Bank Islam Malaysia Berhad v TN Synergy Sdn Bhd & 4 Yang Lain (22M-282-07/2018)

TN SYNERGY SDN BHD

RAJA NOR RAFIDAH BINTI RAJA ABDUL HAMID

YONG SURAYA BT OTHMAN

SELYSTER JOHN BIN EMBU

MOHD TAHIR BIN SAAD @ ISMAIL (NRIC NO: 650802-02-5555 / A 0224682) … DEFENDANTS BEFORE YA KHADIJAH BINTI IDRIS JUDICIAL COMMISSIONER 2 GROUNDS OF JUDGMENT Introduction [1] In this writ action the Plaintiff’s cause of action is premised on the default by the 1st Defendant company to perform its payment obligations in respect of Islamic financing facilities granted by the Plaintiff for the operational business of the 1st Defendant company. In consideration of the financing facilities granted, the 2nd, 3rd, 4th and 5th Defendants has agreed to guarantee the said payment obligations of the 1st Defendant company. [2] The Plaintiff’s application to enter summary judgment against all the Defendants was allowed and the Defendants appealed. Factual background [3] At the request of the 1st Defendant company the Plaintiff granted, vide letter of offer dated 15 August 2013 (hereinafter referred to as “the Letter of Offer 1”) an Islamic financing facility under the Business Premises Financing program for the sum of RM 823,000.00 (hereinafter 3 referred to as “the BF-i Facility”). Details of the BF-i Facility is as follows – Amount RM 823,000.00 Plaintiff’s Sale Price RM 2,631,995.76 Tenure 20 years / 240 months Shariah concept tawarruq Payment of the Plaintiff’s Sale Price is to be made in the following manner Month Instalment (RM) Number of instalment Total (RM) 1 - 24 10,287.50 24 246,900.00 25 – 240 11,042.11 216 2,385,095.76 Total 2,631,995.76 The parties executed the Tawarruq Master Facility Agreement (Business Financing-i) dated 20 January 2014 (hereinafter referred to the “Master Facility Agreement (BF-i)”) where the terms and conditions in relation to the BF-i Facility is stipulated. A Tawarruq Agency Agreement (BF-i) dated 20 January 2014 was also executed between the parties. 4 [4] In accordance with the Shariah concept of tawarruq, the BF-i Facility was granted to the 1st Defendant company for utilisation on the following terms –

(a)

upon confirmation of the purchase, the Plaintiff shall perform an acceptance of offer to purchase (“qabul”) and the Plaintiff will then immediately sell the commodity to the 1st Defendant company at an agreed sale price which is payable by the 1st Defendant company on deferred term;

(c)

the 1st Defendant company shall pay the amount due under the BF-i Facility based on the agreed terms with the Plaintiff. [5] In consideration of the BF-i Facility granted to the 1st Defendant company –

the 2nd, 3rd and 4th Defendants executed the Guarantee Agreement dated 20 January 2014 (hereinafter referred to as the “Guarantee Agreement (BF-i) ”). Under the Guarantee Agreement (BF-i) (see Exhibit BIMB-4 to the Plaintiff’s affidavit enclosure 10) the 2nd, 3rd and 4th Defendants agree to jointly and severally guarantee the outstanding amount under the BF-i Facility; and

the 1st Defendant company agrees to assign to the Plaintiff a property held under Master Title PN 38617 Lot No. 29865 and PN 38618 Lot No. 29866 both in the Mukim of Setapak, District of Kuala Lumpur in the State of Wilayah Persekutuan Kuala Lumpur. The Deed of Assignment dated 20 January 2014 is produced as Exhibit BIMB-5 to the Plaintiff’s affidavit enclosure 10. 6 [6] Further, at the request of the 1st Defendant company the Plaintiff granted, vide letter of offer dated 19 May 2014 (hereinafter referred to as “the Letter of Offer 2”) the Business Cash Line-i for the sum of RM 25,000,000.00 (hereinafter referred to as “the BCL-i Facility”) and the Bank Guarantee-i Facility for the sum of RM 4,300,000.00 (hereinafter referred to as “the BG-i Facility”) under the Specific Procurement & Contract Financing Islamic (hereinafter referred to as “the PCF-i”) Program. Details of the BCL-i Facility is as follows – Facility limit RM 25,000,000.00 Plaintiff’s Sale Price RM 28,750,000.00 Tenure 1 year / 12 months Shariah concept tawarruq The parties executed the Tawarruq Master Facility Agreement (Business Cash Line-i) dated 25 June 2014 (hereinafter referred to the “Master Facility Agreement (BCL-i)”) where the terms and conditions in relation to the BCL-i Facility is stipulated. A Tawarruq Agency Agreement (BCL-i) dated 25 June 2014 was also executed between the parties. [7] In accordance with the Shariah concept of tawarruq, the BCL-i Facility was granted to the 1st Defendant company for utilisation on the following terms – 7

