CIMB Bank Berhad v Quality Castors & Wheels (M) Sdn. Bhd. (PA-22NCC-39-04/2025)

PA-22NCC-39-04/2025 IN THE HIGH COURT OF PULAU PINANG IN THE STATE OF PULAU PINANG, MALAYSIA CIVIL SUIT NO.: PA-22NCC-39-04/2025 BETWEEN CIMB BANK BERHAD (Company No.: 197201001799/13491-P) ...PLAINTIFF AND

1. QUALITY CASTORS & WHEELS (M) SDN. BHD. (Company Registration No.: 199801006872 (462999-K))

2. LOO AH SENG (NRIC No.: 570611-08-6099)

3. KAREN LOO (NRIC No.: 861008-35-5354) ...DEFENDANTS GROUNDS OF JUDGMENT INTRODUCTION

1. This involves an application for summary judgment against the $ 3^{rd} $ Defendant, who is a guarantor for the outstanding sums under the banking facilities granted to the $ 1^{st} $ Defendant (Enclosure 15). BACKGROUND FACTS

2. By a Letter of Offer dated 16.07.2019 ("Letter of Offer"), the Plaintiff granted to the $ 1^{\mathrm{st}} $ Defendant the following banking facilities ("the said Facilities")-

(ii) 'Overdraft' in the sum of RM1,400,000-00;

(iii) 'Multi Option Line (MOL 1)' in the sum of RM140,000-00; and

(iv) 'Multi Option Line (MOL 2)' in the sum of RM200,00000.

3. By a Letter of Guarantee dated 21.08.2019 ("the Letter of Guarantee"), the $ 2^{nd} $ and $ 3^{rd} $ Defendants jointly and severally agreed to guarantee the repayment of the said Facilities to the Plaintiff.

4. The Facilities Agreement dated 21.08.2019 ("the Facilities Agreement") was also executed by the $ 1^{\mathrm{st}} $ Defendant as borrower and both the $ 2^{\mathrm{nd}} $ and $ 3^{\mathrm{rd}} $ Defendants as guarantors.

5. Owing to the failure, refusal and neglect of the $ 1^{\mathrm{st}} $ Defendant in repayments of the said Facilities, the Plaintiff issued a Notice of Demand dated 19.02.2025 to the $ 1^{\mathrm{st}} $ Defendant as borrower and both the $ 2^{\mathrm{nd}} $ and $ 3^{\mathrm{rd}} $ Defendants as guarantors ("the said Notice of Demand") and demanded the overdue facility payments be settled within fourteen (14) days from the date of the notice, failing which, the said Facilities will be revoked and legal action will be initiated against all the Defendants.

6. The Defendants failed, refused and neglected to comply with the said Notice of Demand. This led to the issuance of a Notice of Recall and Termination dated 14.03.2025 ("said Notice of Recall and Termination") to the $ 1^{\mathrm{st}} $ Defendant and a demand to the $ 2^{\mathrm{nd}} $ and $ 3^{\mathrm{rd}} $ Defendants as guarantors.

7. However, there was still no payment received by the Plaintiff even after the lapse of the stipulated fourteen (14) day deadline in the said Notice of Recall and Termination.

8. By a Writ of Summons and Statement of Claim dated 16.04.2025, the Plaintiff initiated this legal action against the Defendants, claiming, inter alia, for the outstanding sums due and owing under the said Facilities.

9. On 04.08.2025, Judgment in Default of Appearance was granted and recorded in favour of the Plaintiff against both the $ 1^{\mathrm{st}} $ and $ 2^{\mathrm{nd}} $ Defendants.

10. Subsequently, on 25.09.2025, the Plaintiff filed the application herein via Enclosure 15. ANALYSIS AND FINDINGS

11. In opposing Enclosure 15, Solicitors for the $ 3^{\mathrm{rd}} $ Defendant submitted that the Plaintiff's case is not plain and obvious, instead involves bona fide triable issues of fact and law based on four (4) points-

(1) the Plaintiff's claim was prematurely filed due to absence of proof of proper notices

12. It was argued that the documents exhibited by the Plaintiff and marked as "CIMB-5" in the Plaintiff's Affidavit in Support filed (Enclosure 16) did not disclose Acknowledgement of Receipt (AR) card and/or any form of proof of delivery of the notices (i.e. said Notice of Demand and said Notice of Recall and Termination) to the $ 3^{rd} $ Defendant.

