Usman Bin Mustaffa v Skf Solution Sdn Bhd (WA-12ANCC-88-06/2021)

I shall refer to the parties as they are referred to at the Sessions Court, namely the appellant as the defendant and the respondent as the plaintiff.

There are two appeals before this court, which arose from the decision of the learned Sessions Court judge at Kuala Lumpur Sessions Court Suit No. WA-A52NCC-2507-12/2017 (“Sessions Court Suit”): a. An appeal against the decision to allow summary judgment against the defendant (“Summary Judgment Appeal”); and b. An appeal against the decision to allow the striking out of the defendant’s counterclaim (“Striking Out Appeal”).

The appeals were filed at the Kuala Lumpur High Court as Civil Appeal No. WA-12ANCC-88-06/2021 (“Suit 88”) and Civil Appeal No. WA- 12ANCC-89-06/2021 (“Suit 89”). Following the defendant’s application and the plaintiff’s non-objection to the application, I allowed the consolidation of Suit 89 with Suit 88, as both appeals arise from the same action, and as such, are based on the same factual matrix.

After considering the evidence before this court and hearing submissions of learned counsel, I dismissed both appeals. On the Summary Judgment Appeal, I found that the defendant had failed to raise any triable issue to warrant a full trial of the Sessions Court Suit. I am of the view that the issues raised by the defendant, on the plaintiff’s failure to comply with the Moneylenders Act 1951 (“MA”), on his receipt of only part of the loan, and on his claim that he had paid the loan in full, are bare denials, unsupported by contemporaneous documentary evidence. I also found that the defendant’s counterclaim, which is premised on his alleged overpayment of the outstanding amount to the plaintiff, is obviously unsustainable. There is no evidence to support the defendant’s claim for this excess payment.

The dispute between the parties arose pursuant to a moneylending agreement dated 25 October 2016 (“Agreement”). The salient terms of the Agreement are as follows: a. The plaintiff granted a loan amounting to RM240,000 to the defendant (“Loan”); 5 b. Interest at the rate of 12% per annum was imposed on the Loan; c. The defendant charged a property known as HSD 68430, PT No. 8380, Mukim Damansara, Bandar Selayang, Daerah Gombak, Negeri Selangor, as security for the Loan; d. The defendant is required to repay the Loan and interest through instalment payments amounting to RM7,200 per month, for 50 months (“Monthly Instalments”); and e. In the event the defendant defaults in the payment of the Monthly Instalments, the plaintiff is entitled to: i. impose interest at the rate of 8% per annum on the unpaid Monthly Instalments, from the due date of the Monthly Instalments, until full payment; and ii. terminate the Agreement, and claim for the amount outstanding under the Agreement.

The Loan was disbursed to the defendant on 26 October 2016, with RM130,100 disbursed via cash and RM109,900 disbursed via cheque. The receipt of the Loan was acknowledged by the defendant.

The defendant defaulted on the payment of the Monthly Instalments. After issuing a notice of demand and termination dated 5 June 2017, the plaintiff filed the Sessions Court Suit. In the Sessions Court Suit, the plaintiff claimed the amount outstanding of RM210,980, as at 26 September 2017.

The defendant had continued to make payments towards settlement of the Loan and the interest outstanding, until May 2020.

The defendant’s defences are as follows: a. The defendant only received RM120,000 from the plaintiff, and not the full amount of the Loan. b. The defendant had fully repaid the sum of RM120,000 to the plaintiff, together with interest of RM103,220, within a period of 41 months. c. The amount that the defendant had repaid to the plaintiff is in excess of the amount outstanding, by RM54,020. The defendant filed a counterclaim to claim this excess amount from the plaintiff (“Counterclaim”). d. The defendant was not provided with the Agreement. C. The Decision Of The Sessions Court

At the Sessions Court Suit, the plaintiff filed an application for summary judgment pursuant to order 14 rule 1(1) of the Rules of Court 2012 (“ROC 2012”), and an application to strike out the Counterclaim pursuant to order 18 rule 19(1) of the ROC 2012.

Both applications were allowed by the learned Sessions Court judge. The learned Sessions Court judge found that: a. The Agreement was in order and complied with the MA; b. The defendant was aware of and understood the terms of the Agreement; c. The full Loan, amounting to RM240,000 had been disbursed to the defendant; and d. The defendant’s claim in the Counterclaim, that he had overpaid RM54,020 to the plaintiff, is without merit. D. Assessment And Findings

Having considered the evidence before this court, I dismissed the appeals and upheld the decisions of the learned Sessions Court judge.

I found that the defendant had not raised any issue that would necessitate a trial of the Sessions Court Suit. Contemporaneous documentary evidence shows that the full amount of the Loan had been disbursed to the defendant, and that defendant had not fully paid the Loan or interest on the Loan. I also found the Counterclaim to be obviously unsustainable, as there is no evidence to support the defendant’s claim that he had overpaid the plaintiff.

I will start with the Summary Judgment Appeal.

