Hussein Khamis Sdn Bhd v Small Medium Enterprise Development Bank Malaysia Berhad (WA-22M-1682-11/2023)

This case presents a contemporary corporate dispute where recollection meets the discipline of documentary record, and memory is tested against the detailed paper trail of institutional finance. It brings to mind, in a modest way, the reflective structure seen in Kazuo Ishiguro's The Remains of the Day, where memory and silence influence how past events are understood. Here, the Plaintiff’s case rests on a single recollection: a meeting on a specific date during which a multimillion-ringgit settlement was said to have been agreed verbally. The Defendant, on the other hand, grounds its position in dated letters, contemporaneous correspondence, and the notable absence of any written confirmation.

The claim by the Plaintiff, Hussein Khamis Sdn Bhd, against the Defendant, Small Medium Enterprise Development Bank Malaysia Berhad (SME Bank), for RM5,423,750.44 therefore becomes a forensic inquiry into a single moment in time. The question is whether the parties, in that meeting room, crossed the line from negotiation to agreement or whether they remained in the grey space of commercial discussion. Upon the close of the Plaintiff’s case, the Defendant has taken a decisive procedural step by submitting that there is no case to answer. Having heard oral submissions and considered the extensive written submissions filed by both sides, I now set out my grounds of judgment.

The Plaintiff was a customer of the Defendant and had obtained several Islamic financing facilities, which were restructured in

The facilities were secured by the Plaintiff’s factory land held under Geran 11031, Lot 21184 in Rawang, Selangor. The Plaintiff entered into a sale and purchase agreement with Laundry Care Sdn Bhd to sell this property for RM14,000,000.00 and subsequently applied to the Defendant for a redemption statement to discharge the facilities.

The Plaintiff’s pleaded case revolves around two main allegations. First, it alleged a sudden and unexplained increase in the redemption amount from RM11,170,151.64 (as stated in the Defendant’s letter of 28 September 2022) to RM12,938,500.00 (as stated in the Defendant’s letter of 23 February 2023). Second, and crucially, it alleged that during a meeting on 3 January 2023 between the Plaintiff’s director, En Arzeman Bin Hussein (“PW1”), and the Defendant’s Chief Executive Officer, the Defendant agreed to accept a full and final settlement of only the principal sum of RM7,791,324.00, subject to the Plaintiff obtaining similar interest/profit waivers from two other financing banks, Bank Islam Malaysia Berhad and Bank Kerjasama Rakyat Malaysia Berhad.

The Plaintiff asserted that it obtained the requisite waivers from the other banks, but the Defendant reneged on the alleged agreement and instead demanded the higher sum. The Plaintiff, under protest, made payments totalling RM13,215,074.44 to redeem the facilities. The claim of RM5,423,750.44 represents the difference between the amount paid and the alleged agreed sum of RM7,791,324.00.

The Defendant, in its Defence, denied the existence of any such agreement. It contended that all communications surrounding the meeting and negotiations were “without prejudice” and privileged. It further denied any sudden or unexplained increase in the redemption sum, asserting its right to review and adjust the sum to account for accrued profit, especially since the Plaintiff failed to settle within the timeframe initially stipulated in a redemption statement dated 8 September 2022.

A full trial commenced on 1 July 2025. The Plaintiff called one witness, PW1, its director. Upon the close of the Plaintiff’s case, counsel for the Defendant informed the Court that the Defendant would not be calling any evidence and instead made a submission of no case to answer. Both parties subsequently filed comprehensive written submissions, and the Defendant filed a further submission in reply.

After considering the parties’ submissions, I dismissed the Plaintiff’s claim on 13 October 2025 and awarded costs of RM35,000.00. The Plaintiff thereafter filed a notice of appeal on 11 November 2025.

The core issue for determination at this stage is whether the Plaintiff has adduced sufficient evidence to establish a prima facie case that warrants the Defendant being called upon to answer. This requires an examination of whether, accepting the Plaintiff’s evidence at its face value, a case in law has been established, or conversely, whether the Plaintiff’s evidence is so unsatisfactory or unreliable that it has failed to discharge its legal burden of proof.

Plaintiff’s Contention:

Learned counsel for the Plaintiff, Encik Abdul Razak Bin Abu Bakar argued that the claim is squarely founded on the agreement reached on 3rd January 2023. It was submitted that PW1 gave clear and positive evidence of this agreement. Counsel relied heavily on the principle that when a defendant elects to make a submission of no case to answer, all evidence led by the plaintiff must be presumed to be true for the purpose of testing whether there is a case to answer, citing Yoong Sze Fatt v Pengkalen Securities Sdn Bhd [2010] 1 MLJ 85 (CA).

