Ramesh A/L Rajaratnam v Malayan Banking Berhad (WA-12BNCC-39-10/2018)

This was an appeal against the decision of the learned Sessions Court Judge handed down on 17th October 2018 allowing the Respondent‟s claim against the Appellant with costs of RM5,000.00 after a full trial.

The Respondent bank‟s claim against the Appellant was in respect of outstanding sums due under two credit cards issued by the Respondent to the Appellant.

The Appellant was the principal card holder of a Visa Platinum Credit Card No. 4842 8100 3603 8897 (“Visa Card”) and an American Express Platinum Credit Card No. 03791 868301 62400 (“American Express Card”) issued by the Respondent. 2

The Respondent‟s claims in respect of the credit cards issued were RM400,897.15 in respect of the Visa Card and RM28,996.60 in respect of the American Express Card.

That these credit cards were issued by the Respondent to the Appellant was admitted in the Appellant‟s Defence.

The terms and conditions of the agreements in relation to the credit cards issued by the Respondent were pleaded in paragraph 4 of the Statement of Claim. These terms and conditions pleaded were also admitted by the Appellant, subject to the Appellant‟s right of set off and what was described as “consolidation of any money to the Defendant‟s Card Account”.

The Appellant in his defence, denied the amount allegedly owed by him and demanded of him by the Respondent‟s solicitors.

In addition, the Appellant pleaded that the Respondent, as a creditor, had security over a piece of land which was said to be his matrimonial home. The Appellant pleaded that he was in the midst of a divorce petition and the sale of the Appellant‟s matrimonial asset would be sufficient to pay for the alleged amount owed to the Respondent.

It was pointed out in the grounds of judgment of the learned Sessions Court Judge that the Appellant‟s application to consolidate this action with the divorce petition that the Appellant was involved in, was dismissed by the High Court. 3

In this appeal, the first contention of the Appellant was that the learned Sessions Court Judge had erred and failed to appreciate the evidence led.

It was maintained that the learned Sessions Court Judge was wrong to have stated that the Appellant did not object to or question the Respondent‟s witness in relation to Exhibit P4 that was tendered into evidence as a Part B document. Exhibit P4 were the statements of accounts in respect of the Appellant‟s credit cards in question.

In relation to the Part B documents, it was pointed out by the learned Sessions Court Judge that they were documents the validity of which was not disputed save for their contents.

In addition it was maintained that the learned Sessions Court Judge had erred in stating that the Appellant remained silent and did not contradict the amount stated to be due and demanded by the Respondent‟s solicitors in their letter of demand of 11th December 2017.

In relation to these two contentions, the Appellant maintained that the learned Sessions Court Judge had erred by reason of the following, which was the cross examination of one of the Respondent‟s witnesses: “PA Terima kasih. Jadi setujukah dengan saya jumlah kad kredit Visa yang dituntut adalah sebanyak RM400,897.15? Berapa amaun tadi? 4 RM400,897.15 Cik Dorathe? 428 Soalan adalah berterusan dari jawapan kamu yang dulu. Tadi cakap pages 32 to 188. 188 Sekarang soalan peguam adalah untuk Visa Sahaja. RM400,897.15; Visa sahaja Setujukah kamu bahawa Plaintif di dalam prosiding ini mempunyai bukti untuk jumlah tersebut? Ya, setuju Sila jelaskan kepada Makamah mana bukti itu? Penyata bulanan Dari muka surat berapa? Muka surat 32 hingga 188 Ya, terima kasih. Saya membawa Cik Dorathe kepada muka surat 32. 32, ya. Di situ ada terdapat satu jumlah yang besar sebanyak RM128,044.37. Ya Adakah bukti untuk amaun tersebut di Mahkamah ini?

The Appellant also maintained that the Respondent had failed to discharge the burden of proving the debt claimed because the agreements in respect of the credit cards in question were not tendered in evidence. 5

The Appellant contended that the terms and conditions of these agreements led by the Respondent into evidence contained a clause making reference to the Financial Services Act 2013 and the Personal Data Protection Act 2010 both of which legislation had only come into existence after the credit cards in question had been issued to the Appellant in 2005.

