Steve Shim CJ (Sabah & Sarawak):

[1] Leave to prosecute this appeal was granted by this court on 23 March 2004 upon the following two questions:

1. Whether a certificate of indebtedness issued in accordance with the express provisions of the contract which provide that the certificate is final and conclusive of the matters stated therein is final and conclusive evidence of the amount in the absence of any manifest error on the certificate;

2. Whether apart from producing a certificate of indebtedness pursuant of the contract (sic) which provided that the certificate was final and conclusive of the matters stated therein, the appellant had a further obligation to produce statements of account to prove the debt in an application for summary judgment.

[2] As a preliminary note, we should mention that by a vesting order dated 22 December 2000, the business of Cempaka Finance Bhd (the appellant herein) was taken over by United Finance Bhd which in turn, on 25 June 2001, changed its name to Southern Finance Bhd. Under a loan agreement dated 17 July 1996, the appellant agreed to grant the 1st respondent a fixed loan of RM1.5 million. In consideration, the 2nd respondent signed a guarantee agreement on the same date. The 1st respondent defaulted. In consequence, the appellant filed a suit against both respondents in the High Court on 29 May 1998. Thereafter, on 19 April 1999, the appellant filed a summons in chambers under O. 14 Rules of the High Court 1980 for summary judgment. The matter came before the senior assistant registrar who, on 17 August 1999, granted an order in terms of the application. The respondents then appealed to the judge in chambers. The judge upheld the decision of the senior assistant registrar. On further appeal by the respondents, the Court of Appeal reversed the decision of the High Court.

[3] It seems clear that the central issue canvassed before the judge in chambers relates to the questions now postulated for our consideration. The questions concern specifically the certificate of indebtedness found in cl. 27 of the loan agreement and in cl. 7.03 of the guarantee agreement. Now cl. 27 stipulates:

If and when the loans shall be withdrawn or revoked and/or the said account or accounts whatsoever in respect thereof shall be closed, a statement by the Director, General Manager, Manager, Assistant Manager, Sub-Manager, Secretary, Accountant or any other duly authorized officer or agent of the Lender for the time being as to the amount of such balance and the money and liabilities for the time being incurred or due to the Lender by or from the Borrower(s) shall be accepted by the Borrower(s) and/or any person or persons deriving title from the Borrower(s) and/or the successors in title and assigns of the Borrower(s) as final and conclusive evidence for all purposes whatsoever including for purposes of legal proceedings.

And cl. 7.03 stipulates:

It is hereby agreed that any admission or acknowledgment in writing by the Borrower(s) or any authorized person on behalf of the Borrower(s) or a statement of account in writing showing the indebtedness of the Borrower(s) in relation to the subject matter of this Agreement duly certified by an authorized officer of the Lender shall be binding and conclusive against the Guarantor(s) and his heirs, executors, personal representatives and successors.

[4] In this connection, the appellant had relied on the two clauses to establish the conclusiveness of the certificate of indebtedness in support of its application for summary judgment under O. 14 Rules of the High Court 1980. Therein, the High Court held that the certificate of indebtedness, exh. P3, certified by a duly authorised officer of the appellant was binding as to quantum and liability relying, it seems, on the case of Chen Heng Ping & Ors v. Intradagang Merchant Bankers (M) Bhd [1995] 3 CLJ 690. It further held that there was no manifest error on the face of the said certificate nor was there any fraud. As