1. ) Lee Suit Yin v Hong Leong Bank Berhad (BA-22NCvC-485-11/2024)

LEE SUIT YIN [I/C NO.: 750305-14-5562]

SRITHARAN NAIDU [I/C NO.: 731202-01-6019] … PLAINTIFFS AND HONG LEONG BANK BERHAD [COMPANY NO.: 193401000023 (97141-X) … DEFENDANT

The Defendant filed two applications via Enclosure 24, for summary judgment of the counterclaim to be recorded pursuant to O14 Rule 5 of the Rules of Court 2012 (ROC) and Enclosure 26, to strike out the Plaintiffs’ claim in accordance with Order 18 Rule 19 of the ROC. 19/11/2025 12:07:42

Both applications were heard together. After hearing both parties and reviewing the submissions filed, I allowed the applications. As a result, summary judgment was entered against the Plaintiffs on the Defendants’ counterclaim, and their action against the Defendant was struck out under Order 18 Rule 19 of the ROC.

Plaintiffs now appeal to the Court of Appeal, and below are my reasons.

The 1st Plaintiff (P1) bought a three storey terrace house held under Geran 313568, Lot No 103982, Mukim Dengkil, District of Sepang, State of Selangor with a postal address known as No 2, Villa Citrine, Jalan CSR 4, Cristal Serin Residence Off Jalan Fauna 1, Cyber 9, 63000 Cyberjaya, Selangor (the property) from the Developer, Trientel Land Sdn Bhd (the Developer) for a purchase price of RM2,171,600.00.

P1 booked the property from the Developer and later approached the Defendant, a financial institution, for a loan to part-finance the property. She applied, and upon verification of P1’s eligibility, the loan application was approved.

A Sale and Purchase Agreement (SPA) was executed between P1 and the Defendant on 17.8.2015.

The Letter of Offer, Facilities Agreement, Deed of Assignment and Power of Attorney were duly executed by P1. Defendant released the loan in accordance with the payment schedule for the purchase price stipulated in the SPA. It was an undisputed fact that P1 did not contest the Defendant’s release of the loan to the Developer.

Upon the Developer’s completion of the property, P1 took vacant possession.

However, it was alleged that P1 has been living in the property without paying the monthly instalments to the Defendant.

Despite repeated demands, P1 failed and/or refused to pay the monthly instalments under the facilities agreement. As of 9.10.2024, P1 had only paid RM250,194.25 to the Defendant. The amount owing is RM2,344,557.41, with interest at 4.49% per annum, calculated daily, from 10.10.2024.

Accordingly, empowered under the loan instruments, the Defendant decided to sell the property by way of public auction to recover its losses.

The Plaintiffs then filed this Writ and Statement of Claim against the Defendant, seeking, inter alia, an injunction to stop the Defendant from selling the property, and alleging fraudulent inducement, misrepresentation, negligent misstatement, breach of fiduciary duties, and forgery that vitiates the validity of the loan agreement.

The 2nd Plaintiff (P2) is the husband of P1. P2 was never a party to any of the contractual documents executed by P1 and the Defendant.

The Defendant applied to strike out the Plaintiffs’ claim on the following grounds:

P2 has no reasonable cause of action and no locus standi to commence this suit with P1 against the Defendant.

The relationship between P1 and the Defendant is purely contractual, as lender and borrower, and no contract exists for advisory services regarding the viability of purchasing the property in Cyberjaya or its locality.

P1 had booked the property with the Developer before applying for the loan from the Defendant; therefore, there is no connection between P1’s decision to purchase the property and the Defendant’s approval of the loan to part-finance the purchase.

The Defendant is not a party to the SPA, as it was between P1 and the Developer.

The Defendant cannot be held liable for P1’s misjudgment in pursuing the property in the event the development in that locality had not appreciated.

The Defendant, as a financial institution, should not be held accountable for any depreciation in the property’s market value.

Plaintiffs objected to this application and state as follows:

This application is premature and misconceived, as it involves complex issues involving serious allegations of fraud, misrepresentation, and breaches of fiduciary duties, which necessitate a full trial.

P2 has been involved in the loan transaction, as he made the payment, and the Defendant did not object to receiving funds from P2.

Valuation was not conducted before approving the loan, which constitutes a breach of banking standards.

The loan application was a fraud.

The Defendant filed a counterclaim for the outstanding amount of RM2,344,557.41 as at 9.10.2024, together with the accruing interest.

The Defendant then filed an application for summary judgment on their counterclaim on the following grounds:

P1 has no defence and/or any defence on merits as the Facility Agreement, Deed of Assignment and Power of Attorney bind her.

P1 did not deny executing the agreements.

The Statement of Account issued by the Defendant is a final and conclusive proof of the debt.

