Back
2020 MarsdenLR 1772
HIGH COURT MALAYA KUALA LUMPUR
HERUKH THAKURDAS JETHWANI & ANOR – Appellant
Versus
BANK SIMPANAN NASIONAL – Respondent
[Originating Summons No: WA-24NCC-332-06-2019]
The absence of explicit joint and several liability does not exempt obligors from being liable for the entire obligation as per the original agreement terms.
Headnote:(A) Contracts Act 1950 – Section 44 – Joint and Several Liability – The obligation towards a judgment sum is presumed to be joint unless expressly stated as joint and several. Each obligor, under such circumstances, is liable for the entire obligation. The dismissal of the plaintiffs’ Originating Summons confirmed that the liability is joint and several as explicitly detailed in the loan agreement. (Paras 1, 9, 17, 21, 31)
(B) Civil Procedure – Joint Obligors – A creditor may enforce a judgment against each obligor for the entirety of the obligation. The case examines the consequences of non-joinder of joint obligors in judgments and their enforceability. (Paras 21, 31)
Facts of the case: Plaintiffs argued they overpaid under a judgment they deemed joint, seeking declarations of their individual non-liability and outstanding sums owed by the defendant. A loan of RM3,760,000 was secured against a property, and judgment was entered against the plaintiffs and guarantors. (Paras 2-8)
Findings of Court: The court held that the judgment confirmed the plaintiffs' obligations as joint and several, and their claims for repayment were dismissed. Cost of RM8,000 awarded to the defendant. (Paras 60)
Issues: Whether the liability was joint or joint and several; implications of judgment silence in specifying liability type. (Paras 14, 21)
Ratio Decidendi: The court emphasized that the absence of an express joint and several provision does not negate the joint and several nature of liability where such intention derives from the terms of the agreement. (Paras 27, 34)
Result: The plaintiffs' application dismissed with costs.
[1] In the case where the obligation is joint among two or more parties, is the individual joint obligor obligated to meet the debt in its entirety or is each joint obligor bound himself only for his aliquot share as in proportionate to the number of joint obligors for the debt? This is the main issue before the court in this case.
Background Facts
[2] On 8 November 2006, the defendant granted to the 1st and 2nd plaintiffs a housing loan amounting to RM3,760,000 ('the Loan') to finance the purchase of a house at No 5 Jalan Lembah Tunku, Bukit Tunku, Kuala Lumpur ('the Property').
[3] The Loan was secured by two guarantees, namely, a personal guarantee from the 1st and 2nd plaintiffs' father, one Thakurdas a/l Naraindas and a corporate guarantee by one MAX Celebrity (M) Sdn Bhd (collectively 'the Letters of Guarantee').
[4] The Property was also charged to the defendant as further security for the Loan.
[5] The 1st and 2nd plaintiffs defaulted in the repayment of the Loan and the defendant filed a civil action vide Suit No: D8-22-246-2008 in the Kuala Lumpur High court against the plaintiffs and the guarantors ('the 246 Suit').
[6] On 12 June 2008, the defendant entered judgment in default of defence against the plaintiffs and the guarantors in the following terms:
"TIADA PEMBELAAN telah disampaikan oleh defendan-defendan dalam tindakan ini dan ADALAH PADA HARI INI DIHAKIMKAN bahawa defendan-defendan yang dinamakan di atas hendaklah membayar kepada plaintif seperti berikut:
(a) Pembayaran amaun keseluruhan tertunggak sebanyak RM3,790,902.92 setakat 16 Oktober 2007;
(b) Faedah pada kadar 5.75% setahun yang dikira atas dasar bulanan dari 17 Oktober 2007 hingga tarikh penghakiman sehingga penyelesaian penuh; dan
(c) Kos tindakan RM270.00"
('the Judgment')
[7] The plaintiffs have paid a sum of RM3,915,313.76 to the defendant under the Judgment. However, according to the defendant, there is still outstanding and due under the Judgment a sum of RM1,186,048.50 as at 17 March 2014.
[8] In this Originating Summons, the plaintiffs seek from the court the following primary reliefs:
i. A declaration that the 1st plaintiff does not owe any sums to the defendant under the Judgment;
ii. A declaration that the 2nd plaintiff does not owe any sums to the defendant under the Judgment;
iii. A declaration that the defendant owes RM727,091.85 to the 1st plaintiff;
iv. A declaration that the defendant owes RM727,091.85 to the 2nd plaintiff;
v. An order that the defendant pays RM727,091.85 to the 1st plaintiff within seven days from the order with interests from 2 July 2013 until full realisation at such rate deems fit by this court;
vi. An order that the defendant pays RM727,091.85 to the 2nd plaintiff within seven days from the order with interests from 2 July 2013 until full realisation at such rate deems fit by this court.
[9] The plaintiffs' ground for the claims against the defendant is that the obligation of the parties to pay the judgment sum under the Judgment is necessarily a joint obligation as the Judgment did not expressly state that the obligation is joint and several. As a joint obligation, the plaintiffs contend that each of the judgment debtors is only liable to pay an aliquot or pro-rated share of the Judgment Sum, ie each judgment debtor is obliged to pay only RM947,725.73 being 25% of RM3,790,902.92 as at 12 June 2008 as adjudged in the Judgment.
[10] In support, the plaintiffs relied heavily on the decision of the court of Appeal in Sumathy Subramaniam v. Subramaniam Gunasegaran & Anor, where Her Ladyship Mary Lim JCA (as she then was) held at para [12] of the judgment as follows:
"[12] It is the argument of both appellants that while the respondent may be entitled to enter judgment for the same single sum, which the respondent did, the liability of each of them is necessarily joint. This is because, the summary judgment that was entered has not specified that both appellants are jointly and severally liable for that single s
