Malayan Banking Berhad v Tan ke Xiou (WA-12BNCC-3-02/2022)

8.1 The Guarantee is tainted with fraud perpetrated by the Third Parties;

8.2 The 2nd Defendant has filed a suit in Kuala Lumpur High Court Suit No: WA-22NCC-596-10/2019 (“suit 596”) against the Third Parties (and has obtained Judgment against them);

8.3 The Guarantee executed by the 2nd Defendant binds her to liabilities and/or responsibilities and/or to amounts which are much greater to that to be paid by the 1st Defendant hirer;

8.4 The Guarantee was not executed before a Commissioner for Oaths or a Magistrate or a Notary Public. [9] The salient agreed facts by the parties were:

9.1 The hp agreement dated 14.7.2019 and Guarantee executed by the 2nd Defendant are governed by the Hire Purchase Act, 1967 (“the Act”);

9.2 The Guarantee was not executed before a Notary Public, Commissioner for Oaths or a Magistrate;

9.3 The Second Defendant is a guarantor for the hirer; and

9.4 Judgment in default was obtained (on 12.8.2020) against the hirer by the Plaintiff. [10] The Agreed Issues for trial (see pg 247/248 Appeal Records) were:

10.1 Whether the 2nd Defendant’s liabilities under the Guarantee of Hire Purchase Agreement has arisen and is due or void and unenforceable?

10.2 Whether Section 22 of the Act is applicable to the Guarantee?

10.3 Whether the indebtedness of the 2nd Defendant is proven, valid, and correct?

10.4 Whether the Guarantee executed by the 2nd Defendant binds the 2nd Defendant to liabilities and/or responsibilities and/or amount which are much greater as compared to the First Defendant as the principal debtor as provided for under s 22 of the Act?

10.5 Whether the Second Defendant executed the Guarantee of Hire Purchase Agreement voluntarily or by reason of fraud by the Third Parties? Decision of The Sessions Court [11] The learned SCJ in his Judgment found that:

11.1 the Plaintiff has failed to prove its case on a balance of probabilities and dismissed the Plaintiff’s claim against the 2nd Defendant with costs of RM19,000.00;