Counsel further contended that the Defendant’s failure to call its CEO, who was a central figure in the alleged meeting, should lead to an adverse inference being drawn against the Defendant under section 114(g) of the Evidence Act 1950, as illustrated in cases such as Takako Sakao v Ng Pek Yuen [2009] 6 MLJ 751 (FC) and Subry bin Hamid v Husaini bin Tan Sri Ikhwan & Anor [2006] 6 MLJ 229 (CA). The Plaintiff maintained that it had discharged its burden and proven its case on a balance of probabilities.

(ii) Defendant’s Contention:

Learned counsel for the Defendant, Encik Habizan Rahman Bin Habeeb Rahman submitted that the Plaintiff had manifestly failed to discharge its legal burden of proof under Sections 101 and 102 of the Evidence Act 1950. Counsel highlighted that during cross-examination, PW1 made several critical admissions:

He confirmed that the claim was not based on the alleged “sudden increase” in the redemption sum, but solely on the difference between the amount paid and the alleged agreed sum of RM7,791,324.00 from the 3 January 2023 meeting;

He agreed that the Defendant’s letter dated 13 January 2023, issued ten days after the purported agreement, requested further documents from the Plaintiff for “evaluation” and did not reflect any final agreement;

He conceded that as of 13 January 2023, no final decision or agreement had been reached;

He admitted that the Plaintiff never issued any letter to rebut or challenge the contents of the Defendant’s 13 January 2023 letter; and

He acknowledged that there was no documentary evidence issued by the Defendant confirming an agreement to accept RM7,791,324.00.

Counsel for the Defendant argued that, based on the Plaintiff’s own evidence and documents, no agreement as alleged could be inferred. The letter of 13 January 2023, which was part of the Plaintiff’s own bundle of documents, was fatal to its case as it demonstrated ongoing negotiations, not a concluded agreement. Consequently, counsel submitted that the Plaintiff failed to prove the foundational fact upon which its entire claim rested.

Relying on Syarikat Kemajuan Timbermine Sdn Bhd v Kerajaan Negeri Kelantan Darul Naim [2015] 2 CLJ 1037 (FC), counsel argued that this was a proper case for a submission of no case to answer, either because accepting the Plaintiff’s evidence at face value disclosed no legal cause of action, or because the evidence led was so unsatisfactory that the burden of proof was not discharged.

I have considered the pleadings, the agreed facts, the notes of proceedings, the documents tendered, and the detailed submissions of both counsel. The principles governing a submission of no case to answer are settled. As explained in Syarikat Kemajuan Timbermine Sdn Bhd v Kerajaan Negeri Kelantan Darul Naim (supra), such a submission may succeed in two situations. The first is where, even taking the plaintiff’s evidence at its highest, no case in law is established. The second is where the evidence led is so unsatisfactory or unreliable that the plaintiff fails to discharge the burden of proof.

The Plaintiff’s claim turns entirely on the alleged oral agreement of 3 January 2023. The burden of proving this agreement rests on the Plaintiff under Section 101 of the Evidence Act 1950, and the standard is the balance of probabilities.

Having evaluated the Plaintiff’s evidence in full, I find that it has not established a prima facie case. My reasons follow:

The Plaintiff’s own evidence does not support its claim.

PW1, the Plaintiff’s sole witness, made several concessions in cross-examination that were inconsistent with the assertion that an agreement had been concluded. He accepted that the Defendant’s letter dated 13 January 2023 requested documents for evaluation, and that this meant no final decision had been reached. For ease of reference, I reproduce the contents of the said letter: Ruj. Fail : RWBC: 2012(40100)/1-3 Tarikh : 13 JANUARI 2023 HUSSEIN KHAMIS SDN BHD (300402-X) Lot 21184 No. 55 Jalan Industry 2/2, Rawang Integrated Industrial Park, 48000 Rawang, SELANGOR U/P : En Arzeman bin Hussein Tuan, PELANGGAN : HUSSEIN KHAMIS SDN BHD (300402-X) KEMUDAHAN: A) COMMODITY MURABAHAH TERM FINANCING-I (CMTF-I)-I BERJUMLAH RM8,856,909.15 B) COMMODITY MURABAHAH TERM FINANCING-I (CMTF-I)-II BERJUMLAH RM2,313,242.49 PERKARA : PENYELESAIAN PENUH PEMBIAYAAN DAN PENGECUALIAN BAYARAN BALIK CAJ KEUNTUNGAN Perkara diatas dan surat tuan bertarikh 21.11.2022 serta perbincangan diantara pihak tuan dan SME Bank pada 03.01.2023 adalah dirujuk. Melalui perbincangan tersebut, pihak tuan dikehendaki untuk mengemukakan maklumat/dokumen seperti berikut untuk tujuan penilaian lanjut pihak Bank :- 1) Projek pemiagaan tuan yang terkini dan penyata kewangan (6 bulan) yang berkaitan dengan pemiagaan tersebut. 2) Maklumat terperinci jumlah pengecualian yang telah dipohon serta status kelulusan berkenaan permohonan tuan untuk mendapatkan pengecualian bayaran keatas caj keuntungan pembiayaan yang dikenakan oleh bank-bank lain seperti Bank Islam Malaysia Berhad (Bank Islam) dan juga Bank Kerjasama Rakyat Malaysia Berhad (Bank Rakyat). Sila kemukakan semua dokumen-dokumen tersebut pada atau sebelum 20.01.2023 kepada kami untuk penilaian kami seterusnya. Sekiranya pihak tuan mempunyai sebarang pertanyaan, sila hubungi pegawai kami Puan Dzuhafiza Dzulkifly di talian 03- 2615 2980 atau Enoik Syahrizam Mohamed di talian 03- 2615 3982. Sekian, terima kasih. Yang Benar, Untuk Small Medium Enterprise Development Bank Malaysia Berhad.

