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HIGH COURT MALAYA KUALA LUMPUR
MUHAMAD ANNAS MOHAMAD ANUAR – Appellant
Versus
SMALL MEDIUM ENTERPRISE DEVELOPMENT BANK MALAYSIA BERHAD – Respondent
[Civil Appeal No: WA-12AM-13-12/2023]
Certainly. Based on the provided legal document, the key points are as follows:
The application to set aside the default judgment was filed beyond the statutory 30-day period, and the delay was deemed inordinate and inexcusable, leading to the dismissal of the application (!) (!) .
Proper service of the default judgment was established through registered mail, and the deemed receipt date was supported by the evidence presented, confirming that the judgment was effectively served on D4 (!) (!) .
The purpose of the initial case management is procedural, and judgment entered a day before this scheduled event was considered appropriate and in line with procedural requirements (!) (!) .
The defendant's claim of non-receipt of the judgment was refuted by matching addresses and evidence indicating receipt at the address associated with D4, undermining the assertion of non-service (!) (!) .
The defendant's delay in filing the application to set aside the judgment was unjustifiable, and the court exercised its discretion to deny the extension of time, emphasizing the importance of promptness in litigation (!) (!) .
The default judgment was properly entered as the procedural requirements for service and filing were satisfied, and the judgment was deemed regular and valid (!) (!) .
The defendant's assertion that the judgment was obtained irregularly due to timing issues was dismissed, as the judgment was entered following proper procedures and within the appropriate timeframe (!) .
The defendant did not raise any credible or substantial defense on the merits; allegations of forgery lacked sufficient supporting evidence and were considered an afterthought aimed at obstructing proceedings (!) (!) .
The defendant's claim of forgery was further undermined by the absence of timely action to challenge or investigate the signature, and the belated police report was viewed as a tactical maneuver rather than a genuine defense (!) (!) .
The defendant's resignation from the company prior to the execution of the guarantee did not absolve him of liability, as his obligation as a guarantor was not contingent upon holding an official position at the time of the guarantee's execution (!) (!) .
Overall, the court found that the default judgment was properly entered, the application to set aside was filed out of time without sufficient justification, and the defendant failed to raise a credible defense on the merits, leading to the dismissal of the appeal with costs (!) .
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JUDGMENT
Introduction
[1] This interlocutory appeal emerges from a decision of the learned Sessions Court Judge handed down on 1 December 2023, where the Appellant, the fourth defendant (hereafter 'D4'), sought to challenge a judgment entered in default of his appearance on 15 November 2022. The crux of D4's argument is that the learned Sessions Court Judge was in error in dismissing his application to set aside the default judgment. The plaintiff, in contrast, steadfastly supports the decision, asserting that the entry of default judgment was entirely warranted. For the sake of coherence and continuity, the parties in this appeal shall be referred to as they were in the Court below.
Background
[2] Makmur Agrofuture Sdn Bhd ("Makmur Agrofuture") was the customer of the plaintiff bank, who had applied for the financing of its agriculture-based business. Based on an offer letter dated 25 June 2020, ("the said Offer Letter"), the plaintiff granted Makmur Agrofuture with a Commodity Murabahah Term Financing-i for the sum of RM700,000.00 ("CMTF-i") for the purpose of working capital requirements.
[3] The commitment of the parties to the facilities was further evidenced by the concomitant execution of the following documents:
(a) Facility Agreement executed by Makmur Agrofuture on 11 September 2020;
(b) Corporate Guarantee executed by the first defendant ("D1") on 11 September 2020;
(c) Corporate Guarantee executed by the second defendant ("D2") on 11 September 2020;
(d) Personal Guarantee executed by the third, fourth and fifth defendants ("D3", "D4" & "D5") on 11 September 2020; and
(e) Asset Sale Agreement executed by Makmur Agrofuture on 17 September 2020 evidencing the Bank's selling price of RM770,879.15.
[4] Makmur Agrofuture was ordered to be wound up on 18 November 2021, following the successful Winding-Up Petition No MA-28NCC-2907/2021 initiated by Hap Seng Credit Sdn Bhd in the Malacca High Court . In the aftermath of this development, the plaintiff duly lodged its proof of debt on 25 May 2021.
[5] A formal demand was made upon the defendants, invoking the guarantees arising from the non-payment of Makmur Agrofuture's obligations. This demand was communicated through a letter dated 1 July 2022 (see Exhibit A-7, pages 201-207 of the Appeal Records, Part C, Volume 2).
[6] As at 1 July 2022, the sum of RM721,986.94 was outstanding and payable by the defendants. The plaintiff also claims for compensation ('ta'widh') at a rate of 1.00% per annum on the sum of RM721,986.94 commencing 2 July 2022 till full settlement; and the current overnight daily rate of the Islamic Interbank Money Market (IIMM-rate) on the entire outstanding amount from expiry of maturity date.
[7] The plaintiff thereafter commenced legal action against the defendants at the Kuala Lumpur Sessions Court in Suit No WA-B52M625-10/2022 by filing a Writ of Summons and Statement of Claim on 14 October 2022. (See pages 49-17 Appeal Records, Part A, Volume 1).
[8] A judgment in default of appearance was entered against the defendants on 15 November 2022. Specific against D4, a Bankruptcy action was filed against him at the Alor Setar High Court vide Winding-up Petition No KA-29NCC-45-03/2023. On 8 September 2023, D4 applied to have the default judgment set aside wherein the Sessions Court dismissed the said application on 1 December 2023. Dissatisfied with the Sessions Court 's aforesaid decision, D4 lodged an appeal via Notice of Appeal dated 11 December 2023 in encl 1. (See pages 18-20 Appeal Records, Part A, Volume 1).
[9] Having carefully considered the arguments advanced by both parties and weighed the applicable legal principles, I had on 10 May 2024 dismissed D4's appeal with costs of RM3,000.00. This, therefore, is my judgment.
Issues
[10] The appeal addresses the following issues:
(a) Whether the application to set aside default judgment was out of time;
(b) Whether the default judgment was properly entered; and
(c) Whether D4 has raised a d
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