Selvaraja Namachivayam v N.Jeganathan A/L Ara.Nachiappan (PA-12A-34-07/2022)

P filed an application under Order 14 of the Rules Of Court 2012 (ROC) to record judgment summarily against D.

The Sessions Court granted the summary judgment.

D appeals against the Sessions Court’s decision. THE PERTINENT PLEADED FACTS [5] I would like to first set out the pertinent facts pleaded according to the parties respectively. P’s version [6] In May 2015—P lent D RM100K in cash, as a friendly loan.

In June 2016 (on 1.6.2015)—D gave a RM100K cheque to P as repayment of the loan. But D asked P not to encash the cheque, so P did not present the cheque for payment

In April 2016 (on 2.4.2016)—P and D entered into a Friendly Loan Agreement (FLA) for RM500K. P gave the RM500K to D in cash.

Also in April 2016 (on 2.4.2016 and 3.4.2016)—P lent D another RM100K, this time by giving D 3 cheques for RM30K, RM20K and RM50K.

About two years later, in August 2018 (on 6.8.2018)—D affirmed a statutory declaration (SD) stating that he received a cumulative sum of RM700K as a friendly loan from P.

About two years after that, in December 2020 (on 18.12.2020)—P, through his solicitors, issued a letter to D to demand for the repayment of the RM700K loan.

Later in December 2020 (on 28.12.2020)—D, through his solicitors, replied to P’s letter of demand, denying the debt and alleging that the money was paid by P to D as an investment. D’s version [13] D’s RM100K cheque that was given to P in June 2016 was part of D’s investment in P’s project.

P asked D to invest in P’s project, and “forced” (dipaksa) D to sign the FLA as a guarantee of D’s investment.

D never received any money from P “personally” (secara peribadi) as a friendly loan.

D pleads that the FLA is void as it offends the Stamp Act 1949.

D challenges (mencabar) P to prove that the money went into D’s bank account.

P sued D because their investment went bad and P wants to get his (P’s) money back. THIS APPEAL IS A RE-HEARING [19] All Appeals from the Sessions Court are heard and determined by the process of re-hearing. In other words, when I hear and determine this Appeal, it is as if I am re-hearing P’s Order 14 application.

Order 55 Rule 2 provides for this principle. Order 55 Rule 2 reads—

Order 55 Appeals to High Court from Subordinate Courts Appeal to be by re-hearing on notice (O. 55 r. 2) All appeals to the High Court shall be by way of re-hearing and shall be brought by giving a notice of appeal within fourteen days from the date of the decision appealed from. [21] In United Malayan Banking Corporation Bhd v Pembinaan KSY Sdn Bhd & Ors [1993] 3 MLJ 45 (SC), [1993] 2 AMR 2169; [1993] 3 CLJ 612, the Supreme Court propounded this principle like so (at MLJ page 49)— The approach to be taken by an appellate court in an O 14 appeal has been settled. The appellate court should not regard the appeal as reviewing the exercise of the judge's discretion but should approach the appeal as a rehearing. Page 5 of 17 [emphasis mine] THE LAW ON ORDER 14—TO ENTER SUMMARY JUDGMENT [22] The pertinent portions of Order 14 are set out here—

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… .

Judgment for plaintiff (O. 14 r. 3)

Unless on the hearing of an application under rule 1 either the Court dismisses the application or the defendant satisfies the Court with respect to the claim, or the part of a claim, to which the application relates that there is an issue or question in dispute which ought to be tried or that there ought for some other reason to be a trial of that claim or part, the Court may give such judgment for the plaintiff against that defendant on that claim or part as may be just having regard to the nature of the remedy or relief claimed… [emphasis mine] [23] There are two alternative tests that P needs to satisfy for the Court to favour P and enter a summary judgment against D— Page 6 of 17

there is, what is commonly known as a triable issue, namely an issue in dispute between the parties that require the whole process of a trial before the Court can decide on that issue; or