(a)

upon confirmation of the purchase, the Plaintiff shall perform an acceptance of offer to purchase (“qabul”) and the Plaintiff will then immediately sell the commodity to the 1st Defendant company at an agreed sale price which is payable by the 1st Defendant company on deferred term;

(c)

the 1st Defendant company shall pay the amount due under the BCL-i Facility based on the agreed terms with the Plaintiff. 8 [8] In consideration of the BCL-i Facility granted to the 1st Defendant company the 2nd, 3rd, 4th and 5th Defendants executed the Guarantee Agreement dated 25 June 2014 (hereinafter referred to as the “Guarantee Agreement (BCL-i)”). Under the Guarantee Agreement (BCL-i) (see Exhibit BIMB-9 to the Plaintiff’s affidavit enclosure 10) the 2nd, 3rd 4th and 5th Defendants agree to jointly and severally guarantee the outstanding amount under the BCL-i Facility. [9] With regards to the BG-i Facility, the facility limit is RM 4,300,000.00. Terms and conditions in relation to the BG-i Facility is stipulated in the Trade Facilities Agreement dated 25 June 2014 executed by the Plaintiff and the 1st Defendant company (hereinafter referred to as the “Trade Facilities Agreement”). [10] In consideration of the BG-i Facility granted to the 1st Defendant company the 2nd, 3rd, 4th and 5th Defendants executed the Guarantee Agreement dated 25 June 2014 (hereinafter referred to as the “Guarantee Agreement (Trade Facilities)”). Under the Guarantee Agreement (Trade Facilities) (see Exhibit BIMB-11 to the Plaintiff’s affidavit enclosure 10) the 2nd, 3rd 4th and 5th Defendants agree to jointly and severally guarantee the outstanding amount under the BG-i Facility. 9 [11] At the request of the 1st Defendant company the Plaintiff agreed, vide Letter of Renewal of Facility dated 1 August 2016 (hereinafter referred to as the “Letter of Renewal of Facility”) to renew the BCL-i Facility and the BG-i Facility subject to the terms and conditions stated in the Letter of Renewal of Facility. Other terms and conditions as stated in the Letter of Offer 2 remains the same. [12] The 1st Defendant company defaulted in making payment in relation to the BF-i Facility, BCL-i Facility and the BG-i Facility (collectively referred to as the “Financing Facilities”). Vide Letter of Demand dated 12 April 2018 to the Defendants the Plaintiff terminated the Financing Facilities and

demanded against the 1st Defendant company and the 2nd, 3rd and 4th Defendants the amount outstanding in the sum of

RM 2,092,233,59 under the BF-i Facility;

(ii) RM 26,419,675.89 under the BCL-i Facility; and

(iii) RM 4,300,249.49 under the BG-i Facility as at 5 April 2018.

demanded against the 5th Defendant to pay the outstanding amount in the sum of RM 26,419,675.89 under the BCL-i 10 Facility and RM 4,300,249.49 under the BG-i Facility as at 5 April 2018. Summary Judgment Application [13] Despite the demand made, the Defendants failed to pay the outstanding amount. The Plaintiff commenced this instant case against the Defendants. Vide enclosure 9, the Plaintiff filed an application to enter summary judgment (Summary Judgment Application) in the following terms –

