Bank of China (Malaysia) Berhad v Fivestar Development (Puchong) Sdn Bhd & 1 Lagi (WA-22NCC-252-06/2017)

RAYMOND TAN … DEFENDAN- (No. K/P: 601016-10-6349/5990988) DEFENDAN 25 GROUNDS OF DECISION [1] Vide a Notice of Application dated 11/9/2017 (encl.7) the Plaintiff applied for summary judgment against D1 and D2 pursuant to 30 O.14 of the Rules of Court 2012 (‘ROC 2012’) of the following:

the sum of RM1,830,348.22 due and owing to the Plaintiff as at 10/5/2017;

interest on the said sum of RM1,830,348.22 at 2.5% per annum above the Plaintiff’s Base Lending Rate 35 (currently at 6.60% per annum) calculated on daily rests basis (‘Prescribed Rate’) from 11/5/2017 until date of full settlement; 2

additional interest on the principal sum of 5 RM1,830,348.22 at the rate of 1% above the Prescribed Rate calculated from 11/5/2017 until the date of full settlement;

costs on solicitor-client basis; and

any further and other relief deemed fit and proper by the 10 Court. [2] For the purpose of this application I am satisfied the preliminary requirements have been complied with i.e. (i) the defendant has entered appearance; (ii) the statement of claim must have been 15 served on the defendant; and (iii) the affidavit in support of the application must comply with the requirements of r.2 of O.14 of the ROC 2012. Upon these considerations being satisfied, the plaintiff will have established a prima facie case and it comes entitled to judgment and the burden shifts to the defendant to satisfy the Court why 20 judgment should not be given against him (per George Seah FJ in National Company For Foreign Trade v. Kayu Raya Sdn. Bhd. [1984] 1 CLJ (Rep) 283 at p.285 e-f) & Cempaka Finance Bhd v Ho Lai Ying (trading as KH Trading) & Anor [2006] 2 MLJ 685 (FC) at 689 [5]). 25 [2.1] It is also trite law that in a claim for summary judgment the burden is on the defendant to raise triable issues though a complete defence need not be shown; the determination of whether an issue is triable or not must necessarily depend on the facts or the law arising in each case as disclosed in the affidavit evidence before the Court 30 (per Mohamed Azmi SCJ in Bank Negara Malaysia v Mohd Ismail & Ors [1992] 1 MLJ 400 at p.408 A-B and further on the same page E-F, the Supreme Court held - 3 “Where such assertion, denial or dispute is equivocal, or lacking in 5 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.” 10 Brief Facts [3] Through a Letter of Offer dated 14/2/2005 (‘Letter of Offer’) and at the request of D1, the Plaintiff granted the following credit facility of RM16,000,000.00 to the 1st Defendant comprising -

Term Loan Facility with limit of RM7,000,000.00;

Bridging Facility - Overdraft 1 for the principal of RM6000,000.00; and

Overdraft 2 for the principal of RM3,000,000.00. (collectively referred to as ‘the Facilities’) (exh.NTK-1) [3.1] Upon request by D1, the Plaintiff agreed to revise the terms and 20 conditions of the Facilities as stated in the Plaintiff’s letters dated 14/4/2005 and 18/5/2005 (‘Supplementary Letter’) respectively received by D1 (exh.NTK-2). [3.2] The terms and conditions of the Letter of Offer and the Supplementary Letter were reduced into a Facility Agreement dated 25 27/6/2005 (‘the said Facility Agreement’) in which D1 agreed to all the terms and conditions contained therein (exh.NTK-3). [3.3] Through a Guarantee and Indemnity Agreement dated 27/6/2005 (exh.NTK-4), D2, Tan Lai Kim and Tan Poh Chai jointly and severally agreed to guarantee the repayment of D1’s liability 30 upon the said terms and conditions contained in the Guarantee and Indemnity Agreement. [3.4] Subsequently, upon request by D1, the Plaintiff agreed to alter the terms and conditions of the Letter of Offer through letters dated 18/4/2008, 18/1/2012, 5/6/2012, 1/2/2016 and 3/4/2017 respectively 35 4 in which the Plaintiff reduced the Facilities to RM3,000,000.00 5 (exh.NTK-5). (All exhibits mentioned above appear in the Plaintiff’s Affidavit in Support). [3.5] By letter dated 13/6/2012 (exh.RT-2, Defendants’ Affidavit in Reply), the Plaintiff had released and discharged the Debenture, 10 Mortgages and Tan Lai Kim and Tan Poh Chai as guarantors of D1. [3.6] The Plaintiff through its solicitor issued a Letter of Demand dated 12/4/2017 to the Defendants to claim the amount in excess of RM241,055.38 as at 10/4/2017 (exh.NTK-6, Plaintiff’s Affidavit in Support). 15 [3.7] After receipt of letter of demand dated 12/4/2017, the Defendants made payment of RM125,000.00 to the Plaintiff on 27/4/2017. [3.8] Vide its solicitor’s Letter of Termination cum Recall dated 15/5/2017 (exh.NTK-7, Plaintiff’s Affidavit in Support), the Plaintiff 20 alleged that D1 breached the terms and conditions of the said Facility Agreement whereby it failed, neglected and/or refused to pay the amount in excess and terminated the Facilities and demanded for the amount outstanding as prayed for in the summary judgment application which was filed thereafter on 23/6/2017. 25 [3.9] In response to the Plaintiff’s solicitor’s letter of 15/5/2017, vide letter dated 25/5/2017, the Defendants made another proposal of repayment plan, among others, that the Defendants will continue to serve the monthly interest and a commitment to pay RM200,000.00 within 3 months of receipt of Plaintiff’s approval to withdraw the 30 termination and recall of the Facilities (exh.NTK-8, Plaintiff’s Affidavit in Support). 5 [3.10] The Plaintiff responded vide letter dated 13/6/2017 (exh.NTK- 5 9, Plaintiff’s Affidavit in Support) rejecting the Defendants’ proposed offer to settle vide letter dated 18/4/2017 and proposed repayment plan of 25/5/2017 and with instructions to proceed with legal action for recovery of the outstanding amount. 10 [4] The Defendants submitted there are 2 triable issues to dispute the Plaintiff’s claim, namely -

