Orix Credit Malaysia Sdn. Bhd. v Granville Grocery Sdn. Bhd. (JA-A52NCC-553-09/2025)

AND GRANVILLE GROCERY SDN BHD

TAN AH MAI [Identity Card No.: 611102015450]

TENG KOK GUAN [Identity Card No.: 910328016317]

TAN BOON KOK [ Identity Card No.: 760129085917]

TAN LEE HENG (M) SDN. BHD. [ Company No.: 474915D ] …DEFENDANTS GROUNDS OF JUDGMENT (ENCLOSURE 18)

The Plaintiff filed an application for summary judgment under Order 14 Rule 1 of the Rules of Court 2012 (the ROC 2012) against the Third and Fifth Defendants. The application was allowed by this Court on 29.4.2026 with costs of RM3,000.00

The Third and Fifth Defendants, dissatisfied with the decision by this Court, filed this appeal.

The Plaintiff and the First Defendant entered into two Hire Purchase agreements (the agreements) for machinery. The Third and Fifth Defendants were among the guarantors under the agreements. The Third and Fifth Defendants have signed the Guarantee and Indemnity Agreements dated 23.6.2022 and 3.10.2022.

The First Defendant defaulted on its payments. Subsequently, the Plaintiff commenced an action against all the defendants, including the Third and Fifth Defendants.

The application for summary judgment is governed by Order 14

Application by Plaintiff for summary judgment (O. 14 r. 1)

Where in an action to which this rule applies a statement of claim has been served on a defendant and that defendant has entered an appearance in the action, the Plaintiff may, on the ground that the defendant has no defence to a claim included in the writ, or to a particular part of such a claim, or has no defence to such a claim or part thereof except as to the amount of any damages claimed, apply to the Court for judgment against that defendant.

The Federal Court in the case of National Company for Foreign Trade v Kayu Raya Sdn Bhd 1984 1CLJ 283, set out the preliminary requirements of an application under O.14, which are as follows:

the defendant must have entered an appearance;

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

(iii) the affidavit in support must comply with the requirements of Rule 2 of O.14.

In National Company of Foreign Trade (supra), it was also held that if the Plaintiff satisfies the above considerations, a prima facie case is established against the defendant, and the burden shifts to the defendant to show why the Court should not grant summary judgment against him.

In Segi Astana Sdn Bhd v Mesra Indah Jaya Sdn Bhd (2022) CLJU 1327, the High Court held that:

Law for Summary Judgement. [7] The applicable law concerning an Order 14 Rules of Court 2012 application is trite. My understanding of the applicable principles is summarized as follows: -

The application for a summary judgment application is based on the pleadings and the affidavit evidence presented by both the Plaintiff and the Defendant.

(ii) This Court should not enter judgment against the Defendant if it finds that the defence or issue or question in dispute between parties that ought to be tried or that there ought for some other reason to be a trial of the claim or part of the claim. This Court must analyse the affidavit evidence of both parties.

(iii) Generally, in the normal way, it is not appropriate for me to resolve conflicts of evidence on affidavit alone but where such statement or assertion, denial or dispute is unequivocal or lacking in precision or is inconsistent with undisputed contemporary documents or statements then I am duty-bound to reject them and enter judgment.

(iv) This power should be exercised by me in a very clear case where the defence and affidavit filed in opposition do not show any bona fide defence and there are no real issues to be tried.

If a Defendant even raises a single triable issue, it will not be a fit and proper case for summary judgment. [8] For a party to successfully obtain an order for summary judgment, it must be shown to Court that the Defendants have no defence to a claim.”

In Cempaka Finance Bhd v Ho Lai Ying & Anor (2006) 3 CLJ 544, the Federal Court held as follows: In the instant case, the Court of Appeal had put the burden on the Plaintiff to prove his case in an O. 14 application. With respect, that could not be the correct proposition of law. In an application under O. 14 RHC, the burden is on the Plaintiff to establish the following conditions: (i) that the defendant must have entered an appearance; (ii) that the statement of claim must have been served on the defendant; and (iii) that the affidavit in support must comply with r. 2 of O. 14 RHC 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. Once those conditions are fulfilled, the burden then shifts to the defendant to raise triable issues. The law on this is trite (National Company for Foreign Trade v. Kayu Raya Sdn Bhd folld). The Court of Appeal, in reversing the burden of proof, had misapplied the relevant principles relating to an application for summary judgment under O. 14 RHC. (para 4). (Emphasis added)

This Court finds that the Plaintiff has met the requirements outlined above. Therefore, a prima facie case has been established against the Third and Fifth Defendants, who must now demonstrate to this Court that the case warrants going to trial.