It was thus contended that there had been a variation to the agreements and this had to be proven. It was further contended that the terms and conditions in respect of the credit cards in question do not contain the parties‟ signatures.

The Appellant also contended that the Respondent‟s pleadings were defective as the Appellant‟s wife who is the supplementary card holder was not joined as a party, the relief pleaded was defective and that there was a failure to state if the Appellant‟s liability was joint or several.

The Appellant further contended that the amounts allegedly due and owing under the two different credit cards were wrongly consolidated by the Respondent.

As for the Certificate of Indebtedness adduced in evidence by the Respondent, it was alleged that the amount due under each credit card was stated separately. However, in the Statement of Claim, the amount prayed for was a single sum of RM429, 893.75. This, it was argued, was not the same figure in the Certificate of Indebtedness. Thus, there was a manifest error in the Certificate of Indebtedness. 6

Lastly, the Appellant contended that contrary to the finding of the learned Sessions Court Judge there was no admission to the debt on the part of the Appellant. The following was the testimony of the Appellant relied upon for this contention: “PA Saya rujuk – This is – Dato‟ kepada muka surat 3 tadi ya. tadi. Sila jelaskan mengapa Dato‟ tidak setuju amaun tersebut sahaja. Perlahan-lahan Dato‟, Ok. Dengan izin Puan. Melalui emel tersebut di muka surat 3 saya bermula degan berkata kepada En Shaharin „I refer to our discussions on settlement”. The reason is sebab saya menjelaskan kepadanya bahawa matter ini termasuk dalam Australia as part of liability and asset settlement dan hutang yang dituntut oleh Maybank bukan hutang yang hutang saya tetapi hutang isteri saya my ex-wife‟s debts. Jadi dia pun faham. So that‟s why I said this amount we have to settle but as a gesture of goodwill I offer to pay 30% and 70% he‟ll write-off. So bukan saya setuju dengan amaun itu tetapi saya setuju – Puan tengah tulis Oh slowly. Minta maaf Puan Tak apa, tak apa Ok. Ya. Saya setuju ada … ada debt tetapi amaunnya dipertikaikan kerana kebanyakkan hutang tersebut adalah hutang marital pool. Bukan hutang saya. Jadi dia pun tahu. Nanti kejap. Hutang apa? Marital? 7 Marital pool sebab isteri yang incur the debts. Bukan saya. Ex…ex-wife. Sorry Puan. Tak apa Jadi saya beritahu dia keputusan Mahkamah di Australia as to berapa each party has to bear, belum ditentukan. Itu sahaja En Ramesh. Ya. But as a gesture of goodwill I proposed, saya cadangkan ok, if you waive 70% of whatever the final amount is 30% saya bayar. This was just as a discussion as to settlement under privilege communication. Ya.”

In relation to what was effectively a challenge to the amount claimed, no evidence was led by the Appellant as to what the correct amount was. What the Appellant did testify to was that the debt owed was incurred by his ex-wife. It needs to be pointed out that in his Defence, the Appellant merely denied the amount owed. It was not pleaded that he did not incur the debt.

In any event, what was also tendered in evidence was a Certificate of Indebtedness setting out the amounts owed under each of the two credit cards. These amounts were not consolidated as alleged by the Appellant. They were stated in separate statements in Exhibit P4.

In the Statement of Claim, particulars of the amounts claimed were set out separately in respect of each credit card. In the Certificate of 8 Indebtedness, the amounts owing and due were also set out separately in respect of each of the two credit cards.

The only complaint was the pleading point, which was that the amount prayed for in the Statement of Claim was for a sum of RM429,893.75.

This amount prayed for was clearly a total of the debts due under each of the two credit cards, that is to say RM400,897.15 for the Visa Card and RM28,996.60 for the American Express Card, both as at 3rd December 2017. These were the amounts pleaded in the Statement of Claim and also stated in the Certificate of Indebtedness. There was therefore no manifest error as alleged.