acceptance of settlement of debt of RM241,000.00 by conduct; and

unjust enrichment. 15 Findings Acceptance of settlement of debt of RM241,055.38 by conduct [5] In respect of the 1st purported issue in its Written Submission, the Defendants submitted - 20  “The Plaintiff had demanded a sum of RM241,055.38 as full settlement of the debt. Acting on this and in reliance of this, the Defendants made payment of RM125,000.00. The Plaintiff after receiving the money purported to reject the settlement but nevertheless kept RM125,000.00 paid in lieu of the settlement. 25  Due to the failure of the Plaintiff to appreciate the fact that the Defendants had made part payments of RM125,000.00, the Plaintiffs through their solicitor’s letters dated 13/6/2017 (exh.NTK-9) and 15/5/2017 (exh.NTK- 11) respectively rejected the Defendants’ settlement proposal without any 30 reasonable explanation and proceeded with legal actions against the Defendants.  The Plaintiff had also expressly admitted, by receiving of the said amount of RM125,000.00 on 27/4/2017 to settle the debt at RM241,055.38. 35  Having in effect accepted settlement to be made at RM241,055.38, it is therefore unjust for the Plaintiff to now seek to claim the sum of RM1,830,348.22 from the Defendants. 40 6  It is, therefore, the Defendants’ case that the Plaintiff by their conduct is 5 now estopped from claiming RM1,830,348.22 the debt of which in any event is denied”. [5.1] In support the Defendants referred to the following cases:

Low Lup Piow & Ors. v. Lee Soh Hua [1983] 1 MLJ 304 at 10 p.307F left where the High Court held - “There was no undue delay by the plaintiffs in trying to comply with the agreement. They were doing all they could reasonably do in the circumstances and I held that the defendant had acted unreasonably and wrongfully in terminating the agreement. The plaintiffs on their part had 15 paid $300,000.00 as part payment … and they were willing to pay the balance …”.

Boustead Trading (1985) Sdn Bhd v Arab-Malaysian Merchant Bank Bhd [1995] 3 MLJ 331 at p.348 E-F 20

Eckhardt Marine GMBH v Sheriff, High Court of Malaya, Seremban & Ors [2001] 4 MLJ 49 where the Court of Appeal at p.54 held - “Fourthly, the act of acceptance may be either by words or by conduct or it may be partly by words and partly by conduct. Brogden v Metropolitan 25 Railway Co (1877) 2 App Cas 666 is a case of acceptance by conduct …”.