D. THE THIRD AND FIFTH DEFENDANTS’ ARGUMENTS In opposing the Plaintiff's application for summary judgment, the Third and Fifth Defendants filed an Affidavit in Reply raising several grounds of objection. The Third and Fifth Defendants contended that they were not privy to the Hire Purchase Agreements entered into between the Plaintiff and the First Defendant and, as such, the terms and conditions of those Agreements could not be enforced against them. The Third and Fifth Defendants further averred that copies of the Hire Purchase Agreements and the Guarantee and Indemnity Agreements were never furnished or delivered to them, and therefore, the burden is on the Plaintiff to prove that the terms were agreed upon by the Plaintiff and the Third and Fifth Defendants.

The Third and Fifth Defendants also challenged the quantum of the Plaintiff's claim. They disputed the amounts under the respective Agreements, asserting that the financing amount under the First Hire Purchase Agreement was RM235,881.00 and not RM288,865.00 as alleged by the Plaintiff. Similarly, they contended that the amount under the Second Hire Purchase Agreement was RM133,500.00, not RM182,094.70, as claimed by the Plaintiff.

In addition, the Third and Fifth Defendants disputed the Plaintiff's claim for interest at 0.065% per day, arguing that the rate is excessive and was never agreed to by them under the Guarantee and Indemnity Agreements. They further maintained that they had never been served with any letter or notice of demand from the Plaintiff before the commencement of this proceeding. Consequently, they contended that the Plaintiff's claim against them was premature under the law because the Plaintiff had not yet exhausted all means of recovering the arrears from the First Defendant, the principal borrower.

The Third and Fifth Defendants further contended that the machinery repossessed by the Plaintiff was sold at auction for a price substantially below its reasonable market value, resulting in significantly lower proceeds than could reasonably have been obtained. They averred that the Plaintiff failed to take reasonable steps to secure the best obtainable price for the machinery and that such conduct has prejudiced them as guarantors by unnecessarily increasing the alleged outstanding indebtedness.

The Third and Fifth Defendants further asserted that there is a manifest error in the Plaintiff's calculation of the outstanding sums claimed because the Plaintiff failed to account for the payments made by the Fifth Defendant between June 2024 and April 2025, totaling RM250,000.00. In these circumstances, the Third and Fifth Defendants disputed the Plaintiff's claim and stated that this case could not be decided on affidavit evidence and must be determined at a full trial.

PLAINTIFF’S ARGUMENTS In response, the Plaintiff contended that copies of the Agreements as well as the Guarantee and Indemnity Agreements had been duly sent to the Third and Fifth Defendants by post. The Plaintiff relied on the relevant evidence of posting to demonstrate that the documents were properly dispatched to the Third and Fifth Defendants at their respective addresses.

The Plaintiff further contended that the defence advanced by the Third and Fifth Defendants is mala fide. On the one hand, the Third and Fifth Defendants asserted that they had never received the Agreements and the Guarantee and Indemnity Agreements, but on the other hand, they challenged the accuracy of the financing amounts under those very Agreements.

The Plaintiff further relied on Clause 8 of the Hire Purchase Agreements, which expressly entitled the Plaintiff, upon the occurrence of an event of default, to repossess the machinery and thereafter dispose of it by private sale or public auction. The Plaintiff contended that the repossession and subsequent auction of the machinery were conducted in a reasonable manner. Prior to the auction, the Defendants were afforded sufficient opportunity to redeem the machinery or suggest prospective purchasers. The Plaintiff further averred that the requisite notices were duly served upon the Defendants.

The Plaintiff further denied the allegation that the payments made by the Fifth Defendant had not been taken into account in computing the outstanding indebtedness. The Plaintiff averred that the RM250,000.00 in payments made by the Fifth Defendant had, in fact, been accounted for. However, the Plaintiff pointed out that the Fifth Defendant was not merely a guarantor under the two Hire Purchase Agreements that are the subject matter of the present proceedings, but was also a guarantor in respect of two other Hire Purchase Agreements entered into between the Plaintiff and the First Defendant. Consequently, the payments made by the Fifth Defendant were appropriated and applied across four hire purchase facilities, and not exclusively toward the two Agreements forming the subject matter of this action.

