Tan Ah Chai V Chu Fee-Loong, Aloysius & 1 Lagi


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SUIT NO. D-22NCC-609-2009


















This is my judgment in respect of enclosure 7 of the plaintiff’s application for summary judgment and the enclosure 10, the defendants’ application to strike out the plaintiffs claim.


Brief Facts


1. The plaintiff gave a friendly loan of RM 4,061,335.41 to the 1st defendant and the 2nd defendant was a guarantor. The said sum was to be paid by 24 monthly installment and 24 post dated cheques were deposited for the payment. A post dated cheque dated 31.10.2009 for the sum of RM 100,000.00 was dishonoured and the plaintiff says under the




terms of the agreement the balance of the loan become due and payable. And hence this action.


2. The defendants gives some reasons for the non-payment and assert that the 1st defendant had on 30.10.2009 requested that the plaintiff only cash the post-dated cheque dated 31.10.2009 on 4.11.2009. And in addition assert that the plaintiff had agreed; but the plaintiff denies this and there is no documentary evidence to support the defendants’ version though the defendants purport to act on the principles relating to waiver.


3. The plaintiff and defendants relied on the following cases namely: Wong Nget Thau & Anor v. Tay Choo Foo [1994] 4 CLJ 617; Bank Negara Malaysia v. Mohd Ismail Ali Johor & Ors [1992] 1 CLJ (Rep) 14; Chen Heng Ping@Tian Seow Hock & 5 Ors [1995] 3 CLJ 690; Keng Huat Film Co. Sdn Bhd v. Makhanlall (Properties) Pte. Ltd [1983] CLJ (Rep) 186; RHB Bank Bhd v. Datuk Keramat Holdings Bhd [2004] 3 CLJ 646; Associated Pan Malaysia Cement Sdn Bhd v. Sykt. Teknikal & Kejuruteraan Sdn Bhd [1990] 1 CLJ (Rep) 15; Seal Incorporated Berhad v. Norsechem Resins Sdn Berhad [2004] 1 LNS 658; Master Strike Sdn Bhd v. Sterling Heights Sdn Bhd [2005] 2 CLJ 596; Aset Nusantara Sdn Bhd v. Ekran Berhad & Anor [2009] 1 LNS 1408; Pengiran Othman Shah bin Pengiran Mohd Yusoff & Anor v Karambunai Resorts Sdn Bhd (formerly known as Lipkland (Sabah) Sdn




Bhd) & Ors [1996] 1 MLJ 309; Union Eagle Ltd v. Golden Achievement Ltd [1997] 2 All ER 216; Malaysia Building Society Bhd v. Tan Sri General Ungku Nazaruddin Ungku Mohamed [1998] 2 CLJ 340; Industrial Concrete Products Bhd v. Concrete Engineering Products Bhd & Other Suits [2001] 8 CLJ 262; Boustead Trading (1985) Sdn Bhd v. Arab-Malaysian Merchant Bank Berhad [1995] 4 CLJ 283; John Lo Thau Fah v. FACB Resorts Berhad [2007] 4 MLJ 685; Liew Yin Yin Construction Sdn Bhd v. Tan Teck Seng Suit No: 12-138-03 Dato’ V.T.Singham, J High Court Ipoh 15 April 2008; United Malayan Banking Corporation Bhd v. Pembinaan KSY Sdn Bhd & Ors [1993] 3 MLJ 45; Megnaway Enterprise Sdn Bhd v. Soon Lian Hock [2003] 5 CLJ 103; Alloy Automotive Sdn Bhd v. Perusahaan Ironfield Sdn Bhd [1986] CLJ (Rep) 45; Invescor Ventures Sdn Bhd v. Metro Jelita Sdn Bhd [1999] 1 LNS 340; Indah Desa Saujana Corp Sdn Bhd & Ors v. James Foong Cheng Yuen, Judge, High Court Malaya & Anor [2008] 2 MLJ 11; Ansa Teknik (M) Sdn Bhd v. Cygal Sdn Bhd [1989] 2 MLJ 423.


4. I have read both applications, affidavits and submission of the parties in detail. I take the view the plaintiffs application for summary judgment must be allowed. My reasons inter alia are as follows:


(i) In the instant case the defendants relied much on the background in entering the agreement and the issue relating to waiver. I do not think it is relevant on the facts of the case. In this case parties have




clearly agreed to the terms and cheques were deposited for the payment to make sure the payment is honoured on the specific date. If for any reason the 1st defendant was not able to honour any of the cheques the proper procedure will be to either make payment in advance i.e. before the cheque is presented or obtain a written confirmation that the plaintiff has agreed to present the same. In this case neither was done, and that makes the defendants’ line of defence a sham.


(ii) I have dealt with the jurisprudence relating to summary judgment in John Lo Thau Fah v. FACB Resorts Berhad (supra) I do not wish to repeat the same. On the facts of the case the following decisions are instructive namely:


(a) In Wong Nget Thay & Anor v. Tay Choo Foo (supra) the court stated:


“The court was obliged to go through the affidavits and documents in detail to see if there was a fair or reasonable probability of the defendant having a real or bona fide defence. Though it was trite law that a conflict of evidence should not be disposed of on affidavit evidence only, it was also trite law that the affidavit evidence must not be uncritically accepted. ”


(b) In Keng Huat Film Co Sdn Bhd v. Makhanlall (Properties) Pte


Ltd (supra) the Federal Court had this to say:


“For the construction of a written agreement the established doctrine is firstly to exclude evidence of negotiations leading up to the contract on the ground that it is only the final agreement which records a consensus and as such evidence of negotiations is unhelpful; and secondly to exclude evidence of the parties’ subjective intentions so that any individual purpose which either of them hopes to achieve by the agreement and their own




interpretation and understanding of the agreement is not admissible. As against this, evidence of surrounding circumstances and factual background have always been admissible. ”


(iii) It is also settled principle that a bill of exchange or promissory note is to be treated as cash. In the instant case if the cheque is dishonoured it will trigger the default clause of the loan agreement. In Yeo Hiap Seng v Australian Food Corp. Pte Ltd [1991] 3 MLJ 144 the court stated that in an application for summary judgment against a defendant on the proceeds of a dishonoured cheque, the defendant will not be allowed to set up by way of a set off or a counterclaim for damages for breach of the underlying contract, and the plaintiff is entitled to judgment for the amount of his claim without a stay of execution. A cross-claim relating to the transaction in which the action on a bill of exchange arose is not a defence to the action on the bill of exchange (See Fielding & Platt Ltd v Selim Najjar (1969) 1 WLR 357).


(iv) The defendants’ defence also militates against Evidence Act.


5. For reasons stated above I allow the plaintiffs application for summary judgment prayer (a) with costs as per RHC 1980. And the defendants’ application to strike out the plaintiffs claim is dismissed with costs. And the defendants to pay the plaintiffs costs in the sum of RM 5,000.00 to the plaintiff in respect of enclosure 10.




I hereby order so.






High Court (Commercial Division)




Date: 6th May 2010


For the Plaintiff: A.S. Lua; M/s Kamarudin, Wee & Co.


For the Defendant: Lavinia Kumaraendran; M/s Thomas Philip



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