Account show that the old account (No. 88820002902433) was closed only because its balance was transferred to the Page 8 of 14 new account (No. 88820006677413) on 26.3.2021. Hence, the closure was administrative in nature and did not constitute payment in full.

On these facts, I find that the Appellants had not made full settlement and their reliance on the letter dated 25.3.2021 is misconceived. The Sessions Court was correct to so find. F] ISSUE 2: BINDING EFFECT OF THE CERTIFICATE OF

Clause 18 of the Letter of Offer provides that a statement by the Bank of any amount due shall, save for manifest error, be final and conclusive.

The Certificate of Indebtedness dated 19.9.2022 certifies the sum of RM384,530.98 as due under the new account. This sum corresponds with the amount claimed in the Statement of Claim. No manifest error was shown by the Appellants either in their affidavit or submissions.

In Bangkok Bank Ltd (supra) and Cempaka Finance (supra), it was held that such certificates are conclusive as to the amount due “for the time being” unless manifest error is proved. No such error was proved here.

Furthermore, the Appellants did not challenge the accuracy of the Certificate of Indebtedness or provide any details Page 9 of 14 regarding its alleged inaccuracies in their Defence or affidavit. In this regard, the Court of Appeal in Banking Bhd v. Boo Hock Soon @ Boo Choo Soon [2013] 2 MLJ 843, held as follows: “[35] Be that as it may, the defendant guarantor ought not to be allowed to challenge the correctness of the certificate of indebtedness because the defendant guarantor has not alluded to this in any of his affidavits in reply nor as there any averment that there were manifest errors in the said certificate. A submission from the bar on this very crucial issue will not be entertained by this court (Ng Hee Thoong & Anor v Public Bank Bhd [1995] 1 MLJ 281; [1995] 1 CLJ 609 (CA); and Abdul Razak Ahmad v Majlis Bandaraya Johor Bahru [1995] 2 MLJ 287; [1995] 2AMR 1174; [1995] 4 CLJ 339 (HC)).” (own emphasis added)

Accordingly, I find that the Certificate of Indebtedness is valid, binding and conclusive against the Appellants. G]

Clause 11 of the 2017 Offer Letter states that “subject to approval, CGC will guarantee up to RM242,900 (70%) of the facility limit under PGS.” This merely records that the facility was eligible for CGC support. It does not create a contractual obligation between the Bank and the borrowers for the Bank to claim from CGC first.

The authorities are clear that the CGC guarantee is an agreement between the Bank and CGC, not between the Bank and its borrowers. In Four Winds Maritime (supra); Mohd Jafari Ariffin (supra) and Goh Wee Peng (supra), the Courts held that the bank is at liberty to sue the borrower without first recovering from CGC.

The Court in Goh Wee Peng (supra) held as follows: “[66] Based on the reasons stated above the Judgment Creditor is not obliged to pursue against CGC before it institute action to recover monies from the Judgment Debtor under the Personal Guarantee and the Term Loan Facility. The Judgment Debtor has contractually agreed to be liable either alone or jointly for monies due and owing from the principal debtor to the Judgment Creditor. These terms are binding on the Judgment Debtor and the Judgment Creditor is at liberty to enforce it. As such the issue of miscarriage of justice does not arise.” (own emphasis added)

The Respondent also submitted, and I agree, that there is no clause in any of the facility or guarantee documents stipulating that the Credit Guarantee Corporation (“CGC”) would bear primary liability for the loan or indemnify the Respondent in place of the Appellants (see Mohd Jafari Ariffin (supra)). It would indeed be commercially illogical and inconsistent with the contractual structure to suggest that the Borrower and its Page 11 of 14 guarantors would be liable for only thirty per cent of the total sum while a third party, not privy to the contracts, would be responsible for the remaining seventy per cent. No such provision was ever included in the facility or security documents.

Further, the decided cases above demonstrate that even under the CGC scheme, the Bank’s right to recover from CGC arises only after it has exhausted all legal remedies against the borrower and guarantors. Nothing in the contractual documents or in law precludes the Respondent from proceeding directly against the Appellants for the full outstanding amount.

Accordingly, the argument that the Respondent was obliged to claim from CGC before suing the Appellants is without merit. The Sessions Court rightly found no triable issue on this point. H]

Under Order 14 Rule 2 of the Rules of Court 2012, once the plaintiff establishes a prima facie case, the burden shifts to the defendant to show why judgment should not be entered (National Company for Foreign Trade v. Kayu Raya Sdn Bhd [1984] 2 CLJ 220).

The Appellants have not raised any bona fide triable issue. The facts are clear and the defences advanced are unsupported by Page 12 of 14 evidence and contradicted by contemporaneous documents. As observed in Southern Finance Bhd (forerly known as United Merchant Finance Bhd) v. Sun City Development Sdn Bhd & Anor [2006] 6 MLJ 673, the Courts should not too readily find triable issues in banking cases where the borrower’s liability is plain and documentary.

I find no error of law or fact in the learned Sessions Court Judge’s decision.

For the reasons given, I dismissed this appeal with costs. Dated this 24th day of October, 2025 -SGD- (WAN MUHAMMAD AMIN BIN WAN YAHYA) JUDGE HIGH COURT OF MALAYA, (COMMERCIAL DIVISION (NCC 3)) HIGH COURT OF KUALA LUMPUR IN THE FEDERAL TERRITORY, MALAYSIA Page 13 of 14 COUNSEL FOR THE APPELLANTS/ DEFENDANTS : K Karthigesan A/L Shanmugam (Kanagavalli A/P Krishnamoorthy and Thamayanthy A/P A. Rajasekaran together him) Messrs Karthig Shan No. 265-1, Pusat Dagangan Sendayan 3/5, Pusat Dagangan Sendayan, 71590 Banda Sri Sendayan, Negeri Sembilan Tel: 06-6307441 Email: karthigshan@gmail.com COUNSEL FOR THE RESPONDENT/ PLAINTIFF : Robin Lim (Yuganiya Rajalingam together with him) Messrs Azhar & Wong 16-08, Level 16, Menara Centara, 360, Jalan Tuanku Abdul Rahman, 50100 Kuala Lumpur Tel: 03-26023898 Email: azharw@azharwong.com.my LEGISLATION / RULES CITED Rules of Court 2012 ▪ Order 14 Rule 2

Bangkok Bank Ltd v. Cheng Lip Kwong [1990] 2 MLJ 6

Banking Bhd v. Boo Hock Soon @ Boo Choo Soon [2013] 2 MLJ 843

Citibank Bhd v. Titik Juta Sdn Bhd [2008] 5 MLRH 774

Cempaka Finance Berhad v. Ho Lai Ying [2006] 3 CLJ 544

Goh Wee Peng v. Standard Chartered Bank Malaysia Bhd [2017]

Malayan Banking Bhd v. Four Winds Maritime Sdn Bhd & Ors [2012] MLJU 1093

Mayban Finance Bhd v. Mohd Jafari Ariffin [2003] 6 CLJ 262

National Company for Foreign Trade v. Kayu Raya Sdn Bhd [1984] 2 CLJ 220

Soon Peng Yam & Anor v. Bank of Tokyo-Mitsubishi (M) Bhd [2003] 2 MLRA 363

Southern Finance Bhd (forerly known as United Merchant Finance Bhd) v. Sun City Development Sdn Bhd & Anor [2006] 6