Rhb Bank Berhad(No. Syarikat: 6177-M) … PlaintiffDan1. Megaluck Industry Sdn. Bhd.(No. Syarikat: 259224-K)2. Chow Keong Wai(No. K/P (Baru): 621104-10-6419)3. Low Kwai Thai(No. K/P (Baru): 621017-10-5610) … Defendants

  

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riNGGI MALAYA Dl KUALA LUMPUR

 

_________HAGIAN DAGANG)

 

GUAMAN NO: 22NCC-1894-12/2012

 

ANTARA

 

RHB BANK BERHAD (No. Syarikat: 6177-M)

 

PLAINTIFF

 

DAN

 

1. MEGALUCK INDUSTRY SDN. BHD.

 

(No. Syarikat: 259224-K)

 

2. CHOW KEONG WAI

 

(No. K/P (Baru): 621104-10-6419)

 

3. LOW KWAI THAI

 

(No. K/P (Baru): 621017-10-5610) … DEFENDANTS

 

Azizah Nawawi JC:

 

Application

 

[1] Enclosure (5) is the Plaintiff’s application for summary judgment against the Defendants pursuant to Order 14 Rules of Court 2012.

 

[2] The Plaintiff’s claim against the 1st Defendant is for sum of RM1, 137,348.26 due and owing under the term loan facility with interest at 3.5% above the Base Lending Rate. The claim against the 2nd and 3rd Defendants is premised on the Guarantee

 

GROUNDS OF DECISION

 

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I by the 2nd and 3rd Defendants over the Defendant.

 

The Salient Facts

 

[3] Pursuant to a letter of offer dated 23.8.1996, the Plaintiff offered credit facilities to the 1st Defendant, namely overdraft facility and letters of credit.

 

[4] By a letter dated 17.2.2003, the existing banking facility was renewed until 28.2.2004. The facilities offered and accepted by the 1st Defendant comprised of overdraft facility and multi trade lines (the ‘credit facilities’).

 

[5] The same facilities was extended to 31.7.2005 vide a letter dated 28.7.2004 from the Plaintiff.

 

[6] By a letter dated 25.11.2005, 1st Defendant had also accepted the same facility but with an additional facility, Multi Trade line (2) of RM1.2 million, and the total facility available to the 1st Defendant was RM2.2 million.

 

[7] The relationship between the parties continued with the Plaintiff’s letters of offer dated 2.12.2005; 2.3.2006 and 9.10.2006 were duly accepted by the 1st Defendant.

 

[8] In consideration of the Plaintiff granting the credit facilities to the 1st Defendant, the 2nd and the 3rd Defendants have signed Letters of Guarantee dated 30.8.1996 and 20.1.2006 (exhibit

 

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y have both agreed and guaranteed to pay ng incurred by the 1st Defendant under the

 

[9]

 

[10]

 

credit facilities. The credit facilities have since been released to the 1st Defendant.

 

By a letter dated 28.8.2012 (exhibit ‘TSH-6’), the 1st defendant requested for a restructuring of the ‘overdraft’ and ‘multi trade lines’. By a letter dated 3.9.2012, the Plaintiff agreed to restructure the outstanding balance under the overdraft and multi trade lines facilities (which are then cancelled) into a term loan at 2.5% above the BLR and payable as follows:-

 

(i) Year 1 – RM20,000 per month

 

(ii) Year 2 – RM23,000 per month

 

(iii) Year 3 – RM25,000 per month

 

(iv) Year 4 – RM27,000 per month

 

(v) Year 5 until full settlement – RM30,000 per month

 

The Plaintiff’s offer of the restructuring of the credit facilities into a term loan was accepted by the 1st Defendant on 10.9.2012, and both the 2nd and the 3rd Defendants acknowledged the variation and “agreed to remain and be jointly and severally liable as guarantor(s) with respect to the terms in the above Letter of Variation under the existing Letters of Guarantee(s) dated 30.8.1996 for RM1,000,000.00 and 20.1.2006 for RM1,200,000.00 executed by me/us in your favour.”

