Ytl Cement Marketing Sdn Bhd v 1. ) Easy MIX Sdn Bhd (WA-22C-89-10/2019)

EASY MIX SDN BHD (Company No.: 242217-D)

BINA PURI HOLDINGS BHD (Company No.: 207184-X) ... DEFENDANTS GROUNDS OF JUDGMENT Introduction [1] This is the Plaintiff’s application for summary judgment pursuant to O. 14, r. 1 of the Rules of Court 2012 (‘RoC 2012’) for the amount due and owing for goods (cement) sold and delivered by the Plaintiff to the 1st Defendant (‘D1’) at D1’s request in the principal sum of 2 RM1,238,012.21 together with interest as at 31.7.2019 in the amount of RM447,564.07 and continuing at the rate of 1.5% per month on the principal sum from 1.8.2019 until full settlement and costs. The same application is made against the 2nd Defendant (‘D2’) as principal debtor under a Corporate Guarantee (‘CG’). [2] A remote hearing of the Plaintiff’s application was held on 19.6.2020 with the consent of the parties. Having read the Notice of Application (encl. 11); Amended Statement of Claim (encl. 9); Amended Defence (encl. 10); the Plaintiff’s Affidavit In Support (‘AIS’) affirmed by its Director/ Senior General Manager, Mr. Teng Heng Mun (encl. 12); the Affidavit In Reply (‘AIR’) affirmed by D1’s Executive Director, Mr. Ooi Tat Lean (encl. 13); the Plaintiff’s AIR (encl. 14) and the written submissions filed by the parties (encls. 15, 17, 19 and 20), and having heard oral submissions by Mr. Ramash Kumar Nariadass appearing for the Plaintiff and Mr. Edward Chow Yew Khong for the Defendants, I had allowed the Plaintiff’s application with costs of RM5,000.00, subject to allocatur. 3 [3] Aggrieved with the said decision, the Defendants are now pursuing an appeal. Hereinbelow are my reasons for allowing summary judgement to be entered against the Defendants. Brief background facts [4] On 27.4.2016, D1 had submitted the Credit Application Form To Open A Distributor / Direct Account (‘said Credit Application’) to the Plaintiff for the purchase of cement products based on the trading terms as set out in the said Application (exhibit “A” in the Plaintiff’s AIS). [5] In consideration of the Plaintiff agreeing to D2’s request to supply D1 with the goods, D2 provided the CG dated 14.7.2016 to the Plaintiff for the period from 14.7.2016 to 31.12.2018 (exhibit “B” in the Plaintiff’s AIS). It is the Plaintiff’s contention that D2 has irrevocably and unconditionally agreed to be liable as principal debtor and not merely as surety, undertaking to pay on demand an amount not 4 exceeding RM2 million together with late payment interest of all monies due and owing to the Plaintiff by D1. [6] D1 then placed orders of OPC cement from the Plaintiff which the Plaintiff duly sold and delivered to D1. The tax invoices, delivery orders and statement details were issued to D1 (exhibit “C” in the Plaintiff’s AIS). [7] On 21.11.2018, the Plaintiff’s solicitors sent a notice of demand to D1 by registered and ordinary post to demand payment for the supply of cement in the sum of RM1,788,012.21 together with interest amounting to RM248,786.19 as at 31.10.2018 and continuing at the rate of 1.50% per month until full settlement (‘2018 Demand’). The total amount claimed was RM2,036,798.40. A notice of demand was also sent to D2 on the same date [the notices are in exhibit “D” whilst the “Statement Details As At 15 November 2018” (‘Nov. 2018 Statement’) is in exhibit “E” in the Plaintiff’s AIS and AIR, respectively]. 5 [8] Subsequently, D1 paid the sum of RM550,000.00 but failed to fully settle the sums claimed. [9] Another notice of demand was sent on 12.9.2019 by the Plaintiff’s solicitors, again vide registered and ordinary post to D1 and D2, this time demanding payment for the sale and delivery of OPC cement in the sum of RM1,238,012.21 together with interest amounting to RM447,564.07 as at 31.7.2019 and continuing at the rate of 1.50% per month until full settlement amounting to RM1,685,576.28 (‘2019 Demand’). However, the Defendants failed to respond. [10] This prompted the Plaintiff to file the Writ of Summons and Statement of Claim (‘SoC’) on 10.10.2019 based on the 2019 Demand i.e. for the principal sum of RM1,238,012.21 and interest in the sum of RM447,564.07 as at 31.7.2019. [11] The Defendants filed their Defence on 7.11.2019. 6 [12] On 27.11.2019, the Plaintiff filed an application to amend the SoC (encl. 7) to which the Defendants did not object. The Amended SoC was then filed by the Plaintiff on 18.12.2019 (encl. 9) followed with the Defendants’ Amended Defence on 27.12.2019 (encl. 10). The present Notice of Application for summary judgment against the Defendants was filed on 22.1.2020. The Plaintiff’s application for summary judgment [13] The Defendants do not dispute that the three conditions for summary judgment have been satisfied namely, the SoC and Amended SoC were served on the Defendants; the Defendants have entered appearance on 24.10.2019; and the Plaintiff has affirmed the AIS of the application on 6.1.2020 verifying the facts on which the Amended SoC is based and the belief that there is no defence to the SoC (see the Federal Court decision in National Company for Foreign Trade v. Kayu Raya Sdn. Bhd. [1984] 2 M.L.J. 300). 7 [14] The burden then shifts to the Defendants to raise any triable issue or to show that there ought for some other reason to be a trial [see O. 14, r. 3(1) RoC 2012]. In this regard, Shaik Daud Ismail JCA in delivering the judgment of the Court of Appeal in South East Asia Insurance Bhd v. Kerajaan Malaysia [1998] 1 CLJ 1045 at p 1048 - 1049 held, inter alia, that “It is well settled that if a defendant in an O. 14 application succeeds in raising even a single triable issue, it will not be a fit and proper case to order summary judgement. It is only in plain and obvious cases where there are no issues to be tried that should recourse be had to O. 14.”. [15] In their attempt to show that this is not a case which is suited for judgment to be entered summarily, the Defendants submitted that there are the following triable issues which merits a full trial to be held:

