Ambank (M) Berhad v 1. ) Sd Impex Sdn Bhd (WA-22NCC-556-08/2023)

SD IMPEX SDN BHD [No. Syarikat: 200001025301 (527908-M)]

MOHD ABDUL KARIM BIN ABDULLAH [(No. K/P: 650523-13-5719)]

ABANG MUHAMMAD FAHKRIE BIN ABANG ARBIE [(No. K/P: 930528-13-6143)]

SD ASSOCIATES VENTURE SDN BHD [(No. Syarikat: 201101022068) (950207-V)] … DEFENDAN-DEFENDAN GROUNDS OF JUDGMENT A. Introduction [1] The plaintiff filed an application for summary judgment against the defendants (“Summary Judgment Application”). [2] The court allowed the application, for the reasons explained below. B. Background Facts [3] The plaintiff’s claim against the defendants arose from breaches by the 1st defendant of the terms and conditions of the following financial facilities: a. A term loan facility of RM4,903,000 (“TL1 Facility”), a term loan facility of RM1,500,000 (“TL3 Facility”), and overdraft facilities of RM260,000 ("OD1 Facility") and RM500,000 (“OD2 Facility”), granted by the plaintiff to the 1st defendant by way of: i. A letter of offer dated 23 January 2018; ii. Supplementary letters of offer dated 23 March 2018, 23 April 2018, 17 July 2018 and 18 March 2019; iii. A letter of offer dated 30 April 2019; iv. Supplementary letters of offer dated 25 July 2019, 6 August 2019, 21 August 2019, 16 June 2022 and 7 July 2022; and v. A facilities agreement dated 4 June 2018. b. A term loan facility under the “Working Capital Guarantee Scheme-Extension” of RM927,452.24 (“TL2 Facility”), granted by the plaintiff to the 1st defendant way of a letter of offer dated 8 August 2018, supplementary letters of offer dated 18 March 2019, 16 June 2022 and 7 July 2022 and a facilities agreement dated 30 November 2018. The TL1 Facility, the TL2 Facility, the TL3 Facility, the OD1 Facility and the OD2 Facility are collectively referred to as the “Facilities”. [4] The 2nd to 4th defendants guaranteed the repayment of the Facilities by the 1st defendant, by way of the following documents: a. For the 2nd defendant, guarantees and indemnities dated 4 June 2018 and 30 November 2018; b. For the 3rd defendant, a guarantee and indemnity dated 26 August 2019; and c. For the 4th defendant, guarantees and Indemnities dated 4 June 2018 and 30 November 2018. These guarantees and indemnities are collectively referred to as the “Guarantees and Indemnities”. [5] The 1st defendant breached the terms and conditions of the TL1 Facility, the TL2 Facility and the TL3 Facility by failing to pay monthly instalments and to regularise its accounts with the plaintiff in a satisfactory manner. [6] The 1st defendant’s default under the TL1 Facility, the TL2 Facility and the TL3 Facility triggered an event of default under the OD1 Facility and the OD2 Facility, pursuant to a clause on cross-default under the facilities agreement dated 4 June 2018. [7] Consequently, the plaintiff recalled and terminated the Facilities, by a letter dated 14 July 2023. [8] The plaintiff filed this action to recover the amounts outstanding under the Facilities. The plaintiff thereafter filed the Summary Judgment Application, based on the ground that the defendants have not raised any triable issue in respect of the plaintiff’s claim. C. Principles of Summary Judgment [9] The Summary Judgment Application is filed under order 14 rule 1 of the Rules of Court 2012 (“ROC”), which provides that: “(1) Where in an action to which this rule applies a statement of claim has been served on a defendant and that defendant has entered an appearance in the action, the plaintiff may, on the ground that the defendant has no defence to a claim included in the writ, or to a particular part of such a claim, or has no defence to such a claim or part thereof except as to the amount of any damages claimed, apply to the Court for judgment against that defendant.” (emphasis added) [10] Order 14 rule 2 of the ROC provides for the manner in which an application for summary judgment shall be made. Order 14 rule 2(1) requires an application to be supported by an affidavit verifying the facts on which the claim is based, and stating that in the deponent’s belief, there is no defence to that claim. [11] Once the preliminary requirements under order 14 rules 1 and 2 of the ROC have been met by a plaintiff, namely: a. the statement of claim has been served on the defendant; b. the defendant has entered appearance; and c. the affidavit in support of the summary judgment application has verified the facts upon which the claim is based, and has stated that there is no defence to the claim, the plaintiff would have established a prima facie case against the defendant. [12] The burden then shifts to the defendant to satisfy the court as to why judgment should not be given against it (see National Company for Foreign Trade v Kayu Raya Sdn Bhd [1984] 2 MLJ 300). D. Considerations [13] It is undisputed that the writ and statement of claim have been served on the defendants, and that the defendants have entered appearance in these proceedings. In the affidavit in support of the Summary Judgment Application, the plaintiff had also verified the facts upon which the claim is based, and had stated that there is no defence to the claim. [14] The plaintiff’s case is premised on the defendants’ breaches of the letters of offer, facilities agreements, and guarantees and indemnities executed between the plaintiff and the defendants, in respect of the Facilities. As a consequence of these breaches, the plaintiff recalled and terminated the Facilities, and demanded the amounts outstanding under the Facilities from the defendants. [15] However, the defendants have failed to pay the amounts outstanding. [16] In its affidavit in support of the Summary Judgment Application, the plaintiff provided a certificate of indebtedness dated 30 June 2023, (“Certificate of Indebtedness”) to certify that the following