The Plaintiffs objected to this application and submitted as follows:

Plaintiffs emphasise that the main issue was fraudulent inducement, misrepresentation, negligent misstatement, breach of fiduciary duty and forgery on the part of the Defendant, which then vitiates the validity of the agreement. Therefore, the entire transaction is rendered void.

Plaintiffs submitted that Defendant had failed to disclose the actual 2015 property valuation for the loan agreement, and that this non-disclosure of a material fact falsified the agreement.

The loan agreement was prepared without the knowledge or consent of the Plaintiffs and therefore constitutes a fraud.

Plaintiff did not authorise or sign the loan document.

Defendant misrepresented the purpose of the loan and failed to inform the Plaintiff of the legal implications and liability structure of the agreement.

Defendant owes a duty of care and a fiduciary responsibility for failing to conduct due diligence, falsifying documents, withholding critical information, failing to perform property valuation, and falsely charging the Plaintiff for an unconducted valuation.

Defendant had attempted a series of rushed auctions and significantly reduced the property reserve price from RM1.2 million to RM742,000.00.

The loan transaction was illegal. Analysis and Findings

Reviewing the Plaintiffs’ claim against the Defendant, it is clear that the Plaintiffs sought to avoid their liability and obligations under the facilities agreement. This is not a premature conclusion; rather, I must state that the Plaintiffs’ use of AI tools in their submission has confused my understanding of what they are presenting to this Court for consideration, especially after dealing with lists of cited cases submitted that were mostly inaccurate.

However, the tangled thread was finally untangled, and I am of the view that the disputed issues between the parties stemmed solely from the Plaintiffs’ attempt to hold on to the property to secure a better price rather than rely on the Defendant’s reserved price, which was relatively lower. Enclosure 26 (striking out application)

To appreciate the trivial dispute between the parties, it is not challenged that P1 entered into a sale and purchase agreement with the Developer on 17.8.2015 for the purchase of the property. P1 then applied for a loan facility with Defendant to partly finance the purchase of the property. The Defendant approved the loan, and after duly executing all relevant documents, the loan was released in accordance with the schedule.

The loan facilities were for RM1,737,280.00 with a monthly repayment sum of RM9,608.00 for a term of 300 months (25 years).

As security for the loan, by way of a Deed of Assignment, P1 had assigned the property, including all rights, title and interest under the SPA to the Defendant and by way of a Power of Attorney, P1 granted the Defendant the power to deal with the property in accordance with the terms and conditions.

P1 then took vacant possession of the property from the Developer upon completion.

P1 had not made any monthly repayments except for a sum of RM250,194.25 on 9.10.2024. A Notice of Eviction was issued and served on P1 on 29.10.2024 for them to quit and yield up the property within 7 days. Subsequently, P1 was notified on 4.12.2024 of the proclamation of sale, and the property was scheduled to be sold by way of public auction on 20.12.2024 at a reserve price of RM1,200,000.00; hence, this action was filed by the Plaintiffs on 9.12.2024.

The Plaintiffs acted on their own, causing the proceedings to be prolonged, as matters could not be simplified due to the Plaintiffs’ persistence in buying more time and attempting to secure a prospective buyer for a higher purchase price. Unfortunately, these efforts were in vain, as the alleged prospects aborted the transaction.

Before going further into the issues, P2’s position in this dispute seems inappropriate, as he was not a party to any of the loan agreements, and I am of the considered view that any claim/remedy he has against the Defendant is obviously unsustainable in law. Therefore, I find that P2 has no locus standi and the doctrine of privity of contract precludes P2 from maintaining this suit (see the case of Khor Chai Seang v Khor Teng Tong Holdings Sdn Bhd (2018) MLJU 483 and Tan Poh Yee v Tan Boon Thein (2017) 3 MLJ 244).

P1 consistently denied signing the loan agreement and contended that the Defendant misrepresented her into this contractual relationship. I find this assertion to be a bit absurd and unjustified, as P1 has not shown any evidence that the Defendant, a financial institution, could forge her signature for the purpose of obtaining a loan to purchase a property, which she has been residing in all the while.

Hence, I am not convinced that forgery is a valid cause of action for the Plaintiff, who alleges that she did not sign the loan agreement.

Consequently, I am of the opinion that upon any event of default by P1 (the borrower), the Defendants is entitled to exercise its rights under the Facilities Agreement, Deed of assignment and the Power of Attorney inter alia, to terminate and take possession of the said property and the right to sell and assign the property by way of public auction or private treaty in its absolute discretion (refer to section 9.01 of the Deed of Assignment and section 13.01 of the Facilities Agreement).

The Defendant’s above rights were endorsed in the Federal Court case of Damai Freight (M) Sdn Bhd v Affin Bank Bhd

4 CLJ 1, where it was held that: “[32]...in the absence of any statutory provisions or any express bar in the assignment to that effect, the bank was entitled and could not be prohibited from exercising its power and rights as stipulated under the LACA.”