inaccurate principal sum claimed by the Plaintiff; 8

invalid late payment interest charged by the Plaintiff; and

D2’s liability under the CG has lapsed. 1st Issue: Whether the principal sum claimed by the Plaintiff is inaccurate - The parties’ submissions [16] The Defendants took issue with the accuracy of the principal sum claimed by the Plaintiff against D1. The inconsistency is said to exist when one compares the following documents:

“Statement Details As At 31 August 2019” (‘August 2019 Statement’) with the tax invoices in exhibit “C” in the Plaintiff’s AIS. In the first line of the August 2019 Statement, the date is stated as “15/12/2017” with “Doc No. 129433” for the sum of “RM59,526.39”. However, the Tax Invoice No. 129433 dated 15.12.2017 indicates an amount of RM207,615.72 (p 16 of exhibit “C”); and 9

the August 2019 Statement with the 2019 Demand. The August 2019 Statement shows the amount of RM1,685,576.28 being the principal sum and the accrued interest as of 16.8.2019. However, the 2019 Demand shows that the amount of RM1,685,576.28 is for the principal sum and the interest accrued as of 31.7.2019. The calculation of interest for both dates was never shown or explained by the Plaintiff in the Plaintiff’s AIS. Therefore, the Defendants submitted that the Plaintiff’s claim, especially for accrued interest is inconsistent and/ or disputed. [17] Based on the foregoing reasons, the Defendants argued that the principal sum in the Plaintiff’s claim is a triable issue. The Defendants referred to the case of Roti Segar (M) Sdn. Bhd & Ors v Bank Perusahan Kecil & Sederhana Malaysia Berhad [2015] 1 LNS 464 and the decision of the Court of Appeal in Wasal Construction Sdn Bhd v Boh Huat Chan Timber Products Sdn Bhd [2013] 1 LNS 1269 to support its argument that the issue of the accuracy of the principal 10 sum and the interest is a triable issue whereby oral evidence from witnesses is vital to resolve the inconsistencies. It was contended that the instant case is not one that is plain and obvious and capable of being resolved by way of summary application, especially taking into account the fact that the Plaintiff’s claim is based on its own documents which are self-conflicting. [18] At the opposite end, the Plaintiff highlighted the fact that the Defendants did not raise any complaints about discrepancies as to the sums claimed before the filing of the civil suit. D1 is aware of the sum of RM550,000.00 which was paid to the Plaintiff and leaving the principal of sum of RM1,238,012.21. This averment in the AIS is said to stand unrebutted. The Plaintiff maintained that the sums as prayed in the Amended SoC is accurate. [19] It was further submitted that the authorities of Roti Segar (M) Sdn Bhd and Wasal Construction Sdn Bhd can be distinguished on the facts and are not applicable here as D1 had made payments which 11 was used to set-off part of the sums owed. This accounts for the differences in the amounts as alleged by the Defendants. [20] It is noted that during the hearing of the application, Mr. Edward Chow raised a new argument which was not encompassed in the written submissions, namely that the part payment by D1 could amount to a compromise. Mr. Ramash Kumar responded by saying that the cause of action arose after the 2018 Demand. When the Defendants refused to pay the Plaintiff, there was a breach of the agreement as signified by the said Credit Application and CG. If there was indeed a compromise as alleged by the Defendants, the Plaintiff would not be pursuing the balance owing to it. - Findings of the Court [21] I have carefully examined the said Credit Application, tax invoices, delivery orders, Nov. 2018 Statement and August 2019 Statement as exhibited in the Plaintiff’s AIS and AIR and I find that – 12

