Ambank (M) Berhad v 1. Ahmad Tajuddin Shah Holdings Sdn Bhd 2. Ahmad Tajuddin Bin Shahabudin 3. Fauziah Bt Samion 4. Mohammad Tajul Azman Bin Ahmad Tajuddin (22NCC-169-05/2017)

MOHAMMAD TAJUL AZMAN BIN AHMAD TAJUDDIN DEFENDANTS JUDGMENT Introduction [1] The plaintiff applied to enter judgment summarily against the defendants pursuant to the provisions of O.14 Rules of Court 2012 (‘RC 2012’). There were only three affidavits filed, with two of them being the plaintiff’s. [2] I had after considering the issues and the submissions, allowed the plaintiff’s application. This judgment encapsulates the reasons for the decision. 2 The plaintiff’s case [3] The plaintiff’s claim is premised on the banking facilities granted to the first defendant, namely two mortgage loans. MBF Finance Berhad (‘MBF’) had initially granted these two facilities back in 1997 and 2000 respectively. MBF has since then been renamed as the plaintiff. [4]

The defendants have entered an appearance,

The statement of claim has been served on the defendants, 4

The plaintiff’s affidavit in support of its summary judgment application has complied with the requirements of O. 14 r. 2 RC 2012. As these requirements have been fulfilled, the burden now shifts on the defendants to convince this court, that judgment should not be granted to the plaintiff summarily; National Company For Foreign Trade v Kayu Raya Sdn Bhd [1984] 2 MLJ 300 (SC). [9] For the defendants to succeed, they must be able to demonstrate that there are arguable issues that could only be determined in a trial; Voo Min En v Leong Chung Fatt [1982] 2 MLJ 241 (FC). [10] For the court addressing a summary judgment application, the test is simply this: Would the court be able to decide on the issues raised by merely relying on the affidavits and the exhibits? If the issues put forward can only be satisfactorily or fairly decided at a full trial with the advantage of having witnesses testifying, then the application for summary judgment must be dismissed, and the suit set down for trial. The issues [11] That the first defendant had taken and utilised the two banking facilities was not disputed. It was also not disputed that the second, third and fourth defendants are guarantors to these facilities. 5 [12] In gist, the issues raised by the defendants are as follows:

That the first defendant had reneged on its promise to provide end-financing facilities to the first defendant, and that the first defendant had only agreed to take up the plaintiff’s offer for the banking facilities based on the plaintiff’s representation;

The plaintiff had failed to fully realise the securities held under the banking facilities before commencing this suit; and