There was in fact no consolidation of the amounts claimed as alleged. Separate accounts were maintained as disclosed in Exhibit P4.

Clause 14.11 of the Terms and Conditions in respect of the Visa Card states as follows: “14.11 CERTIFICATE OF INDEBTEDNESS A certificate signed by the officer of Maybank as to the monies for the time being due and owing to Maybank from the Cardmember shall be conclusive evidence or proof that the amount appearing therein is due and owing and payable by the Cardmember to Maybank”

Clause 15.11 of the terms and conditions relating to the American Express Card states as follows: 9 “15.11 CERTIFICATE OF INDEBTEDNESS A certificate signed by the officer of Maybank as to the monies for the time being due and owing to Maybank from the Cardmember shall be conclusive evidence or proof that the amount appearing therein is due and owing and payable by the Cardmember to Maybank.

The learned Sessions Court Judge made specific reference to these clauses in coming to her conclusion as to the Appellant‟s liability. These clauses make it clear that the Certificates of Indebtedness issued as described, shall be conclusive evidence of the amount due, owing and payable by the Appellant.

It is well established that a Certificate of Indebtedness expressed to be conclusive evidence does provide conclusive evidence in law, in the absence of any manifest error. As Steve Shim CJ (Sabah & Sarawak) stated in Cempaka Finance Bhd v Ho Lai Ying & Anor [2006] 3 CLJ 544 (Fed Ct) at p 554: “A certificate of indebtedness operates in the field of adjectival law. It excuses the plaintiff from adducing proof of debt. Such a certificate shifts the burden onto the defendant to disprove the amount claimed” (See also Hong Leong Bank Bhd v M Muthiah & Anor and Another Appeal [2014] 1 CLJ 1; Chen Heng Ping & Ors v. Intradagang Merchant Bankers (M) Bhd [1995] 3 CLJ 690 (CA), D & C Nomura Merchant Bankers Bhd v. Gunung Kuari Sdn Bhd [1990] 2 CLJ 58 ; Bank Bumiputra Malaysia Bhd v. Doric Development Sdn Bhd [1988] 1 CLJ 311 and Citibank N.A. v. Ooi Boon Leong & Ors [1981] 1 MLJ 282.) 10

Upon careful consideration of the cross-examination referred to by learned counsel for the Appellant referred to above, there was in fact no direct challenge as to the accuracy of the Certificate of Indebtedness or the amounts claimed. In addition, no evidence was led by the Appellant that there was no debt owed or that the amounts allegedly owed were wrong. Clearly the Appellant had not discharged the evidential burden that had shifted to him by the Certificates of Indebtedness.

As was pointed out by Tengku Maimun Tuan Mat JCA (as her Ladyship then was) in Randhir Singh Bhajnik Singh v Sunildave Singh Parmar [2018] 1 LNS 1374 at p 9: “(a) It is trite that legal burden is on the plaintiff and the evidential burden and/or opposing evidence to rebut the plaintiff‟s claim on the balance of probability lies on the defendant. In Pan Malaysian Pools Sdn Bhd v. Kwan Tat Thai & Anor and other appeals [2018] 4 CLJ 323, the Court of Appeal observed: “[7] It is well-established as a general rule that „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. ……”. [See Selvaduray v. Chinniah [1939] 1 MLJ 253].”

The effect of the Certificate of Indebtedness and the statement of accounts in respect of the credit cards were clearly to shift the evidential burden to the Appellant to demonstrate that either was somehow wrong. However, this, the Appellant failed to do.

As for the Appellant‟s contention that the agreements were not proven, the learned Sessions Court Judge found this contention to be without merit. Indeed, as was also pointed out by the learned Sessions 11 Court Judge, the Appellant had in his Defence admitted to having been issued with the two credit cards. The Appellant never denied having entered into agreements with the Respondent for the credit cards in question.