in relation to the BF-i Facility against the 1st Defendant company, 2nd, 3rd and 4th Defendant the sum RM 2,074,487.85 as at 31 May 2018 and late payment charges by way of ta’widh at the rate of 1% per annum on the balance outstanding of the Plaintiff’s Sale Price from 1 June 2018 until maturity or judgment whichever is earlier and a sum equivalent to the prevailing daily overnight Islamic Interbank Money Market Rate until full settlement 11

in relation to the BCL-i Facility against the 1st Defendant company, 2nd, 3rd, 4th and 5th Defendant the sum RM 22,466,207.68 as at 31 May 2018 and late payment charges by way of ta’widh at the rate of 1% per annum on the balance outstanding of the Plaintiff’s Sale Price from 1 June 2018 until maturity or judgment whichever is earlier and a sum equivalent to the prevailing daily overnight Islamic Interbank Money Market Rate until full settlement

in relation to the BG-i Facility against the 1st Defendant company, 2nd, 3rd, 4th and 5th Defendant the sum RM 4,321,140.53 as at 31 May 2018 and late payment charges by way of ta’widh at the rate of 1% per annum on the balance outstanding of the Plaintiff’s Sale Price from 1 June 2018 until maturity or judgment whichever is earlier and a sum equivalent to the prevailing daily overnight Islamic Interbank Money Market Rate until full settlement

in the event the Defendants settle in full the outstanding amount under the Financing Facilities before the maturity dates the Plaintiff undertakes to grant to the 1st Defendant ibra (rebate) on 12 the deferred profit calculated from the date of full settlement until date of maturity. The grant of rebate will result in the reduction of the sale price in the Financing Facilities. the calculation of rebate is in accordance with the formula approved by Bank Negara Malaysia. Defendants’ position [14] In paragraph 3 of the Defendants’ Statement of Defence, the Defendants did not deny the facts pleaded by the Plaintiff in paragraphs 7 to 18 of the Statement of Claim. The facts as pleaded in paragraphs 7 to 18 of the Statement of Claim essentially sets out the following –

details of the Financing Facilities (which consists of the BF-i Facility, BCL-i Facility and BG-i Facility) granted by the Plaintiff to the 1st Defendant company including the amount of facility, the sale price and payment of the sale price;

the various documents executed by the Plaintiff and the 1st Defendant company in relation to the Financing Facilities including the Letter of Offer 1, Master Facility Agreement 13 (BF-i), Letter of Offer 2, Master Facility Agreement (BCL-i) and Trade Facilities Agreement;

the financing procedure in accordance with the Shariah concept of tawarruq which is to be observed by the parties for purpose of utilisation of the BF-i Facility and BCL-i

the Guarantee Agreement (BF-i) executed by the 2nd, 3rd and 4th Defendants, both the Guarantee Agreement (BCL-i Facility and Guarantee Agreement (BG-i Facility) executed by the 2nd, 3rd, 4th and 5th Defendants. Under the said guarantee agreements the 2nd, 3rd, 4th and 5th Defendants agree to jointly and severally guarantee the payment by the 1st Defendant company of all outstanding amount due and payable under the Financing Facilities. [15] However in stark contrast of the Defendants’ pleadings, at paragraph 7 of the Defendants’ affidavit (enclosure 12) resisting the Summary Judgment Application, the Defendants took a completely different stand by denying the averments made by the Plaintiff (in paragraphs 13 to 23 of its affidavit supporting the said application) in 14 respect of the same facts pleaded in paragraphs 7 to 18 of the Statement of Claim in relation to the Financing Facilities (as summarised in paragraph 14 above) which was admitted by the Defendants in their Statement of Defence. [16] It is trite law that parties are bound by their pleadings. Thus the Defendants are estop from departing their pleaded case through their affidavit. Accordingly the Defendants are bound by the terms and conditions of the various agreements executed by them in relation to the Financing Facilities. The conflicting position is obviously an afterthought and a desperate attempt of the 1st Defendant company to avoid its liabilities under the Financing Facilities. In any event the Defendants’ denial are bare averments without any supporting evidence. [17] The Defendants defence and grounds for resisting the Summary Judgment Application as stated in the Statement of Defence and their affidavit are as follows –