The plaintiff had failed to particularise the amount claimed. I shall address each issue in turn. The end-financing [13] The first defendant contended that there were oral representations made by the plaintiff prior to them taking up the banking facilities. The first defendant claimed that the plaintiff had offered to finance its housing project in Langkawi in 1997, and gave the first defendant an assurance, that it will provide end-financing as a package. It was also claimed that the plaintiff would ensure that the redemption statements would be issued to the house buyers expeditiously. It was these representations that convinced the first defendant to take up the plaintiff’s offer for the banking facilities. 6 [14] The first defendant contended that the plaintiff had failed to provide the end-financing as promised, and that it faced difficulty to obtain any end-financing facilities for the potential house buyers. The first defendant also claimed that the plaintiff had failed to provide the redemption statements to the house buyers expeditiously. [15] The first defendant had taken up its grievances with Bank Negara by writing a letter of complaint dated 25 March 1999. A meeting was subsequently held on the 21 May 1999, where the representatives of the plaintiff, the first defendant and Bank Negara were present. Pursuant to the meeting, the first defendant claimed that the plaintiff had on the 28 May 1999 sent its representatives to inspect the progress of the housing project, and that the representatives had given the plaintiff’s commitment to provide end-financing. [16] The plaintiff subsequently rescheduled the principal repayment dates, waived overdue interests for a certain period, and agreed to provide end-financing facilities to some house buyers through its letter to the first defendant dated 16 July 1999. It was submitted that this supports the first defendant’s contention that there was a collateral contract, which existed with the loan agreements for the banking facilities, and that this is a triable issue. [17] Financial institutions are in the business of providing banking facilities, and would endeavour to get companies to use them 7 for financing. I do not find it improbable that the first defendant’s representatives could have at the material time, stated that they would be willing to provide end-financing. After all, it would be beneficial for the first defendant if the house buyers were to use their services. [18] Nevertheless, I find no merits in the first defendant’s contention that they had only taken up the banking facilities offered by the first defendant based on this promise. There is no evidence to support this. There are no terms or conditions in the loan agreements that support the first defendant’s allegation. If the granting of end-financing was indeed crucial for the first defendant, it should have insisted for the representation to be reflected in the loan agreements. [19] It is highly improbable for any financial institutions to guarantee that it would grant end-financing to any house buyers. Any financial institution would want to ensure that the applicant would have been able to fulfil its criteria before granting end-financing. This fact is evident from the plaintiff’s letter to the first defendant dated 16 July 1999, where it stated as follows:- “6. End-financingFacility We wish to inform that we will be providing end-financing to your purchasers who are qualified on case to case basis with the following terms and conditions:- …” 8 [20] It is foolhardy for the first defendant to insinuate that all its house buyers would be given end-financing as of right. The first defendant had in fact considered and even approved some end-financing for some house buyers as can be seen from the correspondences after the meeting with Bank Negara. [21] In any event, this alleged representation by the first defendant to provide end-financing and the letters referred to in its affidavit in reply, were made more than eighteen years ago in 1999. If the first defendant was indeed aggrieved with the plaintiff for reneging on it’s alleged promise, it should have then taken steps to enforce its rights. Since more than eighteen years had passed, the first defendant is deemed to have acquiesced to any alleged wrongs committed by the plaintiff. [22] The House of Lords in Archbold v Scully9 H.L Cases 371 defined acquiescence as follows:- If a party could object, lies by and knowingly permits another to incur an expense in doing an act under the belief that it would not be objected to, and so a kind of permission may be said to be given to another to alter his condition, he may be said to acquiesce. (p 383) [23] I would further add the first defendant’s allegation is doomed for failure due to laches. Many years had passed, and the first defendant had not given any explanation to explain why 9 they have not over these years raised this issue with the plaintiff or take any action. Failure to realise the securities [24] The first defendant had pledged some land in Langkawi as securityfor the banking facilities given by the plaintiff. The first defendant alleged that the plaintiff should have taken steps to realise them first, and that this failure meant that the plaintiff had failed to mitigate its losses. [25] The answer to this lies in clause 11.02 of the loan agreements for both facilities, which states as follows:- “Notwithstanding any provision hereof, it is hereby expressly agreed that upon default or breach by the Borrower of any term, covenant, stipulation and/or undertaking herein provided and on the part of the Borrower to be observed and performed the Lender shall thereafter have the right to exercise all or