The court ruled that summary judgment is inappropriate when genuine triable issues exist, allowing defendants to defend the claim under conditions to ensure fairness.

Yusrin Faidz Yusoff JC:

Introduction

[1] This case involves the plaintiffs application under encl 10, seeking summary judgment for the outstanding sum of RM12,049,666.91 owed under banking facilities extended to the first defendant ('D1'). In opposition, D1 and its guarantors, namely the second, third, fourth and fifth defendants ("D2," "D3," "D4", and "D5") resist the application, contending that there exists a bona fide triable issue necessitating a full hearing. The issue for the Court's determination is whether the defendants have raised a genuine issue fit for trial or whether the plaintiff is entitled to summary judgment.

Background Facts

[2] D1 was a customer of the plaintiff bank and had applied for, and was granted, financing based on the Bai' Bithaman Ajil (BBA) concept. The first facility was extended pursuant to an offer letter dated 1 October 2012 ("Offer Letter No 1"), which provided an Islamic Term Financing-i ("BPF-i") facility of RM6,450,156.00 to D1 for the purpose of financing the purchase of a 4/4 storey shop building and the related legal fees.

[3] The key terms of the BPF-i facility included:

(a) bank purchase price of RM6,450,156.00;

(b) bank selling price of RM15,716,119.20; and

(c) repayment period of 240 monthly instalments.

[4] To secure the BPF-i facility under Offer Letter No 1, the following were entered into:

(a) A General Facility Agreement dated 3 December 2012 ("GFA");

(b) An Asset Purchase Agreement dated 3 December 2012 ("APA");

(c) An Asset Sale Agreement dated 3 December 2012 ("ASA");

(d) A First Party Charge dated 3 December 2012 over the property held under Grant of Title Nos 4371 and 4372, Lots 1489 and 1490, s 46, Kuala Lumpur ("Mortgage"); and

(e) A Guarantee and Indemnity dated 3 December 2012 by D2, D3,D4 & D5 ("Guarantee and Indemnity").

(Collectively referred to as the "GFA Transaction and Security Documents").

[5] The plaintiff fulfilled its obligations under the GFA by disbursing the BPF-i facility to D1.

[6] On 18 November 2014, the plaintiff issued a revised Islamic Financing Facility Offer Letter ("Offer Letter No 2") to D1 for RM8,058,682.70 ("Financing Facility No 2"). The key terms of Offer Letter No 2 included:

(a) A revised BPF-i limit of RM6,058,682.70; and

(b) A Multi Option Line-i ("MOL-i") facility aggregating RM2,000,000.00, comprising:

(i) A Documentary Credit-i ("DC-i") facility of RM2,000,000.00; and

(ii) A Trust Receipt-i ("TR-i") facility of RM2,000,000.00.

(d) The purpose of Financing Facility No 2 was to facilitate the import/purchase of business-related goods financed under the DC-i and TR-i facilities.

(e) Financing Facility No 2 under Offer Letter No 2 was secured by the existing GFA Transaction and Security Documents.

[7] D1 failed to make the required installment payment toward the financing facilities, prompting the issuance of a letter of demand on 17 October 2023. As the default continued, the facility was subsequently terminated through a notice of termination dated 16 November 2023. As of 31 October 2023, the defendants owed an outstanding sum of RM12,049,666.91, along with additional late payment charges ("ta'widh").

[8] The plaintiff commenced this action by filing a Writ and Statement of Claim on 27 December 2023. Pursuant to the plaintiff's application in encl 10, filed on 7 October 2024, and upon hearing the respective submissions of learned counsel for both parties, this Court, on 6 March 2025, dismissed the plaintiff's application for summary judgment. In lieu thereof, the Court granted the defendants conditional leave to defend the action, on the express condition that the sum of RM2,000,000.00 be paid into Court within thirty (30) days from the date of the order.

[9] The Court further ordered that, in the event the defendants complied with the said condition, the matter would proceed to trial, with the costs of the application in encl 10 to be costs in the cause. Conversely, non-compliance with the said condition would entitle the plaintiff to enter final ju