vide the said Credit Application, D1 had agreed to accept the trading terms of the Plaintiff including the term that D1 will settle all outstanding debts within 30 calendar days from the date the debts are incurred;

the Plaintiff had sent the Statement Details as at 15.11.2018 to D1 for invoices issued from 21.11.2017 to 28.2.2018 for the total principal sum of RM1,788,012.21 and interest at the rate of 1.5% per month as at 31.10.2018 in the sum of RM248,786.19 bringing the total amount to RM2,036,798.40. This total amount is consistent with the 2018 Demand;

the Plaintiff had pleaded in its AIR that D1 had paid RM550,000.00. Mr. Edward Chow in his submission, did not deny that this payment was made by D1; 13

in the Plaintiff’s Submission In Reply, a further explanation was provided as to the RM550,000.00 which was paid by D1, namely that it was used to set off the principal sums in –

Invoice No. 128450 in the amount of RM11,484.25;

(ii) Invoice No. 128781 in the amount of RM242,722.62;

(iii) Invoice No. 129120 in the amount of RM147,703.80; and

(iv) Invoice No. 129433 in the amount of RM148,089.33 thus leaving a balance due of RM59,526.39 out of the total invoice sum of RM207,615.72. The Defendants’ objected to the fact that the said explanation was offered in the Plaintiff’s reply submission rather than by way of affidavit evidence. However, I accepted the same since the invoice numbers, dates and amounts can be seen in the first four items in the Nov. 2018 Statement and the first item in 14 the August 2019 Statement which were exhibited in the Plaintiff’s affidavits;

in the Statement Details as at 31.8.2019, the balance principal sum is stated as RM1,238,012.21 and “Interest Chargeable (Calculation as at 31/07/19)” as RM447,564.07 with the total outstanding of RM1,685,576.28. This total amount is consistent with the August 2019 Demand and as prayed in para 8 of the

at the end of the Nov. 2018 Statement and August 2019 Statement, it is stated that “DISCREPANCY IN THIS STATEMENT SHOULD BE NOTIFIED TO US WITHIN 7 DAYS AFTER RECEIPT OF THIS STATEMENT.”. [22] Based on the foregoing, it can be concluded that the Plaintiff had supplied and D1 had received all the goods as ordered and confirmed by the acknowledgement on the Delivery Orders. D1 had also received the tax invoices and Statement Details where in the latter 15 document, D1 is required to notify the Plaintiff of any discrepancies within seven days after receiving the same. There is no evidence that D1 had ever done so. Instead, D1 admitted that it paid the sum of RM550,000.00 to the Plaintiff. [23] There is no averment in any of the affidavits as to when this amount was exactly paid. However, by scrutinising the Nov. 2018 Statement and August 2019 Statement, the first three items in the Nov. 2018 Statement, being sales dated 21.11.2017, 30.11.2017 and 7.12.2017, no longer appears in the August 2019 Statement, whilst for the sales dated 15.12.2017, a balance of RM59,526.39 is carried through in the August 2019 Statement. Therefore, the sum of RM550,000.00 must have been paid between the date that D1 received the Nov. 2018 Statement and before the August 2019 Statement was issued. [24] Based on the foregoing reasons, I am of the view that the issue raised by the Defendants on the accuracy of the principal sum claimed by the Plaintiff does not amount to a triable issue. 16 2nd Issue: Whether late payment interest charged is invalid - The parties’ submissions [25] According to the Defendants, the Plaintiff has acted unreasonably in charging late payment interest that is arbitrary, unilateral, exorbitant and never agreed by the Defendants. [26] The Defendants relied on two cases to support their arguments:

the judgment of SM Komathy Suppiah J in Nissha Industrial And Trading (M) Sdn Bhd v. Coco Floor Sdn Bhd & Anor [2019] 1 LNS 37 where Her Ladyship held that it is trite law that a seller is not allowed to charge late payment interest in the absence of the buyer’s acknowledgement and agreement/ consent. The issue as to whether the Defendants agreed to the imposition of late payment interest is said to amount to an issue to be tried; and 17

the judgment of Wong Kian Kheong JC (as His Lordship then was) in BHS Book Printing Sdn Bhd v. Penerbitan IMT Sdn Bhd [2016] 1 LNS 67 where His Lordship held that a vendor is not a licensed financial institution and thus, the imposition of late payment interest of 1% per month is in itself exorbitant and if it was allowed, it will cause injustice and inequity to the affected party. The Defendants submitted that the late payment interest claimed by the Plaintiff is an attempt to manoeuvre through the Court’s process in order to enforce a term that is blatantly arbitrary and therefore void in nature. The imposition of interest at the rate of 1.5% per month is equivalent to 18% per annum. A triable issue thus arises as to whether the imposition of such an excessive interest rate by the Plaintiff is just, legitimate and/ or permissible by the law. [27] The Plaintiff rebutted the above submissions by the Defendants on the ground that D1 had agreed to allow the Plaintiff, at its sole discretion, to charge interest on all outstanding debts at the rate of 1.5% per month, such interest accruing after the expiry of 30 calendar 18 days from the day the outstanding debts are incurred, as per the said Credit Application. Further, vide the CG (exhibit “B” in the AIS), D2 guaranteed as Principal Debtor to pay the outstanding amounts including late payment interest. [28] Mr. Ramash Kumar additionally submitted that the interest rate chargeable was never disputed by the Defendants, even following receipt of the notices of demand sent by the Plaintiff’s solicitors. In fact, the Defendants made part payment in the sum of RM550,000.00. - Findings of the Court [29] I have examined the said Credit Application which was signed by Mr. Ooi Tat Lean as D1’s Executive Director [exhibit “A” in the AIS at pp 1 to 9 and in particular para (b) at p 6] wherein it is clearly stated that D1 agrees “to allow YTL Cement Marketing Sdn Bhd at its sole discretion to charge interest on all outstanding debts at the rate 1.5% 19 per month, such interest accruing after the expiry of the 30 calendar days from the day the outstanding debts are incurred”. [30] By signing the said Credit Application, and in the absence of fraud and/ or misrepresentation, D1 is bound by the terms and conditions as stipulated therein, including the term regarding the rate of interest: see L’Estrange v Graucob [1934] 2 KB 394; Serangoon Garden Estate Ltd v Marion Chye [1959] MLJ 113; Majunder v AG of Sarawak [1966] 1 MLJ 41; and Chin Well Fasteners Co Sdn Bhd v Sampath Kumar Vellingiri & Ors [2006] 1 MLJ 117. This agreement, which was made on 27.4.2016, preceded the supply of goods by the Plaintiff to D1. There is thus no doubt in my mind that D1 has unequivocally agreed to allow the Plaintiff, at its sole discretion, to charge interest on all outstanding debts at the rate of 1.5% per month, such interest accruing after the expiry of 30 calendar days from the day the outstanding debts are incurred. [31] I have also perused the Extract of Directors’ Circular Resolutions Passed On 14 July 2016: Corporate Guarantee In Favour Of YTL 20 Cement Marketing Sdn. Bhd. signed by D2’s Director and Secretary (exhibit “B” in the AIS at p 13). This document shows that D2’s Directors had resolved that approval be given for D2 to act as Corporate Guarantor for RM2.0 million in favour of D1 in consideration of D1 agreeing at D2’s request to supply goods to D1, a wholly-owned subsidiary, for an amount in total not exceeding RM2.0 million for the period from 14.7.2016 to 31.12.2018 subject to the terms and conditions as stipulated in the CG. [32] The CG at p 11 in the same exhibit reads: “In consideration of your agreeing at our request to supply Easy Mix Sdn Bhd of No. 32, Jalan Kajang Perdana 2/3, Taman Kajang Perdana, Kajang, 43000, Selangor Darul Ehsan (“Said Company”) with goods (“the goods”), we hereby irrevocably and