besides a triable issue, there is some other reason that there should be a trial. [24] From case law authorities, there are principles that I am mindful to heed. The first is the principle that when the parties assert certain facts or issues or reasons that bear on the merits of a summary judgment application, I am not bound to accept those assertions just because the parties made them. I must evaluate the cogency of the assertion, and consider whether the assertion is tenable, or plausible, or reasonable: Bank Negara Malaysia v Mohd Ismail & Ors [1992] 1 MLJ 400 (SC); [1992] 1 CLJ 627. [25] The second principle is that I must evaluate whether the facts or issues or reasons raised by D amount to a “fairly arguable defence” to the claim, such that I have a “reasonable doubt” against granting judgment summarily: Malayan Insurance (M) Sdn Bhd v Asia Hotel Sdn Bhd [1987] 2 MLJ 183 (SC); [1987] 1 CLJ 246. [26] The third principle is that when I am deliberating on the facts or issues or reasons that D raises, the question that I am to determine is— are they bona fide triable issues i.e. issues that require determination by trial?—Ng Hee Thoong & Anor v Public Bank Bhd [1995] 1 MLJ 281 (CA); [1995] 1 AMR 622; [2000] 1 CLJ 503. [27] The law on summary judgment is well established. An application for summary judgment is defeated by D raising triable issues. In other Page 7 of 17 words, D needs to demonstrate that a trial is required for P to prove his claim against D. [28] Put differently, just from an analysis of the parties’ respective pleadings and affidavits, as well as the documentary evidence referred to—when I am not persuaded to by-pass a trial to enter judgment summarily against D, then P’s summary judgment application must fail. [29] Another way of putting it is that it must be obvious to me that the D has no defence on the merits before summary judgment is granted THE DEFENCES RAISED BY D First issue [30] First, D’s main defence is that D did not receive the money; that no money changed hands; and that there is no proof that P gave the money to D. [31] But the most damning piece of evidence is D’s SD sworn on 6.8.2018. In it, D avers that he has taken the money. In the SD, he states on oath that “I have taken a total of RM700,000 (Seven hundred thousand) Loan without interest” from P. [32] And the SD was signed before a Commissioner For Oaths: Haji Mohamed Yusoff Bin Mohd Ibrahim. [33] The penultimate paragraph of the SD discloses that D made the SD “on [his] free will without any pressure, promise or thread [sic] by any one”. Page 8 of 17 Section 92 of the Evidence Act 1950 [34] I am of the view that section 92 of the Evidence Act 1950 applies to D’s SD. [35] The pertinent portions of Section 92 are set out here for reference— Section 92. Exclusion of evidence of oral agreement. When the terms of any such contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document, have been proved according to section 91, no evidence of any oral agreement or statement shall be admitted as between the parties to any such instrument or their representatives in interest for the purpose of contradicting, varying, adding to, or subtracting from its terms: Provided that—

any fact may be proved which would invalidate any document or which would entitle any person to any decree or order relating thereto, such as fraud, intimidation, illegality, want of due execution, want of capacity in any contracting party, the fact that it is wrongly dated, want or failure of consideration, or mistake in fact or law;

