IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR
(COMMERCIAL DIVISION) SUIT NO. D-22-1418-2009
CIMB BANK BERHAD
1. ABM DEVELOPMENT SDN. BHD
2. YONG YU KEN
3. ONG CHENG SENG … DEFENDANTS
GROUNDS OF DECISION
1. The plaintiff has made an application in encl. (6) for an order that summary judgment be entered against the 1st defendant as the borrower and the 2nd – 3rd defendants as guarantors.
Facts of The Case
2. The plaintiff entered into a Facility Agreement with the 1st defendant on 10 July 2007 for a sum of RM1,700,000.00 (the Facility). The 2nd and the 3rd defendants were guarantors of the said Facility Agreement. The Facility had been charged with the fixed deposit of RM200,000.00. The liability of the defendants depended on the making of a demand upon them by the plaintiff. The 1 defendant had defaulted in the repayment of the Facility. The plaintiff uplifted the fixed deposit to reduce the 1st defendant’s indebtedness. However there was still shortfall due and owing to the plaintiff. Upon default in repayment, the plaintiff sent a letter of demand to the defendants dated 24.12.2008 claiming an outstanding sums of RM1,003,068.63 as at 15.7.2008 together with interests. There was a Certificate of Indebtedness to show the amount due and owing from the defendants.
3. The defendants counsel argued that the plaintiff’s claim should be dismissed because the plaintiff’s Statement of Claim is defective based on the following reasons:
There is no pleading as to what term had been breached ;
(b) There is no pleading as to how these terms had been breached (for example if the claim is for non-payment, what was the date it became due, was there a total recall of the facility, what is the amount that was due, what is the interest due, what is the default interest due etc.);
(c) There is no even an averment of what amount is owed by the 1st defendant.
4. In any event, the defendant argued that there is also a triable issue as the application of the Fixed Deposit was unlawful since no prior demand was made on the 1st defendant. If the Fixed Deposit was wrongly applied then the plaintiff is obliged to account for his monies with interest accruing on the Fixed Deposit.
5. For the purposes of an application under Order14 of the Rules of the High Court (RHC) the preliminary requirements are :
(i) The defendant must have entered appearance
(ii) The statement of Claim must have been served on the defendant and
(iii) The affidavit in support of the application must comply with the requirements of O14 r (2).
6. If the plaintiff fails to satisfy either of these considerations, the summons may be dismissed. If however, these considerations are satisfied, the plaintiff will have established a prima facie case and he becomes entitled to judgment. The burden then shifts to the defendants to satisfy the court why judgment should not be given against him by affidavit or otherwise. National Company for Foreign Trade v Kayu Raya Sdn. Bhd.  2 MLJ 300, Noh Hyoung Seok v Perwira Affin Bank Bhd  2 MLJ 203, HSBC Bank Malaysia Bhd v LH Timber Products Sdn Bhd & Ors  6 MLJ 625.
7. In the instant case, it is not disputed between the parties that the preliminary requirements have been satisfied and that this case comes within the provisions of Order 14 of RHC. The burden now shifts to the defendants to satisfy the court why judgment should not be given against him.
8. The question before the court is whether the Statement of Claim is defective and hence the application for summary judgment against the defendants should be dismissed.
9. It is trite that for the purpose of Order 14 application, the Statement of Claim must be complete and good in itself, any defect or omission cannot be corrected or supplemented by the Plaintiff’s affidavit. Furthermore if the defect is one of substance application for summary judgment will be dismissed. It is most important that a defendant should know from the writ what the exact claim against him is. Gold Ores Reduction Co v Pain  2 Q.B14 Sheba Gold Mining Co. v Trubshawe  1 Q.B.674, United Malayan Banking Corporation Berhad v Palm & Vegetable Oils (M) Sdn Bhd & Ors  1 MLJ 206, National Company for Foreign
Trade v Kayu Raya Sdn. Bhd.  2 MLJ 300, Gilbert Engineering Co. v Zainuddin Ahmad & Ors  7 CLJ 489.
10. I have carefully perused the Statement of Claim and agreed with the submission of the plaintiff’s counsel that the plaintiff has pleaded the material facts upon which the cause of action is grounded and hence the Statement of Claim is not defective. The Court found that the defendants knew from the Statement of Claim what were the exact claim against them.
