Goldbell Capital Sdn Bhd v 1. ) ST Healthcare Group Sdn Bhd (BA-22NCC-45-03/2024)

1.

SAFARUDIN BIN TAMBI …Defendants GROUNDS OF JUDGMENT Introduction [1] Plaintiff filed an application for summary judgment under Order 14 of the Rules of Court 2012 (the ROC) in enclosure 8, and Defendants applied for leave to amend their Statement of Defence via enclosure 12 under Order 20 of the ROC. [2] Both enclosures were heard together. After hearing both parties, I find that the proposed amendment was irrelevant to the main cause of action by the Plaintiff. The proposed amendment had strayed too far from the present defence filed. It was as good as a new defence being put forward on irrelevant issues regarding a third entity that is not a party to the Hire Purchase Agreements. [3] Defendant's application in enclosure 12 was dismissed with cost RM5000, subject to the allocator. [4] On the application for summary judgment, I agree with Plaintiff that Defendants had failed to show triable issues, and I am satisfied that the requirement of an O14 application is sufficiently proved by Plaintiff for judgment to be recorded as prayed for. [5] Enclosure 8 is allowed with cost of RM5000, subject to the allocator. [6] The Defendants have now appealed to the Court of Appeal, and my reasons are below. Factual Background [7] Plaintiff entered into eight (8) Hire Purchase Agreements (the HPA) dated from 17.8.2021 – 23.6.2022 with the First Defendant (D1) whereby it was agreed that Plaintiff would let and D1 would hire medical equipment and machinery (the goods) subject to the terms and conditions in the said HPA. [8] The salient terms of the HPA are as follows:

D1 shall pay the monthly rentals – Clause 4.

D1 shall be liable for late charges at the rate of 24% per annum on monies overdue – Clause 10.

In the event of default, Plaintiff is entitled to terminate the HPA and is entitled to immediate possession of the goods – Clause 15.1.

Upon termination, D1 shall forthwith deliver possession of the goods to the Plaintiff and shall pay the Plaintiff the unpaid balance of the purchase price and other sums payable under the HPA – Clause 15.2.

If Plaintiff was unable or unwilling to resume possession of the goods, Plaintiff shall be entitled at its option, in lieu of resuming the possession of the goods, to recover from D1 the unpaid balance of the hire purchase price less a rebate (if any) plus all other sum payable under the HPA – Clause 15.3. [9] The second Defendant (D2), as the director and shareholder of D1, has executed eight (8) Guarantees and Indemnities in favour of the Plaintiff. [10] Based on Clause 3 of the Guarantee and Indemnity, Plaintiff shall be at liberty to act as though D2 were the principal debtor to the said HPA. [11] D1 has been diligently paying the monthly rentals to the Plaintiff but until August 2022 to December 2022, had allegedly failed to pay the rentals. [12] Reminders and demands were made on the outstanding arrears, but D1 still neglected to pay, resulting in a Notice of Demand being sent to them. [13] Plaintiff, through their solicitors, issued Notice of Termination on 23.11.2023 for the respective HPAs and subsequently demanded possession of the goods. [14] Despite the Notice of Demand, Defendants had allegedly failed, neglected or refused to pay the amount due or deliver possession of the said goods to the Plaintiff. [15] Hence, this action for the outstanding sum amounting to RM2,318,858.40 which, as contended by Plaintiff, is severally liable by both Defendants due to the breach committed by D1. [16] Defendants filed their Statement of Defence (enclosure 6), putting the Plaintiff on strict proof, denied all allegations and stated as follows:

Plaintiffs' claim against Defendants is flawed and lacks a proper cause of action and/or is procedurally incorrect.

The goods claimed by the Plaintiff are not in the possession of the Defendants.

The goods are under the control of Setia Gemilang Sdn. Bhd. and/or HNM Global Marketing Sdn. Bhd. and/or Gideons (Malaysia) Sdn Bhd.

The Plaintiff and/or his employees had full knowledge of this fact.

