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2025 MarsdenLR 3639
HIGH COURT MALAYA PENANG
AFFIN BANK BERHAD – Appellant
Versus
COSMIC SIMULATOR LEISURE SDN BHD & ORS – Respondent
[Suit No: PA-22NCC-67-10/2024]
Summary judgment is justified when defendants fail to present triable issues or valid defenses, particularly when evidence like a certificate of indebtedness is deemed conclusive unless proven otherwise.
Headnote:(A) Rules of Court 2012 - Order 14 - Summary judgment - Recovery action by bank against borrower and guarantors - Defendants defaulted on repayment of loan and failed to provide triable issues - Summary judgment granted due to lack of valid defense - The existence of a certificate of indebtedness requiring defendants to disprove correctness. (Paras 15, 23, 42)
(B) Estoppel - Conduct of defendants deemed to have lulled the bank into believing no real dispute existed - Defendants cannot deny liability after acknowledging terms. (Paras 30, 40)
(C) Certificate of Indebtedness - Conclusive evidence of amount owed unless manifest error is shown, burden of proof lies on defendants to challenge validity. (Paras 41, 43)
Facts of the case:
The Bank filed for summary judgment against Company and individual guarantors for RM 1,541,981.69 due to default under a term loan facility. The Company defaults led to the Bank liquidating collateral and issuing multiple demand notices before legal action commenced.
Findings of Court:
Summary judgment granted, confirming the validity of the certificate of indebtedness and lack of defense.
Issues: Whether the Defendants presented bona fide defense merits, and if material facts were concealed by the Bank.
Ratio Decidendi: The court held that the lack of genuine dispute, the nature of the claims, and the existence of a certificate of indebtedness led to the conclusion that the case necessitated no trial.
Result: Summary judgment entered against the Defendants, ordering them to pay costs.
| Table of Content |
|---|
| 1. recovery of debts under banking facility. (Para 1 , 4 , 5 , 6 , 9 , 10 , 14) |
| 2. summary judgment granted due to defaults. (Para 3 , 12 , 13) |
| 3. criteria for summary judgment applications. (Para 15 , 16 , 18 , 19 , 22) |
| 4. entering summary judgment and costs awarded. (Para 23) |
| 5. defendants' arguments found unarguable. (Para 24 , 25 , 35 , 38) |
| 6. certificate of indebtedness as conclusive evidence. (Para 41 , 42 , 43) |
Introduction
[1] This is a recovery action by the Plaintiff ("Bank") against the Defendants for the amounts due to the Bank in connection with a banking facility that was granted by the Bank to the 1st Defendant ("Company"). The 2nd Defendant ("D2") and the 3rd Defendant ("D3") are sued as guarantors. They had guaranteed the repayment of the banking facility granted by the Bank to the Company.
[2] The Bank filed an application dated 14 December 2024 in Enclosure 8 for summary judgment against the Defendants. Enclosure 8 is made under O 14 of the Rules of Court 2012.
[3] On 11 March 2025,1 allowed encl 8 and entered summary judgment against the Defendants. It is my finding that the Defendants do not have a valid defence against the Bank's claim, let alone any triable issue. I am satisfied that this is a plain and obvious case where summary judgment ought to be granted. Here are the grounds of my decision.
Background facts
[4] The Bank's claim against the Defendants is for monies due and owing under a term loan (banking facility) granted to the Company for the sum of RM 1,584,000.00 pursuant to the terms and conditions of the Bank's letter of offer dated 7 December 2016.
[5] After the Company's acceptance of the terms and conditions in the Bank's letter of offer, the Bank and the Company then entered into a bank facility agreement dated 15 June 2017.
[6] The banking facility was secured by the Company through the following:
(a) an assignment of sale and purchase agreement dated 15 June 2017;
(b) a letter of set off (first party) dated 15 June 2017; and
(c) a charge over cash deposit (first party) dated 15 June 2017.
[7] By way of security for the banking facility given, the Company vide the aforesaid assignment of sale and purchase agreement dated 15 June 2017, assigned to the Bank a property located at Bandar Perai Jaya, Perai Pulau Pinang.
[8] Individual guarantees dated 15 June 2017 were also given by D2 and D3 to the Bank, jointly and severally guaranteeing repayments to the Bank.
[9] The Company defaulted in the repayment of the banking facility to the Bank. Thereafter, at the request of the Company, the Bank via a letter dated 6 November 2020 ("said letter") considered the request of the Company. The Bank agreed to review the instalment proposal of the Company on a without prejudice basis. The Bank reserved its rights to continue with legal action and recover the full outstanding liability due to it in the event of default.
[10] Subsequently, the Company did not keep up with its promise and defaulted in the repayments.
[11] As such, the Bank exercised its rights in accordance with the terms and conditions of the aforementioned charge over cash deposit (first party) and letter of set off (first party) dated 15 June 2017. The Bank uplifted and liquidated the charged fixed deposit with interest in the sum of RM 71,527.95 to settle part of the Company's debt.
[12] The Bank via its solicitors issued a notice of demand dated 26 September 2023 and a notice of recall dated 8 December 2023 to the Defendants, recalling the banking facility given to the Defendants.
[13] The Defendants were still defaulting. Hence, the Bank instructed its solicitors to issue a notice of demand / notice of recall dated 5 September 2024 to the Defendants. The Bank recalled the term loan (banking facility) given to the Company. The Bank demanded from the Defendants jointly and severally the payment RM 1,541,981.69 as at 31 August 2024, together with interest accruing thereon at the rate of 3.5 % per annum above the Bank's