In addition, the Appellant had also admitted the terms and conditions of the agreements in respect of the credit cards pleaded in the Statement of Claim. The terms and conditions of the credit cards were also admitted into evidence as Part B documents.

The terms of both the credit cards also catered for a variation of the terms themselves. Clause 14.7 of the terms and conditions in respect of the Visa Card states as follows: “14.7 VARIATION The Cardmember agrees that Maybank shall be at liberty and reserves the right to vary, add to or amend the terms and conditions under this Agreement or arrangements (including the privileges made available by Maybank in connection with the Credit Card whether such privileges are set out herein or elsewhere) whenever Maybank deems necessary by giving twenty one (21) calendar days prior notice before the implementation. Cardmembers are advised to refer to the updated terms and conditions at Maybank‟s website at www.maybank.com from time to time. The latest terms and conditions made available on the website shall supersede all previous terms and conditions made between Maybank and Cardmember under this Agreement or any other arrangements. The Cardmember is deemed to have accepted the variation, addition and/or amendment wholly or in part of the terms and conditions and are bound by them once he/she starts using his/her Credit Card. In the 12 event the Cardmember does not accept such variation, addition and/or amendment wholly or in part, he/she shall terminate the use of his/her Card by calling Customer Service or giving prior written notice to Maybank, before the effective date of such proposed variation. Pursuant to the provision relating to termination above, Cardmember shall surrender the Credit Card and return to Maybank by cutting his/her Card into halves, failing which he/she shall be deemed to have accepted such variation, addition and/or amendment.” (Emphasis added)

The provisions in clause 15.7 of the terms and conditions relating to the American Express Card were in pari materia to those in clause 14.7 of the terms and conditions in respect of the Visa Card.

Thus, contrary to the Appellant‟s contention, variations to the agreement in respect of each of the credit cards were allowed by their own terms and conditions. No further documentation is required. If the Appellant did not agree to any variation, he could have terminated the use of the credit cards. This he did not do.

The Appellant contended that the Supplementary Cardmember, the Appellant‟s ex-wife, should also be made jointly liable and not only him as the Principal Cardmember. The following were, however, the relevant terms in respect of the two credit cards: Clause 10.2 of the Visa Card “The Principal Cardmember will be responsible and liable for all charges incurred by his Supplementary Cardmember. The Supplementary Cardmember shall be liable for all charges incurred by him/her in an individual capacity. Further, the Cardmember shall be liable to ensure 13 that his/her Supplementary Cardmember shall observe all terms, conditions and obligations herein set out.” (Emphasis added) Clause 11.2 of the American Express Card “The Principal Cardmember and the Supplementary Cardmember shall be liable jointly and/or severally for all charges incurred by the Cardmember and/or by the Supplementary Cardmember under his/her Credit Card Account. Further, the Cardmember shall be liable to ensure that his/her Supplementary Cardmember shall observe all terms, conditions and obligations herein set out.” (Emphasis added)

Therefore, contrary to the Appellant‟s contention, the Appellant as the Principal Cardmember in respect of each of the two credit cards was personally and severally liable for the all debts incurred including those of the Supplementary Cardmember. The second sentence to clause 10.2 of the Visa Card merely means that the Supplementary Cardmember is also liable personally for debts incurred by the Supplementary Cardmember.

There was also evidence that the Appellant did not dispute the Respondent‟s claim prior to the action being filed. In his oral testimony the Appellant did not deny the debt but claimed it was incurred by his wife.

In a series of correspondence with the Respondent, the Appellant made several attempts at trying to settle the claim. There was no denial that the claim was not warranted or that the amount claimed was wrong. 14 The Appellant‟s main contention was that it was his ex-wife who had incurred the debts.