13. Quoting the Court of Appeal decision in Item Industrial Engineering Sdn Bhd & Ors v Bank Utama (Malaysia) Berhad [2015] 2 MLRA 28, the Solicitors for the $ 3 ^{rd} $ Defendant argued that proof of proper notice is a prerequisite to enforcing rights under a facility or guarantee. [14] In an action for recovery, a proper demand must be made to the guarantors... before an action can be initiated against them..." "[19] Thus, we are of the considered view that the learned trial judge had failed to consider that the plaintiff had failed to prove that a proper demand was made to the guarantors before the plaintiff can initiate this proceedings against them. Undeniably, there is a demand filed by the plaintiff in the Appeal Record. We find that the 2nd and 3rd defendants were not served with the letter of demand in the absence of the relevant AR card in the bundle."

14. Hence, it was argued such omission raised a triable issue as to whether the claim was premature by reason of defective service as Plaintiff's omission to prove service of both demand and termination notices, rendered the Plaintiff's action premature and unsustainable.

15. Now, it is undisputed that the $ 3^{rd} $ Defendant, as guarantor for the $ 1^{st} $ Defendant liabilities under the said Facilities, is bound by the terms of the Letter of Offer, the Letter of Guarantee and the Facility Agreement by virtue of Clause 19 of the Letter of Guarantee.

16. Pursuant to Clause 4 of the Letter of Guarantee as well as Clause 15 of the Facility Agreement, any notice of demand against the $ 3^{rd} $ Defendant, should be left at the usual or last known address of the $ 3^{rd} $ Defendant or sent by ordinary mail to such address i.e. as per the address stated in Section 2 of the Schedule in the Letter of Guarantee. Under these provisions, proof of posting to the $ 3^{rd} $ Defendant shall be deemed as proof of receipt by the $ 3^{rd} $ Defendant on the second day of posting.

17. In accordance with the aforesaid Letter of Guarantee and Facility Agreement, the said Notice of Demand was issued by the Plaintiff to the $ ^{1} $ $ ^{st} $ Defendant as the borrower and copied to the $ ^{3} $ $ ^{rd} $ Defendant as guarantor.

18. This was followed by the issuance of the said Notice of Recall and Termination to the $ 1^{\mathrm{st}} $ Defendant which was also copied to the $ 3^{\mathrm{rd}} $ Defendant. Proof of posting of the aforesaid notices were exhibited and marked as "CIMB-5" of the Plaintiff's Affidavit in Support (Enclosure 16).

19. Based on Clause 4 of the Letter of Guarantee and Clause 15 of the Facility Agreement, proof of receipt of the notice of demand by the $ 3 ^{rd} $ Defendant is deemed on the second day after posting.

20. In other words, the 3rd Defendant is deemed to have received the abovesaid notices on the second day of posting.

21. Therefore, all that is required for the Plaintiff is to show proof of posting of the aforesaid notices (i.e. said Notice of Demand and said Notice of Recall and Termination).

22. There is no requirement for the Plaintiff to prove receipt of the notices as alleged by the $ 3^{rd} $ Defendant be it in the form of Acknowledgement of Receipt (AR) card, courier record, delivery confirmation, etc.

23. Moreover, there being no requirement that the mode of service of the notice of demand is by way of AR registered post, there is thus no necessity for the Acknowledgement of Receipt (AR) card to be exhibited.

24. The Court of Appeal case of Item Industrial Engineering Sdn Bhd & Ors v Bank Utama (Malaysia) Berhad (supra) is thus distinguishable from the case herein.

25. Hence, the said Notice of Demand and said Notice of Recall and Termination to the $ 3^{rd} $ Defendant demanding for the payment defaulted by the $ 1^{st} $ Defendant/Borrower were issued to the $ 3^{rd} $ Defendant in compliance with the aforesaid agreements.

26. The arguments raised by the Solicitors for the $ 3^{\mathrm{rd}} $ Defendant on improper or defective service are thus devoid of merit.

27. As the Plaintiff had proved that the said Facilities were validly terminated whereupon proper demand was also made to the $ 3^{rd} $ Defendant, the Defendant's argument on premature action by the Plaintiff is also without merit.

(2) there exist material contradictions within the Plaintiff's own affidavits

28. It was submitted by the $ 3^{\mathrm{rd}} $ Defendant's Solicitors that the said Notice of Demand and said Notice of Recall and Termination issued are inherently defective and inconsistent.

