Kueen Lai Properties Sdn Bhd v 1. ) Ace Credit (M) Sdn. Bhd. (WA-22NCC-513-10/2022)

ACE CREDIT (M) SDN. BHD.

CHANG AI NEE

DATO’ CHOONG CHEE MENG (NRIC NO: 610726-08-5743) … DEFENDANTS GROUNDS OF JUDGMENT [1] Enclosure (“Enc.”) 20 is the Plaintiff’s application for summary judgment pursuant to Order 14 of the Rules of Court 2012 (“ROC 2012”) against all three Defendants. [2] On 13.3.2023, I heard the application which was then adjourned to 11.5.2023 for decision. By letter dated 27.4. 2023 (Enc. 49), the 1st Defendant (“D1”) ’s solicitors wrote to the court informing that D1 had applied for a judicial management order vide Kuala Lumpur High Court Originating Summon No. WA-28JM-9-04/2023 (“JM application”), annexed only a copy of the Originating Summons, and as such, stated that pursuant to the express wordings of s. 410(c) of the Companies Act 2016, no other proceedings can be continued or commenced against D1. Learned Counsel for D1 appeared on 11.5.2023 to state the same again. This court adjourned decision against D1 till after the JM application has been disposed of but allowed the summary judgment application against the 2nd and 3rd Defendants (“D2 and D3”), and given broad grounds of decision. This judgment contained the full reasons as to why. Background [3] The Plaintiff and D1 have entered into an investment agreement dated 12.3.2021 (“the Investment Agreement”) where the Plaintiff agreed to invest in D1 a sum of RM2,000,000.00 (“the Investment Sum”) and D1 agreed to accept the investment from the Plaintiff subject to the terms of the Investment Agreement. The salient terms of the investment as per the Investment Agreement are as follows: No.

Investment Date 12-03-2021

Maturity Date 11-03-2022

Tenure 12 months

Investment Sum

Targeted Amount of Return on Investment

Investment Target Return 15 Percent (%)

Payout of Investment Target Return Maturity Investment Redemption Sum That Shall Be Payable By D1 To The Plaintiff Upon The Maturity Date On 11-03-2022 RM2,300,000.00 [4] In consideration of the Plaintiff making the investment, D2 and D3 as Directors of D1, executed a guarantee dated 12.3.2021 (hereinafter referred to as “the guarantee”) to jointly and/or severally guaranteed to the Plaintiff the full performance of all obligations and undertakings of D1 under the Investment Agreement. Clause 2 of the guarantee specifically stated that the guarantee is a continuing guarantee to the extent of the Investment Sum and the Investment Target Return. [5] There is no dispute that the Investment Sum was paid to D1. [6] The Plaintiff was not paid the Investment Sum and the Investment Target Return totalling RM2,300,000 (the Investment Redemption Sum) on the maturity date of 11.3.2022. [7] By letter dated 21.3.2022 to the Plaintiff (“1st extension letter”), D1 informed that it had to delay payment due to circumstances arising from the Covid-19 pandemic, that it “remains committed to pay the target profit return at the rate prescribed in the Investment”, “we have never failed even one time in the past in paying any profit returns to all our investors, including the two years of the pandemic in 2020 and 2021” urged the Plaintiff to understand, be patient and appreciate its commitment and “we will pay the RM2.3M together with profit return of 15% per annum calculated on a daily basis until 12th June 2022 which add up to RM2,386,250.00.” [8] The above letter was signed by the 3rd Defendant as group executive director. [9] The sum of RM2,386,250.00 was not paid by D1 to the Plaintiff on 12.6.2022. [10] Instead, the Plaintiff was given a letter dated 22.6.2022 (“2nd extension letter”) by the D1 where D1 stated “we humbly apologize and seek your very kind consideration that we need to extend the payment until 12th August, 2022 (2 months) with a profit rate of fifteen percent (15%) per annum which calculated with a total amount of RM2,445,906.00 until 12th August, 2022” (“the 2nd extension letter”). [11] The 2nd extension letter was signed by D3. [12] By letter dated 23.6.2023, the Plaintiff agreed to the extension to make payment until 12.8.2023 and made clear such extension is made out of goodwill and no further extension will be granted. [13] D1 failed to pay the sum of RM2,445,906.00 on 12.8.2023. [14] The Plaintiff through its solicitor by letter dated 6.9.2022 respectively to the Defendants demanded payment of the said sum of RM2,445,906.00 but to no avail. [15] Hence this action and subsequently enc. 20 for summary judgment were filed by the Plaintiff to recover the sum of RM2,445,906.00. The Defendants’ case in resisting summary judgment [16] In resisting summary judgment, the Defendants’ contentions on triable issues in essence are:

D1

16.1 D1 asserted that there is no investment made by the Plaintiff; the Investment Agreement stated by the Plaintiff was a ‘moneylending agreement’ wherein the Plaintiff, without any licence under the Moneylenders Act 1951 has willingly given a loan to D1 with imposition of interest at the rate of 15% for a period of 12 months;

16.2 The imposition of interest at the rate of 15% per annum is illegal, makes the ‘moneylending agreement’ null and void ab initio, and is contradictory to Section 24 of the Contracts Act 1950;

16.3 At all material times, the Plaintiff has full knowledge that the repayment of the said loan was subject to Clause 4.03 which interalia set out the substantial degree of risks and the possibility of a complete loss of investment; and

16.4 The Plaintiff’s claim is frivolous, vexatious, and/or it is an abuse of legal process wherein the Plaintiff has breached Clause 8.02 of the said ‘moneylending agreement’.

(ii) D2 and D3

16.5 D2 and D3 asserted that the Plaintiff on its own volition provided a loan for the sum of RM2,000,000.00 to D1 with an agreement of return interest of 15% per annum on the sum is for the purpose of moneylending;

16.6 The investment agreement is in fact a ‘Loan Agreement’ which was void ab initio pursuant to Section 24 of the Contracts Act 1950 and contrary to Section 15 of the Moneylenders Act 1951 as the Plaintiff is not a licensed moneylender;

16.7 The guarantee ceases to bind D2 and D3 pursuant to s. of the Contracts Act 1950 due to the variation pursuant to D1’s letters dated 21.3.2022 and 22.6.2022 to the Plaintiff. D2 and D3 never consented to the said variations and were never consulted and/or notified of the same. Applicable law and findings [17] It is trite law following National Company For Foreign Trade v. Kayu Raya Sdn. Bhd [1984] 2 MLJ 300; [1984] 2 CLJ 220 and Cempaka Finance Bhd v Ho Lai Ying & Anor [2006] 2 MLJ 685; [2006] 3 CLJ 544; [2007] 1 AMR 525, to be prima facie entitled to summary judgment, the Plaintiff has to fulfil the following preliminary requirements:

17.1 the statement of claim must have been served on the

17.2 the Defendants must have entered an appearance; and

17.3 the affidavit-in-support of the application must comply with the requirements of Order 14 rule 2 of the Rules of Court 2012. [18] The Plaintiff in this case having satisfied the preliminary requirements that the Order 14 application has been properly filed, the burden then shifts to the Defendants to satisfy the Court why judgment should not be given against them. It is important to be reminded that in an Order 14 ROC 2012 application for summary judgment, the Court must look at the matter as a whole and ask itself whether the Defendants have satisfied the Court that there is an issue or question in dispute which ought to be tried, or there ought for some other reason to be a trial of that claim or part of the claim. [19] Where a defendant is able to demonstrate facts to show that he has raised a defence or reasonable grounds for setting up a defence or even a fair probability that he has a bona fide defence, he ought to be given leave to defend. This discretion lies with the judge. [20] It is also to be borne in mind that the defendant must raise an arguable issue that requires a trial in order to determine it: Voo Min En & Ors. v. Leong Chung Fatt [1982] 2 MLJ 241. [21] In Bank Negara Malaysia v. Mohd Ismail Ali Johor & Ors [1992] 1 MLJ 400; [1992] 1 CLJ Rep 14 the Supreme Court helpfully summarised the approach to be taken in dealing with the affidavits: “In our view, basic to the application of all those legal propositions, is the requirement under O. 14 for the Court to be satisfied on affidavit evidence that the defence not only has raised an issue but also that the said issue is triable. The determination of whether an issue is or is not triable must necessarily depend on the law arising from each case as disclosed in the affidavit evidence before the Court…. Under O. 14 when a fact is asserted by one party and denied by another, and such denial is equivocal or lacking in precision or is inconsistent with undisputed contemporary documents or other statement by the same deponent or is inherently improbable in itself, the judge has a duty to reject such assertion or denial, thereby rendering the issue as not triable. In our opinion, unless this principle is adhered to, a Judge is in no position to exercise his discretion judicially under an O.14 application. Thus, apart from identifying the issues of fact or law, the Court must go one step further and determine whether they are triable. This principle is sometimes expressed by the statement that a complete defence need not be shown. The defence set up need only show that there is a triable issue. Where the issue raised is solely a question of law without reference to any facts or where the facts are clear and undisputed, the court should exercise its duty under O 14. If the legal point is understood and the court is satisfied that it is unarguable, the court is not prevented from granting a summary judgment merely because 'the question of law is at first blush of some complexity and therefore takes a little longer to understand'. (See Cow v Casey 6 and European Asian Bank AG v Punjab & Sind Bank 7 at p 516.)” [22] The threshold to resist summary judgment is relatively very low as a defendant need only raise one triable issue to be given leave to defend - South East Asia Insurance Bhd v Kerajaan Malaysia [1996] MLJU 642; [1998] 1 CLJ 1045; HSBC Bank Malaysia Bhd v Ng Tien Beng & Ors [2008] 9 CLJ 631; Stamford College Bhd v Iris Corp Bhd [2014] 8 MLJ 178. [23] In Southern Finance Bhd v Sun City Development Sdn Bhd & Anor [2006] 7 CLJ 464, it was held: “The general principle is where a Defendant shows that he has a fair case for defence or reasonable grounds for setting up a defence or even a fair probability that he has a bona fide defence he ought to be given leave to defend (Saw v. Hakim 5 TLR 72). A Defendant should not be shut out from defending unless it is very clear indeed that he has no case in the action under discussion (Sheppards v. Wilkinson 6 TLR 13). The power to give summary judgment under O. 14 is “intended only to apply to cases where there is no reasonable doubt that a Plaintiff is entitled to judgment and where therefore it is inexpedient to allow a Defendant to defend for mere purposes of delay”. (Jones v. Stone [1894] AC 122). Where there is any serious conflict to matters of fact or where any real difficulty as to matters of law arises, summary judgment under O. 14 should not be granted. (Electric and General Corpn. v. Thomson-Houston Electric 10 TLR 103). But, however difficult the point of law is, once it is understood and the Court is satisfied that it is really unarguable it will give final judgment (Cow v. Casey [1949] 1 KB 481). (See Percetakan Solai Sdn Bhd v. Kin Kwok Daily News Sdn Bhd & Anor [1985] CLJ (Rep) 632 at p. 637).” [24] Thus, for the Defendants to succeed in being given leave to defend, they must convince this Court that they have raised an issue of fact and/or law to be tried in this action, and if they cannot, they have to show there is “some other reason for trial” pursuant to O. 14 r. 3(1) ROC 2012. [25] With the above principles in mind, I turn now to deal with the issues. The issues [26] Separating the wheat from the chaff, in my view, the issues can be condensed into:

Whether the agreement dated 12.3.2021 is an investment agreement or a loan agreement for a sum RM2,000,000.00 paid by the Plaintiff to D1;

(ii) If the agreement is an investment agreement, whether Plaintiff should succeed in its claim and whether the guarantee is enforceable against D2 and D3; and

(iii) If the agreement is a loan agreement, whether it runs foul of Section 24 of the Contracts Act 1950 and Section 15 of the Moneylenders Act 1951, and as such is illegal and void. Reversing the Burden of proof [27] I should at the outset deal with an argument of D2 and D3 on where the burden of proof lies in a summary judgment. D2 and D3 in Enc 34 paragraph 29 stated: “It is submitted that the Loan Agreement for the sum of RM2,000,000.00 with an agreement of return interest of 15% per annum on the sum is enough proof to raise the presumption that the Plaintiff is in the moneylending business. The burden now shifts to the Plaintiff to prove that it is not in the business of moneylending. The Second and Third Defendants submit that the Plaintiff has not adduced any evidence to rebut the presumption and have merely taken a stand that it is an investment agreement without leading any evidence to rebut the presumption.” [28] With respect, in advancing this argument, it appears to me with utmost respect that the significance of the proposition of law enunciated by the Federal Court in National Company for Foreign Trade (supra) as alluded to in [17] of this judgment was lost on D2 and D3 and amount to the D2 and D3 reversing the burden of proof, which reflected the same mistake occasioned by the Court of Appeal in Ho Lai Ying (trading as KH Trading) & Anor v Cempaka Finance Bhd [2004] 2 MLJ 197; [2004] 1 CLJ 232 when it allowed an appeal against summary judgment entered by Cempaka Finance Bhd when it stated interalia: “Thus, a plaintiff would be entitled to obtain summary judgment without trial if he can prove his case clearly which to us would mean that the plaintiff has to establish the existence of certain facts and must prove that those facts exist before the court can determine the issue as to whether the defendant has a defence or has raised an issue against the claim which ought to be tried. set aside.” [29] The Federal Court in Cempaka Finance Bhd v Ho Lai Ying (trading as KH Trading) & Anor [2006] 2 MLJ 685; [2006] 3 CLJ 544 reversed the Court of Appeal’s decision and upheld the summary judgment entered by the High Court. Steve Shim CJ (Sabah & Sarawak) in delivering judgment of the Federal Court held: “[5] Quite clearly, the Court of Appeal has put the burden on the plaintiff to prove his case in an O 14 application. With respect, that cannot be the correct proposition of law. In an application under O 14, the burden is on the plaintiff to establish the following conditions: that the defendant must have entered appearance; that the statement of claim must have been served on the defendant; that the affidavit in support must comply with r 2 of O 14 in that it must verify the facts on which the claim is based and must state the deponent's belief that there is no defence to the claim (see Supreme Leasing Sdn Bhd v Dior Enterprises & Ors [1990] 2 MLJ 36). Once those conditions are fulfilled, the burden then shifts to the defendant to raise triable issues. The law on this is trite. In National Company for Foreign Trade v Kayu Raya Sdn Bhd [1984] 2 MLJ 300 the Federal Court has stated thus: We think it appropriate to remind ourselves once again that in every application under O 14, the first considerations are (a) whether the case comes within the order and (b) whether the plaintiff has satisfied the preliminary requirements for proceeding under O 14. For the purposes of an application under O 14, the preliminary requirements are:

the defendant must have entered an appearance;

