BMW Credit (Malaysia) Sdn Bhd v C F L Engineering Sdn Bhd & 2 Lg (WA-22NCC-325-08/2017)

CFL ENGINEERING SDN BHD (No Syarikat: 808845-D)

CHAI CHU FAH (No. K/P: 790131-05-5255)

CHAI CHU LEONG (No. K/P: 821203-05-5115) … DEFENDAN-DEFENDAN

This case concerns an application by the Plaintiff BMW Credit (Malaysia) Sdn Bhd for summary judgment against the Defendants, as documented in enclosure 7. I allowed the application against the Defendants. These are the full reasons for my decision. 2

The 1st Defendant had obtained a Restraining Order from the High Court of Johor Bahru pursuant to section 368 of the Companies Act

The Restraining Order had expired on 13.5.2018 and the Defendants’ solicitors do not have any instructions as to whether there has been an extension of the Restraining Order. I will therefore proceed on the basis that the Restraining Order has expired and has not been extended.

3.

27.10.2016, with 59 monthly instalments of RM 40,112.00 and a final instalment of RM 40,092.00; ii) The 1st Defendant agreed to pay interest at the rate of 24% per annum on daily rests on all payments under the Hire Purchase Agreement which are in arrears and all outstanding amounts thereunder; iii) The 1st Defendant’s liability to pay the hire rentals shall continue notwithstanding any defects in the Goods or the breakdown, loss of or damages to the Goods; iv) The 1st Defendant shall not sell, transfer, dispose of, pledge, mortgage or encumber the Goods or any right, title or interest therein or attempt purport or agree to do so; and v) The 1st Defendant shall pay to the Plaintiff all expenses including legal costs on a solicitor and client basis incurred by or on behalf of the Plaintiff in endeavouring to take possession of the Goods and of any legal proceedings by or on behalf of the Plaintiff to enforce the provisions of the Hire Purchase Agreement.

If during the hiring the 1st Defendant shall default in payment of any of the hire rentals or any other sums payable under the Hire 4 Purchase Agreement, the Plaintiff may, without prejudice to any other rights and remedies it may have under the agreement immediately terminate the agreement without notice and resume possession of the Goods and if the Plaintiff shall for any reason whatsoever be unable to resume possession of the Goods, the Plaintiff shall be entitled at its option, in lieu of resuming possession of the Goods, to recover from the 1st Defendant the unpaid balance of the hire purchase price less a rebate ( if any) plus all other sums under the agreement.

By way of a Guarantee & Indemnity executed by them, the 2nd and 3rd Defendants jointly and severally guaranteed the punctual payment of all sums of money which may become due to the Plaintiff under the Hire Purchase Agreement executed by the 1st Defendant and the due performance, and observance by the 1st Defendant of the stipulations and conditions contained in the said Hire Purchase Agreement.

In default of the Hire Purchase Agreement, the 1st Defendant defaulted in payment of the hire rentals since 27.4.2017. Despite the Plaintiff making demand for the arrears of RM 85,129.76 by letter dated 29.5.2017, the 1st Defendant has failed to pay the said arrears. 5

The Plaintiff was unable to resume possession of the Goods and by letter through its solicitors dated 29.6.2017, the Plaintiff gave notice to the 1st Defendant of the termination of the Hire Purchase Agreement and demanded payment of the entire outstanding balance of RM1,834,161.09. Particulars of the said sum of RM1,834,161.09 are as follows: BUTIR-BUTIR Tolak Tambah Tolak Tambah : : : : Harga Tunai Bayaran Pendahuluan Jumlah Dibiayai (Financed) Caj Faedah Jumlah Yang Perlu Dibayar Ansuran Yang Telah Dibayar Rebet Faedah setakat 29.6.2017 Faedah Tertunggak setakat 29.6.2017 Lain-lain Caj Yuran Guaman Jumlah Yang Perlu Dibayar setakat 29.6.2017 RM2,369,100.00 RM319,100.00 ____________________ RM2,050,000.00 RM356,700.00 ____________________ RM2,406,700.00 RM320,876.00 RM258,461.31 ____________________ RM1,827,362.69 RM6,593.77 RM90.57 RM114.06 ____________________ RM1,834,161.09 ____________________

By separate letters to the 2nd and 3rd Defendants dated 29.6.2017, the Plaintiff through its solicitors demanded payment of the said sum of 6 RM 1,834,161.09 from the 2nd and 3rd Defendants. To-date, no payment was made by any of the Defendants to the Plaintiff and the Plaintiff commenced the action herein against the Defendants and filed the application for summary judgment.

This is an application for summary judgment under Order 14 of the Rules of Court 2012 (ROC 2012). It is established law that once an Order 14 application is demonstrated to be properly filed, the burden shifts and rests on the Defendant who seeks to resist the application to raise a defence which shows a “bona fide triable issue”, in the sense of an issue which justifies and warrants the matter to be considered at a full trial.

This is in keeping with the requirements of Order 14 r 3 of the ROC 2012 which provides that unless the Defendant satisfies the Court with respect to the claim, or part of a claim, to which the application relates that : 7 i) There is an issue or question in dispute which ought to be tried; or ii) There ought for some other reason to be a trial of that claim or part thereof.