amounts are due from the defendants: a. Under the TL1 Facility, RM4,737,474.20, together with interest; b. Under the TL2 Facility, RM895,276.15, together with interest; c. Under the TL3 Facility, RM1,108,966.34, together with interest; d. Under the OD1 Facility, RM261,714.93, together with interest; and e. Under the OD2 Facility, RM499,548.56, together with interest. [17] Based on the facts set out, I find that the plaintiff has established a prima facie case against the defendants. The burden has shifted to the defendants to satisfy the court as to why judgment should not be given against them in a summary manner. [18] There are three main issue raised by the defendants, which they claim necessitate the trial of this action. [19] First, the defendants claimed that the Certificate of Indebtedness contains manifest errors. However, the defendants have not condescended to particulars as to how exactly the Certificate of Indebtedness is erroneous. The defendants' affidavit opposing the Summary Judgment Application simply states that there are manifest errors in the Certificate of Indebtedness, with no explanation as to what these errors are. With such a bare allegation unsupported by evidence, the court finds the defendants have failed to show any manifest error on the Certificate of Indebtedness. [20] The court further notes that annual statements of accounts had been sent to the 1st defendant, and that the 1st defendant did not raise any objection on the content of the statements of accounts during the period of financing. Details in the Certificate of Indebtedness would have been derived from the statements of accounts sent to the 1st defendant, and as such, this lack of objection on the part of the 1st defendant is inconsistent with the allegation of a manifest error on the Certificate of Indebtedness. [21] Second, the defendants claimed that the Certificate of Indebtedness was not provided to them beforehand. The court finds that there is no obligation for the plaintiff to provide the Certificate of Indebtedness to the defendants before the commencement of this action. [22] The Certificate of Indebtedness was issued pursuant to the provisions of the facilities agreements and the Guarantees and Indemnities, and specifically clauses 18.1 of the facilities agreements dated 4 June 2018 and 30 November 20128, and clauses 15.1 of the Guarantees and Indemnities. These clauses provide that any certificate or statement from the plaintiff as to any amount due to the plaintiff shall be conclusive and binding on the defendants. There is no requirement in these clauses for the Certificate of Indebtedness to be provided to the defendants before the commencement of proceedings against the defendants. [23] I am guided Southern Finance Bhd (formerly known as United Merchant Finance Bhd) v Sun City Development Sdn Bhd & Anor [2006] 6 MLJ 673, where the High Court placed emphasis on the conclusiveness of a certificate of indebtedness in cases concerning the collection of loans by financial institutions: “[31] In postlude, I take this occasion to make the following observation. The courts should not too readily find triable issues in cases which concern loans to borrowers from banks and other financial institutions. If such institutions are obliged to wait for a lengthy period of many years — that a full trial and appeal process would often entail — in order to recover loans made to borrowers, then commercial investments from such institutions in this country would be adversely affected, not to mention the cash flow problems that they would encounter. It would be prudent for courts, when dealing with applications for summary judgments in such cases, to apply, in appropriate cases, the estoppel and the finality-of-certificate-of-indebtedness principles as set out in 6 and 7 above.” (emphasis added) [24] In the present case, the Certificate of Indebtedness was duly and properly issued in accordance with the provisions of the facilities agreements and the Guarantees and Indemnities. The defendants have failed to prove that the certificate contains any manifest error. The Certificate of Indebtedness is therefore final and can be relied on for the purpose of the Summary Judgment Application. [25] Finally, the defendants also contended that the plaintiff failed to prove that monies had been disbursed to the 1st defendant. However, this issue was not raised in the defendants’ affidavits opposing the Summary Judgment Application. As such, I view this allegation to be inherently improbable and a mere afterthought designed to avoid liability. [26] I have also taken note of a letter dated 15 June 2023 issued by the 1st defendant to the plaintiff. In this letter, the 1st defendant had admitted to its failure to service the Facilities, and had proposed repayment plans to regularise the 1st defendant’s accounts. The letter is an admission that there are amounts due from the 1st defendant to the plaintiff. As such, the allegation that monies had not been disbursed to the 1st defendant cannot hold water. [27] With these findings, it is my considered view that the issues raised by the defendants are claims that are inconsistent with undisputed contemporaneous documents, and that are on the balance of probabilities inherently improbable.

[28] From my assessment of the evidence before this court, I find the defendants have not raised any credible defence or triable issue. This is therefore a plain and obvious case justifying the grant of summary judgment against the defendants. [29] As such, the court allowed the Summary Judgment Application, with costs. Dated 22 May 2025 ADLIN ABDUL MAJID Judge High Court of Malaya Kuala Lumpur Counsel: Plaintiff : Kingston Tan (together with Kwong Ho Qong) of Messrs. Heiley Hassan Tan & Partners Defendants : Rex Kuan Kai Tat of Messrs. Rajashree