circa April 2014, the 1st Defendant company was awarded with a design and build contract by Prasarana Malaysia Berhad (hereinafter referred to as “Prasarana”) Contract No 15 PRASARANA / GCS / CTT / 2.0501 / 2014 (hereinafter referred to as “the Contract / Project”);

the Financing Facilities obtained was used for the purpose of the Contract / Project. The revenue derived from the Contract / Project is utilised to repay the Financing Facilities on the basis of “back-to-back” arrangement or understanding. The said arrangement is within the Plaintiff’s knowledge who had endorsed the same. At all material times the 1st Defendant company had made prompt payment and there were no sum outstanding under the Financing Facilities and there was no default on the part of the 1st Defendant company;

on 29 January 2018 Prasarana had wrongfully terminated the Contract / Project and the outstanding sum payable by Prasarana to the 1st Defendant company for works done is about RM 14 million. As such the 1st Defendant and the Guarantors deny they had breached the terms of the Financing Facility; 16

the 1st Defendant has taken legal action against Prasarana vide Guaman Sivil No. WA-22C-51-07/2018 ((hereinafter referred to as the “Prasarana Suit”) to recover all outstanding sums due and payable to the 1st Defendant as a result of the wrongful termination of the Contract / Project;

the Plaintiff failed to prove and provide details of the sum claimed against the Defendants;

the Plaintiff’s action against the 2nd, 3rd, 4th and 5th Defendants is premature as the said Defendants are merely guarantors in respect of the Financing Facility and not the primary obligor (who is the 1st Defendant company); and

the 2nd, 3rd, 4th and 5th Defendants reserves their rights to claim indemnity or contribution against the 1st Defendant company or any appropriate third party as necessary. 17 The law [18] Under Order 14 rules 1 and 2 of the Rules of Court 2012 (RoC 2012), in an application for summary judgment, it is incumbent on an applicant seeking the same to prove the following –

the statement of claim has been served on the defendant;