The Plaintiff has not pleaded the true facts in the Statement of Claim.

The Plaintiff's claim is not a straightforward claim. [17] Consequent to the above defence, Plaintiff filed enclosure 8 for summary judgment to be recorded under Order 14 of ROC. [18] Defendants then appointed a new solicitor to continue representing them, who then immediately filed an application to amend the defence (enclosure 12). [19] The proposed draft of the amended defence is attached at "Lampiran A" of the application. [20] It is pertinent to note that the whole original paragraphs were deleted and a new set of statements had been inserted by the Defendants. I will refer to this later in this judgment. Summary Judgment under Order 14 Rule 1 [21] The law on summary judgment is trite. It is only in plain and obvious cases that recourse should be given to the summary process under Order 14 Rule 1. It should only be made if the Court thinks it is a plain case and ought not to go to trial (refer to Esso Standard Malaysia v. Southern Cross Airways (M) Bhd [1972] CLJU 31 and National Company for Foreign Trade v. Kayu Raya Sdn Bhd [1984] 1 CLJ Rep 283). [22] However, the Defendants should not be shut out from defending a claim unless it is apparent they have no case in the action. A complete defence need not be shown (see Alloy Automotive Sdn Bhd v. Perusahaan Ironfield Sdn Bhd [1986] CLJ Rep 45). The defence setup needs only to show that there is a triable issue (Bank Negara Malaysia v. Mohd Ismail & Ors [1992] 1 CLJ 627). [23] However, merely raising an issue does not mean that the issue is triable. The Federal Court in Voo Min En & Ors Leong Chung Fatt [1982] CLJU 47 held that ".. the pertinent principle being one where it is not enough for the defendant "to raise an issue or any issue". The Defendant must instead raise such issue as would require a trial in order to determine it." Amendment of Pleading under Order 20 Rule 5 [24] Under Order 20 r 5 of the ROC, the Court may, at any stage of the proceedings, allow parties to amend their pleading on such terms as to costs or otherwise as may be just and in such a manner, if any, as it may direct. [25] The Federal Court in Yamaha Motors Co. Ltd. v. Yamaha (M) Sdn. Bhd. & Ors [1983] CLJ Rep 428 outlined the following core considerations for an application to amend: "Three basic questions should be considered to determine whether injustice would or would not result,

whether the application is bona fide;

whether the prejudice caused to the other side can be compensated by costs and

whether the amendments would not in effect turn the suit from one character into a suit of another and inconsistent character. [See Mallal's Supreme Court Practice page 342]. If the answers are in the affirmative, an application for amendment should be allowed at any stage of the proceedings particularly before trial, even if the effect of the amendment would be to add or substitute a new cause of action, provided the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the original statement of claim." [26] With the introduction of the pre-trial case management in the year 2000 under Order 34 of the Rules, the following question of law was deliberated by the Federal Court in Hong Leong Finance Bhd v. Low Thiam Hoe and Another Appeal [2015] 8 CLJ 1:

Whether the principles in Yamaha Motor Co Ltd v. Yamaha Malaysia Sdn Bhd & Ors (supra) are the sole consideration in deciding an application made on the eve of the trial, to amend pleadings to introduce a new case.

If the answer to Question 1(a) is in the negative, what are the principles a court should properly apply, in deciding such an application in lieu of the Yamaha Motor principles? Emphasis added [27] In the case of Hong Leong Finance, based on Yamaha Motor's test, the High Court's decision to dismiss the Defendant's amendment was reversed by the Court of Appeal. The Federal Court overturned the Court of Appeal's decision and affirmed the High Court's dismissal of the amendment application. In answering the question of law (Question 1(a)&(b)), the Federal Court in Hong Leong Finance ruled as follows: "[33] Having considered the facts and the circumstances of the present case, our views are as follows:

when dealing with an application to amend the pleadings, which introduce a new case in the claim or Defence, on the eve of the trial, the principles in Yamaha Motor are not the sole considerations;

the principles in Yamaha Motor applies to cases where the application to amend the pleadings is made at an early stage of the proceedings;

that there has to be a cogent and reasonable explanation in the applicant's affidavit as to why the application was filed late;

that the application to amend the pleadings is not a tactical manoeuvre;

that the proposed amendment must disclose full particulars for the Court to ascertain if there is a real prospect of success in proving the same; and

that lateness in the application to amend the pleadings cannot necessarily be compensated by payment of costs. Analysis and Findings [28] Based on the assertions and contemporaneous documentary evidence attached, I find that the Plaintiff has proved the following facts:

The HPA has been sealed and agreed upon between the parties. This fact is undisputed.

The goods under the HPA have been delivered by the Plaintiff and accepted by D1. Delivery Notes and invoices were acknowledged and received by D1. Goods were used without any complaint. Therefore, Plaintiff had satisfied its contractual obligations under the HPA.

The hire rentals payment was due and payable by D1 to the Plaintiff.

Defendants had failed to make payments according to the HPA and Guarantee and Indemnity executed between the parties. [29] On the Guarantee and Indemnity by D2, reference was made to the Preamble which provides: "I/We, the undersigned jointly and severally hereby Guarantee the punctual payment of all sums of money which may be due or become due to you under the terms of the said Hire Purchase Agreement or of any variation or extension thereof and the due performance and observance by the Hirer of the stipulations and conditions contained in the said Hire Purchase Agreement." [30] Further, Clause 3 of the Guarantee states: "I/We agree that you shall be at liberty to act as though I/we were the principal debtors." [31] It is an established principle of law that the liability of a guarantor depends on the language of the instrument and nature of the liability it creates (see Orang kaya Menteri Paduka Wan Ahmad Isa Shukri bin Wan Rashid v Kwong Yik Bank Berhad (1989) 3 MLJ 155). [32] Based on the express terms above mentioned, D2 had jointly and severally agreed to guarantee the punctual payments of the rentals and bear the liability under the guarantee as the principal debtor. [33] It is also trite that the liability of a principal debtor is not dependent on the liability of the principal borrower. I refer to the case of the Federal Court in Andrew Lee Siew Ling v United Overseas Bank (Malaysia) Bhd (2013) 1 MLJ 449, where the Court ruled as follows: "[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 [1985] CLJU 71; [1985] 1 LNS 71]." [34] Therefore, I agree with the Plaintiff that they had the lawful right to claim from D2 as guarantor and principal debtor of the said guarantee without proving the liability of D1. [35] In the first instance, the defence filed by the Defendants, I find that they had not pleaded the assignment of the HPA or the intended sale and purchase agreement purportedly between them and a third party. [36] At this juncture, it would be essential to have a glance at the original Statement of Defence and the proposed amendment version in Lampiran A (enclosure 12). Defendants had attempted to reconstruct the defence to assert details of the alleged assignment, sale and purchase agreement with Setia Gemilang Sdn. Bhd. (SGSB). [37] Defendants had undisputedly defaulted in August 2022, and they state in their proposed amendment that they had negotiated to dispose of their business and clinics to SGSB on 1.6.2023. Defendants then go on to state the narrative with regard to their sale and purchase transactions with SGSB. [38] Negotiations on the alleged acquisition of the goods and the price were revealed to explain that there was progress going on towards finalising the transaction between the Defendants and SGSB. [39] The Plaintiff's role was briefly alluded to when their representative attended a meeting on 26.5.2023 regarding the incoming assignment in relation to the HPA. Due to this presence at the meeting, the Plaintiff was said to have knowledge of this impending effort by the Defendants. Therefore, the Defendant alleged that there was either an equitable or legal assignment, and the Plaintiff had impliedly consented to this arrangement. [40] However, Defendants then discovered that SGSB had unilaterally excluded certain clauses pertaining to the continued servicing of the HPA in the last version of the Sale and Purchase agreements. Hence, there were hiccups in this arrangement. Again, the Plaintiff's representative was asked to assist the Defendants and SGSB in rectifying the issue. Unfortunately, on 25.9.2023, SGSB had allegedly refused to continue with the arrangement and a police report was lodged by the Defendants. [41] Plaintiff filed this action on 13.3.2024. Defendant then took a view, in their proposed amendment to the defence, that Plaintiff's claim was filed in bad faith and/or with malicious intent due to their "involvement" in