 

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> failed to comply with the terms of the term tiff issued a letter of demand and filed this

 

suit to recover the sum due and owing at RM1,137,348.26 and interest at 3.5% above the BLR until the date of full settlement.

 

The Findings of the Court

 

[12] In an application for summary judgment, this Court is guided by the principles laid down in National Company for Foreign Trade v. Kayu Raya Sdn Bhd [1984] 1 CLJ 283 (Rep); [1984] 2 CLJ 220; [1984] 2 MLJ 300, where it was stated by the Federal Court as follows:-

 

”… We think it appropriate to remind ourselves once again that in every application under O. 14, the first considerations are (a) whether the case comes within the order and (b) whether the plaintiff has satisfied the preliminary requirements for proceeding under O. 14. For the purposes of an application under O. 14, the preliminary requirements:-

 

(i) the defendant must have entered an appearance;

 

(ii) the statement of claim must have been served on the Defendant;

 

(iii) the affidavit in support of the application must comply with the requirements of r. 2 of the O. 14.

 

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tiff fails to satisfy either of these \he 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. This burden then shifts to the defendant to satisfy the court why judgment should not be given against him…”

 

[13] In the present case, the Plaintiff had satisfied the preliminary requirements as laid down in the Kayu Raya’s case that is:-

 

(i) the Defendants have entered appearance;

 

(ii) the Statement of Claim have been served on been served on the Defendants; and

 

(iii) the Affidavit in Support is in compliance with O. 14 r. 2 ROC 2012

 

Therefore, the burden is then shifted to the Defendants to satisfy the Court why Judgment should not be entered against them.

 

[14] In Bank Negara Malaysia v. Mohd Ismail [1992] 1 CLJ 14 (Rep); [1992] 1 CLJ 627 the Supreme Court held that the duty of a Judge does not end as soon as the fact is asserted by one party, or denied or disputed by the other on affidavit. The Judge has a duty to reject such assertion or denial if such assertion or denial is equivocal or lacking in precision or is inconsistent with undisputed contemporary documents or is inherently improbable. The Court

 

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ie issues of fact or law and to determine

 

e.

 

[15] The first issue raised by the Defendants is that they did not enter into any term agreement with the Plaintiff. However it is clear from exhibit ‘TSH – 6’, that it is the 1st Defendant who had requested for a restructuring of the overdraft facility and the multi trade lines facilities. On the 1st Defendant’s request, the Plaintiff had offered to restructure the overdraft and multi trade lines into a term loan. This was accepted by the 1st Defendant on 10.9.2012 by signing the Plaintiff’s Letter of Offer.

 

[16] The credit facilities given to the 1st Defendant and the conversion of the credit facilities into a term was explained by the Plaintiff in paragraph 5 and 6 of the affidavit in support affirmed by Thean Soon Hin on 15.1.2013. In response to this, in paragraph 5 of their affidavit affirmed by the 3rd Defendant, as a Director of the 1st Defendant, the Defendants said this:-

 

“Setakat ada menerima tawaran-tawaran seperti yang dinyatakan di perenggan 5 dan 6 Afidavit Sokongan Plaintif tersebut, saya sekeras-kerasnya menafikan tawaran-tawaran tersebut adalah untuk satu pinjaman “Term Loan” (No. Akaun: 71418300040339) berjumlah RM1,131,695.45 dan seterusnya saya mengulangi kenyataan saya seperti di perenggan 4 diatas.”

 

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paragraph 5, the Defendants had admitted sd the various credit facilities, including the

 

term loan as explained in paragraph 5 and 6 of the Plaintiff’s affidavit in support, even though in the next breath they denied accepting the term loan. However, from exhibit “TSH – 6″, it is very clear that the 1st Defendant had accepted the Plaintiff’s offer of restructuring the credit facilities into a term loan. Further, the 2nd and 3rd Defendants had also signed on the Plaintiff’s offer letter signifying their consent to guarantee the repayment of the term loan. Therefore, I am of the considered opinion that the term loan is not a triable issue in this case.