the defendant has entered appearance; and

the applicant has affirmed an affidavit verifying the facts on which the statement of claim is based. The applicant is also required to affirm his belief that the defendant has no defence to the statement of claim. [19] Upon the fulfilment of the above preliminary requirements the burden is on the defendant to prove under Order 14 rules 3 and 4 of the RoC 2012 that there is an issue or question in dispute which ought to be tried (National Company For Foreign Trade v. Kayu Raya Sdn Bhd [1984] 1 CLJ (Rep) 283; Cempaka Finance Bhd v. Ho Lai Ying & Anor [2006] 3 CLJ 544). An application for summary judgement may also be dismissed by the court if the defendant satisfies the court that there ought for some other reason to be a trial namely there are circumstances that ought to be investigated by the court (United 18 Merchant Finance Bhd v. Majlis Agama Islam Negeri Johor [1999] 2 CLJ 151; [1999] 1 MLJ 657). [20] The duty of the court in relation to an application under Order 14 of the RoC 2012 is well established in Bank Negara Malaysia v Mohd Ismail & Ors [1992] 1 MLJ 400 at page 408 – In our view, basic to the application of all those legal propositions, is the requirement under O 14 for the court to be satisfied on affidavit evidence that the defence has not only raised an issue but also that the said issue is triable. The determination of whether an issue is or is not triable must necessarily depend on the facts or the law arising from each case as disclosed in the affidavit evidence before the court. Under an O 14 application, the duty of a judge does not end as soon as a fact is asserted by one party, and denied or disputed by the other in an affidavit. Where such assertion, denial or dispute is equivocal, or lacking in precision or is inconsistent with undisputed contemporary documents or other statements by the same deponent, or is inherently improbable in itself, then the judge has a duty to reject such assertion or denial, thereby rendering the issue not triable. In our opinion, unless this principle is adhered to, a judge is in no position to exercise his discretion judicially in an O 14 application. Thus, apart from identifying the issues of fact or law, the court must go one step further and determine whether they are triable. This principle is sometimes expressed by the statement that a complete defence need not be shown. The defence set up need only show that there is a triable issue. 19 Findings of the court [21] It is not disputed that the Statement of Claim had been served on the Defendants (see enclosure 4) and that Memorandum of Appearance (enclosure 6) was duly entered by the 1st Defendant company, and the 2nd, 3rd, 4th and 5th Defendants. [22] In support of its Application for Summary Judgment the Plaintiff through its Assistant General Manager has deposed an affidavit verifying the relevant facts in relation to the granting of the Financing Facilities and the various agreements (produced as exhibits in the Plaintiff’s affidavit) executed by the Plaintiff and the 1st Defendant company in relation thereto. The Plaintiff has also verified the facts in relation to the guarantee agreements executed by the 2nd, 3rd, 4th and the 5th Defendants in consideration of the Plaintiff granting the Financing Facilities to the 1st Defendant company. It is also averred by the Plaintiff that the sum claimed by the Plaintiff against the Defendants is owing, due and payable by the 1st Defendant company and the 2nd, 3rd, 4th and the 5th Defendants. The Plaintiff has also deposed that the Defendants has no defence to the claim made by the Plaintiff against them. 20 [23] Thus in so far as the preliminary requirements is concerned, the Plaintiff has fulfilled the said requirements. As such the burden shifts on the Defendant to prove that there are issue or question in dispute which ought to be tried or there ought for some other reason to be a trial, namely, there are circumstances that ought to be investigated by the court. As stated above the Defendant need not raise a complete defence, suffice for the Defendant to show there is a triable issue or question. In South East Asia Insurance Bhd v Kerajaan Malaysia [1998] 1 CLJ 1045 it was held if a defendant in an Order 14 application succeeds in raising even a single triable issue, it will not be a fit and proper case to enter summary judgment. Whether there are triable issues [24] Having considered the issues raised by the Defendants, this court is of the view the issues raised are not triable. The reasons are stated below. “back-to-back” or “pay when paid” agreement [25] It is submitted on behalf of the 1st Defendant company that there exists a specific agreement or understanding between the Plaintiff and 21 the 1st Defendant company that the 1st Defendant company is only required to make payment of the Financing Facilities as and when the 1st Defendant company is paid by Prasarana. Since Prasarana failed to pay to the 1st Defendant company for works done under the Contract / Project the 1st Defendant was not able to pay the Plaintiff. As such by the “back-to-back” arrangement the 1st Defendant denies that they has breached the terms of the Financing Facilities. [26] In this respect, there is no iota of evidence adduced by the 1st Defendant to support the purported specific agreement or understanding between the 1st Defendant company and the Plaintiff in respect of the “back-to-back” or “pay when paid” as alleged by the 1st Defendant company. As such the allegations that the 1st Defendant company is only required to pay the Plaintiff when it is paid by Prasarana runs hollow. [27] The 1st Defendant is therefore bound to make payment in relation to the Financing Facilities in the manner mutually agreed by the parties (as stipulated in Letter or Offer 1 and Letter of Offer 2) unless it can be shown that the 1st Defendant’s consent to execute the various documents in relation to the Financing Facility is obtained by fraud or 22 misrepresentation (Serangoon Garden Estate v Marian Chye [1959] 1 MLJ 113, [1958] 1 LNS 77, [1958] 1 MLRH 212). [28] The 1st Defendant’s reliance on the case Asiapools (M) Sdn Bhd v IJM Construction Sdn Bhd [2010] 3 MLJ 7 is irrelevant and misplaced. The case of Asiapools concerned a construction subcontract between the plaintiff as the nominated subcontractor and the defendant as the main contractor. The plaintiff sued the defendant for payment in respect of works done under the said subcontract. The defendant argued that they did not pay the plaintiff because they were not paid by the employer / developer. [29] The issue in Asiapools case relates to the interpretation of clause 13.01 of the subcontract which refers to “Progress Payment / Interim Payment”. The plaintiff argued that final payment claimed by the plaintiff is outside the “pay when paid” provision expressed in clause 13.01 of the subcontract which reads as follows –