the arrangement. [42] With regard to the application for amendment, the Defendants state that the change of solicitors is one of their grounds to justify the delay in filing the application. These are not cogent reasons. I observe that the factual narratives pleaded in the proposed amendment were circumstances readily available at the time of filing the original defence. It was not something new or recently discovered. [43] I am also of the considered view that this application to amend the defence by the Defendants is a tactical manoeuvre to distract from the main issue of default by them in relation to the HPA and to resist Plaintiff's application for summary judgment. [44] Even if I were to accept the proposed assertions, I find that the narratives do not relate to the Plaintiff in any aspect, especially since the Plaintiff is not privy to the alleged sale and purchase agreement, nor to the assignment, whether equitable or legal. The arrangement was between the Defendants and SGSB. Whether it successfully concluded or otherwise has no effect on the Plaintiff's rights pursuant to the HPA. [45] Therefore, as stated earlier, the proposed amendment to the defence had diverged too far from the original statement, essentially becoming a new statement altogether. Hence, I find merit in the Plaintiff's objection towards the application to amend. [46] Returning to the application for summary judgment, the Defendants had asserted this allegation of an assignment of the leasing of the goods with SGSB in response to this application. Unfortunately, going strictly on the law that parties are bound by the four corners of their pleading, Defendants cannot rely on or raise these issues by way of an affidavit without pleading the same in the defence. [47] Plaintiff had filed this application (for summary judgment) first before the application to amend. First come, first. Just because an application was filed, it does not mean they can jump the queue, asserting unpleaded facts that are within their knowledge from the very beginning but were not pleaded in the first instance. [48] Anyhow, I am not inclined to agree with the Defendants that the HPA was effectively assigned to SGSB. I reiterate that Plaintiff was not privy to the intended sale and purchase agreement between Defendants and SGSB. Their representative might have knowledge, but it does not bind them in any way on whatever terms agreed between Defendants and SGSB. Therefore, not a triable issue. [49] In addition, I also find that the alleged factual matrix on the assignment of HPA to SGSB is irrelevant to the obligation of the Defendants to settle the outstanding sum. Such an act would only amount to an affirmation that Defendant are endeavouring to settle the sum and admit their failure to comply with the terms of the HPA. [50] Even taking the assertion into consideration (the alleged assignment and the sale and purchase agreement with SGSB), the said sale and purchase agreement was still not concluded and therefore no valid assignment as yet, leaving the Defendants still holding the responsibility and commitment to comply with the terms of the HPA. [51] From the evidence submitted, I find that the HPA is valid and enforceable and the Plaintiff's claim was clear and justified. Defendants, on the other hand, failed to establish triable issues based on the defence filed on record. [52] On the issue of repossession of the goods, I also agree with Plaintiff's contention that since they are unable to resume possession of the goods due to Defendants' avoiding calls from Plaintiff, Clause 15.3 provides that they are entitled an option in lieu of possession, to recover from D1 the unpaid balance of the hire purchase price less a rebate (if any) plus all other sum payable under the HPA. Final Order [53] Based on the above discussion, enclosure 8 is allowed, and enclosure 12 is dismissed with costs. [54] Summary judgment recorded as prayed for, that Defendants to be jointly and severally liable to pay the sum of RM2,318,858.40 with interest. Dated this: 3rd July 2025 ~signed~ (NOOR HAYATI BINTI HAJI MAT) Judge Shah Alam High Court NCVC 9 Counsels: For the Plaintiff: Nur Amalin Shahida binti Sabidi together with Atiqah Maisarah binti Azrul Hisham Messrs Ben Lee & Sharen For the Defendants: Alliff Benjamin Suhaimi together with See Hau Tsien