 

[18] With regards to the issue of the interest rate, it is the submission of the Defendants that they have not been informed of the variation of the interest rates nor was there any agreement on the interest rate. However, the parties are bound by their contractual obligations, in that clause 5.1 of the Plaintiff’s Letter of Offer dated 22.11.2005 and 28.7.2004 clearly stipulates that the Plaintiff may vary the interest rate. Clause 5.1 reads:-

 

“5. VARIATION OF INTEREST RATE

 

5.1 The Bank shall be entitled at its sole and absolute discretion, without notice to the Borrower,

 

vary at any time and from time to time the Base Lending Rate and/or Costs of Funds and/or the margin of interest imposed above the Base Lending Rate and/or Costs of Funds of the Bank and/or commissions or other rate of

 

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ble PROVIDED THAT the Bank will wide notice of such variation(s) in the

 

following manner…

 

[19] From the said clause 5.1, it clearly provides that that the Plaintiff may vary the interest rate without notice, but will endeavour to provide the notice. It is also a term of the Letter of Offer dated 3.9.2012 to restructure the credit facilities into a term loan that it is the sole discretion of the Bank to vary the interest rate. In a letter dated 7.12.2012, the Bank had informed the Defendants that the interest rate has been increased to 3.5% above the BLR. As the Defendants had accepted the terms of the loan agreement, they are bound by the same. In Hasmah bt Abdul Rahman v Kenny Chua Kien Lam [2006] MLJU 262, the Court of Appeal held that the parties are bound by the facility agreement which they have signed that contained a variation clause. In the premise, I am of the considered opinion that the issue over the interest rate does not merit a trial.

 

[20] The Defendants also questioned the sum owing, and submit that the sum claimed as at 9.12.2012 is RM1,137,348.26 is wrongly computed, as the various ‘overdraft’ and ‘multi trade line’ is only RM1,000,000.00 and not RM1,137,348.26. It is the submission of the Defendants that witnesses must explain the discrepancy of the amount owing. The Plaintiff, however had exhibited the Certificate of Indebtedness (exhibit ‘TSH – 5’) issued pursuant to clause 16 of the Letters of Offer dated 28.7.2004 and 25.11.2005. Clause 16 provides that a Statement of Account signed by an

 

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ri the amount outstanding and interest rate nal and conclusive, unless it can be shown

 

that there is manifest errors in the account.

 

[21] Therefore, pursuant to the said clause 16 and the decision of the Federal Court in Chempaka Finance Bhd v Ho Lai Ying &Anor [2006] 544, the certificate of Indebtedness shall be binding and conclusive evidence, and the burden is then shifted to the defendants to disprove the amount claim. In Arab – Malaysian Finance Bhd v Siva Subramaniam Appupillai [1999] 8 CLJ 23, the Court said this:-

 

“The appellant had produced a statement of account showing the amount outstanding. In the light of the conclusive evidence clause in the guarantee, it would not be open for the respondent to dispute the amount as stated by the appellant in the final account.”

 

[22] In the present case, the Defendants only challenged the Plaintiff to provide the evidence but did not adduce any facts to support their contention. The Defendants merely state that the accounts are ‘tidak tepat dan mengelirukan’. In RHB Bank Bhd v Tan Swee Long Holdings Sdn Bhd & Ors [2008] 10 CLJ 519, the Court held it is not enough for the defendants to merely deny the amount owed, “but the defendants must plead any salient and relevant facts which negative the existence of the debt or which show that the claim is not maintainable on other grounds.”

 

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:he circumstances of this case and the

 

____________________I am of the considered opinion that there is

 

no triable issue raised by the Defendants. In the premise, I had allowed enclosure (5) with costs.

 

(AZIZAH BINTI HAJI NAWAWI) JUDICIAL COMMISSIONER HIGH COURT MALAYA (Commercial Division) KUALA LUMPUR

 

Dated 29.5.2013

 

For the Plaintiff: Ms. Jasmine Yee

 

(Tetuan Che Mokhta & Ling)

 

For the Defendants: Mahfuzah Mohd Faizi

 

(Tetuan Nurhayati & Mahfuzah)

 

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