(ii) the statement of claim must have been served on the defendant; and

(iii) the affidavit in support of the application must comply with the requirements of r 2 of the O 14. … If the plaintiff fails to satisfy either of these considerations, the summons may be dismissed. If however, these considerations are satisfied, the plaintiff will have established a prima facie case and he becomes entitled to judgment. This burden then shifts to the defendant to satisfy the court why judgment should not be given against him.” [6] The proposition of law enunciated by the Federal Court in National Company has been applied in numerous cases. We accept the correctness of that proposition. In reversing the burden of proof as the Court of Appeal in the instant case has done, it has, in our respectful view, misapplied the relevant principles relating to an application for summary judgment under O 14 of the Rules of the High Court 1980.” (Emphasis added) Triable issues? Whether the agreement dated 12.3.2021 is an investment agreement or a loan agreement for a sum RM2,000,000.00 given by the Plaintiff to D1 [30] Although judgment was postponed against D1, it is nevertheless necessary to discuss the obligations of D1and whether D1 has breached the agreement dated 12.3.2021 as D2 and D3’s liability as guarantors is co-extensive with that of the principal debtor D1. I have in mind s. 81 of the Contracts Act 1950 which reads: “81. Surety’s liability The liability of the surety is co-extensive with that of the principal debtor, unless it is otherwise provided by the contract. ILLUSTRATION A guarantees to B the payment of a bill of exchange by C, the accepter. The bill is dishonoured by C. A is liable, not only for the amount of the bill, but also for any interest and charges which may have become due on it.” [31] Added to that, Article Five, Section 5.01 of the Agreement provides: “ARTICLE FIVE: GUARANTEE Section 5.01 In consideration of the Investor having made the Investment subject to the terms and conditions contained in this Agreement, and upon request by the Investor, the Company hereby agrees to procure the Company’s directors to execute the personal guarantee in favour of the Investor whereby the said directors shall jointly and severally agree to UNDERTAKE and GUARANTEE the due performance of the Company’s obligations as stated herein (“Directors’ Personal Guarantee”) in the form as attached in Appendix 2 herein.” (in original text) [32] The Directors’ personal guarantee in Appendix 2 expressly inter alia provides that D2 and D3 irrevocably and unconditionally guarantee and undertake to the Plaintiff to guarantee and ensure full performance of all obligations and undertakings of D1 under the Investment Agreement, and that D2 and D3 agreed “to be jointly and severally liable in the same manner and with the same effect as if each of them had signed separate instruments”. [33] D2 and D3 have admitted signing the guarantee in paragraph 16 of their Affidavit in Reply at Enc. 24. [34] It is to be noted that the agreement dated 12.3.2021 was signed by D3 on behalf of D1. [35] Whether the agreement dated 12.3.2021 is an investment agreement or a loan agreement is a question of fact. On this issue I find that the defendants’ assertions that the agreement is an illegal money lending agreement to be baseless and lacking in evidence. My reasons follow. No system or continuity in the giving of loans [36] Firstly, the relevant definitions in s. 2 of the Moneylenders Act 1951 (“MLA”) are: ‘moneylender’ means any person who carries on or advertised or announces himself or holds himself out in any way as carrying on the business of moneylending, whether or not he carries on any other business; ‘moneylending’ means the lending of money at interest, with or without security, by a moneylender to a borrower; ‘moneylending agreement’ means an agreement made in writing between a moneylender and a borrower for the repayment, in lump sum or instalments, of money borrowed by the borrower from the moneylender. [37] In Ngui Mui Khin & Anor v Gillespie Bros & Co Ltd [1980] 2 MLJ 9; [1979] 1 LNS 60, the Federal Court held: At the outset we wish to observe that the Moneylenders Ordinance 1951 does not apply to moneylending but only to moneylenders. It does not make every moneylending transaction illegal and unenforceable. It is a moneylending transaction of a moneylender which is the subject matter of the Ordinance and must comply with its provisions on pain of being declared illegal and unenforceable by the court. We make this simple and obvious observation because it was canvassed very strongly before us by counsel for the appellants that since the transactions between the respondent and the client are moneylending transactions, the respondent must be a moneylender and the guarantee which the appellants signed is therefore unenforceable. This submission overlooks the fact that the party to a transaction who thereby becomes the creditor may or may not be a moneylender. He is a moneylender if within the meaning of s 2 of the Ordinance, he can be said to be a person ‘whose business is that of moneylending’. To prove business requires some sort of continuity or system or repetition of similar transactions (Chow Yoong Hong v Choong Fah Rubber Manufacturer [1962] AC 209 at 218; [1962] MLJ 74). [38] The Privy Council advised in the case of Chow Young Hong v Choong Fah Rubber Manufactory [1962] 1 MLJ 74, at p 77: In order to prove that a man is a money-lender within the meaning of the (Moneylenders) Ordinance, it is necessary to show some degree of system and continuity in his moneylending transactions. If he were left to discharge this burden without the aid of any presumption, a defendant might be frequently be in a difficulty. He might have had only one or two transactions with the money-lender and he might find it difficult to obtain evidence about the business done by the money-lender with other parties. Section 3 enables a defendant to found his claim on proof of a single loan made to him at interest, it being presumed, in the absence of rebutting evidence, that there were sufficient other transactions of a similar sort to amount to a carrying on of business. [39] Salleh Abas FCJ speaking for the Federal Court in Yeep Mooi v. Chu Chin Chua & Ors. (1981) 1 MLJ 14, at page 15 to page 16 stated: "We have on another occasion observed that the Moneylenders Ordinance, 1951 does not strike at moneylending but at moneylenders and at the loans lent by them. The Ordinance is never intended to apply to an individual, or any member of the public who lends money even at interest, unless he does so as a business. (Ngui Mui Khin & Anor. v. Gillespie Bros. & Company Ltd. (1980) 2 M.L.J. 9).” [40] Since the Defendants alleged the Plaintiff is a moneylender, therefore the burden falls on the Defendants to prove so. Other than an ipse dixit by the Defendants, there is not a shred of evidence produced before the court that the Plaintiff has carried on, or advertised, or announced, or held itself out as carrying on a business of moneylending as a moneylender. [41] I am fully aware that the Court of Appeal in Mahmood bin Ooyub v Li Chee Loong and other appeals [2020] 6 MLJ 755 at [230] stated that even a single loan at interest is enough to raise the presumption of that person carrying on the business of moneylending but that statement has to be read with [233] of the same judgment where the Court of Appeal found in that case that the presumption of moneylender has not been rebutted. At any rate, I find here that the Plaintiff has rebutted the presumption as set out in s. 100A MLA by way of affidavit evidence in enc. 24 particularly at para 11. Rebuttal can be made by affidavit, see Wong Kim Fatt v Yong Kwet Yin (1996) 1 MLJ 45, at pg 46, where the headnote reads: "(1) From the affidavit evidence, it was clear that the appellant did not advertised or held himself out in any way as a moneylender as defined by s 2 of the Act. The allegation of moneylending was merely a bare allegation which was unsupported by any concrete evidence. A denial of moneylending by way of affidavit evidence would be sufficient to rebut the presumption of being a moneylender under s 3 of the Act. It is not necessary for the appellant to obtain the services of a competent officer from the licensing authority to swear an affidavit to say that the appellant was not a moneylender (see pp 53D-F and 54H); Teng Ah Seah v Teh Choo Pheng 2 MC 253, Litchfield v Dreyfus [1906] 1 KB 584 andLarut Matang Supermarket Sdn Bhd v Liew Fook Yung [1995] 1 MLJ 375 followed." Investment Agreement speaks for itself [42] Second, D1 in paragraph 9 of its affidavit at enc 23 admitted that it carries on business of moneylending and investment business. The nature of the parties relationship and what their intentions were in this case, is to be gathered from the agreement. [43] In law, parties are bound by the terms of the contract they have entered into and it is axiomatic that the duty of the court is to give effect to the clear intention of the parties as expressed in plain and unambiguous language. See e.g. Setapak Heights Development Sdn Bhd v Tekno Kota Sdn Bhd [2006] 2 CLJ 337 CA at [27]; Dato’ Sivananthan a/l Shanmugam v Artisan Fokus Sdn Bhd [2016] 3 MLJ 122 CA at [31]. The Federal court in Michael C. Solle vs. United Malayan Banking Corporation [1986] 1 MLJ 45 said: “The principles of construction to be applied to the undertaking are similar to those applied to an ordinary contract. The intentions of the parties are to be gathered from the language used. They are presumed to have intended what they said. The common and universal principle is that an agreement ought to receive that construction which its language will admit, which will best effectuate the intention of the parties, to be collected from the whole agreement.” [44] When considering the agreement dated 12.3.2021 entered between the Plaintiff and D1, the Court needs to:

44.1 consider the whole contract;