unconditionally agree to be answerable and responsible to you as principal debtor and not merely as surety for the due and punctual payment by the Said Company for all goods whatsoever which you may from time to time supply to them. In that respect we hereby irrevocably agree and undertake to pay to you an amount or amounts in total not exceeding Ringgit Malaysia Two million 21 (RM2,000,000.00) only together with late payment interest thereof at such rate(s) agreed upon between the Said Company and you (“Guaranteed Amount”) upon receipt of your demand or demands in writing, without proof and/or condition(s) and notwithstanding any objections, protest or contestation whatsoever by the Said Company and/or any person(s) and/or any third party(s). This guarantee shall be a continuing guarantee. You shall be entitled to make several or partial demands under this guarantee at your absolute discretion provided that the total of all partial demands so made shall not exceed the Guaranteed Amount. We undertake that all amounts to be paid by us under this guarantee shall be in clear funds to the bank account nominated by you in your demand by bank transfer or in such other manner as you may reasonably specify in your demand and shall be without any set-off, counterclaim, deductions and/or withholdings whatsoever. If your demand does not specify the means of payment, we shall make payment in clear funds.”. [33] Turning now to the two case authorities cited by Mr. Edward Chow, for ease of reference, firstly the passage from the case of Nissha 22 Industrial And Trading (with my added emphasis) as cited by the Defendants is re-produced below: “[11] I turn now to consider the second issue. The defendants contended that the plaintiff had no right to unilaterally impose late payment interest. It was pointed out that the plaintiff had not informed the defendants when the goods were ordered that late payment interest would be imposed and nor was it stated in any of the invoices. It was only stated in the monthly statement of accounts. In meeting this point, the plaintiff contended that as the first defendant had acknowledged the monthly statements of accounts as correct, the defendants was estopped from disputing the plaintiff's right to impose late payment interest. I agree with the defendants that the plaintiff' s claim for late payment interest is a triable issue as it is trite law that a seller cannot impose late payment interest unless it has been made known to and agreed by the buyer. The fact that the first defendant acknowledged as correct the sum claimed in the monthly statements of accounts as correct does not preclude it from disputing the plaintiff' s claim for late payment interest.”. 23 [34] In Nishha Industrial And Trading, the plaintiff sold and delivered floor tiles to the first defendant from time to time pursuant to orders made by the latter, and invoices and monthly statements of account were issued in respect of the goods delivered. The invoices required payment within 60 days from the date on the invoice. By a letter dated 19.4.2017, the plaintiff sought payment of around RM1.2 million as acknowledged by the first defendant as correct as at 31.3.2017. Additionally, by the same letter, the plaintiff informed the first defendant that in view of the delay in making payments, the plaintiff had no alternative but to impose late payment interest at the rate of 1.5% per month with effect from 1.5.2017. The subsequent correspondence between the parties do not show that the parties agreed to the imposition of late payment interest and at the rate of 1.5% per month. [35] In my view, Nishha Industrial And Trading is easily distinguishable from the present case as the late payment interest charged in that case was unilaterally imposed by the plaintiff whereas here, D1 had agreed to this term as evidenced by the said Credit Application. 24 [36] Moving on to the decision in BHS Book Printing, the relevant excerpt relied upon by the Defendants’ counsel in his submission is shown below: “[34] When an agreement of sale of goods is silent on the question of interest, I am not in favour of applying the equitable estoppel doctrine to allow a vendor to claim interest, pre-judgment and post-judgment, on the price of the goods from a purchaser. This view is premised on the following reasons:

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if this court orders interest at the rate of 1% per month as stated in the 21 Invoices, this means the Defendant has to pay interest on the Claimed Sum at the rate of 12% per annum which is much higher than the prevailing interest rate imposed by licensed financial institutions for credit facilities. A vendor of goods cannot be equated to a licensed financial institution under the 25 Financial Services Act 2013 or a licensed moneylender under the Moneylenders Act 1951. The application of the equitable estoppel principle (to allow the Plaintiff to claim interest at the exorbitant rate of 12% per annum), in my opinion, will cause an injustice and inequity to the Defendant. The equitable estoppel principle should not be applied to cause an injustice and inequity.”. [37] To my mind, the case of BHS Book Printing can similarly be distinguished. In that case, the plaintiff had printed, bound, sold and delivered school text books and materials to the defendant in the sum of around RM2.4 million. The only novel question which arose in the hearing of the plaintiff’s application for summary judgment was whether the plaintiff was entitled to interest at the rate of 1% per month on all overdue payments as stated in the 21 plaintiff’s invoices which the defendant had received and made no objections thereto. In para 33 of the decision, the Court expressed the view that (i) if a contract of sale of goods has provided for interest, the vendor of goods can clearly claim for interest on the price of the goods from the purchaser; and (ii) if a contract of sale of goods does not provide for 26 interest, the vendor cannot rely on the equitable estoppel doctrine to contend that the vendor is entitled to interest as provided in the invoice. The learned High Court Judge then exercised His Lordship’s discretion and awarded pre-judgment and post-judgment interest at the rate of 5% per annum on the claimed sum pursuant to para 61(2)(a) of the Sale of Goods Act 1957 [Act 382], s 11 of the Civil Law Act 1956 [Act 67] and O. 42, r. 12 RoC 2012. [38] In view of the said Credit Application which was signed by D1, the facts in the case before this Court fall within the ambit of category (i) above as expounded in the judgment in BHS Book Printing. [39] In the upshot, the factual matrix in the cases relied upon by the Defendants are not on all fours with the facts in the present case. On the evidence, the parties here had agreed on the rate of interest and they should be held to the bargain that they had made: see the Federal Court decision in Woon Hoe Kan & Sons Sdn Bhd v Bandar Raya Developments Bhd [1974] 1MLJ 24. This is not an issue which needs to be tried at a full hearing. 27 Issue 3: Whether D2’s liability under the CG has lapsed - The parties’ submissions [40] The Defendant submitted that the Plaintiff’s claim against D2 is based on the CG that is only valid for the period from 14.7.2016 until 31.12.2018 as stated in para 6 (exhibit “B” in the AIS) as follows: “This Corporate Guarantee is effective from 14 July 2016 to 31 December 2018. All Claims (if any) must be made in writing and received by us on or before 31 December 2018 (“Final Claim Date”). Should we receive no claim from you by the Final Claim Date, then all of our liability and obligations in regard to the Corporate Guarantee shall become null and void irrespective whether the Corporate Guarantee has been returned to us for cancellation.”. [41] Since the Plaintiff’s claim in this action is premised upon the 2019 Demand, which is after the expiry of the validity period of the CG, the Defendants contended that D2, by not having received any claim within the enforcement period of the CG, is no longer liable to the 28 Plaintiff pursuant to the same. In other words, D2’s liability is limited by time. The Defendants relied on the decision of the Federal Court in The Pacific Bank Bhd v. Kerajaan Negeri Sarawak [2015] 3 CLJ 717 to support the contention that any claims by the Plaintiff against D2 has to be made within the validity period of the CG. [42] It was additionally submitted that the Plaintiff’s demand has included the claim up until 16.8.2019, if the August 2019 Statement is to be followed, or until 31.7.2019, if the 2019 Demand is to be followed. The Defendants stance is that all claims beyond the CG’s validity period are invalid and unenforceable against D2 and this constitutes a triable issue. [43] The Plaintiff retorted that via the CG, D2 has irrevocably and unconditionally agreed to be liable as principal debtor and undertook to pay an amount not exceeding RM2 million, including late payment interest, upon receipt of the demand in writing without proof and/ or conditions. In short, the CG is a “guarantee on demand”. 