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2020 MarsdenLR 141
COURT OF APPEAL PUTRAJAYA
HALIM SAAD – Appellant
Versus
CHAN YOK PE – Respondent
[Civil Appeal No: W-02(IM)(NCVC)-2277-12/2019]
Court upholds summary judgment against defendant for failure to repay a friendly loan, emphasizing the binding nature of admission through non-response to legal demands.
Headnote:(A) Rules of Court 2012 – Order 14 and Order 42 Rule 13 – Summary judgment – The court dismissed the defendant's application to set aside a summary judgment entered against him due to a friendly loan of RM3,000,000, with outstanding balance RM2,500,000. The defendant acknowledged receiving the loan but claimed to have repaid it, which the court found unsupported by evidence. (Paras 1-3, 12, 15-34, 50-52)
(B) Appeal – The defendant's appeal against the High Court's decision to dismiss his application was considered devoid of merits, leading to penalties. (Paras 1, 26, 52)
Facts of the case: The plaintiff lent RM3,000,000 to the defendant on a friendly basis in November 2014, with a partial repayment of RM500,000 made later. The plaintiff sought the remaining balance after repeated demands.
Findings of Court: The court upheld that the relevant loan agreement was valid, finding no merit in the defendant's claims of having repaid the entire amount or that the loan was made to a company. The court emphasized the lack of response to legal demands as detrimental to the defendant's position.
Issues: The court addressed whether the defendant properly responded to loans and legal demands, and the implications of his failure to present his case earlier.
Ratio Decidendi: The judicial commissioner found the defendant's current claims contradicted earlier admissions and that failure to respond to the plaintiff's demands constituted an implicit acknowledgment of the debt, supporting the summary judgment's validity.
Result: Appeal dismissed with costs.
Introduction
[1] This is an appeal by the appellant (defendant) against the decision of the learned Judicial Commissioner of the High Court dated 3 December 2019 ("the JC") dismissing the defendant's application (encl 40) to set aside the judgment/order of the High Court dated 12 July 2019 given under O 14 Rules of 2012 ("ROC") whereby judgment was entered against the defendant. The defendant's application (encl 40) is predicated on O 42 r 13, O 45 r 9 and O 47 r 1 ROC. But the specific provision on setting aside of judgments and orders is O 42 r 13 ROC. For brevity and convenience, we shall refer to the parties by their titles in the High Court ie as "plaintiff" and "defendant" respectively. On 18 September 2020, we dismissed the defendant's appeal. These are the reasons for our decision.
Background
[2] The plaintiff and defendant are well known to each other and have had previous business dealings with each other. The plaintiff's claim against the defendant for recovery of a sum of RM2,500,00.00 being the balance of a friendly loan which was given by the plaintiff to the defendant. According to the plaintiff, the defendant was in need of funds and pursuant to the defendant's request, he gave a friendly loan of RM 3,000,000.00.
[3] The loan is said to have been given on 13 November 2014. The defendant had since repaid a sum of RM500,000.00 via CIMB Bank Berhad Cheque No 586536 dated 6 March 2015 issued by Cekal Teguh Sdn Bhd ("Cekal Teguh"). As such, the balance sum payable under the friendly loan was RM2,500,00.00.
[4] It is relevant to mention at the outset that Cekal Teguh is essentially the defendant's own company. The issued share capital of Cekal Teguh is 100,000 ordinary shares and the defendant is the registered shareholder of 99,997 of the issued share capital of Cekal Teguh. Thus, it is fair to say that the defendant owns and controls Cekal Teguh.
[5] According to the plaintiff, the friendly loan is acknowledged by the defendant in an acknowledgement note dated 13 November 2014.
"RE: FRIENDLY LOAN
This is to confirm that I, received a total cash of Ringgit Three Million Only (RM3,000,000.00) from Mr Chan Yok Peng (I/C No 520810-02-5429) on 13th November 2014
Name: TAN SRI HALIM SAAD"
[6] The balance of the loan ie RM2,500,00.00 remained unpaid. The plaintiff sent a letter dated 19 October 2018 and asked the defendant to settle the loan.
[7] The plaintiff's letter to the defendant reads as:
Our Ref: CYP-001-2018
Date: 19th October 201 [sic]
Yang Bahagia Tan Sri Halim Saad,
43-11 The Boulevard, Mid Valley City, Lingkaran Syed Putra, Kuala Lumpur
Dear Sir,
RE: OUTSTANDING AMOUNT OF RM2,500,000-00 for A FRIENDLY/PERSONAL LOAN FOR THE SUM OF RM3,000,000-00
I am writing in reference to a friend/personal loan which had been given to yourself in cash amounting to RM3,000,000-00 on 13 November 2014 which you had duly acknowledged.
I enclosed herewith a copy of the said acknowledgement receipt for your reference of the same.
Please take note that you had only repaid the loan via a cheque issued by Cekal Teguh Sdn Bhd on 6 August 2015 for a sum of RM500,000-00 only (see attached). You have still failed and/or refused and/or neglected to pay the balance of RM2,500,000-00.
As such, I hereby demand for the full payment of outstanding amount of RM2,500,000-00 within fourteen days (14) from the date of this letter.
If this matter is not resolved upon the expiry of the fourteen (14) days period, I shall reserve the right to commence legal proceedings to recover all the outstanding amount without further notice to your good self and this letter may be tendered in Court as evidence of your failure to pay.
Your prompt response to the above matter is highly appreciated and I am looking forward for your most favourable reply.
Thank you.
Yours sincerely,
(Chan Yok Peng)
CC En Meor Othman Bin Meor Lope
[8] There was no response. The plaintiff then instructed his solicitors, Messrs Mahadi Redzuan & Co to send a letter of demand dated 4 Dece