11.2 clause 3 of the Guarantee contravenes s 22 of the Act; the Learned SCJ agreed with D2’s submission that by the wordings in clause 3 of the Guarantee, the 2nd Defendant has bound herself to pay the Plaintiff an aggregate sum which is larger than the balance originally payable under the hire purchase agreement. As such, the Guarantee ought to have been executed before a magistrate or a commissioner for oaths or a notary public as required by s 22 of the Act and as it was not so executed, the Guarantee is void and unenforceable against the 2nd Defendant and relied on the cases of Su Chii Leong (Sued as a Guarantor) v. Orix Credit Malaysia Sdn Bhd [2004] 5 MLJ 308 (“Su Chii Leong”); and Trade Ocean Exporters Sdn Bhd v. Arab-Malaysian Finance Bhd [2009] 10 CLJ 758; [2009] 1 MLJU 492 (“Trade Ocean Exporters”) which followed Su Chii Leong. Law on Appellate Intervention [12] In Al Sharhan Sdn Bhd & Anor v Edipro Construction & Engineering 2021] 10 MLJ 585, [2020] 1 LNS 1046, I have discussed the fundamental principles pivotal to be borne in mind by an appellate court in hearing an appeal from a judgment of the trial court : “[7] In hearing this appeal, this Court as an appellate court is reminded that it should be slow to interfere with the findings of fact of a trial judge. Reference is made to China Airlines Ltd-v-Maltra Air Corp Sdn Bhd (formerly known as Maltran Air Services Corp Sdn Bhd) and another appeal [1996] 3 CLJ 163 where the Federal Court at page 175 said: It is a settled principle of law that in an appeal, where facts have to be reviewed, it is undesirable that the findings of the court below should be disturbed by a court of appeal unless it appears that those findings are clearly wrong, and more especially that it is undesirable to do so where the conclusion reached must to a large extent depend on the credibility of the witnesses and the impression formed by a court which has seen them and can judge their honesty and accuracy. [8] In Lee Chee Keong v Fadason Holdings Sdn Bhd [2017] MLJ 728, the Court of Appeal citing the judgment of Nallini Pathmanathan JCA (now FCJ) in MMC Oil & Gas Engineering Sdn Bhd v Tan Boon Kwee & Sons Sdn Bhd [2016] 2 MLJ 428 held that appellate interference is only warranted where no reasonable Judge could have reached the same conclusion of the trial judge: [15] This is a point of some importance because it underscores the rationale that the appellate court is not at liberty to reverse or interfere in the finding of a trial judge even if the appellate court is clearly of the view that it would not have reached the conclusion the trial judge did on the evidence on record before it. It requires something more. The requisite or correct standard to be applied is that no reasonable judge, on the evidence on record, could have reached the conclusion of the trial judge. In other words, so long as the findings of the trial judge are plausible on the evidence on record, there is no room for interference merely on the grounds that the appellate court forms a different opinion on the same evidence. [9] The Federal Court in Ming Holdings (M) Sdn Bhd v Syed Azahari Noh Shahabudin & Anor [2010] 6 CLJ 857 at pages 873 to 875 had this to say: [41] Before we leave this subject and move on to the next two questions, we feel a need to remind that a trial judge has the advantage over an appellate court in hearing the witness and observing his demeanour. Thus, unless the trial judge is plainly wrong in his finding, the appellate court should not reverse a finding of fact by the trial judge. This “plainly wrong” test has been long established and can be observed in the Judicial Committee of the Privy Council pronouncement in Chow Yee Wah & Anor v. Choo Ah Pat [1978] 1 LNS 32 where Lord Fraser said: In the face of that finding by the trial judge on the question of fact the Federal Court were only entitled to displace his conclusion if they were satisfied that his view was plainly wrong and that any advantage which he enjoyed by having seen and heard the witness was not sufficient to explain his conclusion, as the authorities already quoted show. [42] Before stating this, Lord Fraser cited two cases in support which we find appropriate to repeat as a reminder to all appellate courts of their role in dealing with a finding of fact by a trial judge. [43] The first is Lord Tankerton in Watt or Thomas v. Thomas [1947] AC 487:

My/Our liability under this guarantee shall not be for any sum greater than the total amount for which the Hirer shall be liable to you under the said Hire Purchase Agreement.

If a provision in this guarantee is wholly or partly invalid or unenforceable, the provision or the part of it that is invalid or unenforceable must to that extent be treated as deleted from this guarantee and this does not affect the validity or enforceability of the remaining provisions.” [16] Section 22 of the Act provides: “Guarantor not to be bound in certain cases

Where a guarantor of the performance of the obligations of the hirer under a hire-purchase agreement enters into an agreement binding the guarantor -

(a) to pay to the owner an aggregate sum which is larger than the balance originally payable under the agreement; or

(b) to perform an obligation in respect of goods other than the goods comprised in the hire-purchase agreement, the agreement so entered shall be void unless the agreement is executed by the guarantor in the presence of a Magistrate, a Commissioner for Oaths or a Notary Public.” [17] In considering the issue, it is to be borne in mind that it is an agreed fact that the 2nd Defendant is the guarantor for the hirer. It is also not disputed that the Guarantee was executed by the 2nd Defendant and witnessed by SP-1 who was at the material time an officer of the Plaintiff, and SP-1 was neither a Magistrate, nor a Commissioner for Oaths or a Notary Public. [18] Having considered the cause papers and the parties’ submissions, I am of the considered view that whether the Guarantee is void because of infringement of s 22 of the Act is a question of construction. [19] When looking at a contract, the Court needs to:

19.1 consider the whole contract;