the existence of any separate oral agreement, as to any matter on which a document is silent and which is not inconsistent with its terms, may be proved, and in considering whether or not this proviso applies, the court shall have regard to the degree of formality of the document;… [36] Section 92 provides that where a document is required by law to be in the form of a document (such as an SD), then no evidence of any oral Page 9 of 17 agreement or statement can be admitted to (i)contradict, (ii)vary, (iii)add to, or (iv)subtract from the terms of the document. [37] There are exceptions though. The exceptions to the application of section 92 include facts that would invalidate the document, such as fraud, intimidation, illegality, want of due execution (not signed, for example), want of capacity in a contracting party, wrongly dated, want or failure of consideration, or mistake in law and fact. [38] D has not demonstrated or shown that any of these exceptions apply to this proceeding. [39] Other exceptions include the existence of a separate oral agreement on any matter that is not dealt with in the document. But the alleged oral agreement cannot be inconsistent with the terms of the document. [40] D’s allegation that he invested in P’s business i.e. that there was an oral agreement for D to invest in P’s business—contradicts the fact stated in D’s SD, which was that he took RM700K from P as a loan. Second issue [41] D’s second defence is the argument that D was “forced” to sign the FLA. The FLA relates to the sum of RM500K. [42] But there are no pleaded particulars as to how D was forced to sign the FLA. There is no plea of duress or undue influence, or compulsion or coercion. Page 10 of 17 [43] In fact, the FLA was signed before D’s own solicitor: Mr. A. Albert: advocate and solicitor. At the final portion of the FLA, the solicitor “solemnly and sincerely” declared that he explained the terms of the FLA to D and it appeared to him (the solicitor) that D “understood the nature and consequence” of the FLA. [44] I am of the view that section 91 of the Evidence Act 1950 applies to the FLA. [45] The pertinent portions of Section 91 are set out here for reference— Section 91. Evidence of terms of contracts, grants and other dispositions of property reduced to form of document. When the terms of a contract or of a grant or of any other disposition of property have been reduced by or by consent of the parties to the form of a document, and in all cases in which any matter is required by law to be reduced to the form of a document, no evidence shall be given in proof of the terms of the contract, grant or other disposition of property or of the matter except the document itself, or secondary evidence of its contents in cases in which secondary evidence is admissible under the provisions hereinbefore contained. [46] Section 91 provides that where the terms of a contract are reduced to a document, “no evidence shall be given in proof of the terms of the contract except the contract itself” i.e. if the contract is in document form, D cannot lead any evidence about the terms of the contract except for the document itself. In other words, if the contract is reduced to writing, D cannot lead any other evidence, for instance, oral evidence, to prove that there are other terms to the contract (the FLA). Page 11 of 17 [47] Here, the FLA contains the terms of the contract between the parties. Section 91 provides that D can only use the contract itself to prove the terms of the contract. D cannot use other kinds of evidence, such as oral evidence or affidavit evidence. [48] Put differently, the FLA captures all the terms (the rights and obligations) of the contract between P and D. Third issue [49] D’s third argument is the point that the SD and the FLA were not stamped and so are a void document and a void contract respectively. [50] But the argument about the non-stamping of documents does not tantamount to a triable issue—American Express International Banking Corp v Tan Loon Swan [1992] 1 MLJ 727 (SC); [1992] 1 CLJ 9; where the Supreme Court held, at MLJ pages 732-733— We were referred to and agree with the decision of the Federal Court in Malayan Banking Bhd v Agencies Service Bureau Sdn Bhd & Ors 3, in which the Federal Court held at p 200 that it was clear that under s 52(1) of the Stamp Ordinance 1949, except for certain types of instruments, prohibition against admissibility of an instrument on account of not being duly stamped is not an absolute prohibition but conditional on payment of a duty or a penalty, if any, under ss 43 and 47 of that Ordinance… We therefore agreed with and approve the views of VC George J expressed in Elders Keep Ltd (formerly known as Keep Brothers Ltd) v Luen Mei Plastic Industries Sdn Bhd & Ors 4 at p 1008 that the non-stamping of documents concerned does not provide a triable issue. [emphasis mine] Page 12 of 17 [51] Anyhow, clause 7 of the FLA provides that the obligation to stamp the FLA is D’s obligation, not P’s. So, D is alleging that the FLA is void for an obligation that D himself did not perform. This is untenable. Signing party is bound by the terms of the contract [52] Furthermore, I would like to apply the principle that a party who signs a contract is bound by its terms, except when there is fraud, undue influence, or misrepresentation. This principle is so stringent that a party is bound even if he has not read the contract—Polygram Records Sdn Bhd v The Search & Anor [1994] 3 MLJ 127 (HC); [1994] 3 AMR 2060; [1994] 3 CLJ 806, where Justice Visu Sinnadurai J. held (at MLJ page 147)— The general principle of law, of course, is that a party who signs a written contract is bound by the terms of the contract, except in the limited cases where fraud, undue influence, or misrepresentation may be established. This rule is so strict that even if a party to a contract has not read the contents of a contract, he is held to be bound by its terms. In the leading case of L'Estrange v F Graucob [1934] 2 KB 394, Scrutton LJ pronounced (at p 403): 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] I am therefore compelled to find that D is bound by the averments in his SD, and bound by the terms of the FLA. Page 13 of 17 Fourth issue [54] D’s fourth argument is that he paid RM53K to P, and P did not account for this RM53K. D avers that he has paid a total of RM53K to P as interest for the loan. [55] But I find that D did not plead these payments amounting to RM53K. These alleged payments did not constitute one of D’s defences. So, at the most, D raises this issue as a triable issue to try to defeat P’s application for summary judgment. [56] I am guided by the reasoning of the High Court in Alliance Bank Malaysia Bhd v Khee San Food Industries Sdn Bhd & Anor [2021] 12 MLJ 78 (HC); [2021] 8 CLJ 225; [2021] AMEJ 2027, which held that in an Order 14 proceeding, if D raises an issue in his affidavit, but the issue is not pleaded, then D is precluded from raising the issue. Justice Wan Muhammad Amin JC (as he was then), followed United Malayan Banking Corp v Datin Theresah Abdullah [1994] 4 CLJ 1074 (HC) per Justice Low Hop Bing JC (as he was then), and Pembinaan V-Jaya v Binawisma [1987] 2 CLJ 446 (HC) per Justice Siti Norma Yaakob J (later CJM), and enunciated— [58] With regards to O 14 r 4(1) of the ROC, it is generally accepted that the word ‘otherwise’ means the defendant may show cause against the summary judgment application through an affidavit or his statement of defence (Gissco Sdn Bhd v Blackgold (M) Sdn Bhd [1988] 2 MLJ 397 (HC); Alliance (Malaya) Engineering Co Sdn Bhd v San Development Sdn Bhd [1974] 2 MLJ 94 (FC)). However, this does not mean the rules pertaining to pleadings do not apply. If the defendant raises an issue in his affidavit but the issue was not pleaded in his statement of defence, he will be precluded from raising that issue Page 14 of 17 (United Malayan Banking Corporation Bhd v Datin Theresah bte Abdullah & Anor [1994] MLJU 273; [1994] 2 MLRH 366; and Pembinaan V-Jaya Sdn Bhd v Binawisma Development Sdn Bhd [1987] 1 MLRH 287; [1987] CLJ Rep 823. [emphasis mine] [57] I agree with this proposition. If it were not so, then in an Order 14 summary judgment proceeding where the Defence is filed, the defendant can raise all manner of factual issues that the defendant alleges are triable, even when these issues are outside of the Defence filed. And if the Court accepts these issues as triable issues, and refuses a summary judgment, the resulting consequence is incongruous. The parties will go to trial, but the defendant, being bound by his or her pleadings, will not be permitted to prove those material facts that are said to constitute triable issues, because they are outside the parameters of the pleadings. [58] Furthermore, these alleged payments were made between 2015 and 2017. But the SD was made in 2018, after these payments. Even in 2018, D declared on oath that he took RM700K from P, making no mention that he repaid RM53K of the RM700K. I find, more likely than not, that by D’s own averments in his SD, the RM53K was unrelated to the loan of RM700K. [59] Also, D makes no mention of this RM53K in his solicitors’ reply letter of Dec 2020 to P’s letter of demand. [60] And finally, D makes no mention of this RM53K in his Defence, filed in April 2021. Page 15 of 17 CONCLUSION [61] In conclusion, I find that—