29. It was argued that in the Plaintiff's Affidavit in Support (Enclosure 16), the Plaintiff averred that the Notice of Demand and Notice of Termination both dated 14.3.2025 were duly issued to all Defendants, including the $ ^{3^{rd}} $ Defendant.

30. However, in a subsequent Affidavit in Reply (Enclosure 18), the Plaintiff averred that the said Notice of Recall and Termination dated 14.03.2025 was issued solely to the $ 1^{\mathrm{st}} $ Defendant (being the principal borrower), while only the Notice of Demand dated 14.03.2025 was sent to the guarantors (i.e. the $ 3^{\mathrm{rd}} $ Defendant).

31. It was thus argued that a comparison of the affidavits (Enclosures 16 and 18) show a direct departure from the earlier stance.

32. By applying the principle laid down by the Court of Appeal in Azlin Khalid v Mohamad Najib Ishak (2017) MLRAU 402, the Solicitors for the $ 3^{rd} $ Defendant submitted that as there is a serious conflict of material facts as disclosed in the affidavits, hence a triable issue worthy of judicial investigation in the trial of the action, summary judgment should be refused.

33. A perusal of the aforesaid Notice of Demand and Notice of Termination both dated 14.3.2025 reveals the following.

34. Upon the $ 1^{\mathrm{st}} $ Defendant's / Borrower's default to the Plaintiff, a Notice of Demand dated 19.02.2025 (i.e. the said Notice of Demand) was issued to the $ 1^{\mathrm{st}} $ Defendant to reply, response, dispute or comply to the said demand.

35. A copy of the said notice was also sent to the $ 3^{rd} $ Defendant as one of the guarantors.

36. A separate notice of demand of even date was also issued to the guarantors to remedy the 1 $ ^{st} $ Defendant's / Borrower's default.

37. However, upon receiving no response from either the 1 $ ^{st} $ Defendant / Borrower or the Guarantors, the Plaintiff exercised its rights according to the Letter of Offer, Facility Agreement and Letter of Guarantee and issued a Notice of Recall and Termination dated 14.03.2025 to the 1 $ ^{st} $ Defendant/ Borrower (i.e. the said Notice of Demand and said Notice of Recall and Termination).

38. A copy of the said notice was also sent to the $ 3^{\mathrm{rd}} $ Defendant as one of the guarantors.

39. A separate notice of demand of even date was also issued to the guarantors for the outstanding debt upon the recall and termination of the said Facilities granted to the $ ^{1 s t} $ Defendant /Borrower.

40. Based on the aforesaid analysis, the aforesaid notices were issued by the Plaintiff in accordance with the Letter of Offer, Facility Agreement and Letter of Guarantee.

41. In summary, for each and every notice issued to the $ 1^{\mathrm{st}} $ Defendant/Borrower, be it a Notice of Demand for default (i.e. the said Notice of Demand dated 19.02.2025) or a Notice To Recall & Termination dated 14.03.2025 (i.e. the said Notice of Recall and Termination), a copy of same was copied to the guarantors.

42. In addition thereto, as guarantors, a separate notice of demand dated 19.02.2025 and 14.03.2025, respectively, were also issued to the guarantors.

43. As such, there is no departure in the averments by the Plaintiff in their two (2) affidavits as alleged by the Solicitors for the $ 3^{rd} $ Defendant.

44. The $ 3^{\mathrm{rd}} $ Defendant's Solicitors' argument on the existence of material contradictions within the Plaintiff's own affidavits (i.e. Enclosures 16 and 18) are devoid of merit.

(3) The certificate of indebtedness is incomplete and nonconclusive

45. Solicitors for the $ 3^{\mathrm{rd}} $ Defendant also argued that certificate of indebtedness, exhibited and marked as "CIMB 6" in the Plaintiff's Affidavit in Support (Enclosure 16) is insufficient and non-conclusive in that it reproduces only the total sum alleged to be outstanding and states the applicable interest rate in percentage form.

46. Solicitors for the $ 3 ^{rd} $ Defendant further argued that the certificate of indebtedness fails to specify how the principal amount as well as the amount of interest accrued to date were derived.

47. The legal position governing the conclusiveness of a certificate of indebtedness is firmly established in a plethora of cases. Suffice it to refer to the case of Cempaka Finance v Ho Lai Ying [2005] 2 MLRA 736 where the Federal Court held that the "Certificate of Indebtedness" clause is a conclusive evidence clause in the absence of manifest error in the certificate. his position is firmly established in law.