19.2 give effect to every clause; and

19.3 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 at [34], [35] and [36]. [20] The Federal Court in a judgment delivered by Azahar Mohamed FCJ (now 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] as most recently again by Hasnah Hashim FCJ in Catajaya Sdn Bhd v Shoppoint Sdn Bhd & Ors [2021] 2 MLJ 374: “[57] The terms and conditions of an agreement that have been agreed to by the parties of the agreement cannot be simply brushed aside and ignored. This court through the judgment of Azahar Mohammad FCJ in the case Lucy Wong Nyuk King (F) & Anor v Hwang Mee Hiong (F) [2016] 3 MLJ 689 explained the principle of construing a contract as follows: “… 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] 1 CLJ 995; [1990] 3 CLJ Rep 37 and Mulpha Pacific Sdn Bhd v Paramount Corporation Bhd [2003] 4 MLJ 357; [2003] 4 CLJ 294). 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.” [21] 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.” [22] The construction of the hp agreement and Guarantee 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. [23] With the foregoing principles in mind, I am inclined to accept the Plaintiff’s arguments that a proper construction of the Guarantee will admit of construing clause 3 together with the rest of the clauses of the Guarantee and this will include clause 4 and clause 11 (set out above). [24] In my opinion, in the clear, unambiguous and unmistakable language in which the clauses 3,4 and 11 are cast, and given their natural and ordinary meaning:

24.1 Clause 4 of the Guarantee limits the liability of the guarantor to that of the hirer. Hence, in my utmost respectful view, there is no necessity for execution of the guarantee before a Magistrate, a Commissioner for Oaths or a Notary Public - see Public Finance Bhd v. Zainal bin Md Deros & Anor [1994] MLJU 494 where Mahadev Shankar J (as he was then) in allowing the guarantee to stand held: “12. Having looked once again at the evidence I see that neither Counsel drew my attention to some further words which appear later in the Guarantee which reads:- "Provided that no variation shall make me liable for a greater maximum sum under this Guarantee than that for which I am liable as the above-written Agreement now stands."

These words make it clear that the Guarantor was not to be liable for a greater maximum sum under the Guarantee than that which the Plaintiff could have recovered under the Hire Purchase Agreement i.e. RM210,000/-.”

24.2 Even assuming I am wrong in invoking clause 4 of the Guarantee to limit the liability of the 2nd Defendant, there is still clause 11 to reckon with. Clause 3 is not cast in iron as Clause 11 provides for it to be severed if indeed it offends s 22 of the Act;

24.3 Clauses 4 and 11 of the Guarantee in my opinion are not surplusage, and thus to be given effect to. Both Su Chii Leong and Trade Ocean Exporters are distinguishable in that the courts there were not called upon to consider the issue and effect of limitation of the guarantor’s liability and severance as appearing in clauses 4 and 11 of the Guarantee in the instant case;

24.4 Added to that, I hold the view that the Plaintiff is entitled to raise clauses 4 and 11 in this appeal since the Plaintiff did in paragraph 4 of the Reply to Defence made clear that the Plaintiff is relying on the whole Guarantee for its full terms and effect. In fact, clause 4 was extensively argued by the Plaintiff in the Court below;

24.5 The learned SCJ with respect, erred in construing clause 3 of the Guarantee in isolation; this failure to consider the whole of the Guarantee is to be read harmoniously amounts to an insufficent judicial appreciation;

24.6 Although the severance clause housed in clause 11 was not argued in the court below, I had invited further arguments form the respective parties. My attention was drawn by the Plaintiff’s counsel to Luggage Distributors (M) Sdn Bhd v Tan Hor Teng & Anor [1995] 1 MLJ 719 CA, wherein Gopal Sri Ram JCA (as he was then) in delivering the Court of Appeal’s judgment held that the categories of cases in which an appellate court will admit a new point are not closed. It is my view that it will be in the interest of justice in this case to permit this point to be raised for the 1st time during the appeal. I am fortified in my view as this case involved a construction of the Guarantee at trial and for this, I looked to the Federal Court for guidance in the case of Morello Sdn Bhd v Jaques (International) Sdn Bhd [1995] 1 MLJ 577 wherein Edgar Joseph Jr, FCJ (as he was then) in delivering the majority judgment of the Federal Court held: “Be that as it may, it is clear law that an appellate court is more likely to entertain a new point if it relates to a matter which had been before the court of trial, for example, a new argument based '… upon the construction of a document or upon facts either admitted or proved beyond controversy'. (See Connecticut Fire Insurance Co v Kavanagh [1892] AC 473 at p 480. Similarly, see Donaghey v O'Brien & Co [1966] 2 All ER 822 at pp 828, 831; [1966] 1 WLR 1170 at pp 1180, 1183.)” (Counsel’s emphasis)