13.00 Progress Payment / Interim Payment

13.01 Notwithstanding the provision of Clause 27 pertaining to nominated sub-contractor and the payment for works executed, it is hereby agreed that in the event of any interim certificate which includes, for nominated sub-contract works, the payment in respect of any work, 75% material or goods comprised 23 in the sub-contract shall be made to the sub-contractor within 14 days after receipt by the Main Contractor of payment certified as due in the Interim Certificate from the Client ie Messrs Ng Chee Yee Sdn. Bhd. [30] Upon true construction of clause 13.01 the Court of Appeal held the expression 'progress payment' was sufficiently wide to include the final payment claimed by the plaintiff. As such the plaintiff was only entitled to payment after the defendant had been paid by the employer / developer. [31] In the instant case, as stated above, the 1st Defendant company failed to prove the “back-to-back” or “pay when paid” clause in the various documents executed by the parties in relation to the Financing Facilities. No other contemporaneous evidence is adduced of the purported arrangement or understanding between the Plaintiff and the 1st Defendant company. Taking into account the different nature of the contract in the case of Asiapools (construction contract which involves a manipulated subcontractor and progress payment under the subcontract and main contract) and in the instant case (Islamic financing facility which concerns payment of Sale Price within a certain period of time determined upfront) this court is of the view such “back-to-back” or “pay when paid” understanding or agreement is inherently improbable. 24 [32] The provision in the Letter of Offer in respect of the obligation of the 1st Defendant company to make payment is very clear, namely, the 1st Defendant company is to repay on monthly basis. As such there is no reason whatsoever and the 1st Defendant company cannot now import the “back-to-back” or “pay when paid” arrangement into the agreements executed in relation to the Financing Facilities as such arrangement or understanding was never the intention of the parties in the first place. Applying the principles in OCBC Bank (Malaysia) Sdn Bhd v Lim Hock Kok & Anor [2017] 9 CLJ 454, the 1st Defendant company cannot unilaterally rewrite the various contracts executed with the Plaintiff in relation to the Financing Facilities which was mutually agreed by importing terms which were never thought of or intended to be part of the terms at the time the contracts were executed. [33] The Contract / Project is between the 1st Defendant company and Prasarana. As rightly emphasised by the Plaintiff, they are not privy to the Contract / Project. As such the Contract / Project is not relevant to the Plaintiff’s claim against the 1st Defendant under the Financing Facilities. The allegation of the 1st Defendant company that Prasarana has wrongfully terminated the Contract / Project is an issue between the 1st Defendant company and Prasarana to be determined in the Prasarana Suit. 25 The indebtedness sum [34] The Plaintiff issued a statement which certifies the total amount due and payable in relation to the Financing Facilities is RM 28,861,836.06 at 31 May 2018. A screenshot of the statement which is Exhibit BIMB-14 to the Plaintiff’s affidavit enclosure 10 is reproduced below – 26 [35] The said statement was issued pursuant to the conclusive evidence clause stipulated under the following agreements – Financing Facilities conclusive evidence clause Exhibit (Plaintiff’s affidavit enclosure 10) Master Facility Agreement (BF-i) clause 9.1 Exhibit BIMB-2, page 64 Guarantee Agreement (BF-i) clause 15 Exhibit BIMB-4, page 109 Master Facility Agreement (BCL-i) clause 9.1 Exhibit BIMB-7, page 203 Guarantee Agreement (BCL-i) clause 15 Exhibit BIMB-9, page 252 Trade Facilities Agreement section 8.06 Exhibit BIMB-10, page 296 Guarantee Agreement (Trade Facilities) clause 19(a) Exhibit BIMB-11, page 338 [36] The allegations made by the 1st Defendant company and the Guarantors that no details of the indebtedness sum were provided is just not sufficient to show there is manifest error on the face of the statement issued by the Plaintiff pursuant to the above provisions. Accordingly, the said statement is conclusive evidence of the indebtedness of 1st Defendant company under the Financing Facilities and binding on the 1st Defendant company and the Guarantors (Cempaka Finance Bhd v Ho Lai Ying [2006] 3 CLJ 544; Citibank NA v Ooi Boon Leong & Ors [1981] 27 1 MLJ 282; Boustead Trading (1985) Sdn Bhd v Arab-Malaysian Merchant Bank Bhd [1995] 3 MLJ 