The Certificate of Indebtedness serves as conclusive evidence of debt, and the guarantor is bound by its terms despite challenges, provided no manifest error is shown.

Introduction

[1] This is an appeal by the 2nd Defendant against the decision of the Deputy Registrar dated 14 January 2021 assessing the Plaintiff's claim for damages. The assessment was made by the Deputy Registrar pursuant to an order of the Court of Appeal dated 3 February 2020 when it allowed the Plaintiff's appeal against Justice Lau Bee Lan's decision after full trial dated 1 August 2017.

[2] After hearing both parties, this Court dismissed the appeal with costs. The grounds of the decision are stated below.

Background Facts

[3] The Plaintiff's claim against the 2nd Defendant rests principally on the 2nd Defendant's obligation as a guarantor for the principal debtor, the 1st Defendant for two (2) Term Loan Facilities. The 1st Defendant was wound-up on 16 May 2016 and did not defend against the Plaintiff's claim.

[4] On 1 August 2017, Justice Lau Bee Lan ("Justice Lau") delivered her decision after full trial whereby the Plaintiff's claim for the outstanding amount due and owing under the 1st Term Loan Facility was dismissed; and as for the 2nd Term Loan Facility, the 2nd Defendant was discharged from liability from the date of variation of the 2nd Term Loan Facility i.e. 26 July 2010, with the amount to be determined by the Court. On 14 November 2017, upon clarification, the 2nd Defendant was ordered to pay the sum of RM 932,472.10 being the sum due and owing under the 2nd Term Loan Facility as at 26 April 2017 together with interest.

[5] The Plaintiff appealed against the decision. On 3 February 2020, the Court of Appeal allowed the appeal in part. The 2nd Defendant was only discharged from its obligations to the Plaintiff from the date of variation of the 1st Term Loan Facility which was on 23 October 2009. The amount due and owing as at the date of variation was ordered to be determined by the High Court hence the filing of the assessment application in enclosure 75 by the Plaintiff.

[6] The hearing of enclosure 75 before the Deputy Registrar was by way of affidavit evidence. After hearing parties' submissions, the Deputy Registrar found the 2nd Defendant is liable for the sum of RM 20,304,400.58 being the sum due and owing to the Plaintiff as at 23 October 2009 under the 1st Term Loan Facility, with interest accruing thereon.

[7] The 2nd Defendant filed an appeal against the Learned Deputy Registrar's decision in enclosure 102.

Parties' Submissions

[8] It is the Plaintiff's case that the Certificate of Indebtedness as to the amount outstanding shall be final and conclusive and this is derived from Clause 9.01 of the Loan Agreement. Therefore, the Plaintiff has grounded its application on the evidence of the Certificate of Indebtedness and particulars of the 1st Term Loan Facility.

[9] The 2nd Defendant on the other hand submitted that the Plaintiff's reliance of the Certificate of Indebtedness and Clause 9.01 is misplaced for the following reasons:

i. Neither the said conclusive evidence clause nor the Certificate of Indebtedness are binding on the 2nd Defendant as the parties to the Loan Agreement is the Plaintiff and the 1st Defendant;

ii. It is plain from the express wording of Clause 9.01 itself that there is nothing that binds the 2nd Defendant as the guarantor to the purported conclusiveness of the Certificate of Indebtedness; and

iii. The Letters of Guarantee do not contain any such conclusive evidence clause that would bind the 2nd Defendant.

[10] It was further argued that given the Certificat