The certificate of indebtedness is conclusive proof of the amount due in contractual relationships, unless fraud or manifest error is proven.

[1]This was an appeal by the appellant, CIMB Bank Berhad, against the judgment of the High Court at Kota Bharu, (Ahmad Zaidi bin Ibrahim J presiding), in which His Lordship had dismissed the appellant's writ of summons and statement of claim. The appellant had sought the following reliefs:

(a) that a judgment be entered against all the defendants in favour of the plaintiff for the sum of RM4,493,327.12;

(b) interest thereon at the rate of 3.0% (inclusive of a 1% penalty) per annum above the plaintiff's Base Lending Rate, with monthly rests, from 4 November 2008 until full payment; and

(c) costs.

[2] Being aggrieved by the said judgment, the appellant had now appealed to this Court urging reversal of the judgment of the learned trial judge.

[3] We had heard Puan Himahlini Ramalingam, the learned counsel appearing for the appellant and Encik Mohamad Rafae bin Adnan, learned counsel appearing for the respondents. We had considered the rival submissions made by the learned counsel for the parties and perused the appeal records. For the reasons that follow, we had unanimously allowed the appeal and set aside the judgment of the learned trial judge with costs of RM30,000.00 here and below. Deposits to be refunded to the appellant.

Facts Of The Case

[4] The brief antecedent facts of the case giving rise to this appeal can be summarised thus: The appellant by way of a letter of offer dated 26 July 2005 and a general facility agreement dated 9 October 2005, granted the 1st respondent a term loan of RM2,000,000.00 and a bridging loan of RM9,000,000.00. The banking facilities were to assist the 1st respondent in its project to develop a land located in Pasir Mas, Kelantan. The banking facilities were secured by a guarantee and indemnity dated 9 October 2005, executed by the 2nd and 3rd respondents in favour of the appellant.

[5] On 13 October 2005 and 26 October 2005, the sum of RM2 million under the term loan was disbursed and the sum of RM2,293,125.00 was drawndown under the bridging loan respectively.

[6] Vide a letter dated 30 December 2007, the appellant proposed the restructuring of the banking facilities and required the 1st respondent's acceptance by 13 January 2008, failing which the restructuring proposal was deemed to have lapsed.

[7] On 16 January 2008, the respondents applied for the 2nd progress payment and furnished invoices dated in the year 2006. As the invoices furnished were outdated and fell short of the conditions precedent, the appellant, vide a letter dated 23 January 2008, requested the 1st respondent to furnish reports to show work progress and proof of sales and purchases. However, the 1st respondent failed to furnish the said reports.

[8] The 1st respondent's project area was prone to floods and the 1st respondent did not have any confirmed sales. Therefore, the appellant decided not to allow the 1st respondent to further utilise the bridging loan. The tenor of the term loan and the bridging loan therefore came to an end on 13 October 2008 and 26 October 2008 respectively.

[9] The appellant, through their solicitors, Messrs Lee Hishammuddin Allen & Gledhill, issued a letter of demand dated 10 November 2008. The appellant demanded for the amount of RM4,493,327.12, together with interest thereon at the rate of 3.0% (inclusive of a 1% penalty) per annum above the base lending rate, with monthly rests, from 4 November 2008 until full payment.

[10] The respondents having failed to pay the sum due and owing to the appellant, prompted the appellant to commence legal proceedings against the respondents. After a full trial, the learned trial judge dismissed the appellant's claim. Hence this appeal.