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2022 MarsdenLR 1204

HIGH COURT MALAYA KUALA LUMPUR
MODALKU VENTURES SDN BHD – Appellant
Versus
BESI GAYA (KLANG) SDN BHD – Respondent
[Civil Suit No: WA-22NCC-133-03/2021]



Petitioner Advocates:Aufa Radzi,Kwang Qi Xiang ,Respondent Advocate: Jason Teoh,Ashlyn Lau

A debtor's obligations under a properly assigned debt remain enforceable regardless of direct payments made to the assignor, underscoring the parol evidence rule's protection of written agreements.

Headnote:(A) Evidence Act 1950 – Sections 91 and 92 – Assignment of debts – The Plaintiff sought summary judgment against the Defendant for failure to remit payments to the Plaintiff’s account as per the Deed of Assignment. The Defendant’s claims of promissory estoppel and invoice discrepancies were dismissed for lack of evidentiary support. (Paras 14, 16, 35)

(B) The Court found that the Defendant's obligations under the Notice of Assignment remain even if payments had been made directly to KSSISB. Concurrent claims against both debtor and guarantor are permissible until the debt is fully satisfied. (Paras 26, 32, 36)

Facts of the case: The Plaintiff, as a creditor of KSSISB, assigned receivables to itself but the Defendant failed to make payments as required by the documents, leading to this application for summary judgment.

Findings of Court: The court upheld the Plaintiff's right to claim against the Defendant based on the deeds and agreements executed, determining that the Defendant had breached those terms.

Issues: The Court considered whether the Defendant's defenses (promissory estoppel and discrepancies in invoices) were valid against the clear documented agreements.

Ratio Decidendi: The court decided the Defendant could not use oral statements to contradict the written Deed of Assignment under the parol evidence rule, reinforcing that obligations under the assignment must be adhered to regardless of prior arrangements.

Result: Application for summary judgment allowed in favor of the Plaintiff with costs awarded.

JUDGMENT

Wan Muhammad Amin Wan Yahya JC:

[1] This was an application by the Plaintiff to enter summary judgment against the Defendant pursuant to O 14 r 1 of the Rules of , 2012 ("ROC") ("this Application").

A] Salient Background Facts & The Plaintiff's Claim

[2] This action was instituted by the Plaintiff against the Defendant as the Assignee of Kwang Shen Steel Industries Sdn Bhd (Registration No: 199701038886 (454386-V)) ("KSSISB") pursuant to a Deed of Assignment of Receivables dated 6 May 2019 ("Deed of Assignment"). The Plaintiff is also the Attorney of the Assignor pursuant to the said instrument, which has been duly lodged with the Kuala Lumpur High Court bearing Registration No WA-SKW(IR)-21682-05/2019 dated 6 May 2019.

[3] The Defendant admits that it is the Assignee of KSSISB.

[4] By a Letter of Offer dated 25 April 2019 which has been duly accepted by the KSSISB ("Letter of Offer"), the Plaintiff granted a Note Issuance (Line Facility) Facility to the KSSISB in the total sum of RM4,000,000.00 ("Financing Facility").

[5] The security documents governing the Financing Facility also include, inter alia, the Note Issuance (Line Facility) Agreement Cum Guarantee dated 6 May 2019, the First Supplemental Letter of Offer dated 11 June 2019 and Second Supplemental Letter of Offer dated 22 September 2020 between the Plaintiff and KSSISB.

[6] In consideration of the Plaintiff's agreement to grant and continue to grant the Financing Facility to KSSISB, KSSISB executed the Deed of Assignment wherein KSSISB absolutely and irrevocably assigned to the Plaintiff, all their rights, titles and interest in or under any relevant documents exchanged between the KSSISB and KSSISB's debtors, including the receivables under the invoices due to KSSISB.

[7] By way of a Notice of Assignment dated 8 May 2019 ("Notice of Assignment") from KSSISB to the Defendant which was acknowledged and duly accepted by the Defendant on 9 May 2019, the Defendant was authorised and instructed to remit all present and future receivables due to the KSSISB directly to the Plaintiff for the credit of the following account:

Bank: RHB Bank Berhad

Account Name: Malaysian Trustees Bhd - Modalku Ventures Sdn Bhd (TF)

Account Number: 21412900308853

("Plaintiff's Designated Account").

[8] By several invoices issued by KSSISB to the Defendant in September 2020 to January 2021, KSSISB affixed to each invoice a notice that the invoice must be payable to the Plaintiff, who was assigned and had acquired KSSISB's account and future debts. The notice included the Plaintiff's Designated Account.

[9] However, the Defendant did not to remit the payments due and payable by the Defendant to the Plaintiff under the said invoices to the Plaintiff's Designated Account.

[10] KSSISB defaulted in paying the Financing Facility and by a letter dated 3 March 2021 from the Plaintiff's solicitors to KSSISB, the Plaintiff terminated the Financing Facility and demanded payment of the total outstanding amount due and owing under the Financing Facility in the sum of RM4,259,557.93 as at 18 February 2021 together with interest to be paid within seven (7) days from the date thereof. However, the KSSISB did not to comply with the said demand.

[11] By a letter dated 3 March 2021 from the Plaintiff's solicitors to the Defendant, the Plaintiff demanded payment of the outstanding amount due and owing by the Defendant in the sum of RM2,499,714.00 as at 18 February 2021 pursuant to the unpaid invoices within seven (7) days from the date thereof. However, the Defendant did not comply with the said demand.

[12] On 10 September 2021, in a separate suit at the Kuala Lumpur High Court, the Plaintiff obtained Summary Judgment against KSSISB based on its liability under the Financing Facility.

[13] KSSISB was added as a Third Party in this action by the Defendant.

B] The Defendant's Defence

[14] The Defendant raised the following defences:

i) Prior to signing its acceptance in the Notice of Assignment, both the representatives from th


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