Rhb Bank Berhad V Wai Ah Wah


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SUIT NO. D5-22-1397-2004






(formerly known as Kwong Yik Bank) … PLAINTIFF






(NRIC NO: 611114-10-5947) … DEFENDANT








This is my judgment in respect of the plaintiff’s claim for interest only pursuant to a facility agreement and the defendant’s counterclaim. The defendant on the day of trial was not represented by solicitors and had informed court that he is withdrawing his counterclaim but is contesting that the interest is excessive and is not liable as claimed by the plaintiff.


Brief facts


1. The defendant was given loan facility of RM 168,000.00 for the purchase of shop lot in 1996. He defaulted and the plaintiff recalled the




banking facilities and claimed arrears in the sum of RM 231, 013.38 as at 17.6.2002 with interest at 9.9% per annum (3.5% + BLR 6.4%) on a monthly basis rest from 18.6.2002 until full settlement. The particulars as stated in enclosure 2 page 64 are as follows:


Principal : RM 165,083.16


Interest : RM 64,779.55


Late Charges : RM 1,130.67


Total___________: RM 231,013.38


2. The Senior Assistant Registrar on the application for summary judgment had entered judgment for the principal sum of RM 135,000.00 as the defendant had already paid RM 33,000.00 towards principal. It is in the note of proceeding of the S.A.R though the plaintiffs sealed order has not been filed, for reasons unknown to the court. And the only issue for the court to determine at this stage is to ascertain the interest which the plaintiff is entitled to. And the plaintiffs present claim for interest only is not shown in evidence or in the statement of claim or the amount quantified even at the date of trial, which may be fatal.


3. It must also be noted in this case the property had been auctioned for a sum of RM 150,500.00 as at 27.1.2005 and the plaintiff is holding the said sum and is liable to show clear accounts in respect of the auction, the charges incurred or administrative expenses etc, which in this case




was not produced in evidence and or lead in evidence. Plaintiff relied on the following cases namely: OCBC Bank (M) Bhd v Belton Springs Industries Sdn Bhd & Anor [2005] 7 MLJ 289; Boustead Trading (1985) Sdn Bhd v Arab-Malaysian Merchant Bank Bhd [1995] 3 MLJ 331; Aeh Capital Sdn Bhd v Am-El Holdings Sdn Bhd and Another Appeal [2008] 4 MLJ487.




4. In instant case, the issue is only in respect of interest and that is the reason for the trial. There is a legal duty on the plaintiff to establish according to law and on the facts of the case cannot merely rely on certificate of indebtedness. Support for the proposition can be found in a number of cases. To name a few are as follows:


i) In Affin Bank Bhd v Datuk Ahmad Zahid Hamidi [2005] 1 CLJ


521, Abdul Malik Ishak J (as he then was) had this to say:


“The defendant had challenged the certificate of indebtedness and so the plaintiff was duty bound to prove the same to court. This the plaintiff failed to do. It was also clear that the alleged indebtedness as set out in the certificate of indebtedness was inaccurate, manifestly erroneous and excessive. Final judgment therefore ought not to be accorded to the plaintiff. ”


ii) In Oriental Bank Bhd v Jaafar Sidek Mohd. Salam & Ors. [1990] 2 CLJ (Rep) 585, Siti Norma Yaakob J had this to say:




“The presence of a conclusive evidence clause per se, cannot prevent the guarantors from questioning the correctness or otherwise of the account sought to be produced as conclusive evidence against them. ”


iii) In Malayan Banking Bhd v Yeo Sun Tong [1999] 4 CLJ 425, Augustine Paul J (as he then was) had this to say:


“The purpose of a certificate of conclusiveness is only to dispense with proof of the debt. However, full particulars of the debt due must be pleaded in the statement of claim. A mere statement of the debt in the statement of claim without condescending to particulars when it is made up of several elements means that the pleading itself is in the nature of statement of conclusiveness.


The statement of conclusiveness read with the statement of claim must show with clarity the actual debt due for which proof has been dispensed with by the production of the statement. In this case, the statement of claim does not give particulars of the debt nor was it furnished to the third defendant. Such failure to particularise means that the statement of conclusiveness cannot be regarded as being conclusive of the debt. ”


5. I have heard the witnesses, read the pleading, submissions of the parties in detail. I take the view the plaintiffs claim for interest must be dismissed. My reasons inter alia are as follows:


(i) In the instant case the real issue is how the interest claim was derived. If it could be done by certificate of indebtedness it would have been resolved at the S.A.R stage and need not have come to trial. At trial stage, as there is a dispute as to interest, there is a duty on the plaintiff to show how the interest calculation was




derived to the satisfaction of the court. In this case it was not done at all;


(ii) I have perused the evidence of PW1, the only witness who gave evidence in respect of interest. At no point of time was any explanation given to show how the sum claimed in the certificate of indebtedness was derive at, taking into consideration that the property has been sold and the plaintiff is holding the said auction sum;


(iii) The plaintiff through PW1 was relying on a certificate of indebtedness which does not show a statement of accounts as required by clause 17.17 of the loan agreement which reads as follows:


“It is hereby agreed that any admission or acknowledgment in writing by the Borrower (s) or by any person authorized on behalf of the Borrower (s) or judgment (by default or otherwise obtained against the Borrower (s) ) or a statement of account in writing showing the Indebtedness of the Borrower (s) which is duly certified by an authorised officer of the Bank shall be binding and conclusive evidence against the Borrower (s) for whatever purpose including as being conclusive evidence of Indebtedness in court of law. ”


This in my view is fatal. And in addition, a certificate of indebtedness without a statement of account itself is not sufficient at this stage of trial where the plaintiff has conceded that they will prove their claim for interest and that proof cannot be by a certificate only. In Bank Bumiputra Malaysia Berhad v. Tiong Hua




Kuong & Anor [2008] 1 LNS 261, I have on the facts stated as follows:


“(b) There has been much dispute as to the quantum of the claim. Further, the defendants have served Notice to Produce documents relating to BLR as well as the statement of accounts. Despite the Notice to Produce issued by the defendants the plaintiff has not satisfactorily complied according to law. Failure to do so on the facts of this case attracts adverse inference under section 114(g) of Evidence Act 1950.


(c) On the facts of this case, there is a clear dispute as to quantum which has been well articulated by evidence according to law by the defendants. On such facts and evidence the certificate of Indebtedness clause does not assist the plaintiff. (See Cheng Heng Ping & Ors. v. Intradagang Merchant Bankers (M) Bhd. [1995] 3 CLJ 690; [1995] 2 MLJ 363).”


(iv) After having given much consideration to the plaintiffs submission I take the view the plaintiff has not discharged their legal burden according to law.


6. For reasons stated above the plaintiffs claim for interest is dismissed with no order as to costs and the defendant’s counterclaim is struck out with no order as to costs.


I hereby order so.






High Court (Commercial Division)






Date: 21st April 2010


For the Plaintiff: K.L. Lee; M/s C.S. Tang & Co. For the Defendant: not represented



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