The contents of some of the emails sent by the Appellant to the Respondent that were tendered in evidence included the following:

Appellant‟s email of 25th February 2017 to Respondent‟s officer Rosniyati: “Dear Rosniyati I refer to your mail below. I am currently overseas and will only be back in May this year. On the overdue amounts, your HG/housing department (En. Ahmad Rauuf bin Md. Rusti) is fully aware of my situation. I am currently undergoing a bitter divorce with my wife and she has caveated my assets – thus preventing the sale of the property to settle my debts. Despite this, I am trying to settle my dues from monies that have not been caveated by her but obviously, it is slower. If you noticed, I have made the min payment for my Amex card with Maybank as it‟s a smaller sum. You will also notice that I have been a customer since 1985 and up until now, there has NEVER been a single incident of non payment, over some 32 years. However, this is an unfortunate matter and I am trying my nest (sic) to cope with it. I just need some time to be able to recover from this “tragedy”. Would it possible for Maybank to convert my credit card debt to a soft loan with an agreed repayment, say RM 2,500 per month until I clear my divorce, estimated to take till September this year? That way, it is a win-win for both parties. Until then, I won‟t use my Visa card till my account is regularized. Please let me know whether this is possible because two other banks have agreed to this, being RHB and CIMB as I have been a good customer till my divorce problems started. Rdgs” 15

(ii) Appellant‟s reply of 16th March 2017 to Respondent‟s officer Sharmeela‟s email of even date: “Dear Sharmeela I am in a very difficult position with my wife having caveated my assets – therefore I‟m unable to sell my properties to settle my debts. As mentioned, your housing division has been “stuck” since October 2016 due to the ongoing divorce. If you recall my facilities, I will still not be able to repay the amount because of the above matter. You can sue me and it will just lead to needless mess. I don‟t see why your bank will engage in “lose-lose” situation with a customer of more than 32 years? All I ask for was a little bit of leniency while I sort my divorce matter. That‟s why I proposed RM2,500 per month until the divorce decision was made. I reckon that will happen by September 2017. Once I am able to sell my property, the balance can be settled easily as I‟m sitting on an RM5 mil property, less a loan of about RM2.2 mil. Everybody will be happy. Why would the bank want to screw things up for both of us? In any case, please correct me – the overdue monthly installment is RM45,000 ? Kind rgds”

(iii) Appellant‟s email of 17th April 2017 to Respondent‟s officer Sharmeela: “subject: Re: FW: C/A 0-304210 What amount of minimum payment would reinstate my cards? Surely there has to be some compromise? I am in the midst of the divorce with my wife and as a customer since May 1985, surely the bank can be a little understanding ? Rdgs” 16

(iv) Appellant‟s email of 20th April 2017 to Respondent‟s officer Sharmeela: “Dear Sharmeela It appears like Maybank is unwilling to settle and wants to proceed to legal action that will be lengthy. Why? I only need a few months until my divorce is settled. Rdgs”

Appellant‟s email of 20th September 2017 to Respondent‟s officer Saharin: “Dear Saharin It‟s not the legal collection means that I complained about – that‟s normal business and I understand. I have told your officers before why I am in this situation – my ex-wife has taken an injunction on my assets and prevented me from selling to get cash. The case is set to be heard in the Malaysian Court on 4 Dec 2017. Until then, my hands are tied. Why don‟t you make me a “win-win” offer so that we have a road map? I was upset because the Collection Agency that you employed threatened me and used strong words, insulting me (“you need someone like me to teach you a lesson”). I am an educated man and I know what an “insult” or threat is. I almost wanted to report this to the police and call a press conference to say Maybank is employing gangsters as debt collectors. If someone does that again, you can rest assured I will take this matter to the highest level in Maybank, BNM, Bukit Aman and MoF. I am REALLY upset. I suggest you pull them off my case immediately. I trust you will consider my proposal.

(vi) Appellant‟s email of 25th October 2017 to the Respondent‟s officer Saharin: “Subject: Fwd: Maybank Credit Card Dear Saharin 17 Maybank Credit Card No.: 4842810036038897 - RM384,658.25 0379186830162400 – RM27,577.88 I refer to our discussions on settlement. This is what I propose for BOTH cards:

All accumulated late payment charges and penalties to be waived.

All interests accumulated from day 1 to be waived.

Of the remaining principal only balance, give me a 70% haircut.

