The court held that obligations under loan agreements remain enforceable despite a freezing order by authorities and emphasized the necessity for prompt responses in banking disputes.

JUDGMENT

Anand Ponnudurai JC:

Introduction

[1] This is a recovery action by the Plaintiff Bank against the Defendants due to their default under various loan facilities granted. The Plaintiff has pursuant to O 14 r 1 of the Rules of 2012 ("ROC") filed an application for summary judgment against the 1st Defendant.

The Cause Papers

[2] The cause papers filed in this matter are as follows:-

i) Writ and Statement of Claim filed by the Plaintiff dated 3rd December 2021;

ii) Memorandum of Appearance filed by the First Defendant dated 16th December 2020;

iii) Plaintiff's Notice of Application dated 5th January 2021 for a Summary Judgment against the First Defendant (Encl 13) (hereinafter referred to as "the Plaintiff's Summary Judgment Application");

iv) Plaintiff's Affidavit in Support affirmed by Gan Khong Min on 4th January 2021 (hereinafter referred to as "the Plaintiff's Affidavit in Support");

v) The First Defendant's Defence and Counterclaim dated 15th January 2021;

vi) Plaintiff's Reply to the First Defendant's Defence dated 29th January 2021;

vii) First Defendant's Affidavit in Reply affirmed by Chan Eng Leong on 29th January 2021 (hereinafter referred to as "D1's Affidavit in Reply "); and

viii) Plaintiff's Affidavit in Reply affirmed by Gan Khong Min on 11th February 2021 (hereinafter referred to as "the Plaintiff's Affidavit in Reply").

Background Facts

[3] Through Letters of Offer dated 17th October 2016, 15th December 2016, 22nd December 2016, 20th February 2017, 14th March 2018, 24th August 2018 and 19th June 2019 respectively (hereinafter referred to as "the said Letters of Offer") and a Facility Agreement dated 23rd November 2016 (hereinafter referred to as "the said Facility Agreement") at the 1st Defendant's request, the Plaintiff had agreed to grant General Banking Facilities (which consist of the Overdraft Facility (OD), Term Loan 1 Facility (TL1), Term Loan 2 Facility (TL2), Term Loan 3 Facility (TL3), Term Loan 4 Facility (TL4), Revolving Credit Facilities (RC) and Multi-Trade Finance Facilities (MTF) not exceeding RM18,614,000.00 (hereinafter referred to as "the said General Banking Facilities") to the 1st Defendant, subject to the terms and conditions of the said Letters of Offer and the said Facility Agreement.

[4] The 1st Defendant had duly accepted all the terms and conditions of the said Letters of Offer and the said Facility Agreement. All such letters of offer have been duly exhibited to the Plaintiff's affidavit in support.

The Securities

[5] As a security and consideration of the said General Banking Facilities, the 2nd and 3rd Defendants herein had executed a Guarantee and Indemnity dated 23rd November 2016 (hereinafter referred to as "the said Guarantee") whereupon the 2nd and 3rd Defendants inter alia had agreed to guarantee the said General Banking Facilities and indemnify all the outstanding debts including losses and damages suffered by the Plaintiff herein (Refer: Plaintiff's Affidavit in Support - Exhibit "A-10").

[6] Further, as a security and consideration of the said General Banking Facilities, 10 different properties were charged to the Plaintiff herein (hereinafter referred to as "the said Charged properties"). The details of the said charged properties can be found at paragraphs 14.1 to 14.10 of the Plaintiffs Affidavit in Support. Such charges have also been attached as exhibits to the affidavits in support.

[7] Further, as a security and consideration of the said General Banking Facilities, the 1st Defendant had also executed a Memorandum of Deposit of the Deposit Receipts dated 23rd November 2016 in favour of the Plaintiff (hereinafter referred to as "the said Memorandum").

[8] In addition to the above, 3 separate Letters of Subordination dated 23rd November, 2016, 13th August 2019 and 11th December 2019 respectively were executed in favour of the Plaintiff herein. The details of the said Letters of Subordination can be found under paragraphs 16 (i) to 16 (iii) of the Plaintiff's Affidavit in Support.

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