44.2 give effect to every clause; and

44.3 bring each clause into harmony with the other clauses see - City Investment Sdn Bhd v Koperasi Serbaguna Cuepacs Tanggungan Bhd [1985] 1 CLJ (Rep) 77 and Lucy Wong Nyuk King (F) & Anor v Hwang Mee Hiong (F) [2016] 3 MLJ 689. In Lucy Wong, the Federal Court said: “[34] … it is an established principle of construing a contract that, among others, a contract must be construed as a whole, in order to ascertain the true meaning of its several clauses, and also, so far as practicable, to give effect to every part of it. Each clause in an ordinary commercial contract should be so interpreted as to bring them into harmony with the other clauses of the contract (see National Coal Board v Wm Neill & Son (St Helens) Ltd [1984] 1 All ER 555 which was cited in Royal Selangor Golf Club v Anglo-Oriental (M) Sdn Bhd [1990] 2 MLJ 163; [1990] 3 CLJ Rep 37 and Mulpha Pacific Sdn Bhd v Paramount Corp Bhd [2003] 4 MLJ 357). In Australian Broadcasting Commission v Australasian Performing Right Association Limited (1973) 129 CLR 99, it was held that the whole of the contract has to be considered, since the meaning of any one part of it may be revealed by other parts, and the words of every clause must if possible be construed so as to render them all harmonious one with another. [35] Professor McMeel in The Construction of Contracts (Interpretation, Implication and Rectification) (2nd Ed, 2011) explains in clear words this long-standing canon of construction at para 1.73 as follows: Both the traditional and the modern approaches to construction stress the importance of having regard to the instrument as a whole. It is important not to fixate on one particular word or phrase and thereby neglect the overall purpose of the document or to give disproportionate importance to one phrase or clause. This is a long-standing rule. [36] As stated by Lewison in The Interpretation of Contracts (5th Ed) at para 7.02 that in order to arrive at the true interpretation of a document, a clause must not be considered in isolation, but must be considered in the context of the whole of the document. In Chamber Colliery Co Ltd v Twyerould (1893) [1915] 1 Ch 268n (which was cited by Lewison), Lord Watson said: I find nothing in this case to oust the application of the well-known rule that a deed ought to be read as a whole, in order to ascertain the true meaning of its several clauses; and that the words of each clause should be so interpreted as to bring them into harmony with the other provisions of the deed, if that interpretation does no violence to the meaning of which they are naturally susceptible.” [45] The Federal Court in a judgment delivered by Azahar Mohamed FCJ (later CJM) in the case of Wong Yee Boon v Gainvest Builders (M) Sdn Bhd [2020] 3 MLJ 571 had reiterated the principles in Lucy Wong, at [33] and most recently again by Hasnah Hashim FCJ in Catajaya Sdn Bhd v Shoppoint Sdn Bhd & Ors [2021] 2 MLJ 374 at [57]. [46] In SPM Membrane Switch Sdn Bhd v Kerajaan Negeri Selangor [2016] 1 MLJ 464 the Federal Court reversed the decision of the High Court and the Court of Appeal on the central issue on the interpretation of an agreement and held that the termination of the agreement therein was wrongful. Zainun Ali FCJ in her Ladyship’s usual erudite judgment, after a striking discussion of numerous cases both local and foreign on the principles of construction of a contract also explained: “[51] Thus……. the court must approach it holistically. No term is to be taken or interpreted in isolation. This canon of construction is so long established, it is almost banal. See for instance Chamber Colliery Ltd v Twyerould [1915] 1 Ch 268: … the application of the well-known (sic) rule that a deed ought to be read as a whole, in order to ascertain the true meaning of its several clauses; and that the words of each clause should be so interpreted as to bring them into harmony with the other provisions of the deed, if that interpretation does no violence to the meaning of which they are naturally susceptible.” [47] The Federal Court in the case of Perbadanan Kemajuan Negeri Selangor v. Selangor Country Club Sdn Bhd [2016] 8 CLJ 211 held as follows: “[34] Accordingly, when a court is called upon to interpret a document, it looks at the language. If the language is clear and unambiguous and applies accurately to existing facts, it shall accept the ordinary meaning; for the duty of the court is not to delve into intricacies of the human mind to disclose one’s undisclosed intention, but only to take the meaning of the words used by him, that is to say his expressed intentions.” [48] The construction of the agreement dated 12.3.2021 in this case is a question of law to be determined by the court. It is not for the parties or their counsel to say what the documents say or mean - Silver Concept Sdn Bhd V Brisdale Rasa Development Sdn Bhd (Formerly Known As Ekspidisi Ria Sdn Bhd) [2005] 4 MLJ 101 CA. Silver Concept (supra) was referred to by the Federal Court in Far East Holdings Bhd & Anor v Majlis Ugama Islam dan Adat Resam Melayu Pahang and other appeals [2018] 1 MLJ 1 where Jeffrey Tan, FCJ delivering the judgment of the court authoritatively said: “[156] It must be more than settled that the construction of a document is a question of law. In Munusamy v Public Services Commission [1964] 1 MLJ 239, where on the construction of an article of the Constitution which forbids the dismissal or reduction in rank of certain persons unless a certain condition is complied with, that is that the person concerned be given a reasonable opportunity of being heard, Thomson LJ said ‘That question of construction is a question of law …’. In Citicorp Investment Bank (Singapore) Ltd v Wee Ah Kee [1997] 2 SLR 759, Yong Pung How CJ said ‘we must approach the construction of the document, which is a question of law, untrammelled by any concession as to the meaning of the agreement that might have been given by the court below’. ‘It is trite that a question of construction is a question of law and not fact (see Bahamas International Trust Co Ltd and another v Threadgold [1974] 1 WLR 1514 (HL)’ (Bintulu Development Authority v Pilecon Engineering Bhd [2007] 2 MLJ 610 per Nik Hashim JCA, as he then was, delivering the judgment of the court). In Bahamas International Trust Co Ltd and another v Threadgold, Lord Diplock said ‘that the construction of a written document is a question of law’, which was followed in Tan Suan Heoh v Lim Teck Ming & Ors [1987] 2 MLJ 466, NVJ Menon v The Great Eastern Life Assurance Co Ltd [2004] 3 MLJ 38, Silver Concept Sdn Bhd v Brisdale Rasa Development Sdn Bhd (formerly known as Ekspidisi Ria Sdn Bhd) [2005] 4 MLJ 101, Padiberas Nasional Bhd v Kontena Nasional Bhd [2010] 3 MLJ 134, and The Government of India v Cairn Energy India Pty Ltd & Anor [2011] 6 MLJ 441 and Tun Dr Mahathir bin Mohamad & Ors v Datuk Seri Mohd Najib bin Tun Hj Abdul Razak [2017] 9 MLJ 1). In Desa Teck Guan Koko Sdn d v Sykt Hap FohBh Hing (suing as a firm) [1994] 2 MLJ 246, Ian Chin J opined that ‘……” [49] With all the foregoing principles in mind, upon a proper construction of the agreement dated 12.3.2021 and giving it is plain and ordinary meaning, it is as plain as daylight to me that the agreement is an investment agreement where D1 has agreed to accept the Investment Sum of RM2,000,000 from the Plaintiff for a term of 12 months, and upon the maturity date of 11.3.2022, be paid a guaranteed Investment Redemption Sum (comprising the Investment Sum and the Investment Target Return of 15%) to the Plaintiff within 7 business days of the maturity date, D1 is entitled to utilise the Investment Sum for money lending purposes and all such other purposes as may be determined by D1 and the Plaintiff shall not be concerned in this regard, each party warrants and represents to the other that the investment in D1 will not contravene any laws and regulations that are in force : sections 2.02, 2.03, 3.01, 4.01E and 5.01. Certain risks were stated at section 4.03 of the Investment agreement. There was no mention at all of interest payable on the Investment Sum. The Investment Target Return of 15% is not exorbitant interest as alleged by the Defendants in an attempt to dignify their feeble defence of illegal money lending. Not a Sham Agreement, Defendants cannot approbate and reprobate, Estoppel applies; No illegality [50] Thirdly, in attempting to get out of the bargain, the Defendants contended that the Investment Agreement was a sham agreement, to cover up what was in truth an unlawful money lending transaction at exorbitant interest rates. It bears mention that a sham agreement is defined by the House of Lords in AG Securities v Vaughan & Ors [1990] 1 AC 417 where Lord Justice Bingham explained it as follows: “A written agreement is a sham where it incorporates clauses by which neither party intends to be bound and which is obviously a smoke screen to cover the real intentions of both contracting parties: Hadjiloucas v Crean [1987] 3 All ER 1008, 1014, per Purchas LJ. The accepted definition of a sham is that given by Diplock LJ in Snook v London and West Riding Investments Ltd [1967] 2 QB 786, 802: As regards the contention of the plaintiff that the transactions between himself, Auto Finance and the defendants were a ‘sham’, it is, I think, necessary to consider what, if any, legal concept is involved in the use of this popular and pejorative word. I apprehend that, if it has any meaning in law, it means acts done or documents executed by the parties to the ‘sham’ which are intended by them to give to third parties or to the court the appearance of creating between the parties legal rights and obligations different from the actual legal rights and obligations (if any) which the parties intend to create. But one thing, I think, is clear in legal principle, morality and the authorities (see Yorkshire Railway Wagon Co v Maclure (1882) 21 Ch D 309, CA and Stoneleigh Finance Ltd v Phillips [1965] 2 QB 537), that for acts or documents to be a ‘sham’, with whatever legal consequences follow from this, all the parties thereto must have a common intention that the acts or documents are not to create the legal rights and obligations which they give the appearance of creating. Put more shortly, a sham exists where the parties say one thing intending another: Donald v Baldwyn [1953] N.Z.L.R. 313, 321 per F.B. Adams J.” (Emphasis added) [51] It must be borne in mind that the agreement is D1’s own template agreement. This material assertion by the Plaintiff in its affidavit was not contradicted or denied, and is deemed admitted by the Defendants pursuant to the principles in Ng Hee Thoong & Anor v. Public Bank Bhd [1995] 1 CLJ

