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2022 MarsdenLR 2204
HIGH COURT MALAYA KUALA LUMPUR
ULTRA DEEP SUBSEA PTE LTD – Appellant
Versus
ZAKRI ALWI & ORS – Respondent
[Admiralty Action In Personam No: WA-27NCC-44-06/2019]
A guarantor's liability cannot be determined without sufficient evidential support for the principal debt owed, highlighting the necessity of producing documentary evidence in contractual disputes.
Headnote:(A) Singapore Law – Contracts – Guarantee – The Plaintiff claimed outstanding sums from the Defendants as guarantors of debts owed by RTO, but the court dismissed the claim due to insufficient proof of the amounts claimed. (Paras 1, 48)
(B) A guarantee must be supported by the principal debt and adequately evidenced to establish liability. The Plaintiff failed to adduce necessary invoices to substantiate the claim, and the court ruled that the guarantees provided did not extend to the amounts claimed. (Paras 40, 46)
Facts of the case: The Plaintiff alleged they were owed amounts from RTO based on agreements and sought to enforce guarantees from the Defendants, but disputes over contract terms and lack of documentary evidence led to the claim's dismissal. (Paras 5, 48)
Findings of Court: The Plaintiff’s claims were dismissed due to the inability to prove the amounts owed, despite the Defendants being found to have signed guarantees related to certain services. (Paras 48)
Issues: The enforceability of guarantees, the nature of the agreements, and the evidentiary burden on the Plaintiff constituted the main legal questions. (Paras 7)
Ratio Decidendi: The court noted that guarantees are contingent upon clear evidence of the debt and that the Plaintiff failed to substantiate its claims through requisite documentation. (Paras 48)
Result: Claim dismissed, with costs awarded to the Defendants.
JUDGMENT
(After Full Trial)
Overview
[1] The Plaintiff claimed against the Defendants as guarantors the outstanding sums it alleged were owing to it from a company called Redtech Offshore Sdn Bhd ("RTO"). After a full trial, I dismissed the Plaintiff's claim principally on the ground it had failed to prove the amounts claimed.
Salient Background Facts
[2] The Plaintiff's claim stems from six (6) agreements (collectively, "the Agreements"). Three were in July 2018 and three were in October 2018. They were:
(i) A BIMCO Time Charter Party for Offshore Service Vessels dated 5 July 2018 between Ultra Deep Solutions Ltd, an associate company of the Plaintiff, and RTO ("July CPA");
(ii) A Contract dated 6 July 2018 between the Plaintiff and RTO for the provision of services ("July Services Agreement");
(iii) A Credit Application Form dated 5 July 2018 submitted by RTO to the Plaintiff for trading credit for the services provided by the Plaintiff to RTO ("July CAF");
(iv) A BIMCO Time Charter Party for Offshore Service Vessels dated 2 October 2018 between the Plaintiff and RTO ("October CPA");
(v) A Contract dated 3 October 2018 between the Plaintiff and RTO for the provision of services ("October Services Agreement");
(vi) A Credit Application Form dated 3 October 2018 submitted by RTO to the Plaintiff for trading credit for services provided by the Plaintiff to RTO ("October CAF");
[3] There is no dispute that the Plaintiff and Ultra Deep Solutions Ltd did provide those services to RTO. However, this action was filed only as against the Defendants, and the Plaintiff has not filed any action against RTO. The Plaintiff contended that certain sections in the July CAF and the October CAF were guarantees by the Defendants for all outstanding sums payable by RTO to the Plaintiff and Ultra Deep Solutions Ltd under the Agreements. The Plaintiff's claim against the Defendants included all sums owing by RTO to Ultra Deep Solutions Ltd, contending that the latter had validly assigned to it all of those sums
[4] As those guarantees stipulated that the Defendants' liability to pay arose on demand, the Plaintiff further relied on a letter of demand dated 15 February 2019 ("the Letter of Demand") it issued to them.
[5] Consistent with the sums demanded in the Letter of Demand, in para 17 of its Amended Statement of Claim, the Plaintiff claimed the following relief against the Defendants:
(a) The sums of RM17,626,141.23 and USD291,855.46 together with interest accruing thereupon being the sums due and owing to the Plaintiff;
(b) Interest at the rate of 5% per annum on the Judgment Sums from the date of the Writ till the date of Judgment;
(c) Interest at the rate of 5% per annum on the Judgment Sums from the date of Judgment till the date of full settlement;
(d) Costs of this action; and
(e) Any such further relief as this Honourable Court deems just, fair and equitable in the circumstances.
[6] The Defendants disputed the Plaintiff's entire claims against them.
[7] The parties had agreed on the following Agreed Issues To Be Tried:
(i) Did the Defendants enter into contracts of guarantee and if so on what terms?
(ii) Are the contracts of guarantee enforceable against the Defendants under the laws of Singapore?
(iii) Has there been any valid assignment of the debt owed by RTO from Ultra Deep Solutions Ltd to the Plaintiff?
(iv) In the event the Defendants have entered into enforceable contracts of guarantees and there has been a valid assignment of the debts to the Plaintiff, what is the amounts that the Defendants are liable to the Plaintiff?
[8] As the Agreements all stipulated that the applicable law was the laws of Singapore, the parties had also called upon Experts to provide their expert opinions, particularly in relation to Issues (i), (ii) and (iii). The Plaintiff called upon Mr Noor Mohamed Merican and the 2nd and 3rd Defendants called upon Mr S. Suresh, both senior and distinguished members of the Singapore Bar. Their opinions were set out in the fo