Order 14 rule 1(1) of the ROC 2012, which the plaintiff’s summary judgment application is premised on, provides that: “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.” (emphasis added)

The principles of summary judgment, as derived from Bank Negara Malaysia v Mohd Ismail & Ors [1992] 1 MLJ 400 and Cempaka Finance Bhd v Ho Lai Ying [2006] 2 MLJ 685 are as follows: a. Summary judgment is a procedural device available for prompt and expeditious disposal of an action without a trial. b. To succeed in an application for summary judgment, all substantive issues must be clear, and must be able to be determined once and for all. 9 c. Once the preliminary requirements under order 14 rules 1 and 2 have been met, namely (i) the defendant has entered appearance; (ii) the statement of claim has been served on the defendant; and (iii) the affidavit in support of the summary judgment application has verified the facts upon which the claim is based, and has stated that there is no defence to the claim, the plaintiff has established a prima facie case against the defendant. The burden then shifts to the defendant to satisfy the court as to why judgment should not be given against him. d. Where a defendant’s assertion, denial or dispute is equivocal or lacking in precision or is inconsistent with undisputed contemporary documents, then such assertion, denial or dispute will be rejected. In such a case, the court may grant judgment summarily against the defendant.

It is undisputed that the writ and statement of claim have been served on the defendant, and that the defendant has entered appearance at the Sessions Court Suit. In the affidavit in support of the summary judgment application, the plaintiff had also verified the facts upon which the claim is based, and had stated that there is no defence to the claim.

The plaintiff’s case is that its claim is clear from the following contemporaneous documents: a. The Agreement, which was signed by the parties before a commissioner for oaths; 10 b. A payment voucher dated 26 October 2016, issued by the plaintiff to the defendant, pursuant to which the defendant acknowledged receipt of the Loan; and c. A statement of account issued by the plaintiff pursuant to section 21, read with section 19 of the MA, which shows that the amount due and owing by the defendant to the plaintiff is RM210,980, as at 26 September 2017.

Based on the above, I find that the plaintiff has established a prima facie case against the defendant. The burden then shifts to the defendant to satisfy the court as to why judgment should not be given against him.

The defendant raised several issues, which he claimed to be triable issues that would warrant the disposal of the Sessions Court Suit by way of a full trial.

The first of these issues is the allegation that he had only received RM120,000 from the plaintiff, and not the full amount of the Loan, which is RM240,000. He claimed that on 26 October 2016, he received a cheque for the amount of RM112,800. The amount of RM7,200 was deducted from the total sum of RM120,000, as the first Monthly Instalment. He was then requested to pay RM12,800 in cash to representatives of the plaintiff, as commission for arranging the Loan. The defendant then credited the balance of RM100,000 into his CIMB bank account on 26 October 2016.

Despite his elaborate explanation, the defendant failed to produce any documentary evidence to prove his story. The only document produced is a statement of his bank account, which showed an amount of RM100,000 credited to the account on 26 October 2016. I do not see how the crediting of RM100,000 into the defendant’s account supports his contention that he only received RM120,000 from the plaintiff.

In contrast, the plaintiff had provided the following evidence to prove the disbursement of the Loan: a. A copy of a cheque dated 26 October 2016, for the amount of RM109,900, which was issued to the defendant, together with a statement of account which showed that the cheque had been cashed; b. Confirmation of the collection of the cheque for the amount of RM109,900 and cash amounting to RM130,100, which was signed by the defendant, and which contained the defendant’s thumbprint. The confirmation is dated 26 October 2016. c. A payment voucher dated 26 October 2016, issued by the plaintiff to the defendant, pursuant to which the defendant acknowledged receipt of the Loan, by signing and placing his thumbprint on the voucher.

It is therefore clear, based on documentary evidence before this court, that the Loan had been disbursed to the defendant. The allegation that he had only received RM120,000 is a bare allegation, unsupported by evidence.

Following the allegation that he only received part of the Loan, is the second issue raised by the defendant, namely that he had fully repaid the sum of RM120,000, together with interest of RM103,220. The defendant further claimed that the amount that he had repaid was in excess of the amount due to the plaintiff, by RM54,020.

I am of the view that the defendant’s claim that he had fully repaid the amount outstanding to the defendant cannot stand, as I had found that the defendant had received the full Loan, totalling RM240,000.

The amount that the defendant claimed to have fully paid to the plaintiff is RM120,000 and interest of RM103,220. This total amount of RM223,220 still falls short of the principal amount of RM240,000 disbursed to the defendant. This principal amount has yet to even include interest at 12% per annum and late payment interest at 8% per annum, both of which the plaintiff is entitled to impose pursuant to the Agreement.

Further, the plaintiff had exhibited as “Annexure A” of the statement of claim, a statement of account setting out the principal amount disbursed to the defendant, the rate of interest, the repayments made by the defendant and the amounts outstanding. This statement of account is exhibited pursuant to section 21(1) of the MA, which provides that: “Where proceedings are taken in any Court by a licensee for the recovery of any money lent after the commencement of this Act or the enforcement of any moneylending agreement or security made or taken after the commencement of this Act in respect of money lent either before or after the commencement of this Act, 13 he shall produce a statement of his account as prescribed in section 19.”