331). [37] Furthermore having benefitted from the Financing Facilities and in the absence of any bona fide challenge to the demand of the indebtedness made by the Plaintiff via the Notice of Demand Cum Termination dated 12 April 2018 (see Exhibit BIMB-13 to the Plaintiff’s affidavit enclosure 10) to the Defendants, it is not open to the Defendants now to make unsubstantiated allegations in respect of the indebtedness sum as stated in the statement of account issued by the Plaintiff. Premature action [38] The Guarantee Agreement (BF-i Facility), Guarantee Agreement (BCL-i Facility) and the Guarantee Agreement (Trade Facilities) governs the contractual relationship between the Plaintiff and the 2nd, 3rd, 4th and 5th Defendants as guarantors. In each of the said guarantee agreement, there are specific provision which captured the intention and agreement of the 2nd, 3rd, 4th and 5th Defendants to not only be a guarantor but also as the primary obligor. The said provisions are as follows – 28 Guarantee Agreement Provision Exhibit (Plaintiff’s affidavit enclosure 10) Guarantee Agreement (BF-i) Clause 2 Exhibit BIMB-4, page 106 Guarantee Agreement (BCL-i) Clause 2 Exhibit BIMB-9, page 249 Guarantee Agreement (Trade Facilities) Clause 2 Exhibit BIMB-11, page 329 [39] The 2nd, 3rd, 4th and 5th Defendants has executed the above Guarantee Agreement in favour of the Plaintiff and therefore bound by the terms and conditions thereto. Since the 1st Defendant company has defaulted under the Financing Facilities the 2nd, 3rd, 4th and 5th Defendants who has agreed to step in the shoes of the 1st Defendant company as the primary obligor are therefore liable for all the indebtedness of 1st Defendant company in relation to the Financing Facilities. In the case Andrew Lee Siew Ling v United Overseas Bank (M) Bhd [2013] 1 MLJ 449 which concern, among others, clause 9 of the letter of guarantee and indemnity executed by the appellant which provides that the liability of the appellant / guarantor is not merely as sureties but also as principal debtors and indemnifiers, the Federal Court held – 29 [22] It is our finding that the letter of guarantee and indemnity contained several clauses which clearly show the intention of both guarantors to undertake the liability for the repayment of the term loan and interest therein not merely as sureties but also as a principal debtors as well as indemnifiers… [23] It is our considered view that in the present case the appellant, being a person who has given a guarantee and more importantly an indemnity, is primarily liable for losses which the principal borrower could not have been made liable. His liability is not dependent or secondary to the liability of the principal borrower. He is a principal debtor himself. The liability under a contract of indemnity does not depend on whether the principal debt is enforceable. It has no reference in law to the obligation of any third person. In essence, the liability of the person who has given an indemnity can be more extensive than that of the liability of the principal borrower (see the cases of (1) Yeoman Credit Ltd v Latter & Anor [1961] 2 All ER 294 and (2) Chung Khiaw Bank Ltd v Soi Huan & Ors [1986] 1 MLJ 188). Applying the principle in the Andrew Lee Siew Ling’s case to the instant case the 2nd, 3rd, 4th and 5th Defendants who has agreed to undertake liability for the payment of the Financing Facilities as the primary obligor is therefore primarily liable for the indebtedness under the Financing Facilities. [40] Under the circumstances the issue of the instant case being a premature action does not arise at all. Having agreed under the guarantee agreements to be the primary obligor, the 2nd, 3rd, 4th and 5th 30 Defendants are bound by such term and cannot now evade their obligations in relation to the Financing Facilities (Bank Muamalat Malaysia Bhd lwn Kong Sun Enterprise Sdn Bhd & Yang Lain [2012] 10 MLJ 665). Conclusion [41] Premised on the aforesaid reasons, this court is of the considered view that the issues raised by all the Defendants are not triable as to warrant a full trial. The issues raised are simply not bona fide in light of the undisputed contemporaneous evidence adduced before this court. The Defendants’ defence has no merits. Under the circumstances this is a proper case for summary judgment. The Plaintiff’s Application for Summary Judgement was therefore allowed in terms of enclosure 9 with costs of RM 4,000.00. ( KHADIJAH BINTI IDRIS ) JUDICIAL COMMISSIONER HIGH COURT (COMMERCIAL DIVISION) DATED 9 APRIL 2019 31 Counsel: Plaintiff : Fawza Sabila Faudzi of Messrs Sidek Teoh Wong & Dennis Defendants :