Alexander Brogden and Others v The Directors, &c., of the Metropolitan Railway Company (1877) 2 App Cas 666. 30 [6] With respect I find there is no merit whatsoever in the Defendants’ submission and the purported 1st issue is not a triable issue for the following reasons. [6.1] I find none of the cases cited by the Defendants are of assistance to them. In the present case it is obvious there cannot be 35 estoppel by conduct nor can the Plaintiff be said to have acted unreasonably and wrongfully in terminating the said Facility Agreement nor was there acceptance by conduct on the part of the 7 Plaintiff. This is because in the first place there is no acceptance of 5 both the offers to settle as the Plaintiff had rejected them outright in very clear and explicit terms -

Defendants’ offer to settle of 18/4/2017 (exh.RT-3, Defendants’ Affidavit in Reply) was rejected vide the Plaintiff’s letter dated 15/5/2017 (exh.NTK-11, Plaintiff’s Affidavit in Support); and 10

Defendants’ offer to settle of 25/5//2017 (exh.NTK-8, Plaintiff’s Affidavit in Support) was rejected vide the Plaintiff’s letter dated 13/6/2017 which also made reference to the Defendants’ offer to settle of 18/4/2017 (exh.NTK-9, Plaintiff’s Affidavit in Support).

The Plaintiff’s Letter of Demand of 12/4/2017 categorically 15 states - “We are therefore instructed by our client to demand from you, which we hereby do, the payment of the aforesaid sum of RM241,055.38 as at 10 April 2017 together with the further interest and the sum of RM106.00 (inclusive of 6% GST) being the legal cost of this letter of demand be 20 made to our client within Seven (7) Days from the date hereof, failing which our clients shall terminate the above facility and recall the whole outstanding amount. For your information, the whole outstanding amount is RM1,941,055.38 as at 10 April 2017”. (Emphasis added) 25 It is crystal clear from quoted paragraphs of the said letter, the Defendants are required to pay RM241,055.38 (the amount as at 10/4/2107) by 19/4/2017; otherwise the Plaintiff is at liberty to terminate the said Facility Agreement and recall the whole 30 outstanding amount of RM1,941,05.38 (as at 10/4/2017). As the Defendants had been so notified by the Plaintiff, there is no basis for the Defendants to allege that the Plaintiff’s conduct in terminating the said Facility Agreement and recalling the Facilities as unreasonable and wrongful.

Contrary to what the Defendants contended (5th para 3rd bullet), the acceptance of RM125,000.00 payment from the Defendants as 8 part payment is accepted “on a without prejudice basis” and does not 5 preclude the Plaintiff from exercising its legal right to commence legal action on any balance sum outstanding. Therefore there is no admission by the Plaintiff “to settle the debt at RM241,055.38”. It is the Defendants who were acting under a misapprehension. 10 Unjust enrichment [7] In respect of the 2nd purported issue, the Defendants argued the sum of RM1,830,348.22 claimed by the Plaintiff did not take into account the Defendants’ previous payment of RM125,000.00 and by the summary judgment application, the Plaintiff sought to unjustly 15 enrich itself. In support the Defendants cited Dream Property Sdn Bhd v Atlas Housing Sdn Bhd [2015] 2 MLJ 441 at 484[117]. [8] With respect I find the purported 2nd issue is not triable for the following reasons. Contrary to what the Defendants contended, the 20 Plaintiff had in fact taken into account the payment of RM125,000.00 made by the Defendants and notwithstanding this said payment, the amount outstanding to the Plaintiff is RM1,830,348.22 as at 10/5/2017 as is evident by the Statement of Account dated 8/9/2017 (exh.NTK-10, Plaintiff’s Affidavit in Support) which remained 25 unchallenged. S.16.28 of the said Facility Agreement and s.2.16 of the Guarantee and Indemnity Agreement specifically provide that the Defendants are contractually bound by the said clauses and a Statement of Account signed by Manager, Assistant Manager and any other authorised officer of the Bank is conclusive evidence of the 30 debt due to the Bank save if the Defendants can prove there is manifest error (see Citibank N.A. v. Ooi Boon Leong & Ors. [1981] 1 MLJ 282). 9 5 [9] Finally it is unconscionable of the Defendants to now deny the Plaintiff’s claim having received and utilised the Facilities. [10] Since the Defendants have not raised any triable issue which 10 require to be ventilated at a trial, I allowed the Plaintiff’s application (encl.7) for summary judgment to be entered against the Defendants in terms of prayers (a), (b), (c) and (e) i.e, costs of RM4,000.00 to be paid by the Defendants to the Plaintiff. (Prayer (d) has been abandoned by the Plaintiff). 15 Dated: 31/1/2018 SGD. (LAU BEE LAN) 20 Judge Counsel for the Plaintiff: Encik C.Y. Chuah 25 Messrs Sidek Teoh Wong & Dennis Advocates & Solicitors Level 32, Menara TH Perdana 1001 Jalan Sultan Ismail 50250 Kuala Lumpur 30 Counsel for the Defendants: Encik Suren Rajah together with Encik Tun Yun Ming 35 Messrs James Monteiro Advocates & Solicitors Unit D4-6-1, Solaris Dutamas No. 1, Jalan Dutamas 1 50480 Kuala Lumpur 40