Export-Import Bank of Malaysia Berhad v 1. ) Impiana Ubud (Labuan) Co Ltd (WA-22NCC-57-01/2022)

(M) Bhd [1995] 3 CLJ 690 (CA), was relied on by the High Court in holding a certificate of indebtedness to be binding unless manifest error on the face of it or fraud is shown, the Court of Appeal in the instant case, seems to place no significance on this. Nor has it considered the fact that in Chen Heng Ping the court was able to distinguish the factual peculiarities in Bank of Commerce. It was a case where an error was manifested on the face of the certificate of indebtedness because the guarantee agreement had limited the guarantor's liability to RM140,000 whereas the suit had claimed for RM259,000. Indeed, the Court of Appeal in Chen Heng Ping cited with approval the observation expressed by VC George J in D & C Nomura Merchant Bankers Bhd v. Gunung Kuari Sdn Bhd [1990] 2 CLJ 58; [1990] 1 CLJ (Rep) 752 when he said: ... it was agreed that a certificate of indebtedness by an authorised officer of the plaintiff shall be binding and conclusive against the guarantors of the amount payable by the 1st defendant. In the instant case, there is such a certificate of indebtedness under the hand of an authorised officer of the plaintiff bank. The judgment of Shankar J in MIMB v. G & C Securities (unreported) and the judgment of Bank Bumiputra Malaysia Bhd v. Doric Development Sdn Bhd [1988] 1 CLJ 361 (Rep); [1988] 1 CLJ 311; [1988] 1 MLJ 462, 463 provided authority for the proposition that such a certificate is indeed binding unless there is manifest error. This observation appeared to has escaped the attention of the Court of Appeal in the present case. In the result, the Court of Appeal took the position that the conclusiveness of the certificate of indebtedness exh. P3 was binding only upon the parties and that the court would still have to determine whether sufficient evidence had been adduced to prove quantum and the correctness of the amount claimed. With respect, such a proposition goes against the entrenched principles enunciated by Raja Azlan Shah CJ (Malaya) (as His Highness then was) in Citibank N.A. v. Ooi Boon Leong & Ors [1980] CLJU 168; [1980] 1 LNS 168; [1981] 1 MLJ 282 when he said inter alia: We have often said in this court many a time that where the issues are clear and the matter of substance can be decided once and for all without going to trial there is no reason why the Assistant Registrar or the judge in chambers, or, for that matter, this court shall not deal with the whole matter under the R.S.C. Order 14 procedure. In the present case, the guarantee contains a clause which enables the bank by producing a certificate of indebtedness by its officer to dispense with legal proof of the actual indebtedness of the respondents.... It means that, for the purpose of fixing liability of the respondents, the company's indebtedness may be ascertained conclusively by a certificate. The above dictum establishes firmly the conclusive nature and extent of a certificate of indebtedness. A certificate of indebtedness operates in the field of adjectival law. It excuses the plaintiff from adducing proof of debt. Such a certificate shifts the burden Certificate of Indebtedness The Respondent had issued a statement entitled "Butir-butir Jumlah Terhutang Setakat 3/4/12" to support its claim for the outstanding sum (see Rekod Rayuan page 145). Although the statement was not entitled or captioned as "Certificate of Indebtedness" it was nonetheless meant to inform the Appellants of the sum outstanding with calculations, as at 3/4/12. The Court was satisfied that for all intents and purposes, the statement functioned adequately as a certificate of indebtedness issued to the Appellants. Apart from complaining that the sum claimed was wrongly calculated by the Respondent and was excessive, the Appellants did not adduce any evidence to challenge the "method" of calculation nor the quantum of the outstanding sum. Accordingly, and in light of the decision in the case of Cempaka Finance Berhad v Ho Lai Ying & Anor [2006] 3 CLJ 544 (FC), a certificate of indebtedness is deemed to be final and conclusive. It was held in Cempaka Finance that "a Certificate of Indebtedness operates in the field of adjectival law, excusing the plaintiff from adducing proof of debt and shifting the burden onto the defendant to disprove the amount With respect, the submission of learned counsel for the respondents was bereft of merit. It is axiomatic that a certificate or statement issued pursuant to a conclusive evidence clause is, in the absence of fraud or manifest error on the face of the certificate, determinative of the amount due. In Bache & Co (London) Ltd v. Banque Vernes et Commerciale De Paris SA [1973] 2 Lloyd's Rep 437 ("Bache ") Lord Denning MR said at p. 440: I would only add this: this commercial practice (of inserting 'conclusive evidence' clauses) is only acceptable because the bankers or brokers who insert them are known to be honest and reliable men of business who are most unlikely to make a mistake. Their standing is so high that their word is to be trusted. So much so that a notice of default given by a bank or a broker must be honoured. It ranks as equivalent to, if not higher than, the certificate of an arbitrator or engineer in a building contract. As we have repeatedly held, such a certificate must be honoured, leaving any cross-claims to be settled later by an arbitrator. So if a banker or broker gives a notice of default in pursuance of a 'conclusive evidence' clause, the guarantor must honour it, leaving any cross-claims by the customer to be adjusted in separate proceedings. [19] The above articulation of the rationale underlying the legal acceptance of conclusive evidence clauses was approved in the Federal Court cases of Citibank NA v. Ooi Boon Leong & Ors [1980] CLJU 168; [1980] 1 LNS 168; [1981] 1 MLJ 282 and Cempaka Finance Bhd. v. Ho Lai Ying & Anor [2006] 3 CLJ 544. The highest court of the land had decided that a certificate of indebtedness operates in the field of adjectival law, and it excuses the bank from adducing the proof of debt. It is for the borrower to disprove the amount claimed. [20] We were of the considered view that the learned trial judge erred when His Lordship went against the entrenched principles and decided against the appellant when the respondents failed to disprove by clear and convincing evidence that the amount claimed and/or demonstrated any manifest error in the certificate. Indeed, he