The content of this letter contradicts the claim that a binding agreement had been formed ten days earlier. His admission that he never objected to the content of the 13 January letter further undermines the Plaintiff’s position. If a settlement for RM7.79 million had truly been reached, one would expect an immediate objection when a subsequent letter treated the matter as unresolved.

There is no supporting documentary evidence.

The Plaintiff was unable to produce any document from the Defendant confirming the alleged agreement. For a transaction of this size involving a financial institution, the absence of any written acknowledgment is telling and significantly undermines the claim.

The Plaintiff abandoned its alternative case.

PW1 confirmed that the claim is no longer premised on the alleged sudden increase in the redemption sum. The entire case therefore rests on the oral agreement. Having failed to prove that agreement, the claim cannot stand.

Application of the legal principles on No Case to Answer.

The resolution of the Defendant’s submission turns on the proper application of the legal principles governing ‘no case to answer’ and the burden of proof. Crucially, it also requires an examination of whether, as the Plaintiff contends, an adverse inference should be drawn against the Defendant for its failure to call its CEO as a witness. The Plaintiff heavily relies on authorities concerning adverse inferences, particularly Takako Sakao v Ng Pek Yuen (supra) and Subry bin Hamid v Husaini bin Tan Sri Ikhwan & Anor (supra) which in turn reference the seminal English Court of Appeal decision in Wisniewski v Central Manchester Health Authority [1998] P.I.Q.R. (CA). A thorough understanding of Wisniewski is therefore essential to this determination.

In Wisniewski v Central Manchester Health Authority (supra), Lord Justice Brooke (as he then was), delivering the judgment of the Court of Appeal, distilled a clear set of principles regarding when a court may draw adverse inferences from the absence or silence of a material witness: “From this line of authority I derive the following principles in the context of the present case:

In certain circumstances a court may be entitled to draw adverse inferences from the absence or silence of a witness who might be expected to have material evidence to give on an issue in an action.

If a court is willing to draw such inferences, they may go to strengthen the evidence adduced on that issue by the other party or to weaken the evidence, if any, adduced by the party who might reasonably have been expected to call the witness.

There must, however, have been some evidence, however weak, adduced by the former on the matter in question before the court is entitled to draw the desired inference: in other words, there must be a case to answer on that issue.

If the reason for the witness’s absence or silence satisfies the court, then no such adverse inference may be drawn. If, on the other hand, there is some credible explanation given, even if it is not wholly satisfactory, the potentially detrimental effect of his/her absence or silence may be reduced or nullified. [Emphasis added].

The third principle is the critical and often overlooked precondition. The Court of Appeal in Wisniewski was emphatic that an adverse inference is a tool to be used only after a plaintiff has first crossed the threshold of adducing some evidence on the issue. It is not a mechanism to compensate for a complete failure of proof. As Lord Justice Brooke explained, the inference serves to “strengthen the evidence adduced” or “weaken the evidence… adduced by the party” who failed to call the witness. The verb “adduced” is key, it presupposes that evidence already exists on the record to be strengthened or against which the opposing evidence can be weakened.

Applying the Wisniewski principles to the present case exposes the fundamental flaw in the Plaintiff’s submission on adverse inference. The Plaintiff has failed to satisfy the essential precondition in principle (3). It has not adduced “some evidence, however weak” that establishes a prima facie case on the alleged agreement of 3rd January 2023. The evidence of PW1, taken as a whole and in light of his critical concessions under cross-examination, does not amount to a credible foundation for the alleged agreement. Instead, his testimony, when juxtaposed with the contemporaneous documentary evidence (particularly the Defendant’s letter of 13th January 2023), is so internally contradictory and inconsistent with the objective record that it fails to reach the minimum threshold of “some evidence” upon which an agreement could reasonably be inferred.