any of the remedies available whether by this Agreement or by statute or otherwise concurrently, including pursuing all remedies of sale or possession and civil suit to recover all monies due and owing to the Lender”. [26] It has therefore been expressly agreed, that the plaintiff is at liberty to pursue any remedy to recover the amount outstanding, and that it is not compelled to realise the securities first. It is also completely the plaintiff’s prerogative whether to pursue its claim against the defendants or realise 10 the securities first, or do both simultaneously. The Supreme Court in Low Lee Lian v Ban Hin Lee Bank Bhd [1997] 1 MLJ 77 held:- “Now, it is trite that a charge/creditor may pursue any or all remedies to recover monies lent by him. He may enforce his statutory charge against the charger by way of proceedings in rem under s. 256 of the Code. He may sue the principal debtor (who may or may not be the charger) upon the personal covenant contained in any loan agreement that was entered into between the parties. He may proceed against the surety who has guaranteed the loan. And he may pursue all of these courses simultaneously, contemporaneously or successively.” (p 93) Failure to particularise the amount owing [27] The defendants take issue with the amount claimed by the plaintiff, in that it had failed to give particulars as to how the amount was arrived at. The defendants also contend that the plaintiff’s certificate of indebtedness that was exhibited in its affidavit in support is self-serving, as the certificate had merely referred to paragraph 22[a][l] to [lll] and paragraph 23[a][l] to [lll] of the statement of claim without condescending to particulars. [28] It has been held by high authorities, that a certificate of indebtedness is binding and conclusive, unless one can show manifest error on the face of it, or fraud. Raja Azlan 11 Shah CJ (as his Highness then was) in delivering judgment for the Federal Court in Citibank NZ v Ooi Boon Leong [1981] 1 MLJ 282 held:- “We have often said in this Court many a time that where all the issues are clear and the matter of substance can be decided once and for all without going to trial there is no reason why the Assistant Registrar or the judge in chambers, or, for that matter this court, shall not deal with the whole matter under the R.S.C, Order 14 procedure. In the present case the guarantee contains a clause, which enables the bank by producing a certificate of indebtedness by its officer to dispense with legal proof of the actual indebtedness of the respondents….. It means that, for the purpose of fixing liability of the respondents, the company’s indebtedness may be ascertained conclusively by a certificate..” (p 284) [29] In Cempaka Finance Bhd v Ho Lai Ying (trading as KH Trading) [2006] 2 MLJ 685, one of the questions posed to the Federal Court for appeal was this:- “Whether apart from producing a certificate of indebtedness pursuant of the contract which provided that the certificate was final and conclusive of the matters stated therein, the appellant had a further obligation to produce statements of account to prove the debt in an application for summary judgment”. 12 [30] The question posed by the appellant arose from its dissatisfaction with the Court of Appeal’s decision. The Court of Appeal had overruled the High Court’s decision in granting summary judgment against the respondent. In doing so, the appellate court held that the mere production of the certificate of indebtedness is insufficient to show that the appellant had established the debt, and that the absence of documentary evidence such as the monthly statement of accounts, and the amount of interest imposed on the monies released is fatal to the appellant’s case. The Court of Appeal went further by holding that the burden of proof lies on the appellant to satisfy the court of the amount claimed, and that the certificate of indebtedness is only binding on the parties. [31] Steve Shim CJ (Sabah & Sarawak) who delivered judgment for the apex court, reiterated the dictum in Citibank NZ v Ooi Boon Leong (supra) and held:- “A certificate of indebtedness operates in the filed of adjectival law. It excuses the plaintiff from adducing proof of debt. Such a certificate shifts the burden onto the defendant to disprove the claim”. (p 691) [32] It is therefore futile for the defendants to merely complain of the need for particulars. It is for them to disprove the amount, which they have not. 13 Conclusion [33] In any event, the first defendant’s response to the plaintiff’s letter of demand dated 14 February 2017 was telling. The first defendant had in its reply to the plaintiff through a letter dated 6 March 2017, lamented the problems that it was facing, namely the difficulty that the house buyers are facing in getting loans due to the stringent requirements put by financial institutions, and the criminal breach of trust committed by its solicitors on the redemption sum. The first defendant had in the same letter, also pleaded the plaintiff to waive the interests, and sought for more time to settle the amount due. The content of this letter are a clear admission of the debt due, and estops the first defendant from now disputing it. [34] I have not found any triable issues that could credibly questioned the plaintiff’s claim. The plaintiff’s application for summary judgment is therefore allowed with costs of RM5,000.00 subject to allocatur. Dated: 24 October 2017. -sgd- (Mohamed Zaini Mazlan) High Court Judge Kuala Lumpur High Court (Commercial Division) 14 Plaintiff’s counsel Au Seng Heng (Messrs Y. S. Lim & Ng) Defendants’ counsel Abdullah Abbas & Khairil Khalid (Messrs. Abbas Khairil & Partners)