24.7 the contra proferentum rule posited by the 2nd Defendant’s counsel in my utmost respectful view does not apply as the Guarantee IS NOT in ambiguous terms. [25] As such, I hold that the Guarantee did not infringe s 22 of the Act. Whether fraud (if any) practiced on the 2nd Defendant by third parties taints the enforcement of the Guarantee [26] I turn now to deal with this issue. On this aspect of the case, it is imperative to note that the fraudulent acts now complained by the 2nd Defendant relates exclusively only to the dealings, arrangements, or agreements that she has with the Third Parties. That the Plaintiff played no part and was NOT PRIVY to the 2nd Defendant’s dealings, arrangements, or agreements with the Third Parties was admitted by the 2nd Defendant’s sole witness SD-2 at paragraphs 3 -10 of the transcripts at page 188 of the Rekod Rayuan Jilid 2(1)-Bahagian B. [27] The Learned SCJ held that the 2nd Defendant has executed the Guarantee due to fraud of the Third Parties. In my respectful view, owing to the doctrine of privity of contract, the bristling question which the learned SCJ ought to have asked himself is whether the fraudulent acts of Third Parties affected or vitiated the hp agreement and the guarantee. Had the learned SCJ done so, it would be plain as pikestaff that he would have answered a resounding “NO!” In my opinion, the Learned SCJ was plainly wrong in failing to appreciate or analyse the nature of the wrongdoing in issue. Upon a proper assessment of the totality of the evidence, the Learned SCJ would have found that the alleged fraudulent acts were not known to the Plaintiff; neither was the Plaintiff complicit at all to any of the alleged fraudulent acts and, that the 2nd Defendant had executed the Guarantee voluntarily. It is also in evidence that after the writ was served, the 2nd Defendant by her email and letter of 23.7.2020 in exhibit P7 (pages 462-467 of the Appeal Records Jilid 2(3)) requested the Plaintiff to “withdraw the legal action and I shall make payment of the outstanding amount and resume with the following monthly instalment immediately.” There was not a whisper of the fraudulent acts by Third parties to the Plaintiff even then. [28] Added to that, the evidence when properly analysed will lead to a finding that the fate of the Defence was sealed by the 2nd Defendant’s failure to testify. She undermined her position by not testifying, although she was in the witness list. I can be forgiven for concluding that she was trying to avoid cross examination. Her not testifying is significant as here is a case where she posited she was defrauded into signing the Guarantee by Third Parties. It behoves her to give evidence to rebut the allegations made against her by the Plaintiff. This failure must, on the facts of this case, be thrown into the balance when evaluating the evidence of other witnesses. The learned SCJ did not do so. He ought to have. I am therefore in accord with the Plaintiff’s postulation that this failure fatally flaws the learned SCJ's evaluation of the evidence - see the principle of law enunciated by Elphinstone CJ in Wasakah Singh Wasakah Singh v Bachan Singh (1931) 1 MC 125 at p 128 and applied in Takako Sakao (f) v Ng Pek Yuen (f) Anor (2009) 6 MLJ 751 by the Federal Court speaking through Gopal Sri Ram FCJ, which provides a useful guide when there is no evidence put forth by a defendant in a civil case at [4] to [6] . [29] With a paucity of evidence that the 2nd Defendant was defrauded into signing the Guarantee by Third parties, it is puzzling that the Learned SCJ made a finding that the 2nd Defendant had executed the Guarantee by reason of fraud by the Third Parties. In the instant case, since the 2nd Defendant did not give evidence, the documents tendered and marked as exhibits, as well as the oral evidence by the Plaintiff’s witness’s prima facie incriminates her. It is well established as a general rule that the ‘burden of proof’ in a civil case is on the plaintiff but the burden will shift when the plaintiff has adduced sufficient evidence of probative value which requires the defendant to rebut the plaintiff’s evidence. The facts of this case are not one related to no case to answer where the defendant is not required to give evidence (see Khoo Teng Chye v Cekal Berjasa Sdn Bhd & Anor [2015] MLJU 992; [2015] 6 CLJ 449). The facts of the case requires the 2nd Defendant to give evidence due to the allegations made by her. As stated in Takako Sakao, two consequences followed when a party who was fully conversant with the facts studiously refrained from giving evidence. The first is that the evidence given by the other party ought to have been presumed to be true. The second consequence is that the court ought to have drawn an adverse inference against a party who has a case to answer but did not care to give evidence on the issue in the action. The learned SCJ was plainly wrong when he failed to apply the binding principles propounded by the Federal Court in Takako Sakao. In this regard, the learned SCJ ought to have drawn an adverse inference against the 2nd Defendant and presumed the Plaintiff’s evidence to be true. Sarkar on Evidence (16th Ed) at p 1837 states: “It is the bounden duty of a party personally knowing the whole circumstances to give evidence and to submit to cross-examination. Non-appearance as a witness would be the strongest possible circumstance to discredit the truth of his case Gurbakhsh v Gurdial AIR 1927 PC 230.” [30] All things considered:

30.1 the 2nd Defendant has direct recourse against the Third Parties who allegedly defrauded her; indeed, she did precisely that and obtained Judgment against them in suit 596; her remedy lies against them;

30.2 the 2nd Defendant cannot be allowed to succeed on the argument that the Guarantee was tainted allegedly by fraud practiced by Third Parties on her when such allegations are completely irrelevant to the matter at hand, ‘a red herring hidden in thick fog’. It would simply be too onerous to require the Plaintiff to investigate or enquire into a transaction to which the Plaintiff is not a party. To allow such ipse dixit to succeed would stifle commercial transactions. I am as such, in full agreement with the observation made by Rogers CJ in Corumo Holdings Ltd. &Ors. v. C. Itoh Ltd & Ors. [1990] 3 ACSR 438, at p. 448, which was endorsed by the Federal Court in a judgment by Edgar Joseph, FCJ in The Co-Operative Central Bank Limited (in receivership) v. Feyen Development Sdn. Bhd. [1995] 4 CLJ 300 at 313 that “a commercial Judge must be anxious about the impact that a decision may have on the proper functioning of the commercial community”. Whether the Plaintiff is entitled to judgment on the amount claimed [31] All that remains then to be decided is whether the Plaintiff is entitled to judgment. It was argued by the 2nd Defendant that the hp agreement is invalid - there are different versions of the hp agreement, Exhibit p1 and p1(1-3) and therefore the hp agreement is invalid. This contention I find, is untenable for 2 reasons. Firstly, SP-1 had testified that Exhibit P-1 and P-1(1-3) is the actual hp Agreement between the First Defendant and the Plaintiff. Exhibit P-1 and P-1(1-3) is exactly the same as the hp Agreement in the possession of the 2nd Defendant and produced by her at pages 472- 476 of the Appeal Records. The evidence show she was furnished a copy and there was nary a complaint. Even at trial after the evidence was lead, there was no attempt to amend the Defence to plead the hp agreement is invalid or was tampered with. To recapitulate, she did not take the stand, and this is crucial and dealt with in the preceding paragraphs. Secondly, the parties had agreed inter alia in the statement of agreed facts that “The hp agreement dated 14.7.2019 and Guarantee executed by the 2nd Defendant are governed by the Hire Purchase Act, 1967”. Implicitly the contentions falls. In Johandra Realty Sdn Bhd & Anor v Ketua Pengarah Jabatan Pengairan dan Saliran Malaysia & Ors [2017] 10 MLJ 1, the Court held that an admission is admissible against the party making it, and the same principle applies to a statement of agreed facts. I am in accord with that view, otherwise the purpose of having a statement of agreed facts will be rendered otiose. [32] In this court’s view, following the Federal Court case of Kamarulzaman bin Omar & Ors v Yakub bin Husin & Ors [2014] 2 MLJ 768, as well as the Court of Appeal case of Chan Kwai Foong v Dato’ Capt Mohd Najib bin Abdullah [2017] 3 MLJ 219, by virtue of the Judgment in Default entered against the 1st Defendant on12.8.2020, the unchallenged allegations of the hp loan and the default in repayment which gave rise to the cause of action, merged in the judgment. Until set aside, the default judgment was the incontestable proof of the hp loan to the 1st Defendant and the breach of the hp agreement. The 2nd Defendant is a director of the 1st Defendant. Although the implications of the default judgment against the 1st Defendant (which is subsisting and remains in force) to the primary issue at the trial against the 2nd Defendant was not argued by the parties, it is a question of law which this court is entitled to look at. [33] Written demand to pay the full outstanding amount was sent to the 2nd Defendant by the Plaintiff. Clause 6 of the Guarantee allows the Plaintiff to rely on the certificate of indebtedness. Once the certificate in exhibit P-5 was produced, it is prima facie evidence of the indebtedness and excuses the Plaintiff from adducing proof of debt and shifts the burden onto the 2nd Defendant to disprove the amount claimed – see Cempaka Finance Bhd v Ho Lai Ying (trading as KH Trading) & Anor [2006] 2 MLJ