D3 who signed the agreement on behalf of D1 is not a “babe in the woods” or a “country yokel”; both he and D2 came with an impressive resume as described in the ACE Group profile where they hold positions as group managing director and group executive director respectively and both are on the investment committee of the group. The Defendants’ feeble attempt to distance themselves from the profile of the ACE group by claiming D1 and ACE Group are separate entities is put paid by the 2 extension letters which D1 wrote to the Plaintiff after D1 defaulted on payment. These letterheads clearly carry the ACE Group logo. [52] There is no way of escaping the reality that D1 having signed the agreement is bound by its terms even if it purports not to understand them. In this regard, Scrutton LJ said in L’Estrange v F. Graucob Ltd [1934] 2 KB 394 that: “When a document containing contractual terms is signed then, in the absence of fraud, or, I will add, misrepresentation, the party signing it is bound, and it is wholly immaterial whether he has read the document or not’.” [53] In the case of Subramanian v Retnam [1966] 1 MLJ 172, the Court held that despite the fact that the defendant was ignorant of the English language, he would be bound by the written contract which he had signed in the absence of fraud or misrepresentation. [54] In this case, there was no allegation of fraud or misrepresentation put forward by the Defendants. [55] In my view, it is also utterly misconceived to posit that the agreement is an illegal moneylending agreement, as such a sham and void. This is because of the principles of law against approbating and reprobating as well as estoppel. [56] In this regard, a perusal of the defence and affidavits filed by the Defendants will show that in the same breath they claim the agreement is an illegal money lending agreement and a sham, yet they cherry pick and rely on various clauses in the agreement which they believe is in their favour for e.g. sections 2.01, 3.01, 4.03, 8.02 and 9.08 of the said agreement which are to encapsulate the Plaintiff’s understanding of the risks involved including “the possibility of complete loss” to tactically justify non-payment. The inconsistent positions taken amounts to reprobating and approbating the Investment Agreement and fits precisely into what Scrutton LJ said in Verschures Creameries v Hull & Netherlands Steampship Co Ltd [1921] 2 KB 608: “A person cannot say at one time that a transaction is valid and thereby obtain some advantage, to which he could only be entitled on the footing that it is valid, and then turn round and say it is void for the purpose of securing some other advantage. That is to approbate and reprobate the transaction.” [57] Since D1’s solicitors had apprised the court of the JM Application, I cannot but help note that in support of its JM Application, D3 here affirmed the supporting affidavit therein (“JM affidavit”). The same template Investment Agreement disavowed by the Defendants in this case as being illegal money lending agreement, was adduced to support the JM Application: [58] D1’s JM affidavit affirmed to debts incurred to the tune of RM764,359,535.16 arising from the same template agreement and other contractual obligations as a basis for the JM application: [59] No clearer case than this of a party approbating and reprobating in respect of the same agreement can be made. Wring our hands and succumb to what has been said cynically “the law is an ass — an idiot” - Charles Dicken’s ‘Oliver Twist’? [60] This court is entitled to look at D1’s JM affidavit as it is a matter of public record pursuant to s. 74 of the Evidence Act 1950, and which ought to have been disclosed to the court in the course of proceedings. It was incumbent upon D1’s solicitors to place the same before the court as D1’s affidavits in the instant proceeding and the JM affidavit emanated from the same solicitors’ office. In Datuk Bandar Kuala Lumpur v Perbadanan Pengurusan Trellises & Ors and other appeals [2023] 3 MLJ 829, Nallini Pathmanathan FCJ delivering judgment of the Federal Court tersely reminded: “[559] In order to dispense justice fully and properly, our adversarial system depends entirely on counsel to conduct themselves with candour, courtesy, and fairness. Ours is a practice where counsel owe, a primary duty to the court besides duty to their client. [560] The duty of counsel to his client is subject to his overriding duty to the court, because it is in the public’s interest that there is ‘a speedy and efficient administration of justice’ and thus, a counsel’s duty to the court ‘epitomises the fact that the course of litigation depends on the exercise by counsel of an independent discretion or judgment in the conduct and management of a case’ to quote from Giannarelli and Others v Wrath and Others (1988) 81 ALR 417 (per Mason CJ, High Court of Australia). [561] Our adversarial system can only properly function to administer justice, if there is full disclosure by all parties in their capacity as officers of the court. If the court’s hands are tied to the selective and piecemeal extraction of facts and law, the result is an artificial advancement of our law based on the private interests of a select few at the expense of justice for all.” [61] The contents of the JM affidavit alluded earlier is an indictment on the probity of the Defendants in raising allegations of money lending in this Court. [62] Estoppel also applies against the Defendants – after the default in making payment to the Plaintiff, the 1st and 2nd extension letters affirmed the Investment. The 1st extension letter gave the reason for not being able to pay on maturity date due to problems relating to the Covid-19 pandemic; asked for patience and stated D1 “remains committed to pay the target profit return at the rate prescribed in the terms of the investment” and offered additional recompense for the extra time taken to pay; similarly, the 2nd extension letter sought for the Plaintiff’s kind consideration of an extension till 12.8.2022 and offered to pay additional compensation. Crucially, it was most baffling that D1’s solicitors, Messrs Shahrizat Rashid & Lee letter dated 24.8.2022 (Exhibit SYS-1, Enc 23) did not take exception to the Plaintiff’s solicitors demand dated 16.8.2022 for payment nor raised illegal money lending at the first opportunity; but instead, attempted to justify that the target annual return is not a guaranteed annual return; that the return of the initial investment was based on estimates, assumptions and forecasts, talks of redemption of preference shares (which must be observed are wholly unconnected with the Investment Agreement) and that the investment carried risks with the possibility of complete loss of investment, and concluded by stating that D1 is ”not obliged to make any payment until such further notice”. [63] Fourth, in my respectful view, as the Plaintiff had not been carrying on a business of moneylending, the question of the application of s. 15 and other provisions of the MLA and that the loan is void due to illegality pursuant to s. 24 of the Contracts Act 1950 do not arise. In fact, at clause 4.01E of the Investment Agreement, each party had warranted and represented to the other that the investment in D1 will not contravene any laws and regulations that are in force. Pursuant to Clause 4(b)(i) of the guarantee, D2 and D3 respectively undertook that the Investment Agreement and guarantee do not contravene any laws. [64] In Co-operative Central Bank Ltd (in receivership) v Feyen Development Sdn Bhd [1995] 3 MLJ 313; [1995] 4 CLJ 300, the Federal Court stated that case law “seems to suggest that the courts should be slow to find illegality and strike down commercial transactions”. This approach was also taken by the Federal Court in Maple Amalgamated Sdn Bhd & Anor v Bank Pertanian Malaysia Bhd [2021] 6 MLJ 348 where Tengku Maimun Tuan Mat CJ speaking on behalf of the Federal Court held: [82] Suffice to say, the law in this country has always recognised and more so now with the growing advent of commercial transactions, that the courts should move slowly to strike down agreements for illegality. This approach must necessarily be factored into the initial assessment as to whether the agreement in question in the first place contravenes the statute in question. And, even if the agreement is illegal, the courts must be slow to conclude that the agreement is automatically void. In avoiding this result, Parliament may or may not intervene. … [84] Even in PJD Regency (supra), at paragraph 76, this Court most recently endorsed the principle that even if an agreement was formed on the basis of an illegal act (in that case the collection of booking fees), it would be against sound policy to declare so readily that the agreement is void as that would defeat the purpose of the social legislation in question. In making those observations, this Court relied on the judgment of the Privy Council in Kiriri Cotton Co Ltd v Dewani [1960] 1 All ER 177. [85] The overall tenor of the judgments above-cited and the development of the law suggests that in determining whether an agreement in the first place contravenes the law, primacy and due regard must be given to the object and purpose of the law which is said to have been breached. And, where two possible constructions are possible on the law or the facts, that is, one which results in contravention and one that does not, the interpretation which favours commercial sense (the one that avoids the finding of illegality) is to be preferred. The overarching theory behind this thought process, as seen from Lord Devlin’s dictum in St John’s Shipping (supra) for example is that the public and reasonable commercial people will have organised their affairs on the assumption that what they are doing or have done is not prohibited by law. It is only when the force of the law is abundantly manifest (whether expressly or impliedly) that such a commercial transaction is in breach of the law and an illegality. And, even then, the armoury of the law is wide enough to not immediately render the agreement void for illegality even in the face of such contravention. In all situations, this illegality assessment depends on the facts of every case and the policy as well as language of the law said to have been contravened.” [65] I also find that the contemporaneous documents comprised by the 2 extension letters as well as D1’s solicitors letter in exhibit SYS-1 and the undisputed facts of this case cumulatively underscore the inherent implausibility of the Defendants’ bare assertions that the Investment Agreement is an illegal moneylending agreement. If at all, these letters show patently who is the real victim here. Indeed, the importance and superiority of contemporaneous documents cannot be over emphasised as made clear by the Federal Court in Tindok Besar Estate Sdn Bhd v Tinjar Co [1979] 2 MLJ 229. Bare assertions do not constitute evidence and cannot give rise to a triable issue - Chen Heng Ping @ Tian Seow Hock & 5 Ors v. Intradagang Merchant Bankers (M) Berhad [1995] 3 CLJ 690. [66] Simply because the Defendants pronounce the Plaintiff to be a moneylender does not make it so. Such a stance on the facts of this case, does not resonate with this Court for it pricks the conscience of any reasonable or sensible person. The mere fact that the Defendants support their defence by sworn evidence does not mean that this Court must suspend its critical faculties, and accept that evidence as if it was probably accurate. Here, looking at the whole situation, the account of events put forth by the Plaintiff and Defendants, having regard to inconsistency with contemporaneous documents, inherent implausibility and other compelling evidence, this Court finds the issue raised of illegal money lending to defeat summary judgment is not arguable or credible. [67] On the facts as obtained here, I find the Defendants’ bare assertion that the Investment Agreement is an illegal money lending agreement to ring hollow; a blatant and convenient afterthought concocted to delay the payment to the Plaintiff. If the agreement is an investment agreement, whether Plaintiff should succeed in its claim and whether the guarantee is enforceable against D2 and D3 [68] D1 is bound by the Investment Agreement it has signed. I hold the view that there is no acceptable reason advanced by the D1 to renege on its contractual obligations. Indeed, it is the Court’s duty to uphold bargains and not strike them down willy-nilly - Charles Grenier Sdn Bhd v Lau Wing Hong [1996] 3 MLJ 327; [1997] 1 CLJ 625. [69] In this regard, D1 is obligated pursuant to Section 2.03 of the Investment Agreement to within seven business days of the maturity date i.e., on 12.3.2022 pay the Investment Redemption Sum of RM2,300,000 to the Plaintiff. [70] It cannot be disputed that D1 did not pay within the time agreed in the Investment Agreement. [71] Accordingly, so as not to materially breach its obligations pursuant to the Investment Agreement, D1 wrote the 1st and 2nd extension letters to the Plaintiff, signed by D3, to seek 2 extensions of time to pay. I find the wordings of these letters when examined, show D1 has unequivocally admitted its debt to the Plaintiff and offered additional payments for late payment. These 2 letters in my view are unequivocal acknowledgments of indebtedness to the Plaintiff subsisting at the time of acknowledgment within the requirements as set out by the Federal Court in Wee Tiang Teng v Ong Chong Hooi & Anor [1978] 2 MLJ 54 (FC)). In Wee Tiang Teng, the Federal Court stated that there are three kinds of acknowledgments:

an acknowledgment by the debtor that a debt subsisted in the past but not at the time of the acknowledgment;

an acknowledgment that it subsists at the time of the acknowledgment; and

an acknowledgment that it may subsist in the future but not at the time of the acknowledgment. [72] The Federal Court opined however that the “acknowledgments of kinds (1) and (3) are not really admissions that the debtor is indebted to the creditor”. [73] In the instant case, I find that the 2 acknowledgments of debt contained in the 2 extension letters are valid as they fall under the kind in (2) as set out by the Federal Court. Crucially, it must be noted that these 2 extension letters were not written without prejudice. The Defendants are thus bound by their own admissions and acknowledgements, see e.g. Ong Yew Teik v. Kamal Y P Tan [2019] MLJU 8; [2019] 4 MLRA 51; [2019] 1 LNS 50 CA: “[71] With this timeline and the several matters that had to be organised and attended to before any transfer of the shares could be made, the appellant's case that on 6 November 2006, the respondent signed all three Acknowledgments which contained the sums, now adjusted, was clearly the version that was proved. The evidence led by the appellant were cogent and credible, supported by contemporaneous documentary evidence coming from third parties such as the lawyers who dealt with the documentation and even from the respondent himself. All these material and corroborative evidence were unfortunately, not considered or evaluated properly by the learned judge. Ultimately, the share was transferred to the respondent through Roger. It was never the agreement nor the pleaded defence that the ECT shares were to be transferred for free. The respondent is therefore bound to the admission found in the Acknowledgment. The learned judge was thus plainly wrong in dismissing the claim when the weight of the evidence before the court was overwhelmingly in support of the appellant's claim.” [74] The contents of D1’s 2 extension letters to the Plaintiff also made patently clear that the Plaintiff is not the villain Shylock in William Shakespeare’s ‘The Merchant of Venice’ as painted out to be by the Defendants. [75] Bearing in mind that the Plaintiff has invested RM2,000,000 into D1

Any variance, made without the surety's consent, in the terms of the contract between the principal debtor and the creditor, discharges the surety as to transactions subsequent to the variance." [77] I am not swayed by D2 and D3’s invocation of s. 86 Contracts Act 1950 to escape liability:

77.1 firstly, D1 acts through its directors – at all material times, the only 2 directors of D1 are D2 and D3. D2 and D3 admitted in paragraph 20 of the affidavit in enc. 24 to D1’s 2 extension letters dated 21.3.2022 and 22.6.2022 respectively (offering extra compensation for not being able to make payment by the agreed maturity date). D3 signed these letters. There is no question of any allegation that these letters do not exist or that they were not signed by D3. Thus, in these circumstances, consent can be inferred and in fact there is express consent from the D3. The Investment Agreement was never varied. All that happened, as is clear from the 2 letters is that to avoid a breach of the Investment Agreement, D1 asked for extension of time to pay and offered compensation for the extension. D1 was obliged to pay RM2,300,000.00 on the maturity date of 11.3.2022. For the 1st extension sought to 12.6.2022, D1 offered an additional sum of RM86,250.00 as 15 % profit return, making the total sum payable on 12.6.2022 to be RM2,386,250.00. For the second extension sought up to 12.8.2022, it offered an additional sum of RM59,656.00 as profit rate of 15 % making the total sum payable on 12.8.22 to be RM2,445,906. In Kidurong Land Sdn Bhd & Anor v. Lim Gaik Hua & Ors [1990] 1 CLJ Rep 141; [1990] 1 MLJ 485, Lee Hun Hoe CJ (Borneo) delivering judgment of the Supreme Court had this to say: "Mere knowledge of the variation is insufficient. There must be consent to the variation, although implicit consent may be inferred. However, the authorities establish that implied consent may be inferred only in particular circumstances, examples of which are where the guarantor himself arranges the variation (see Wren v. Emmett Contractors Pty Ltd); where he is involved with the preparation of documents necessary for its execution (see Woodstock v. Oxford & Worcester Railway Company); where a guarantor is a director of the principal company and he negotiates with the creditor in that capacity, he will seldom if ever, be allowed to plead that he has not assented to the variation in his capacity as a guarantor but only in his capacity as a director of the principal debtor (see Mahon J at p 96 in Winstone v. Bourne; see also generally Coronation Electronics Ltd v.

77.2 D2 and D3’s assertions that they have not consented to the variation is bereft of merits. Having signed both extension letters, plainly, it does not lie in D3’s mouth to posit there was no consent. Conduct is relevant for this court to take into account in evaluating the affidavits and giving probative force to the versions advanced by the parties in this case. I find D2 and D3’s allegation to be inherently improbable and a misguided attempt to create a triable issue. In other words, the allegation is self-serving, short on substance, tenuous, and should not be given any weight. Applying the approach in Bank Negara (supra) at paragraph 21 above, which is binding on this Court, I have a duty to reject such a bare assertion, thereby rendering the issue as not triable.

77.3 That is not all. There is also merit to the Plaintiff’s arguments which I accept, that:

77.3.1 Section 9.07 of the said Investment Agreement allows for modification of the Investment agreement by written instrument. Through the 2 extension letters signed by D3, the maturity date was sought to be extended ultimately to 12.8.2022 for which a total additional sum of RM145,906 was offered to be paid to the Plaintiff. The offer was accepted in writing by the Plaintiff. Clause 1 of the guarantee embraces all obligations and undertakings of D1 including the payment for the extension from 12.3.22 to 12.8.22. The Defendants are estopped from claiming they are not liable to pay the Plaintiff RM2,445,906.00 i.e., the Investment Redemption sum together with 15% profit rate for the extension of time;

77.3.2 section 86 ‘discharges the surety as to transactions subsequent to the variance.’ See Bank Pembangunan Malaysia Bhd v Spring Hill Bioventures Sdn Bhd [2020] 4 MLJ 42 CA. Thus, even if it is true as contended, that there is no consent to the 2 letters extending time for D1 to pay, D2 and D3 are still liable for the Investment Redemption Sum of RM2,300,000.00. [78] Added to that, clause 2 of the guarantee specifically stated that the guarantee is a continuing guarantee. When construed with the rest of the terms of the guarantee, it means until the amount guaranteed has been fully repaid, D2 and D3’s liability remain. [79] I also find it noteworthy from the affidavits before the court that there was not a whisper of protest from the D2 and D3 to the Plaintiff’s solicitor’s registered letter of demand dated 16.8.2022 with evidence of postage at exhibit J and K of enc. 21; D2 and D3’s failure to respond can be construed that D2 and D3 admit the statements therein according to the principle in the case of David Wong Hon Leong v Noorazman bin Adnan [1995] 3 MLJ 283 at p 288, 289; [1995] 4 CLJ 155, at 159, where the Court of Appeal speaking through Gopal Sri Ram JCA (as he then was) said as follows: “During argument, we registered our surprise at the learned Judge’s reluctance to enter judgment for this sum of RM100,000. After all, the appellant had failed to respond to the letter of 17 December. If there had never been an agreement as alleged, it is reasonable to expect a prompt and vigorous denial. But, as we have pointed out, there was no response whatsoever from the appellant. In this context, we recall to mind the following passage in the judgment of Edgar Joseph Jr J in Tan Cheng Hock v Chan Thean Soo [1987] 2 MLJ 479 at p 487: In Wiedemann v Walpole [1891] 2 QB 534 at p 537 an action for breach of promise of marriage, it was held, that the mere fact that the Defendant did not answer letters written to him by the Plaintiff in which she stated that he had promised to marry her, was no evidence corroborating the plaintiff’s testimony in support of such promise. Lord Esher MR, in his judgment, remarked, ‘Here, we have only to see whether the mere fact of not answering the letters, with nothing else for us to consider is any evidence in corroboration of the promise’. (Emphasis supplied.) Earlier, in his judgment, he said, ‘Now there are cases - business and mercantile cases in which the courts have taken notice that, in the ordinary course of business, if one man of business states in a letter to another that he has agreed to do certain things, the person who receives that letter must answer it if he means to dispute the fact that he did so agree. But there was no cross-appeal by the respondent against the order of the learned judge granting unconditional leave to the appellant to defend in respect of the sum of RM100,000. This is because the respondent unreservedly accepted the view expressed by the learned judge during the argument in support of the order that he proposed to make. Had there been such a cross-appeal, we may well have been minded to reverse the learned judge and to enter final judgment for this remaining sum.” [80] The principle in Wong Hon Leong David’s case was applied in other Court of Appeal cases; as examples:

Abdol Mulok Awang Damit v. Perdana Industri Holdings Bhd [2003] 3 CLJ 497 at page 502: “...we were inclined to agree with the learned judge in the court below that it was only a bare assertion. Indeed, the appellant did not explain for his failure to respond to the demand letter dated 16 September 1997 (exh. P5 of Koay’s first affidavit) at the first opportunity available. (See: David Wong Hon Leong v. Noorazman Adnan [1995] 4 CLJ 155; Tan Cheng Hock v. Chan Thean Soo [1986] 1 LNS 42; ; [1987] 2 MLJ 479 at p. 487). And such failure seems to reconcile with the fact that by a letter dated 16 October 1996 (exh. P3 of Koay’s first affidavit) the appellant gave his undertaking to repay the advance taken. No doubt the appellant gave his explanation in his affidavit for giving the said undertaking. But surely he could have come up with that much earlier or at least a follow up to that undertaking when the demand came up. None of these took place. And there was no assertion that the appellant was then a mere country yokel. On the contrary he was the Executive Chairman of the company with shares valued in millions of ringgit. (See: Teh Eok Kee & Anor v. Tan Chiah Hock & Anor [1996] 2 CLJ 227). “(Emphasis added)

Ling Hock Ling v Tai Lian Development Co [2006] 6 MLJ 712 at pages 714 to 715: “[3] With these facts in hand we turn to consider the first issue. Now, here we have a case where the Defendant upon receiving copies of the plaintiff’s letters to FELDA did not make any protest about his description as a subcontractor. If it was not the truth he should have said so. But he kept quiet. In these circumstances it does not lie in his mouth to say that he was not the plaintiff’s subcontractor. See, Wong Hon Leong David v Noorazman bin Adnan [1995] 3 MLJ 283. The defendant’s complaint in respect of the first issue is therefore without merit.” (Emphasis added)