I agree with the Defendant that since the relationship between P1 and the Defendant is purely contractual in nature, the Defendant does not owe a fiduciary duty or duty of care towards the Plaintiffs. P1 had never objected to or contested the release of the loan and had even benefited from living at the premises/property, as vacant possession was given by the Developer.

As a financial institution, Defendant would not have control over the property’s current value or be responsible for any depreciation in its market value. To blame the bank for P1’s decision to purchase a property would amount to imposing an unnecessary burden on the bank to investigate or enquire into the sale and purchase agreement, which it is not even a party to. It would be too onerous to do so (see the decision of the Federal Court in Chang Yun Tai v HSBC Bank (M) Bhd (2011) 7 CLJ 909). I refer to the judgment in Chang Yun Tai at paragraphs 14-15: “[14] It is also our considered view that the respondent has no duty to advise the appellants as borrowers in the present case because it is merely a financing bank and not an advisory bank. Generally speaking, in a commercial loan a lender is entitled to seek and obtain the best terms it can. It may have regard solely to its own commercial interest. It is not the lender’s obligation to ensure that the borrower has made a correct or wise commercial decision based upon a full understanding of all risks unless the borrower has specifically sought the lender’s advice. (See the case of Redmand v. Allied Irish Bank Plc [1987] FLR 307). [15] It is to be noted the SPA has already been executed before the end financing facilities were granted. Therefore the respondent can presume that the SPA which the appellants had entered into has been ascertained by the appellants to be valid. It would be too onerous to require the respondent to investigate or enquire into a transaction or contract to which they are not a party. Banking business will be rendered impracticable and burdensome if this was so. In this regard the courts should not impose such a requirement that may impede the flow of commerce..” -emphasis added

For that reason, it was clear that P1’s relationship with the Defendant was merely one of a debtor and a creditor; therefore, if it was a misjudgment of P1 to buy the property at such a locality, and now the market value/price is not as high as expected, it would not be of the Defendant’s concern as a financier.

Upon careful reading of both submissions, I find that based on the contractual document executed by P1 and the Defendant, I am of the view that the terms of the credit facilities bind both parties, and I do not see any justification, factual or documented, for issues raised by Plaintiffs in the present case.

I reiterate, being a non-party to the agreement, I find that P2 does not have a reasonable cause of action to commence this suit with P1 jointly; therefore, there is a lack of locus standi.

From the narrative that was put forward and the documents referred to, I also find that the Defendant is entitled to exercise their rights under the Facility Agreement, the Deed of Assignment, and the Power of Attorney to sell the property to recover the outstanding sum.

Again, I agree with Defendant that the relationship between P1 and Defendant is purely contractual in nature; therefore, to plead forgery or breach of fiduciary duties is unfounded. Hence, the Plaintiff's claim is clearly frivolous and vexatious and fit to be struck out under Order 18. Enclosure 24 for summary judgment of the counterclaim

The outstanding balance was RM2,344,557.41 as at 9.10.2024 under the loan facilities granted by the Defendant to P1.

P1 had failed to pay the monthly instalments, and Defendant had demanded the sum owing. Pursuant to section 16.30 of the Facilities Agreement, P1 has agreed that a Statement of Account issued by the Defendant shall be final and conclusive proof of the indebtedness of P1. The facilities had now been recalled, and the Defendant had exercised its right.

In the case of Nor Azlina Abdul Aziz v Aminah Omar (1998) 2 CLJ 527, it was held that: “In my judgment the Defendant having signed the agreement must be bound by it. It was irrelevant and immaterial if the Defendant did not read the document in question. Even if the Defendant could not read the language in which the agreement was drafted, she was still bound by it contractually..”

I accepted the Defendant’s contention that the Statement of Account issued by the Defendant shall be final and conclusive proof of the indebtedness of P1, and as a consequence, there can be no dispute that the balance outstanding sum under the Facilities Agreement as at 9.10.2024 is RM2,344,557.41. Hence, P1 has no defence on the merits to the Defendant’s counterclaim (see the case of Bank Negara Malaysia v Mohd Ismail & Ors (1992) 1 MLJ 400).

Consequently, as there is a lack of triable issues established by Plaintiffs, the Defendant’s claim for summary judgment with regard to the counterclaim under Order 14 is allowed.

Both applications were allowed with a cost of RM5000 each to the Defendant, subject to the allocator.

Plaintiff’s claim is struck out, and the Defendant’s counterclaim is summarily recorded as prayed for. Dated this: 14th November 2025 ~signed~ (NOOR HAYATI BINTI HAJI MAT) JUDGE HIGH COURT OF MALAYA SHAH ALAM, SELANGOR For the Plaintiffs : Lee Suit Yin and Sritharan Naidu (Unrepresented) For the Defendant : Shamalah Selvarajah together with Thomas Ong Kian Sun, Vanusya