I agree with the Plaintiff’s posit that there is no necessity for the Plaintiff to call Mohd Shahrudin bin Musa to testify. The 2nd Defendant also did not challenge the accuracy of exhibit P-6, being the computerized statement wherein the amount owing tallies with exhibit P-5. Exhibit P-6 was produced by SP 2. GLARINGLY, it was not put to the Plaintiff’s witnesses that the amounts claimed are wrong. It is trite law that the failure to put one’s case to his opponent’s material witnesses would preclude the former from raising it in his argument following the application of the principle in Browne v Dunn (1893) 6 R 67 and accepted by the Court of Appeal in Aik Ming (M) Sdn Bhd & Ors v Chang Ching Chuen & Ors and another appeal [1995] 2 MLJ 770 and in Sivalingam a/l Periasamy v Periasamy & Anor [1995] 3 MLJ 395. The Court of Appeal in Aik Ming (supra) applied the principle in Browne v Dunn and said: “... It is essential that a party's case be expressly put to his opponent's material witnesses when they are under cross-examination. A failure in this respect may be treated as an abandonment of the pleaded case and if a party, in the absence of valid reasons, refrains from doing so, then he may be barred from raising it in argument. It is quite wrong to think that this rule is confined to the trial of criminal causes. It applies with equal force in the trial of civil causes as well.” [34] Added to that, one cannot simply ignore the contents of Exhibit P- 7 as alluded to earlier, which supports an admission of debt and this compounded the 2nd Defendant’s liability. [35] I would conclude on the evidence, as well as the legal result arising from the Judgment in Default against the 1st Defendant, the Plaintiff has proven its case on a balance of probabilities against the 2nd Defendant. [36] I have not overlooked the 2nd Defendant’s argument that the discretion of a lower court is not to be lightly interfered. As the appeal concerns a decision after trial, I think counsel must have meant findings of fact by the Learned SCJ should not, in accordance with the settled practice of appellate courts, be interfered with. I agree - but only to the extent that the practice applies to cases where the court of fact at first instance, has not misdirected itself. [37] Central to appellate intervention, is that a decision arrived at by a trial court without judicial appreciation of the evidence might be set aside on appeal. This is consistent with the “plainly wrong” test - Gan Yook Chin