Small Medium Enterprise Development Bank Malaysia (formerly known as Bank Perusahaan Kecil dan Sederhana Malaysia Bhd) v Lim Woon Katt [2016] 5 MLJ 220; [2016] 9 CLJ 73 where one of the reasons the bank’s appeal was allowed was because: “(e) in the instant case, the learned trial judge failed to take into account that the appellant’s demand notice in a commercial matter was not responded to. Further there was no reason or justification for not responding to it. The omission of the learned trial judge to do so in our view compromised the decision making process;” [81] Indeed, David Wong Hon Leong ’s principle was also affirmed by the Federal Court in Dream Property Sdn Bhd v. Atlas Housing Sdn Bhd [2015] 2 CLJ 453 at page 478: “...It is the ordinary nature of businessman to immediately refute any proposition injurious to him contained in letters and not to let it stand (see David Wong Hon Leong v. Noorazman Adnan [1995] 4 CLJ 155).” [82] By keeping an inelegant silence and not responding to the Plaintiff’s solicitor’s demand vigorously and expeditiously also fortifies that the illegal money lending issue was raised after suit was filed smacks of an afterthought; and is simply too late and unacceptable. [83] The facts and circumstances here considered as a whole, I see no valid reason at all why the guarantee is not enforceable against D2 and D3. The guarantee, cast in plain and unequivocal terms should be given effect to. [84] In the round, I am satisfied that no bona fide triable issue has been raised by the Defendants; nor did they show there is “some other reason for trial” pursuant to Order 14 rule 3(1). It is my considered view that a trial will not throw any further light on the matter as all the issues canvassed in the application before the Court are clear, and can be decided once and for all without going to trial. Besides, a full trial will be wasteful of precious judicial time and resources in the circumstances obtained here. In this regard, it is apposite that I harken to the crisp reminder of Vincent Ng J in Suppuletchimi v Palmco Bina Sdn Bhd [1994] 2 MLJ 368: “.. No party in a proceeding is entitled to require the court to accord them valuable time of several days open court viva voce trial only upon mere or bare assertions in their affidavits…” [85] The Defendants have no defence to the Plaintiff’s claim. There is no necessity to have a trial as I have no reasonable doubt that the Plaintiff is entitled to judgment. [86] For the above reasons, it is thus unnecessary to deal with Issue 3. [87] In the circumstances, I therefore exercised my discretion to enter summary judgment in prayer (a) and (c) of enc. 20 against D2 and D3 with costs subject to allocator. [88] The entry of judgment against D1 is postponed pending resolution of its JM Application. Dated: 6th July 2023 - sgd - ……………………….. Liza Chan Sow Keng Judge High Court of Malaya at Kuala Lumpur COUNSEL: For the Plaintiff : Shahmuni Ravichandran (together with her, Sandra Tan) Messrs Wan Chin & Co. For the 1st Defendant : Nor Syafiqah Messrs Shahrizat Rashid & Lee For the 2nd and 3rd Defendants : Shankar Govinth Messrs Liza Khan Chambers CASES REFERRED: National Company For Foreign Trade v. Kayu Raya Sdn. Bhd [1984] 2 MLJ 300; [1984] 2 CLJ 220 Cempaka Finance Bhd v Ho Lai Ying & Anor [2006] 2 MLJ 685; [2006] 3 CLJ 544 Bank Negara Malaysia v. Mohd Ismail Ali Johor & Ors [1992] 1 MLJ 400; [1992] 1 CLJ Rep 14 South East Asia Insurance Bhd v Kerajaan Malaysia [1996] MLJU 642; [1998] 1 CLJ 1045 HSBC Bank Malaysia Bhd v Ng Tien Beng & Ors [2008] 9 CLJ 631 Stamford College Bhd v Iris Corp Bhd [2014] 8 MLJ 178 Southern Finance Bhd v Sun City Development Sdn Bhd & Anor [2006] 7 CLJ 464 Ho Lai Ying (trading as KH Trading) & Anor v Cempaka Finance Bhd [2004] 2 MLJ 197; [2004] 1 CLJ 232 Ngui Mui Khin & Anor v Gillespie Bros & Co Ltd [1980] 2 MLJ 9; [1979] 1 LNS 60 Chow Young Hong v Choong Fah Rubber Manufactory [1962] 1 MLJ 74 Yeep Mooi v. Chu Chin Chua & Ors. (1981) 1 MLJ 14 Mahmood bin Ooyub v Li Chee Loong and other appeals [2020] 6 MLJ 755 Wong Kim Fatt v Yong Kwet Yin (1996) 1 MLJ 45 Setapak Heights Development Sdn Bhd v Tekno Kota Sdn Bhd [2006] 2 CLJ 337 Dato’ Sivananthan a/l Shanmugam v Artisan Fokus Sdn Bhd [2016] 3 MLJ 122 Michael C. Solle vs. United Malayan Banking Corporation [1986] 1 MLJ 45 City Investment Sdn Bhd v Koperasi Serbaguna Cuepacs Tanggungan Bhd [1985] 1 CLJ (Rep) 77 Lucy Wong Nyuk King (F) & Anor v Hwang Mee Hiong (F) [2016] 3 MLJ 689 Wong Yee Boon v Gainvest Builders (M) Sdn Bhd [2020] 3 MLJ 571 Catajaya Sdn Bhd v Shoppoint Sdn Bhd & Ors [2021] 2 MLJ 374 SPM Membrane Switch Sdn Bhd v Kerajaan Negeri Selangor [2016] 1 MLJ 464 Perbadanan Kemajuan Negeri Selangor v. Selangor Country Club Sdn Bhd [2016] 8 CLJ 211 Silver Concept Sdn Bhd V Brisdale Rasa Development Sdn Bhd (Formerly Known As Ekspidisi Ria Sdn Bhd) [2005] 4 MLJ 101 Far East Holdings Bhd & Anor v Majlis Ugama Islam dan Adat Resam Melayu Pahang and other appeals [2018] 1 MLJ 1 AG Securities v Vaughan & Ors [1990] 1 AC 417 Ng Hee Thoong & Anor v. Public Bank Bhd [1995] 1 CLJ 609 Verschures Creameries v Hull & Netherlands Steampship Co Ltd [1921] 2 KB 608 Datuk Bandar Kuala Lumpur v Perbadanan Pengurusan Trellises & Ors and other appeals [2023] 3 MLJ 829 Co-operative Central Bank Ltd (in receivership) v Feyen Development Sdn Bhd [1995] 3 MLJ 313; [1995] 4 CLJ 300, Maple Amalgamated Sdn Bhd & Anor v Bank Pertanian Malaysia Bhd [2021] 6 MLJ 348 Tindok Besar Estate Sdn Bhd v Tinjar Co [1979] 2 MLJ 229 Chen Heng Ping @ Tian Seow Hock & 5 Ors v. Intradagang Merchant Bankers (M) Berhad [1995] 3 CLJ 690 Charles Grenier Sdn Bhd v Lau Wing Hong [1996] 3 MLJ 327; [1997] 1 CLJ 625 Wee Tiang Teng v Ong Chong Hooi & Anor [1978] 2 MLJ 54 Ong Yew Teik v. Kamal Y P Tan [2019] MLJU 8; [2019] 4 MLRA 51; [2019] 1 LNS 50 OCBC Bank (Malaysia) Bhd v Lim Hock Kok & Anor (kedua-dua berniaga sebagai rakan kongsi di dalam firma ‘Ictinus Home and Building Constructions and Designs’) [2017] 9 CLJ 454; [2017] MLJU 798 Kidurong Land Sdn Bhd & Anor v. Lim Gaik Hua & Ors [1990] 1 CLJ Rep 141; [1990] 1 MLJ 485 Bank Pembangunan Malaysia Bhd v Spring Hill Bioventures Sdn Bhd [2020] 4 MLJ 42 David Wong Hon Leong v Noorazman bin Adnan [1995] 3 MLJ 283; [1995] 4 CLJ 155, at 159 Abdol Mulok Awang Damit v. Perdana Industri Holdings Bhd [2003] 3 CLJ 497 Ling Hock Ling v Tai Lian Development Co [2006] 6 MLJ 712 Small Medium Enterprise Development Bank Malaysia (formerly known as Bank Perusahaan Kecil dan Sederhana Malaysia Bhd) v Lim Woon Katt [2016] 5 MLJ 220; [2016] 9 CLJ 73 Dream Property Sdn Bhd v. Atlas Housing Sdn Bhd [2015] 2 CLJ 453 LEGISLATION/STATUTE REFERRED: Section 410(c) of the Companies Act 2016 Section 2 of the Moneylenders Act 1951 Sections 24, 81, 86 of the Contracts Act 1950