Summary judgment can be granted when the plaintiff meets procedural requirements and demonstrates no genuine triable issue; the defendant must articulate a credible defense to avoid judgment.

Introduction

[1] This judgment concerns the plaintiffs application under O 14 r 1 of the Rules of Court 2012 ("the Rules") to enforce a guarantee. The dispute arises from a loan agreement structured under the Shariah principles of Commodity Murabahah, in which the first defendant ("D1") was the borrower, and second, third and fourth defendants ("D2", "D3", and "D4") acted as guarantors. Following D1's failure to meet its installment obligations, a default judgment was entered against D1, D2, and D4. The plaintiff now seeks summary judgment against D3, asserting that D3 is liable as the principal debtor and indemnitor. D3, however, opposes the application, contending that a triable issue exists and warrants further examination. The key question before this Court is whether D3 has successfully raised a bona fide triable issue or whether the plaintiff has established a clear entitlement to summary judgment as a matter of law.

Background Facts

[2] D1 was a customer of the plaintiff bank, having sought financing for its chicken processing business. Based on a letter of offer dated 20 February 2017, and Supplemental Letters of Offer dated 5 May 2017, 2 February 2021, and 18 November 2021, the following facilities were availed:

(a) Term Financing-i Facility amounting to RM1,800,000.00 under account No 45581007925700000 granted to part finance the cost of supplying and installing cold room freezer, flake ice machine, blast freezer and electric roller shutter door; and

(b) Agro Cash Line-i Facility of RM100,000.00 under account No 45581008270300000 granted to finance operating cost related to nature of business ie chicken processing.

(collectively referred to as the Banking Facilities').

[3] The commitment of the parties to the facilities was further evidenced by the concomitant execution of the following documents:

(a) Master Commodities Sale Agreement (Term Financing-i) dated 21 August 2017;

(b) Master Commodities Sale Agreement (Agro Cashline-i) dated 21 August 2017;

(c) Memorandum of Deposit (Certificate) dated 21 August 2017;

(d) Letter of Set Off (First Party) dated 21 August 2017; and

(e) Guarantee and Indemnity Agreement executed by the D2, D3, and D4 dated 21 August 2017;

[4] The plaintiff has accordingly disbursed the said Banking Facilities to D1, and D1 has utilized the same. However, D1 subsequently failed, neglected, and/or refused to make the overdue monthly payments. Consequently, the plaintiff, through Messrs Shukor, Baljit & Partners, issued a demand dated 16 January 2024 claiming the arrears of RM348,573.36 for account No 45581007925700000 and RM10,725.57 for account No 45581008270300000. (See Exhibit N-4 of Encl 12).

[5] As D1 failed to adhere to the demand, the plaintiff has through Messrs Shukor, Baljit & Partners, issued a notice of termination dated 9 February 2024 and claimed for the outstanding amount of RM2,405,619.90 as at 31 January 2024 (See Exhibit N-4 of Encl 12); which comprises the following:

[6] On 15 March 2024, pursuant to a Letter of Set-Off, the plaintiff applied the fixed deposit held under lien together with profit, amounting to RM135,520.27, and credited it to D1's financing account No 45581007925700000 (Term Financing-i Facility).

[7] A Statement of Account certifying the debt due was issued by the plaintiff pursuant to the relevant clauses under the Master Commodities Sale Agreements as well as the Guarantee and Indemnity Agreement (See Exhibit N-6 of Encl 12);