(P) & Anor v Lee Ing Chin @ Lee Teck Seng & Ors [2005] 2 MLJ 1 FC. In this regard, I have also borne in mind the most recent Federal Court pronouncement on the subject in Ng Hoo Kui & Anor v Wendy Tan Lee Peng (administratrix for the estate of Tan Ewe Kwang, deceased) & Ors [2020] 12 MLJ 67; [2020] 1 LNS 1060 para 148 per Zabariah Mohd Yusof FCJ that so long as the trial judge’s conclusion can be supported on a rational basis in view of the material evidence, the fact that the appellate court feels like it might have decided differently is irrelevant. In other words, a finding of fact that would not be repugnant to common sense ought not to be disturbed. The trial judge should be accorded a margin of appreciation when his treatment of the evidence is examined by the appellate courts. [38] I am however satisfied that had the learned SCJ correctly directed himself on the facts and the relevant law, I have no doubt that he would have held that the Plaintiff is entitled to judgment against the 2nd Defendant. [39] That is not all. There is yet another error in the judgment of the Sessions Court which I should for completeness, address. [40] At paragraph 65 (d) of the Grounds of judgment, the learned SCJ answered “Tidak” to the question “Whether the Guarantee executed by the 2nd Defendant binds the 2nd Defendant to liabilities and/or responsibilities and/or amount which are much greater as compared to the First Defendant as the principal debtor as provided for under s 22 of the Act?” Having so answered, it leaves the salient question as to why the learned SCJ contradicted himself earlier in his judgment that s 22 of the Act applies. [41] For the reasons already given, I would allow this appeal and set aside the order dated 21.1.2022 of the Sessions Court and enter Judgment for the Plaintiff as prayed in paragraph 16(a) and (b) of the Statement of Claim, 2nd Defendant to pay costs here and below in the total sum of RM35,000 subject to allocator; the RM19,000 costs already paid to the 2nd Defendant’s solicitors as stakeholders by the Plaintiff is to be refunded to the Plaintiff’s solicitors within 7 days of this order. [42] I must not conclude without expressing my gratitude to parties for their research which is of assistance to this court. I have not dealt with every single argument advanced and case authority relied upon by the parties as I found it unnecessary to do so in arriving at a decision submitted. Dated 10th August 2022 - signed - ……………………….. Liza Chan Sow Keng Judicial Commissioner High Court of Malaya at Kuala Lumpur COUNSEL: For the Appellant : Azmi bin Mohamed For the Respondent: Nur Izzati binti Yaacob CASES REFERRED: Su Chii Leong (Sued as a Guarantor) v. Orix Credit Malaysia Sdn Bhd [2004] 5 MLJ 308 Trade Ocean Exporters Sdn Bhd v. Arab-Malaysian Finance Bhd [2009] 10 CLJ 758; [2009] 1 MLJU 492 Al Sharhan Sdn Bhd & Anor v Edipro Construction & Engineering 2021] 10 MLJ 585, [2020] 1 LNS 1046 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 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 Public Finance Bhd v. Zainal bin Md Deros & Anor [1994] MLJU 494 Luggage Distributors (M) Sdn Bhd v Tan Hor Teng & Anor [1995] 1 MLJ 719 Morello Sdn Bhd v Jaques (International) Sdn Bhd [1995] 1 MLJ 577 Wasakah Singh Wasakah Singh v Bachan Singh (1931) 1 MC 125 Takako Sakao (f) v Ng Pek Yuen (f) Anor (2009) 6 MLJ 751 Khoo Teng Chye v Cekal Berjasa Sdn Bhd & Anor [2015] MLJU 992; [2015] 6 CLJ 449 Browne v Dunn (1893) 6 R 67 Aik Ming (M) Sdn Bhd & Ors v Chang Ching Chuen & Ors and another appeal [1995] 2 MLJ 770 Sivalingam a/l Periasamy v Periasamy & Anor [1995] 3 MLJ 395 Cempaka Finance Bhd v Ho Lai Ying (trading as KH Trading) & Anor [2006] 2 MLJ 685 Corumo Holdings Ltd. &Ors. v. C. Itoh Ltd & Ors. [1990] 3 ACSR 438 The Co-Operative Central Bank Limited (in receivership) v. Feyen Development Sdn. Bhd. [1995] 4 CLJ 300 Johandra Realty Sdn Bhd & Anor v Ketua Pengarah Jabatan Pengairan dan Saliran Malaysia & Ors [2017] 10 MLJ 1 Kamarulzaman bin Omar & Ors v Yakub bin Husin & Ors [2014] 2 MLJ 768 Chan Kwai Foong v Dato’ Capt Mohd Najib bin Abdullah [2017] 3 MLJ 219 Gan Yook Chin (P) & Anor v Lee Ing Chin @ Lee Teck Seng & Ors [2005] 2 MLJ 1 Ng Hoo Kui & Anor v Wendy Tan Lee Peng (administratrix for the estate of Tan Ewe Kwang, deceased) & Ors [2020] 12 MLJ 67; [2020] 1 LNS 1060 STATUTE/LEGISLATION REFERRED: Section 22 of the Hire Purchase Act, 1967