11. Order 18 r 7 of the RHC states, inter alia, that every pleading must contain, and contain only a statement in a summary form of the material facts on which the party pleading relies for his claim or defence, as the case may be. In Bruce v Odhams Press, Limited  1 KB 697 at P712, Scott LJ said :
“The word ‘material’ means necessary for the purpose of formulating a complete cause of action and if anyone ‘material’ fact is omitted, the Statement of Claim is bad”.
12. In the instant case, the Statement of Claim have pleaded materials facts as follows :
(i) by virtue of the Letter of Offer dated 18.6.2007 (Letter of Offer) and the (Facility Agreement) the plaintiff has agreed to grant Short Term Advance (STA) of RM1,700,000.00 to the 1st Defendant on the terms and conditions of the Letter of Offer and the Facility Agreement (Paragraph 4 of the Statement of Claim).
(ii) the salient terms of the Letter of Offer and the Facility Agreement such as its purpose, payment terms, interest rate, default, interest rates legal costs and that the Certificate of Indebtedness is final and conclusive of the amount outstanding (paragraph 5 of the Statement of Claim).
(iii) In consideration of the Facility granted to the 1st defendant, the 2nd and 3rd defendants signed a Guarantee & Indemnity Agreement dated 10.702007 (paragraph 6 of the Statement of Claim).
(iv) Fixed Deposit (FD) of RM200,000.00 pledged as security (paragraph 7 of the Statement of Claim).
(v) Breach by the 1st defendant in failing, refusing and/or neglecting to pay the amount due to be paid under the STA Facility (paragraph 8 of the Statement of Claim).
(vi) Upliftment of FD to reduce the indebtedness under the STA Facility (paragraph 9 of the Statement of Claim).
(vii) Issuance of letter of demand dated 24.12.2008 and letter of recall dated 19.2.2009 against the defendants (paragraph 10 & 11 of the Statement of Claim).
(viii) Amount of RM1,003,038.63 (as at 15.7.2009), owed by the defendants including interest, solicitor client costs and other relief that the court may grant (paragraph 12 of the Statement of Claim).
13. Having decided that the Statement of Claim is not defective, the next question that has to be considered is whether there is a triable issue raised by the defendants.
14. The 1 defendant raised the issue of the failure by the plaintiff to inform the defendants on the utilization of the Fixed Deposit. In this respect, the Court found that there is no obligation on the plaintiff to inform the defendants how the plaintiff had utilized its Fixed Deposit to reduce the amount owing. Both the Memorandum of Deposit of Fixed Deposit Receipts and Letter of Authorisation contain provisions that authorize the plaintiff without further notice to the defendants to uplift the Fixed Deposit to satisfy the plaintiff’s liabilities.
15. To challenge an O 14 application, the defendant needs to show that there is a triable issue as to the facts. In this respect the defendant must raise an arguable issue that requires a trial in order to determine it, once and for all Bank Negara Malaysia v Mohd Ismail & Ors  1 MLJ 400, Voo Min En & Ors v Leong Chung Fatt  2 MLJ 241, HSBC Bank Malaysia Bhd v LH Timber Products Sdn Bhd & Ors  6 MLJ 625.
16. In the present case, the plaintiff had issued the Certificate of Indebtedness which certify the amount due under the STA Facility as at 15.7.2009 as RM1,003,068.63. In this respect the defendants have not
challenged at all the correctness of the amount stated. There was nothing raised by the defendants to suggest any manifest error on the face of the said certificate. Hence there is no issue or question in dispute which ought to be tried. Cempaka Finance Bhd v Ho Lai Ying & Anor  3 CLJ 544, Bank Negara Malaysia v Mohd Ismail  1 MLJ 400, Noh Hyoung Seok v Perwira Affin Bank Bhd  2 MLJ 203 applied.
17. In my view, in the context of this case, it was rather obvious that the defendants have no defence against the plaintiff’s claim.
Based on the above, the plaintiff’s claim in encl. (6) is allowed.
Dated : 27.5.2010
(DATUK HANIPAH BINTI FARIKULLAH)
JUDICIAL COMMISSIONER HIGH COURT KUALA LUMPUR (COMMERCIAL DIVISION)