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2025 MarsdenLR 4983
HIGH COURT MALAYA KUALA LUMPUR
CIMB ISLAMIC BANK BERHAD – Appellant
Versus
SURIA WHOLESALER SDN BHD & ORS – Respondent
[Suit No: WA-22M-2068-12-2023]
A plaintiff must establish preconditions for summary judgment, shifting the burden to defendants to demonstrate triable issues, while the court retains discretion to impose conditions on leave to defend.
Headnote:(A) Rules of Court 2012 - Order 14 - Summary judgment application - Plaintiff sought RM12,049,666.91 under Islamic financing facilities from defendant - Defendants raised bona fide triable issues necessitating a full hearing - Court found plaintiff met procedural requirements for summary judgment but identified triable issues regarding service of notices and concurrent actions against guarantors - Conditional leave to defend granted upon payment of RM2,000,000.00 into Court. (Paras 1, 8, 11, 61, 62)
(B) Summary Judgment - Essential elements - Plaintiff must prove preconditions for summary judgment; burden shifts to defendant to raise triable issues - Court must ensure strict compliance with notice requirements to uphold due process rights. (Paras 12, 15, 19)
(C) Concurrent Actions - Plaintiff entitled to pursue simultaneous remedies against principal borrower and guarantors as per contractual provisions - Defendants cannot object based on multiplicity of proceedings. (Paras 25, 27, 31)
(D) Conclusive Evidence - Certificate of indebtedness deemed conclusive unless manifest error is shown - Defendants failed to challenge accuracy of claimed amount. (Paras 32, 34) (E) Failure to Comply - Defendants granted conditional leave to defend, requiring payment into Court to proceed, reflecting balance between rights to be heard and preventing undue delay for plaintiff. (Paras 60, 61, 62)
| Table of Content |
|---|
| 1. overview of plaintiff's claims and defendants' liabilities. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10) |
| 2. defendants' arguments against summary judgment. (Para 11 , 22 , 23 , 24) |
| 3. procedural requirements for summary judgment. (Para 12 , 13 , 14 , 15 , 16) |
| 4. burden of proof in summary judgment applications. (Para 17 , 18 , 19 , 20 , 21) |
| 5. plaintiff's right to pursue concurrent actions. (Para 25 , 26 , 27 , 28) |
| 6. principal debtor liability of guarantors. (Para 29 , 30 , 31) |
| 7. conclusive evidence clauses in financial agreements. (Para 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45) |
| 8. validity of notice of demand and termination. (Para 46 , 47 , 48 , 49 , 50) |
| 9. conditions for granting leave to defend. (Para 51 , 52 , 53 , 54 , 55 , 56 , 57 , 58 , 59) |
| 10. court's decision on summary judgment application. (Para 60) |
| 11. final order and implications for parties. (Para 61) |
Introduction
[1] This case involves the plaintiff's application under encl 10, seeking summary judgment for the outstanding sum of RM12,049,666.91 owed under banking facilities extended to the 1st defendant ('D1'). In opposition, D1 and its guarantors, namely the 2nd, 3rd, 4th and 5th defendants ("D2," "D3," "D4", and "D5") resisted the application, contending that there exists a bona fide triable issue necessitating a full hearing. The issue for the Court's determination is whether the defendants have raised a genuine issue fit for trial or whether the plaintiff is entitled to summary judgment.
Background Facts
[2] D1 was a customer of the plaintiff bank and had applied for, and was granted, financing based on the Bai' Bithaman Ajil (BBA) concept. The first facility was extended pursuant to an offer letter dated 1 October 2012 ("Offer Letter No 1"), which provided an Islamic Term Financing-i ("BPF-i") facility of RM6,450,156.00 to D1 for the purpose of financing the purchase of a four- storey shop building and the related legal fees.
[3] The key terms of the BPF-i facility included:
(a) bank purchase price of RM6,450,156.00;
(b) bank selling price of RM15,716,119.20; and
(c) repayment period of 240 monthly instalments.
[4] To secure the BPF-i facility under Offer Letter No 1, the following were entered into:
(a) A General Facility Agreement dated 3 December 2012 ("GFA");
(b) An Asset Purchase Agreement dated 3 December 2012 ("APA");
(c) An Asset Sale Agreement dated 3 December 2012 ("ASA");
(d) A First Party Charge dated 3 December 2012 over the property held under Grant of Title Nos 4371 and 4372, Lots 1489 and 1490, Section 46, Kuala Lumpur ("Mortgage"); and
(e) A Guarantee and Indemnity dated 3 December 2012 by D2, D3, D4 & D5 ("Guarantee and Indemnity").
(Collectively referred to as the "GFA Transaction and Security Documents").
[5] The plaintiff fulfilled its obligations under the GFA by disbursing the BPF-i facility to D1.
[6] On 18 November 2014, the plaintiff issued a revised Islamic Financing Facility Offer Letter ("Offer Letter No 2") to D1 for RM8,058,682.70 ("Financing Facility No 2"). The key terms of Offer Letter No 2 included:
(a) A revised BPF-i limit of RM6,058,682.70; and
(b) A Multi Option Line-i ("MOL-i") facility aggregating RM2,000,000.00, comprising:
(i) A Documentary Credit-i ("DC-i") facility of RM2,000,000.00; and
(ii) A Trust Receipt-i ("TR-i") facility of RM2,000,000.00.
(c) The purpose of Financing Facility No 2 was to facilitate the import/purchase of business-related goods financed under the DC-i and TR-i facilities.
(d) Financing Facility No 2 under Offer Letter No 2 was secured by the existing GFA Transaction and Security Documents.
[7] D1 failed to make the required installment payment toward the financing facilities, prompting the issuance of a letter of demand on 17 October 2023. As the default continued, the facility was subsequently terminated through a notice of termination dated 16 November 2023. As of 31 October 2023, the defendants owed an outstanding sum of RM12,049,666.91, along with