I will settle the 30% principal in 3 equal installments, via post dated cheques.

The CTOS/BNM reports filed by Maybank to be retracted. I hope you will agree to this so that we can move on. Thank you. Sincerely Dato Ramesh Rajaratnam” Conclusion [45] A Court in an appellate role will rarely interfere with primary findings of fact by a trial judge. It will only do so if the findings of fact by the trial judge was clearly or plainly wrong (see Arab-Malaysian Finance Bhd v Steven Phoa Cheng Loon & Ors [2003] 1 CLJ 585; re B (A Child) (Care Proceedings: Threshold Criteria) [2013] 1 WLR 1911; McGraddie v McGraddie [2013] 1 WLR 2477 and Henderson v Foxworth Investments Ltd [2014] 1 WLR 2600). [46] Having regard to the foregoing considerations, there was in fact no appealable error disclosed. There was neither any clear error on the 18 findings of fact nor the applicable law. The appeal was accordingly dismissed with costs of RM5,000.00 to the Respondent as sought for by learned counsel for the Respondent. [47] It is pertinent here to echo the observations of the learned Sessions Court Judge. This case, based on the pleadings and evidence adduced was not one that required a four-day trial. Liberties were taken during the trial by scant regard given for the pleaded case of the parties, resulting in unnecessary waste of judicial time. The observations of the learned Sessions Court Judge in this regard were clearly warranted in this case. Dated this 8th Day of May 2019 -SGD- (DARRYL GOON SIEW CHYE) Judge High Court of Malaya Kuala Lumpur (Commercial NCC 3) COUNSEL FOR THE APPELLANTS: Paul Aisu (Messrs Paul & Associates No. 29-4, Blok E1 Jalan PJU 1/42 Dataran Prima 47301 Petaling Jaya. Tel : 03-7887 5668 Faks: 03-7886 8665). 19 COUNSEL FOR THE RESPONDENT: Ahmad Budiman bin Kamarulzaman (A. Kavitha with him) (Messrs Ho Loke & Koh A-1-1, Megan Avenue 1 No. 189, Jalan Tun Razak 50400 Kuala Lumpur Tel. : 03- 2166 2882 Faks: 03-2166 4350). CASES CITED Aik Ming (M) Sdn Bhd & Ors v Chang Ching Chuen & Ors and another appeal [1995] 2 MLJ 770 Arab-Malaysian Finance Bhd v Steven Phoa Cheng Loon & Ors [2003] 1 CLJ 585 Cempaka Finance Bhd v Ho Lai Ying & Anor [2006] 3 CLJ 544 (Fed Ct) at p 554 Duta Wajar v Pasukhas Construction Sdn Bhd & I-Innovations Construction Sdn Bhd [Rayuan Sivil No: W-02-124-01/2014] Goh Bak Ming v Yeoh Eng Kong and other appeals [2018] MLJU 1133 Henderson v Foxworth Investments Ltd [2014] 1 WLR 2600 Hock Hua Bank Bhd v Leong Yew Chin [1987] 1 MLJ 230 Iftikar Ahmed Khan v Perwira Affin Bank Berhad [Rayuan Sivil No: 02(F)-10- 2011(W) In Re General Railway Syndicate [1900] 1 Ch. In Re Home and Colonial Insurance Company, Limited [1930] 1 Ch. Lee Ing Chin @ Lee Teck Seng v Gan Yook Chin [2003] 2 MLJ 97 McGraddie v McGraddie [2013] 1 WLR 2477 Perembun (M) Sdn. Bhd v Conlay Construction Sdn. Bhd. [2012] 4 MLJ 149 Randhir Singh Bhajnik Singh v Sunildave Singh Parmar [2018] 1 LNS 1374 at p 9 re B (A Child) (Care Proceedings: Threshold Criteria) [2013] 1 WLR 1911 Sumathy a/p Subramaniam v Subramian a/l Gunasegaran [Rayuan Sivil No: W-03(IM)(NCC)-56-07/2016]