Hong Leong Bank Berhad v Harban Singh A/L Mula Singh (BA-22NCC-35-02/2024)

HARBAN SINGH A/L MULA SINGH

DATIN JAMILAH BIBI BTE A ABDUL MAJEED (NO. K/P: 600115-08-6166) …DEFENDAN-DEFENDAN GROUNDS OF JUDGMENT Introduction [1] On 10-2-2025, this Court allowed the Plaintiff’s application to enter summary judgment against the Defendants for RM2,129,868.56 as at 2- 2-2024 with interest accruing at 8.54% p.a. from 3-2-2024 until the date of full payment and costs of RM5,000.00. The claim was premised on a RM4 million loan facility (“Loan”) evidenced by a Letter of Offer dated 24- 11-2006 and Facility Agreement dated 15-1-2007 (“Facility Agreement”) that the Defendants had defaulted in repaying. Admission of debt [2] In paragraphs 4 and 5 of the Plaintiff’s affidavit in support of the summary judgment application, the following averments were made: [3] In the Defendants’ affidavit in reply to the above, it was highlighted that the Defendants stated under oath as follows: [4] Notwithstanding the above unqualified and uncorrected admission, counsel for the Defendants valiantly sought to raise the following as triable issues:

There are pending foreclosure proceedings on properties charged to the Plaintiff as security;

The Certificate of Indebtedness cannot be relied upon because of 3 disputed charges;

The Defendants were given no notice of any variation of the interest rates on the facility; and