The legal effect is decisive: where there is no case to answer on an issue, there is nothing from which an adverse inference can spring. To hold otherwise would be to invert the burden of proof, requiring a defendant to disprove a case that has not been made out, a proposition antithetical to Sections 101 and 102 of the Evidence Act 1950 and the reasoning in Wisniewski. The Defendant’s election not to call evidence is therefore not an evasion but a legally sound response to a case that has collapsed under the weight of its own inconsistencies at the close of the plaintiff’s case.

This analysis is entirely consistent with the Malaysian authorities cited by the Plaintiff. In Subry bin Hamid v Husaini bin Tan Sri Ikhwan & Anor (supra), the Court of Appeal applied the Wisniewski principles but did so in a context where the plaintiff had given positive, direct, and unchallenged evidence on a specific fact (an inducement by a police officer), which was denied only by suggestion during cross-examination. The court found there was a case to answer, thus triggering the potential for an adverse inference when the defendant failed to call the material witness. The present factual matrix is diametrically opposite. Here, PW1’s evidence on the core agreement was not merely challenged but was fundamentally undermined by his own admissions and the documentary evidence he himself produced.

Consequently, the Plaintiff’s reliance on the Defendant’s failure to call its CEO is misplaced. The absence of the CEO from the witness box is immaterial because the Plaintiff has not first laid the necessary evidential groundwork. In the language of Wisniewski, there is no “evidence adduced” on the agreement that requires strengthening, and there is no case for the Defendant to answer on this issue. The Defendant was therefore under no obligation to call evidence to rebut a case that had not been established.

In light of the foregoing, and applying the two-limb test from Syarikat Kemajuan Timbermine Sdn Bhd v Kerajaan Negeri Kelantan Darul Naim (supra), I am satisfied that this is a proper case for a finding of no case to answer. The Plaintiff’s evidence, taken at its highest, is so contradicted by the objective contemporaneous documents and the witness’s own concessions that no reasonable tribunal could conclude that a binding agreement for RM7,791,324.00 was reached on 3 January 2023. Furthermore, the evidence is so unsatisfactory and unreliable on this central issue that the Plaintiff has manifestly failed to discharge the initial burden of proof. The legal burden never shifted.

Returning briefly to the earlier literary reference, the butler Stevens’s carefully arranged memories are revealed, over time, to conceal what he had overlooked or misunderstood. In this case, the Plaintiff’s account of a concluded agreement rests entirely on recollection, while the contemporaneous documents, particularly the letter dated 13 January 2023, show that the matter remained under evaluation. Placed side by side, the written record carries greater weight. The Plaintiff’s narrative, shaped perhaps by expectation rather than fact, cannot withstand the clearer and more reliable account found in the documentary record.

For the reasons stated above, the Defendant’s submission of no case to answer was upheld. The Plaintiff’s claim was accordingly dismissed with costs fixed at RM35,000.00. Dated: 4th December 2025 Yusrin Faidz Bin Yusoff Judicial Commissioner High Court of Malaya Kuala Lumpur Counsel for the Plaintiff: Abdul Razak Bin Abu Bakar Messrs Abdul Razak & Partners, No. 18C (Tingkat 3), Jalan Tengku Ampuan Zabedah K9/K, Seksyen 9, 40100 Shah Alam, Selangor Darul Ehsan. Counsel for the Defendant: Habizan Rahman Bin Habeeb Rahman (Together with Theveni A/P Sri Krishnamayakam & Faiz Idris Bin Abdul Haris) Messrs. Rahman Rohaida, E-07-07, Menara Suezcap 2, KL Gateway, No. 2, Jalan Kerinchi, Gerbang Kerinchi Lestari, 59200 Kuala Lumpur.

Yoong Sze Fatt v Pengkalen Securities Sdn Bhd [2010] 1

Takako Sakao v Ng Pek Yuen [2009] 6 MLJ 751 (FC).

Subry bin Hamid v Husaini bin Tan Sri Ikhwan & Anor [2006] 6 MLJ 229 (CA).

Syarikat Kemajuan Timbermine Sdn Bhd v Kerajaan Negeri Kelantan Darul Naim [2015] 2 CLJ 1037 (FC).

Wisniewski v Central Manchester Health Authority [1998] P.I.Q.R. 324 (CA).

Sections 101, 102, & 114(g) of the Evidence Act 1950