Section 19(1) provides the details required to be set out in the statement of account, which includes the date the loan was made, the principal amount of the loan, the rate of interest, payments received by the moneylender and amounts outstanding to the moneylender. I find that the details set out in Annexure 1 of the statement of claim comply with the requirements of section 19(1) of the MA, and show the indebtedness of the defendant.

Annexure 1 of the statement of claim shows that the amount repaid by the defendant as at 26 September 2017 is RM55,420. The amount outstanding by the plaintiff to the defendant is reflected in the statement of claim as RM210,980 as at 26 September 2017. This amount outstanding is derived by taking into account the Loan of RM240,000 and interest of RM26,400, and deducting the amount of RM55,420 that had been repaid by the defendant.

Apart from the allegation that he only received RM120,000 from the plaintiff, the defendant did not refute the plaintiff’s calculation of the amount outstanding. On this issue, I am guided by Goodyear Malaysia Bhd v Tan Kok Hain & Ors [1993] 3 CLJ 491, where the court allowed the plaintiff’s application for summary judgment as the defendant has inter alia failed to show any manifest error in the plaintiff’s statement of account setting out the amount owing by the defendant. In the case before this court, the defendant had similarly failed to show any error in the statement of account in Annexure A of the statement of claim, and as such I find that the defendant had failed to show any bona fide defence on this issue.

The third issue raised by the defendant is that he was not provided with a copy of the Agreement, and in this regard, the plaintiff had acted in breach of section 16 of the MA, which requires a duly stamped moneylending agreement to be provided to the borrower before money is lent. The plaintiff had however, provided a copy of an acknowledgment dated 26 October 2016, signed by the defendant and containing the defendant’s thumbprint. By the acknowledgment, the defendant confirmed receipt of the original copy of the Agreement, duly stamped. The defendant on the other hand, did not provide any evidence to support his allegation.

Based on my assessment, the allegations and issues raised by the defendant have proven to be bare denials, and the defendant has not raised any credible defence or triable issue. This is therefore a plain and obvious case for the court to exercise its discretion to grant judgment in a summary manner against the defendant.

The plaintiff’s application to strike out the Counterclaim is made pursuant to order 18 rule 19(1) of the ROC 2012. The plaintiff referred to Bandar Builder Sdn Bhd & Ors v United Banking Corporation Bhd [1993] 3 MLJ 36 and argued that the Counterclaim is on the face of it obviously unsustainable. As such, this is a plain and obvious case where recourse should be had to the summary process under order 18 rule 19(1) of the ROC 2012.

The Counterclaim is a claim for the amount of RM54,020, which the defendant claimed was paid in excess of the amount due to the plaintiff. Closely connected to the defendant’s allegation of overpayment, is the allegation that the defendant only received RM120,000 from the plaintiff. However, I found this allegation to be unsubstantiated as the plaintiff had provided proof that the defendant had received the full Loan of RM240,000.

Based on this finding, the claim of overpayment by RM54,020, which is the subject matter of the Counterclaim, cannot possibly stand. Even assuming that the defendant had paid RM223,220 to the plaintiff, as he had claimed, this amount falls short of the Loan of RM240,000. On this basis, I find the overpayment of RM54,020 by the defendant to be inherently improbable.

Thus, I am of the view that the Counterclaim is obviously unsustainable, warranting the exercise of the court’s powers to strike out the Counterclaim.

Based on the assessment set out above, and having found that: a. the defendant had failed to raise any triable issue that would warrant the disposal of the Sessions Court Suit by way of a full trial; and b. the Counterclaim is obviously unsustainable, I dismissed both the Summary Judgment Appeal and the Striking Out Appeal, with costs.

However, I varied the judgment sum to RM127,780, to take into account payments that had been made by the defendant after the commencement of the Sessions Court Suit. These payments had been acknowledged by both parties. Dated 12 September 2022 - sgd - Adlin binti Abdul Majid Judicial Commissioner High Court of Malaya Commercial Division (NCC6) Kuala Lumpur Counsel: Appellant / Defendant : K. Selva Kumaran (together with Yau Jie Luan) of Messrs. Rose Hussin Respondent / Plaintiff : Phoon Wai Kien of Messrs. Che Mokhtar & Ling Legislation referred to: Moneylenders Act 1951, section 16, section 19, section 21(1) Rules of Court 2012, order 14 rule 1, order 18 rule 19(1) Cases referred to: Bandar Builder Sdn Bhd & Ors v United Banking Corporation Bhd [1993] 3 MLJ 36 Bank Negara Malaysia v Mohd Ismail & Ors [1992] 1 MLJ 400 Cempaka Finance Bhd v Ho Lai Ying [2006] 2 MLJ 685 Goodyear Malaysia Bhd v Tan Kok Hain & Ors [1993] 3 CLJ 491