The Amended Statement of Claim was filed out of time and cannot be relied upon. Alleged triable issues Enforcement of Security [5] Section 13.01 of the Facility Agreement provides that upon demand or the occurrence of default, the Plaintiff was entitled to exercise such rights as the Plaintiff may have under any of the security documents or at law, including the right to sue by way of a civil suit. Section 13.03 further provides that the Plaintiff was at liberty to file this action and proceed with foreclosure actions concurrently to recover the debt due. [6] As at the date of entry of summary judgment, the properties charged as security had not been auctioned and accordingly, the amount of the Defendants’ indebtedness under the Facility Agreement remained unchanged. Therefore, the fact that the Plaintiff had initiated foreclosure proceedings was not shown to be a triable issue. Disputed Charges [7] Section 16.28 of the Facility Agreement contains a conclusive evidence clause that allowed the Plaintiff to rely on a statement of account signed by the Manager, Assistant Manager or any other duly authorized Officer of the Plaintiff as the final and conclusive proof of the Defendants’ indebtedness. Such a Statement of Account was furnished in these proceedings together with a Certificate of Indebtedness as at 2-2-2024. [8] According to Cempaka Finance Bhd v Ho Lai Ying & Anor [2006] 3 CLJ 544, the Certificate of Indebtedness is effective to operate as conclusive proof of the debt and shifts the burden to the Defendant to disprove the amount claimed by demonstrating any manifest error on its face. To this end, the Defendants claimed that there were 3 disputed charges on the Statement of Account: RM11,406.67 charged on 6-3-2023; DR MISC FEE charged on 4-8-2023; and DR MISC COST charged on 19- 9-2023. [9] The Facility Agreement defines the Defendants’ indebtedness as the aggregate of all monies due including fees, costs, charges, commissions or otherwise outstanding. Section 16.13 of the Facility Agreement describes such other fees, costs, charges and commissions that could be debited to the Defendants’ account. It was not positively averred by the Defendants that these charges were wrongly charged nor was it demonstrated how they rendered the Statement of Account manifestly in error. [10] It was argued and this Court agreed that the Defendants were estopped from disputing the charges as they had received a letter of demand on 7-2-2024 based on the account containing the same charges but did not dispute them then or at any time before the summary judgment proceedings. Per OCBC Bank (M) Bhd v Belton Springs Industries Sdn Bhd [2005] 7 CLJ 358, failure to dispute the amount due before the filing of suit may amount to an estoppel. Notice of variation of interest rate [11] According to the Letter of Offer dated 24-11-2006, the interest chargeable was 3.38% for the 1st year, BLR-1% for the 2nd year and BLR+0.15% thereafter. The BLR was initially 6.75% and as at 2-2-2024, the interest chargeable was 8.54% p.a. [12] As is typical with bank loans, clause 4.2 of the Letter of Offer dated 24-11-2006 for the Loan to the Defendants stipulated that the Plaintiff may at its absolute discretion, vary the Base Lending Rate (“BLR”), the rate of interest imposed above the BLR (including the default rate), the commission or any other charges from time to time and the variation shall take effect from the date specified in the Plaintiff’s notice or from the date of that notice if no other date is specified. [13] Section 7.02 of the Facility Agreement sets out how notice was deemed to have been given to the Defendants i.e. by a general notice of the prevailing BLR in a daily issue of a national newspaper or by posting it at any branch of the Plaintiff, and in respect of any other changes, by incorporating it in the Plaintiff’s bank statements forwarded periodically to the Defendants. [14] Although there was no proof of such notices or the delivery of statements of account from time to time, this Court was prepared to accept that an estoppel would similarly operate against the Defendants in the absence of any prior disputes raised by them on the interest rates charged. Amended Statement of Claim [15] The Defendants raised a technical argument that the Plaintiff only filed the Amended Statement of Claim on 5-11-2024, 4 days after the expiry of the 14-day timeline stipulated by Order 20 Rule 9 of the Rules of Court 2012 when an amended pleading ought to be filed after the order granting leave to amend is given. [16] Order 20 Rule 9 of the Rules of Court 2012 provides as follows: “Where the Court makes an order under this Order giving any party leave to amend a writ, pleading or other document, then, if that party does not amend the document in accordance with the order before the expiration of the period specified for that purpose in the order or, if no period is so specified, of a period of fourteen days after the order was made, the order shall cease to have effect, without prejudice, however, to the power of the Court to extend the period.” [17] In this case, there was an Order made on 18-10-2024, granting leave for the Plaintiff to amend the Statement of Claim to include particulars of the Letter of Offer dated 24-11-2006, Facility Agreement dated 15-1-2007 as well as the securities held by the Plaintiff. As no deadline was stipulated for the amended pleadings to be filed, the Amended Statement of Claim ought to have been filed by 1-11-2024. The Plaintiff only filed the Amended Statement of Claim on 5-11-2024. [18] Admittedly, the Order dated 18-10-2024 ceased to have effect after 1-11-2024 according to Order 20 Rule 9 of the Rules of Court 2012 unless the 14-day timeline is extended by the Court. The Amended Statement of Claim was technically filed without leave on 5-11-2024, but the Court nevertheless approved it by sealing the Amended Statement of Claim on 5-11-2024. [19] Arguments may well be made about the validity of the Amended Statement of Claim dated 5-11-2024 which this Court views as the consequence of a procedural irregularity that did not occasion any miscarriage of justice to the Defendants. It did not render any issue raised by the Defendants any more or less triable. [20] Insofar as it is relevant, the unamended Statement of Claim only lacked the date of the Letter of Offer and Facility Agreement but was otherwise valid as the originating process on which the Plaintiff’s summary judgment application hinged. The Defendants were not confused and had responded substantively to the application for summary judgment without raising the validity of the Amended Statement of Claim as an issue. Conclusion [21] As noted from the outset, the Defendants have admitted the debt claimed in the Plaintiff’s summary judgment application in their affidavit. Even if this was done in error, the issues sought to be raised by the Defendants do not amount to bona fide triable issues. No revelation could conceivably arise from a trial of this matter that could absolve the Defendants from liability, as this is a straightforward case of a borrower default. Bertarikh : 19 Mac 2025 SGD ELAINE YAP CHIN GAIK PESURUHJAYA KEHAKIMAN MAHKAMAH TINGGI MALAYA SHAH ALAM Peguam Untuk Plaintif: Munirah Mustapha, Messrs S N Yap & Associates Untuk Defendan-Defendan: Kuamaradevan Rajadevan,