29 [44] It was further explained that the Plaintiff made a demand against D2 for sales up to February 2018 in the sum of RM1,788,012.21 together with interest as at 31.10.2018 amounting to RM248,786.19 vide the 2018 Demand. D1 only paid the sum of RM550,000.00 leaving the balance principal sum of RM1,238,012.21. Thereafter, the 2019 Demand was sent for the balance sum of RM1,238,012.21 and interest amounting to RM447,564.07 for the same sales up to February 2018. The sum claimed is said to be consistent with the August 2019 Statement. No payments were forthcoming from D2. Hence, D2 is alleged to have breached its undertaking to pay by failing to settle the full sum and therefore, the Plaintiff has a valid cause of action against D2. [45] Mr. Ramash Kumar referred to the judgment of the Supreme Court in Orang Kaya Menteri Paduka Wan Ahmad Isa Shukri b Wan Rashid v Kwong Yik Bank Bhd [1989] 3 MLJ 155 where it was held that the condition precedent in establishing a claim against a guarantor is that a proper demand must have been made. Applying the ratio of that case to the facts in the present case, the Plaintiff submitted that the 30 condition precedent for establishing liability against D2, namely for a proper demand to be made to D2 to pay, has been fulfilled in accordance with the terms of the CG. [46] The Plaintiff further argued, with reference to the case of Chong Yoong Choy v UOL Factoring Sdn Bhd [1996] 2 CLJ 605, that the Defendants merely made a bare denial as to the 2019 Demand and D2’s allegations are a sham and is nothing more than an attempt to evade payment of the indebted sum guaranteed. - Findings of the Court [47] Contrary to the Defendants’ assertions, I find that the evidence supports the Plaintiff’s submission that the demand against D2 is for goods sold and delivered vide invoices issued for the period from 21.11.2017 until 28.2.2018, a duration which is definitely covered by the CG. 31 [48] At the risk of repetition, D1 only paid the sum of RM550,000.00 after the 2018 Demand was issued, hence leaving the balance principal sum of RM1,238,012.21. This balance principal amount is for goods sold and delivered vide invoices issued for the period from 15.12.2017 until 28.2.2018, a period indisputably covered by the CG. Hence, D2 breached its undertaking in the CG by failing to settle the amount owed by D1 to the Plaintiff and the Plaintiff has a valid cause of action against D2 as a principal debtor. [49] The passages quoted by Mr. Edward Chow from the judgement of Zainun Ali FCJ in The Pacific Bank Bhd (supra) can be found at pp 739, 745 and 751 of the law report viz: “[101] It was held that the cardinal rule is that a guarantor cannot be made more liable beyond the terms of his engagement. As the guarantee terms had been accepted by parties and the time limit was integral to the guarantee, the contention that the guarantee was no longer enforceable was correct. … 32 [137] Coming back to the appeal before this court, it is clear that parties have expressly agreed that for liability on the part of the appellant to arise, a claim (demand) must be made during the guarantee period. In fact even the majority in the court of appeal had agreed that the word “claim” in the said clause meant a demand. … [175] Thus, it is our view that the time period is a limitation for the making of a claim in the event of a default. Following the ordinary meaning of the language of the letter of guarantee, as accepted by the respondent and the guarantor, the claim must be made within the guarantee period upon an event of default. The word “claims” which entails a demand for the payment when default occurs should be construed in its ordinary sense and meaning and thus the limitation paragraph does not amount to restricting one’s right to enforce under s. 29.”