The court affirmed that the validity of a facility agreement is upheld when conditions precedent are satisfied, and claims of breach by the lender must demonstrate bona fide triable issues.

JUDGMENT

Ong Chee Kwan J:

Introduction

[1] This Court granted summary judgment to the Plaintiff in respect of outstanding sums under various banking facilities extended to the 1st Defendant which were guaranteed by the 2nd to the 4th Defendants.

[2] The Defendants' main contention is that by reason of challenges made by third parties against certain first party charges that the Defendants had created as securities in favour of the Plaintiff for the banking facilities, the banking facilities are void and or inoperative. I found this to be wholly without any merits. I found no bona fide issues to be tried to warrant the Plaintiff's claims going for trial.

Background Facts

[3] By a letter of offer dated 3 August 2018 ("Letter of Offer") which was duly accepted by the 1st Defendant, the Plaintiff approved the 1st Defendant's application for 4 term loans with the total limit of RM77,000,000.00 ("Banking Facilities") as follows:

[4] The Banking Facilities were later renewed and or revised via, amongst others the Supplementary Letter of Offer dated 7 September 2018 ("Supplementary Letter of Offer"), which was duly accepted by the 1st Defendant. The Banking Facilities were revised as follows:

Facility Agreement

[5] In respect of the Banking Facilities, the 1st Defendant entered into a Facility Agreement dated 28 February 2018 with the Plaintiff ("Facility Agreement").

[6] At all material times, for the purpose of, amongst others, the reimbursement for the purchase of lands or to partly finance the purchase of lands located at Taman Saujana in Mukim Plentong, Daerah Johor Bahru, the 1st Defendant and its solicitors had represented to the Plaintiff that the full purchase price or the relevant differential sums had been made for the purchase of the lands concerned.

[7] Acting on the faith and truth of the said representations, the Plaintiff granted the 1st Defendant the Banking Facilities and accepted land charges over the aforesaid lands as security for the Banking Facilities.

[8] Thus, as additional securities for the Banking Facilities, the 1st Defendant had executed the following securities in favour of the Plaintiff:

a) various first-party charges over residential lands located in Mukim Plentong, Daerah Johor Bahru ("Land Charges");

b) subordination of shareholder's advances dated 26 September 2018;

c) irrevocable letter of undertaking dated 26 September 2018;

d) letter of undertaking dated 18 October 2018; and

e) letter of undertaking dated 31 January 2019.

(collectively referred as "the Security Documents").

[9] The Banking Facilities were renewed and or revised by way of inter alia subsequent Supplementary Letters of Offer, Letters of Notification, and Letters of Renewal ("Facility Documents").

[10] More specifically, pursuant to a Supplemental Letter of Offer dated 14 June 2022("the SLO-2"), the Plaintiff offered, inter alia:

(a) to defer the monthly instalment payment for TL1 to TL5 for another 3 months from 1 May 2022 to 31 July 2022; or

(b) for the 1st Defendant to make full settlement of the outstanding loan amount for any titles under disputes within 6 months from the date such writ is served on the Plaintiff, failing which it will be an event of default;

(c) for the 1st Defendant to make full settlement of the outstanding loan amount for the 16 land titles involved in dispute ("Disputed Titles") within 6 months from 17 May 2022 or prior to release of TL6/Bridging Loan, whichever is earlier, failing which it would be an event of default.

More will be said on the Disputed Titles below.

[11] By a Letter of Notification dated 22 July 2022, the Plaintiff informed the 1st Defendant to sign and return the original SLO-2 within 5 days from the date of the letter, failing which, the 1st Defendant was deemed to accept the terms and conditions in the SLO-2.

[12] It is not in dispute that the 1st Defendant did not respond to the Plaintiff's Letter of Notification.

[13] By a Letter of Notification dated 27 July 2022, the Plaintiff reminded the 1st Defendant to s