D has not demonstrated a fairly arguable defence to P’s claim;

I have no reasonable doubt that judgment should be entered summarily against D;

D’s allegedly triable issues are not bona fide;

I am persuaded to by-pass a trial to enter judgment against D; and

it is obvious to me that D has no meritorious defence to P’s claim. [62] For the reasons stated, I dismiss D’s Appeal against Sessions Court’s decision granting summary judgment i.e. I uphold the Sessions Court decision and sustain the judgment that was entered. I also order D to pay costs of RM5K to the P by 20.4.2023. And costs are subject to the allocatur. Postscript [63] Right after I delivered this decision, D’s counsel announced to me that D will appeal against the decision, and orally applied for a stay of execution. [64] I informed D’s counsel that I will not hear an oral application for a stay because, first of all, there is no appeal filed as yet. The stay order applied for, if it is made, will be made pending an event that has yet to occur. And secondly, a stay application, whether it is made orally or in Page 16 of 17 writing, is largely fact-centric, as D will be endeavouring to show that there are special circumstances that justify a stay. There is a need for affidavits to be filed in support of, and in opposition to, the application. And, in modern litigation, it is appropriate to file written submissions and possibly submissions in reply. [65] So I directed D to file a formal application for a stay if he wishes to. Dated: 30 May 2023 signed KENNETH ST JAMES Judicial Commissioner Penang High Court Counsel/Solicitors For the Appellant: Ahilan Natarajah [Messrs. N. Ahilan & Associates, Pulau Pinang] For the Respondent: Mavin Thillainathan [Messrs. Lavania & Balan Chambers, Kuala Lumpur] Page 17 of 17 Legislation referred to:

Rules of Court - Order 14 Rule 1 & 3 and Order 55 Rule 2.

Stamp Act 1949.

Evidence Act 1950 - Section 91 & section 92. Cases referred to:

United Malayan Banking Corporation Bhd v Pembinaan KSY Sdn Bhd & Ors [1993] 3 MLJ 45 (SC), [1993] 2 AMR 2169; [1993] 3 CLJ 612.

Bank Negara Malaysia v Mohd Ismail & Ors [1992] 1 MLJ 400 (SC); [1992] 1 CLJ 627.

Malayan Insurance (M) Sdn Bhd v Asia Hotel Sdn Bhd [1987] 2 MLJ 183 (SC); [1987] 1 CLJ 246.

Ng Hee Thoong & Anor v Public Bank Bhd [1995] 1 MLJ 281 (CA); [1995] 1 AMR 622; [2000] 1 CLJ 503.

American Express International Banking Corp v Tan Loon Swan [1992] 1 MLJ 727 (SC); [1992] 1 CLJ 9.

Polygram Records Sdn Bhd v The Search & Anor [1994] 3 MLJ 127 (HC); [1994] 3 AMR 2060; [1994] 3 CLJ 806.

Alliance Bank Malaysia Bhd v Khee San Food Industries Sdn Bhd & Anor [2021] 12 MLJ 78 (HC); [2021] 8 CLJ 225; [2021]

United Malayan Banking Corp v Datin Theresah Abdullah [1994] 4 CLJ 1074.

Pembinaan V-Jaya v Binawisma [1987] 2 CLJ 446.