48. That being said, let us now come back to the case at hand.

49. Contractually, Clauses 11.5 and 14.3 of the Facility Agreement as well as Clause 19 of Additional Terms and Conditions of Schedule 1 to the Letter of Offer stipulate that the "Certificate of Indebtedness shall be conclusive evidence of indebtedness of the $ ^{3^{rd}} $ Defendant to the Plaintiff, save for manifest error.

50. Hence, the burden of disproving the correctness of the certificate of indebtedness lies on the $ 3^{rd} $ Defendant.

51. As exhibited and marked as "CIMB-6" in the Plaintiff's Affidavit in Support (Enclosure 16), the Plaintiff's Certificate of Indebtedness clearly sets out the amount owed under each facility, the applicable interest rate, and the date from which interest began to accrue.

52. On the contrary, Solicitors for the $ 3^{\mathrm{rd}} $ Defendant had failed to provide any reason or calculation as to why the certificate of indebtedness issued by the Plaintiff contains manifest error.

53. In fact, nowhere in the $ 3^{\mathrm{rd}} $ Defendant's Affidavit in Reply (Enclosure 17) nor submission were the keywords "manifest error" mentioned.

54. Simply put, the $ 3^{\mathrm{rd}} $ Defendant did not even allege that the certificate of indebtedness contains "manifest error" let alone provide any proof thereto.

55. As such, the argument by the Solicitors for the $ 3^{rd} $ Defendant on the certificate of indebtedness issue is also devoid of merit.

(4) The quantum of indebtedness remains uncertain in light of the ongoing derivative action

56. Solicitors for the $ 3^{rd} $ Defendant also submitted that the alleged default in repayments of the said Facilities was not caused by any omission of the $ 3^{rd} $ Defendant, but by the misappropriation of funds and financial misconduct of the $ 1^{st} $ Defendant's director, Lim Hooi Cheng, who had exclusive control over the company's financial affairs.

57. Consequently, a derivative action was instituted on behalf of the $ 1^{\mathrm{st}} $ Defendant to recover the misappropriated funds.

58. It was thus argued that these circumstances give rise to bona fide triable issues on:

(ii) whether any portion of the alleged indebtedness may be recovered and reduced through the ongoing derivative proceedings; and

(iii) whether the Plaintiff's claim truly represents the final and conclusive liability of the principal borrower.

59. Under the Letter of Guarantee, the $ 3^{rd} $ Defendant is to indemnify and guarantee the Plaintiff if the $ 1^{st} $ Defendant defaulted in the repayments of the said Facilities.

60. The $ 3^{\mathrm{rd}} $ Defendant's liability as a guarantor is an absolute and independent obligation that is only discharged by full performance (i.e. repayment).

61. In the Letter of Guarantee, it is clearly stated that the obligations of the guarantors (i.e. the $ 3^{rd} $ Defendant) are direct, unconditional and irrevocable.

62. Thus, the $ 3^{\mathrm{rd}} $ Defendant's allegation of misappropriation of funds and financial misconduct of the $ 1^{\mathrm{st}} $ Defendant's director, Lim Hooi Cheng are of no concern whatsoever to the Plaintiff.

63. As such, the derivative proceedings and its legal impact are irrelevant to the $ 3^{rd} $ Defendant's primary obligation under the Letter of Guarantee, for at all material times, the $ 3^{rd} $ Defendant is jointly and severally liable to the Plaintiff for the outstanding debts of the $ 1^{st} $ Defendant owing to its default in repayments of the said Facilities granted therein.

64. The $ 3^{\mathrm{rd}} $ Defendant's arguments on this issue is accordingly without merit. CONCLUSION

65. Based on the aforesaid, this court finds there is no defence raised by the $ 3^{rd} $ Defendant to the Plaintiff's claim. Neither are there bona fide triable issues raised by the $ 3^{rd} $ Defendant in her statement of defence.

66. Enclosure 15 is thus allowed with costs of RM5,000-00 subject to allocator fees. Dated 7th May, 2026. Penang High Court (4) Counsel(s): Ms. Sara Mohamd Hear from Messrs Zaid Ibrahim & Co. for the Plaintiff. Mr. Gandhi Palanisamy from Messrs. Gandhi Syahida & Associates for the Defendant. Case(s) referred to: Item Industrial Engineering Sdn Bhd & Ors v Bank Utama (Malaysia) Berhad [2015] 2 MLRA 28; Azlin Khalid v Mohamad Najib Ishak (2017) MLRAU 402; Cempaka Finance v Ho Lai Ying [2005] 2 MLRA 736