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2025 MarsdenLR 1098
HIGH COURT MALAYA KUALA LUMPUR
LKW INDUSTRIAL SDN BHD & ORS – Appellant
Versus
AMBANK (M) BERHAD – Respondent
[Civil Appeal No: WA-12ANCC-23-03/2024]
The court affirmed that a prima facie case for summary judgment was established, as the appellants failed to raise genuine triable issues or provide evidence supporting their defenses.
Headnote:(A) Rules of Court 2012 - Order 14 - Appeal against summary judgment - Appellants defaulted on loan facility terms, leading to Respondent's demand for repayment - Appellants contested disbursement and terms of repayment arrangement - Court found all material facts pleaded and upheld Respondent's claims. (Paras 1-34)
(B) Summary Judgment - Requirements for granting summary judgment - Respondent established a prima facie case; Appellants failed to raise genuine triable issues or provide evidence to support their defenses. (Paras 33-34)
Facts of the case:
The Respondent provided a loan facility to the 1st Appellant, guaranteed by the 2nd and 3rd Appellants. Following defaults, the Respondent demanded repayment of the outstanding loan amount.
Findings of Court:
The Respondent proved disbursement of the loan and the Appellants did not provide evidence to counter the claims.
Issues: The court addressed whether the loan was disbursed, if the repayment arrangement superseded original terms, fulfillment of CGC Guarantee conditions, proper demands against guarantors, and correctness of the claimed sum.
Ratio Decidendi: The court ruled that the Respondent met the requirements for summary judgment, as the Appellants failed to substantiate their defenses or raise triable issues.
Result: Appeal dismissed with costs.
JUDGMENT
[1] This was an appeal by the Appellants against the decision of the Sessions Court Judge dated 20 February 2024 allowing the Respondent's application for summary judgment under O 14 of the Rules of 2012 ("ROC") ("this Appeal").
[2] After hearing submissions from both parties, I dismissed this Appeal with costs. These are my grounds.
A) Salient Background Facts
[3] Via a Letter of Offer dated 12 February 2019, the Respondent offered the 1st Appellant a Term Loan facility under "SMEBiz Solution Portfolio Guarantee Scheme (PGS)" limited to RM500,000.00 for working capital purposes ("Facility").
[4] The salient terms of the Facility included:
i) Repayment in 84 monthly instalments of RM8,814.00;
ii) Interest rate of 5.00% per annum above the Bank's Base Lending Rate;
iii) Default interest at 1.0% per annum above prescribed rate;
iv) The facility was guaranteed by Credit Guarantee Corporation ("CGC Guarantee") for 70% of the total Facility amount (RM350,000.00).
[5] Through a Guarantee and Indemnity Agreement dated 28 February 2019, the 2nd and 3rd Appellants agreed to guarantee the 1st Appellant's obligations jointly and severally ("the guarantee").
[6] Following default in payments, the Respondent issued a Letter of Demand dated 7 August 2023 claiming arrears of RM15,628.16 as of 5 August 2023.
[7] Upon continued default, the Respondent terminated the Facility and demanded the entire outstanding sum of RM508,244.34 as of 11 September 2023.
B) Issues For Determination
[8] The main issues for determination in this Appeal are:
i) Whether there was failure to plead disbursement of the Facility.
ii) Whether the original Facility terms were superseded by the Repayment Arrangement.
iii) Whether the Condition Precedent regarding the CGC Guarantee under the Facility has been fulfilled and the effect of the CGC Guarantee on the Appellants' liability.
iv) Whether proper demands were made against the guarantors, the 2nd and 3rd Appellants.
v) Whether the sum claimed by the Plaintiff is correct and took into account the instalment payments made by the 1st Appellant.
C) Analysis And Findings
Issue 1: Whether Disbursement Of Facility Pleaded/Proven
[9] The Appellants contend that the Respondent failed to plead the disbursement of the Facility amount.
[10] However, an examination of the Statement of Claim reveals that all the material facts regarding the Facility and its subsequent default have been pleaded.
[11] The Respondent has also demonstrated, inter alia, through the documents in the Appeal Record that:
i) The Facility amount of RM500,000.00 was disbursed on 28 February 2019 (Record of Appeal, p 92).
ii) The Appellants never denied receiving the Facility amount.
iii) No documentary evidence was produced to challenge the disbursement.
Issue 2: Whether The Original Facility Terms Superseded By The Repayment Arrangement
[12] There was a revision of the instalment payments under the Facility vide letter dated 25 November 2022 ("Repayment Arrangement"). This changed the original payment schedule in the 12 February 2019 Letter of Offer, which required payment of RM8,814.00 in monthly instalments for 84 months.
[13] A significant contention by the Appellants is that the Repayment Arrangement superseded the original Facility terms, particularly regarding termination rights and payment obligations. The Appellants argue that under the Repayment Arrangement, the Respondent was not entitled to terminate the Facility but only to retain payments made.
[14] The Repayment Arrangement modified the payment schedule as follows:
i) RM5,200.00 per month from 5 January 2023 until 5 December 2023;
ii) RM6,700.00 per month from 5 January 2024 until 5 December 2024;
iii) RM8,400.00 per month for 78 months from 5 January 2025 until full settlement.
[15] However, cl 2 (under Condition Precedent) of the Repayment Arrangement explicitly preserves the original terms of the Facility:
"Meanwhile save and except as varied by this Supplemental Letter of Offer, all