The Plaintiff averred that by a letter dated 15.5.2024, the Fifth Defendant proposed to settle the outstanding indebtedness arising under all four Hire Purchase Agreements in which the Fifth Defendant stood as a guarantor. In response, the Plaintiff issued a repayment proposal dated 13.6.2024, which was duly acknowledged by the Fifth Defendant, and a copy thereof was also forwarded to the Third Defendant. Pursuant to the repayment arrangement, the Fifth Defendant proceeded to make payment of nine (9) instalments. However, by a subsequent letter dated 31.7.2025, the Fifth Defendant informed the Plaintiff that it was no longer financially able to continue servicing the instalments under the repayment arrangement. In the same letter, the Fifth Defendant requested that the Plaintiff instead pursue its claim against the other guarantors. The Plaintiff did not accede to the said request and, by its letter dated 7.8.2025, rejected the Fifth Defendant's proposal.

E. ANALYSIS AND FINDINGS OF THIS COURT This Court finds that the Third and Fifth Defendants' averments that they were not furnished with the Guarantee and Indemnity Agreements and that they dispute the quantum of the agreements under the Hire Purchase Agreements are baseless. As stated earlier, the burden has now shifted to the Third and Fifth Defendants and they did not produce any evidence to support their contention.

This Court also finds that the Third and Fifth Defendants' allegation that the machinery was auctioned for an unreasonably low price is entirely speculative and unsupported by any evidence demonstrating the alleged market value of the machinery at the material time. The Third and Fifth Defendants had also been given opportunities to redeem the machinery or to introduce any prospective purchaser to the Plaintiff.

Regarding the RM250,000 payments made by the Fifth Defendant, this Court is satisfied with the Plaintiff’s explanation that the said payments were duly accounted for and appropriated. The Third and Fifth Defendants have not produced any evidence to demonstrate that the Plaintiff's allocation of the payments was erroneous or otherwise improper. In the absence of any evidence to the contrary, this Court accepts the Plaintiff's explanation and rejects the allegation of any manifest error in the computation of the outstanding indebtedness.

More significantly, this Court finds that the correspondence produced by the Plaintiff effectively undermines the entire defence advanced by the Third and Fifth Defendants. The documentary evidence demonstrates that, by a letter dated 15.5.2024, the Fifth Defendant proposed to settle the outstanding indebtedness under the Hire Purchase Agreements by way of instalment payments. Thereafter, pursuant to the repayment arrangement proposed by the Plaintiff, the Fifth Defendant proceeded to make nine (9) instalment payments. Subsequently, in his letter dated 31.7.2025, the Fifth Defendant informed the Plaintiff that it was no longer financially able to continue servicing the instalments and requested that the Plaintiff pursue the other guarantors instead.

This Court finds that the contents of these letters constitute clear and unequivocal acknowledgments of the indebtedness and of the Fifth Defendant's liability as guarantor. At no point in the correspondence did the Fifth Defendant dispute its status as guarantor or contend that it had no knowledge of the Hire Purchase Agreements or the Guarantee and Indemnity agreements. Instead, the correspondence demonstrates that the Fifth Defendant was fully aware of the agreements and sought only to negotiate the manner of repayment of the indebtedness.

An extract of the Fifth Defendant's letter dated 15 May 2024 addressed to the Plaintiff is reproduced below:

The excerpt of the Plaintiff's repayment proposal is reproduced below:

The relevant extract of the letter from the Fifth Defendant, dated 31.7.2025, stating that it could no longer continue with the balance instalment is reproduced below:

This Court refers to the case of Malaysia Airport Sdn Bhd v APFT Land Sdn Bhd (2018) 10 MLJ 257, where the High Court held as follows: [20] Having read the content of the above contemporaneous letter in details, it has now come to my mind that the defendant had admitted owing monies to the Plaintiff. The defendant had even gave an assurance to the Plaintiff to settle the debt by monthly instalment of RM500,000 until full settlement. I hardly find anything of such allegations or issues did the defendant’s raised to resist this application. If any, such issues and allegations raised by the defendant would only occurred after the Plaintiff had filed this suit. As such, it is purely an afterthought. (Emphasis added).

Due to the reasons stated above, this Court found that the Third and Fifth Defendants had failed to raise a triable issue. Consequently, this Court believes that this case is suitable for summary judgment. Summary judgment was entered against the the Third and Fifth Defendants with costs. Dated 11 July 2026 -sgd-SUHAILY BINTI SAMSUDIN JUDGE SESSIONS COURT JOHOR BAHRU JOHOR To the parties’ solicitors: For the Plaintiff : Mr.Ronald Ang Yu Chye (Messrs Nora SW Lam & Associates) For the Third and Fifth Defendants: Ms.Low Yee Lin (Messrs.Yee & Tan)