The Court may give such judgment for the Plaintiff against the Defendant on that claim or part as may be just having regard to the nature of the remedy or relief claimed.

In the often quoted decision of the former Supreme Court in National Company For Foreign Trade v Kayu Raya Sdn Bhd [1984] 2 MLJ 300 it was authoritatively ruled as follows: “We think it appropriate to remind ourselves once again that in every application under Order 14 the first considerations are (1) whether the case comes within the Order and (b) whether the Plaintiff has satisfied the preliminary requirements for proceeding under Order 14. For the purposes of an application under Order 14 the preliminary requirements are: The defendant must have entered an appearance; The statement of claim must have been served on the Defendant; and 8 The affidavit in support of the application must comply with the requirements of Rule 2 of Order 14. …If the plaintiff fails to satisfy either of these considerations, the summons may be dismissed. If however, these considerations are satisfied, the plaintiff will have established a prima facie case and he becomes entitled to judgment. The burden then shifts to the defendant to satisfy the Court why judgment should not be given against him.”

In this case, the Plaintiff has satisfied these preliminary requirements and this is not disputed by the Defendant. The burden is now firmly on the Defendant to show one or more triable issues that does not justify summary judgment to be entered against the Defendant. If the Defendant can show even one triable issue, this Court will not grant summary judgment. But it has to be a genuine triable issue. As stated by the Federal Court in Voo Min En & Ors v Leong Chung Fatt [1982] 2 MLJ 241, it is not enough for a defendant to raise an issue or any issue. The defendant must instead raise such an issue as would require a trial in order to determine it. 9

I would also like to refer to the leading judgment of the former Supreme Court on summary judgment applications in Bank Negara Malaysia v Mohd Ismail & Ors [1992] 1 MLJ 400 which held as follows: “In an application under O. 14, the court has 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 depends on the facts or the law arising from each case as disclosed in the affidavit evidence before the court. A complete defence need not be shown. The defence set up need only show that there is a triable issue. 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. Unless this principle is adhered to, a judge is in no position to exercise his discretion judicially in an O 14 application.”

The issues raised by the Defendants are considered below. 10

The first issue raised by the Defendants is that there is a difference between the arrears claimed of RM86,279.61 and the outstanding sum of RM1,834,161.09.

This issue is without substance. It is stated clearly in the Plaintiff’s solicitors’ letters that the arrears were RM86,279.61 whereas the outstanding sum of RM1,834,161.09 is the outstanding balance upon termination of the Hire Purchase Agreement. Pursuant to the Hire Purchase Agreement, upon termination of the agreement, the Plaintiff is entitled to claim the unpaid balance of the hire purchase price less a rebate ( if any) plus all other sums payable under the agreement.

Particulars of the said sum of RM1,834,161.09 were set out in the Plaintiff’s solicitors’ letters of demand and the 2nd and 3rd Defendants have not been able to show that there was any error in the said particulars.

Plain denials do not constitute triable issues. In Chen Heng Ping & Ors v Intradagang Merchant Bankers (M) Bhd 2 MLJ 363 the Court of Appeal held that: 11 “When an application is made for summary judgment under O 14 supported by an affidavit which goes to show that there is no defence, the defendants must show cause why leave to defend must be given. This means that the defendants must provide answers on oath which constitute evidence that they have a defence which is fit to be tried. Denials in a defence do not constitute evidence. They are challenges to the other side to show proof. In the present case the guarantors do not appear to have appreciated this. Their affidavits merely relied on the defence they pleaded, which consists of bare denials and points of law which they could not sustain.”

The other issue raised by the Defendants is whether the action taken against them by the Plaintiff is proper. To be precise, what the Defendants are alleging is that the Plaintiff is obliged to obtain judgment against the 1st Defendant first before the Plaintiff can take action against the 2nd and 3rd Defendants as guarantors. This issue is also without basis. Reading the Guarantee & Indemnity, there is nothing to say that the Plaintiff can only claim against the 2nd and 3rd Defendants after judgment has been entered against the 1st Defendant. In the Guarantee & Indemnity, the 2nd and 3rd Defendants agreed that they can be deemed as principal debtors of the Plaintiff. 12

Having evaluated the facts arising from and examined the law applicable to this case, I have determined that the Defendants have plainly failed to raise any triable issue or reasonable defence. I also find that all the arguments raised by the Defendants to be at variance with either the clear position in law or the undisputed contemporary documents. I allow the Plaintiff’s application against the Defendants with costs of RM 3,000.00 subject to allocator. Wong Chee Lin Judicial Commissioner Kuala Lumpur High Court Dated: 30th May 2018 Solicitors for the Plaintiff Janet Tang Yii Chi Messrs Lim Kian Leong & Co Advocates & Solicitors Kamar 10-8, Tingkat 10 Wisma UOA II, No. 21 Jalan Pinang 13 50450 Kuala Lumpur Tel : 03-2161 4199 / 2161 4157 Fax: 03-2161 4323 Solicitors for the Defendants Tan Eng Keat Messrs Tee, Liew & Co Advocates & Solicitors No. 61A, Jalan Molek 2/4