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2020 MarsdenLR 1994
HIGH COURT MALAYA KUALA LUMPUR
AMBANK ISLAMIC BERHAD – Appellant
Versus
IKHLAS AL DAIN SDN BHD & ORS (ENCL 7) – Respondent
[SUIT NO: WA-22M-45-01/2020]
The court emphasized that mere allegations of unconscionability by defendants failing to pay debts do not override contractual obligations under Islamic financial agreements.
Headnote:(A) Islamic Financial Services Act 2013 – Section 145 – Summary judgment application – Plaintiff granted Bai' Inah Cashline-i financing facilities to Defendants, who defaulted on payment, leading to legal action for recovery – Court ruled upon the burden of proof in summary judgment applications, emphasizing the requirement for Defendants to present a bona fide triable issue to avoid judgment. (Paras 10, 12, 39)
Facts of the case: The Plaintiff provided a financing facility under Islamic principles to the 1st Defendant, which subsequently defaulted, prompting the Plaintiff to issue demands and files a lawsuit for recovery. (Paras 1-9)
Findings of Court: The Defendants failed to demonstrate any triable issues or defenses against the Plaintiff's claims. The summary judgment was affirmed based on the principles established in relevant case law. (Paras 39)
Issues: The Court addressed whether the Defendants were given a fair opportunity to settle their debt prior to legal action and whether the disclosures made by the Plaintiff violated confidentiality provisions. (Paras 14, 25)
Ratio Decidendi: The Court affirmed that the Defendants, being in breach of agreements, could not claim unconscionability against the Plaintiff's legitimate claims, stating that disclosures made were within the Plaintiff's rights. (Paras 22, 32)
Result: Summary judgment granted in favor of the Plaintiff.
JUDGMENT
[1] This judgment concerns the Plaintiff's summary judgment application (encl 7) against the Defendants arising from a writ action filed by the Plaintiff against the Defendants in this suit for recovery under Bai' inah Cashline-i financing facilities granted by the Plaintiff to the 1st Defendant and related guarantors.
[2] At the hearing of this application I granted summary judgment for the Plaintiff. This judgment contains the full grounds for my decision.
Background Facts
[3] At the request of the 1st Defendant, the Plaintiff granted the 1st Defendant and the 1st Defendant accepted a Bai' Inah Cashline-i Islamic banking facility of up to RM5,000,000.00 ("the Facility"). Subsequently the Plaintiff agreed to renew and extend the Facility by increasing the limit of the Facility to RM10,000,000.00.
[4] The Facility was documented by the following documents:
a) Letter of Offer dated 11 July 2014;
b) Letter of Offer dated 3 September 2014;
c) Facility Agreement dated 10 October 2014 ("the 1st Facility Agreement");
d) Letter of Offer dated 8 April 2015;
e) Asset Sale Agreement dated 3 October 2014;
f) Asset Purchase Agreement dated 8 October 2014;
g) Facility Agreement dated 18 September 2015 ("the 2nd Facility Agreement");
h) Letter of Offer dated 21 September 2018;
i) Asset Sale Agreement dated 6 July 2015;
j) Asset Purchase Agreement dated 6 July 2015;
k) Asset Sale Agreement dated 16 October 2018; and
l) Asset Purchase Agreement dated 16 October 2018.
[5] As part of the security arrangement under the Facility, the 2nd Defendant executed corporate guarantees dated 10 October 2014 and 18 September 2015 while the 3rd Defendant and the 4th Defendant executed joint and several guarantees dated 10 October 2014, 18 September 2015 and 20 June 2017 (together, "the Guarantees") whereby they agreed to guarantee payment of all outstanding sums due and owing by the 1st Defendant to the Plaintiff.
[6] Additonally the Facility was secured by assignments and a charge on the 1st Defendant's assets documented by the following documents:
a) Assignment over Escrow Account-i, tenancy Agreements and Proceeds dated 18 May 2010;
b) Supplemental Agreement to Assignment over Escrow Account-i, Tenancy Agreements and Proceeds dated 13 April 2012;
c) Second Supplemental Agreement to Assignment over Escrow Account-i, Tenancy Agreements and Proceeds dated 10 October 2014;
d) Security Sharing Agreement dated 10 October 2014; and
e) Charge and Annexure dated 23 October 2014 registered under Charge Presentation No. 39602/2014 ("the 1st Legal Charge").
[7] The 1st Defendant, according to the Plaintiff, defaulted. It failed to pay the Plaintiff the amounts due for payment on the relevant due dates.
[8] Through its solicitor, the Plaintiff then issued a notice of demand dated 8 November 2019 to the Defendants demanding for the monthly instalment payments in arrears under the Facility for an amount of RM227,436.24. The payment was not made and the Plaintiff vide its solicitor's letter dated 2 December 2019 terminated and recalled the Facility and demanded from the Defendants payment of the whole amount outstanding of RM11,251,232.72 as at 27 November 2019 together with late payment charges (Ta'widh).
[9] No payment was forthcoming from all the Defendants and the Plaintiff filed this action on 16 January 2020 against all of the Defendants claiming a sum of RM11,215,289.13 as at 13 January 2020 together with late payment charges (Ta'widh). On 17 March 2020, the Plaintiff filed this application (encl 7).
Law On Summary Judgment (Order 14)
[10] It is trite that once an application under O 14 of the Rules of 2012 ("ROC") is shown to have been correctly and properly filed, the burden shifts and thus rests on the defendant who desires to resist the application to raise a defence which shows a "bona fide triable issue", in the sense of an issue which justifies and warrants the matter to be considered at the trial proper.
[11] Order 14 r 3 of the ROC provides that
