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2021 MarsdenLR 4243
HIGH COURT MALAYA IPOH
CHAN LAI YOKE & ANOR – Appellant
Versus
ESS ENGINEERING SDN BHD (ENCL 64) – Respondent
[Civil Appeal Nos: AA-12ANCC-11-12/2019 & AA-12ANCC-12-12/2019]
A summary judgment cannot be granted if a defendant raises any triable issue, necessitating a full trial to resolve factual disputes.
Headnote:(A) Contracts Act 1950 (Revised 1974) – Section 63 – Application for summary judgment – Parties disputed loan repayment claim of RM825,000 on basis of alleged payment by third party – The hearing allowed the defendants' appeal against summary judgment due to existence of triable issues concerning repayment and binding agreements – Appeal No 11 was allowed, setting aside the earlier judgment. (Paras 1-5, 25-36)
(B) Summary judgment applications – The principle governing summary judgment is that it should only be granted where no triable issues are present; the existence of any triable issue means summary judgment cannot stand. (Paras 19-23)
Facts of the case: The plaintiff claimed RM825,000 for a loan, while defendants contested the claim based on assertions of repayment made by a third party and supported by documented agreements and evidence, including a letter from a director of the plaintiff confirming no indebtedness. (Paras 5-12, 29-31)
Findings of Court: The court found that the existence of the 2015 Agreement and a letter providing evidence of payment constituted a triable issue, warranting the allowance of the appeal against the summary judgment. (Paras 30-34)
Issues: Primary legal questions included the validity of the 2015 Agreement and whether the owed amount had indeed been paid, as well as the impact of the defendants' claims on the plaintiff's original agreement. (Paras 25-26)
Ratio Decidendi: The court ruled that arguments regarding payment and the validity of agreements invoked significant triable issues, which precluded the granting of summary judgment. (Paras 27-29)
Result: Appeal No 11 allowed; earlier judgment set aside. (Para 36)
Introduction
[1] Initially, two appeals arising out of the Sessions Court's action, one which allowed the respondent/plaintiff's application for summary judgment ("Appeal No 11") and another which dismissed the Appellants/Defendants' striking out application ("Appeal No 12") were before this Court.
[2] When both appeals came up for hearing on 17 September 2021, the appellants/defendants sought leave to withdraw their Appeal No 12 with the issue of costs to be determined after the disposal of ("Appeal No 11")
[3] After hearing the parties with the aid of their written submissions, I had allowed the appellants/defendants' Appeal No 11 and the [summary] judgment entered against them in the Sessions Court on 26 February 2020 was set aside with costs with Appeal No 12 struck out with no order as to costs. Dissatisfied with the decision made for Appeal No 11, the respondent/plaintiff appealed to the Court of Appeal via Notice of Appeal dated 13 October 2021 (Enclosure 64).
[4] These are the grounds of judgment for Appeal No 11 and the parties shall henceforth be referred to as they were in the Sessions Court.
Nature Of The Plaintiff's Claim
[5] The plaintiff sued for the repayment of a loan of RM750,000 with interest of RM75,000 totalling RM825,000 ("Claimed Sum"), which was due on 31 January 2014 with the loan having been given to the first defendant pursuant to a directors' resolution and guaranteed by the second defendant pursuant to a guarantee and indemnity agreement, the loan and guarantee being documented in an agreement dated 23 December 2013 ("2013 Agreement") (Enclosure 3 pp 72 to 75; see p 75).
Defendants' Defence
[6] The first and second defendants are husband and wife.
[7] They pleaded that they owe the plaintiff nothing because the Claimed Sum has been repaid by Chan Seong Phun ("CSP").
[8] CSP is also the principal director of the plaintiff.
[9] In support of their defence they relied upon a written agreement dated 25 April 2015 ("2015 Agreement") made between CSP and the first defendant which documented the fact that CSP had paid the Claimed Sum to the plaintiff and consequently, the first defendant owes CSP the monies originally due under the loan.
[10] On 14 June 2021, this Court allowed the first and second defendants' 70 application by consent (encl 39) to adduce fresh evidence, namely a letter dated 11 June 2020 ("11 June 2020 Letter") from one Chan Seong Jan ("CSJ"), who was a director of the plaintiff at the material time.
[11] The 11 June 2020 Letter confirms that the defendants are not indebted 75 to the plaintiff in respect of the Claimed Sum as CSP had agreed to absorb and had in fact paid the Claimed Sum to the plaintiff.
[12] Reliance was also placed on the fact that the plaintiff's audited financial statements, which were signed off by both CSP and CSJ, who were the only two directors of the plaintiff then, carried no records that the defendants owed the Claimed Sum.
[13] It was pointed out that CSP himself had expressly pleaded that he paid the Claimed Sum for the first defendant in his defence to a suit filed by Amanah Raya Berhad (as executor of the estate of the late mother of, inter alia, CSP and the first defendant ("Late Mother")) together with the first defendant, for the return of, inter alia, the Late Mother's stake in the plaintiff on the basis that CSP had unlawfully transferred the Late Mother's shares in the plaintiff to himself ("Amanah Raya Suit").
[14] It would be useful at this juncture to state that the first defendant, CSP and CSJ are siblings and they are or were at some point in time directors of the plaintiff which was founded by their late parents.
Sessions Court Proceedings
[15] On 11 December 2019, the Sessions Court allowed the plaintiff's application for summary judgment to be entered against the defendants with costs of RM1,500.
[16] Reference was made by the Learned Sessions Court Judge (" the learned judge") to the provisions of s 63 of the Contracts Act 1950 (Revised