. 33 [50] In my opinion, the case of The Pacific Bank Bhd is not relevant as the claim in that case was made vide a letter dated 20.10.1998 which was six months after the expiry of the letter of guarantee (the letter of guarantee was effective from 25.4.1997 to 24.4.1998). This accounts for the Court’s rejection of the respondent’s submission. [51] On the other hand, the case of Chong Yoong Choy v UOL Factoring Sdn Bhd [1996] 2 CLJ as submitted by the Plaintiff is on point. By applying the main legal principles as laid down by the Court of Appeal, the irresistible conclusion is that D2 has undertaken the obligations of a principal debtor and so it really does not matter what happened between the Plaintiff and D1. As far as the Plaintiff is concerned, it entered into the agreement with D1 encouraged by D2’s promise to play the role as principal debtor thereby assuring the Plaintiff that D2 would answer D1’s default. Having so encouraged the Plaintiff, it would be inequitable and unconscionable to now permit D2 to assert that the promise he gave was unenforceable. 34 [52] In the upshot, I do not think that this third and final issue is a bona fide defence that merits a trial to be conducted. Conclusion [53] Under an O. 14 RoC 2012 application, when a fact is asserted by one party and denied by another, and denial is equivocal or lacking in precision or is inconsistent with undisputed contemporary documents or other statements by the same deponent, or is inherently improbable in itself, then the Judge has a duty to reject such assertion or denial, thereby rendering the issue as not triable: see the majority decision of the Supreme Court in Bank Negara Malaysia v Mohd Ismail & Ors. [1992] 1 CLJ 14. [54] Based on all the reasons as elaborated above, the Court is satisfied that there is no issue or question in dispute which ought to be tried or that there ought for some other reason to be a trial of the Plaintiff’s 35 claim. This is thus an appropriate case for summary judgment to be entered for the Plaintiff under O. 14 RoC 2012. [55] Order accordingly. Dated: 30 July 2020 (ALIZA SULAIMAN) Judge Construction Court 2 High Court Kuala Lumpur Counsels/ Solicitors: For the Plaintiff: Ramash Kumar Nariadass Messrs. Baljit & Associates Advocates & Solicitors No. 28-3, Block A, Platinum Walk No. 2, Jalan Langkawi 53300 Kuala Lumpur 36 For the Defendant: Edward Chow Yew Khong (Leong Weng Hoong with him) Messrs. Gazel Chen & Partners Advocates & Solicitors No. 89, Jalan SS 2/72 47300 Petaling Jaya Selangor Darul Ehsan Cases referred to: Bank Negara Malaysia v Mohd Ismail & Ors. [1992] 1 CLJ 14 BHS Book Printing Sdn Bhd v. Penerbitan IMT Sdn Bhd [2016] 1 LNS 67 Chin Well Fasteners Co Sdn Bhd v Sampath Kumar Vellingiri & Ors [2006] 1 MLJ 117 Chong Yoong Choy v UOL Factoring Sdn Bhd [1996] 2 CLJ 605 David Wong Hon Leong v Noorazman bin Adnan [1995] 4 CLJ 155 L’Estrange v Graucob [1934] 2 KB 394 Majunder v AG of Sarawak [1966] 1 MLJ 41 National Company For Foreign Trade v. Kayu Raya Sdn. Bhd. [1984] 2 MLJ 300 37 Nissha Industrial And Trading (M) Sdn Bhd v. Coco Floor Sdn Bhd & Anor [2019] 1 LNS 37 Orang Kaya Menteri Paduka Wan Ahmad Isa Shukri b Wan Rashid v Kwong Yik Bank Bhd [1989] 3 MLJ 155 Padiberas Nasional Berhad v. Zakiron Enterprise Sdn Bhd & Ors [2019] 1 LNS 1152 Pernas Trading Sdn Bhd v Persatuan Peladang Bakti Melaka [1979] 1 LNS 65 Roti Segar (M) Sdn. Bhd & Ors v Bank Perusahan Kecil & Sederhana Malaysia Berhad [2015] 1 LNS 464 Serangoon Garden Estate Ltd v Marion Chye [1959] MLJ 113 South East Asia Insurance Bhd V. Kerajaan Malaysia [1998] 1 CLJ 1045 Syarikat Pakar Kayu Dan Perdagangan v MAA-SK Sdn Bhd [1986] CLJ 694 The Pacific Bank Bhd V. Kerajaan Negeri Sarawak [2015] 3 CLJ 717 38 Wasal Construction Sdn Bhd V. Boh Huat Chan Timber Products Sdn Bhd [2013] 1 LNS 1269 Woon Hoe Kan & Sons Sdn Bhd v Bandar Raya Developments Bhd [1974] 1 MLJ 24 Legislation referred to: Civil Law Act 1956, s. Sale of Goods Act 1957, s. Rules of Court 2012, O. 14 rr. 1 and 3 & O. 42 r.