Estoppel prevents a debtor from denying liability or the quantum claimed when they fail to dispute regular statements of account, and agreed interest rates in contracts are enforceable.

[1] The plaintiff by this application seeks summary judgment against the four named defendants. Vide letter of offer dated 1 October 2004 and a confirming agreement dated 5 October 2004, the first defendant applied for and was granted confirming facilities by the plaintiff. The second, third and fourth defendants are guarantors and indemnifiers under a letter of guarantee and indemnity dated 5 October 2004. They are the directors of the first defendant.

[2] The plaintiff's cause of action against the defendants arose when the first defendant breached the confirming agreement by failing to settle outstanding bills of exchange under the confirming facility on the due dates. The plaintiff through its solicitors issued a letter of demand dated 30 April 2008, to which it received no reply. It is relevant that monthly statements of accounts were sent to and received by the first defendant throughout the tenure of the facility. The plaintiff has annexed its statement of account as of 31 March 2008 showing the total amount outstanding as of that date, being RM321,847.40. The monthly statements of account issued by the first defendant stipulate that: 'The entries and balances shown above are deemed correct and conclusive unless ORIX Factoring Malaysia Sdn Bhd receive notification in writing of any discrepancy within 14 days from the statement date hereof'. Needless to say, the first defendant did not at any point in time refute any of the statements regularly issued by the plaintiff to it in respect of the confirming facilities.

[3] The defendant itself in its affidavit dated 17 June 2009 affirmed by Peh Lay Hwa exhibits a letter whereby it accepts that it is indebted to the plaintiff for the sum claimed by the plaintiff. The first defendant also proposes a repayment proposal which is suitable for it. Accordingly liability is not in issue, given the contents of this letter. Further, as pointed out by the plaintiff, the fact that the first defendant chose not to refute any of the monthly statements issued regularly by the plaintiff demonstrates that the plaintiff has no real dispute on the issue of liability or quantum. If indeed the first defendant did dispute the accounts, it would have responded speedily as required to the statements issued, stating where the error lay. As it stands the first defendant is estopped from denying the existence of the debt as well as the quantum claimed by the plaintiff (see KGN Jaya Sdn Bhd v. Pan Reliance Sdn Bhd , 1996 MarsdenLR 1446 ).

[4] The first defendant at the hearing of this application in essence challenged the plaintiff's calculation in the statement of accounts maintaining that it was not accurate. Additionally it maintained that the interest rate of 25%pa is excessive, unlawful and unenforceable.

[5] On the first issue, the first defendant's contention was that it had made six payments to the paintiff amounting to RM10,000 but that this sum had not been utilised to reduce the principal amount, as the plaintiff was still suing for the principal sum of RM53,307.01. In response to this the plaintiff maintains that the sum of RM10,000 was indeed taken into account but that it was within the discretion of the plaintiff as to how such sum was to be utilised. There is no dispute that the trust receipts are overdue and that they therefore attract interest. Relying on s 61 of the Contracts Act 1950 , it was maintained that the plaintiff was well within its rights to apply such proceeds as it saw fit. Section 61 of the Contracts Act provides that 'Where the debtor has omitted to intimate, and there are no other circumstances indicating to which debt the payment is to be appli