Ramly Ali JCA (delivering judgment of the court)

The plaintiff’s claim against the first defendant is premised on a breach of friendly loans for a sum of RM468,500 claimed to have been given to the first defendant over a period between July 2000 and February 2002 pursuant to several written agreements dated 30 June 2000, 5 December 2000 and 2 February 2002 and oral agreement between them. On top of that the plaintiff also claimed for interest at the rate of 8%pa from 23 December 2004 until full satisfaction.

The first loan agreement is dated 30 June 2000 whereby the plaintiff on request of the first defendant, had given a friendly loan of RM100,000 to the first defendant and the first defendant had agreed to repay the said loan within 90 days from the date of the said first agreement.

The second loan agreement between the same parties is dated 5 December 2000 whereby, the plaintiff again, on request of the first defendant had given another friendly loan of RM300,000 to the first defendant. This time the first defendant had agreed to repay the said loan within six months from the date of the said second agreement. For this second loan, the second defendant had executed a personal guarantee to guarantee the due repayment of the said second loan by the first defendant as stipulated in the second agreement.

The third loan of RM28,500 was given by the plaintiff to the first defendant sometime in June 2001 on an oral request made by the first defendant, whereby the first defendant had agreed to repay the amount within three months from June 2001.

Subsequent to that the first defendant had orally requested for another loan from the plaintiff for a sum of RM40,000. This fourth loan was given by the plaintiff to the first defendant sometimes in February 2002. For this loan the first defendant promised to repay it within three months from February 2002.

Altogether, the total amount of friendly loan given by the plaintiff to the first defendant was RM468,500. To this effect, the same parties had entered into another agreement dated 2 February 2002 whereby the first defendant had acknowledged having taken from the plaintiff the said loan amounting to RM468,500 during the period between July 2000 and February 2002 and had agreed to pay the loan in full.

However, the first defendant had failed to repay the said loan as agreed earlier. Relevant notices of demand were issued by the plaintiff’s solicitors to the first and second defendants demanding for repayment of the said loan. Both the first and second defendants have failed to comply with the said notices of demand.

The plaintiff filed his writ and statement of claim against both the defendants on 4 March 2005. On 31 May 2005, the plaintiff filed an application to enter judgment under O 27 r 3 of the Rules of the High Court 1980 (‘RHC 1980’) against the first defendant.

After an exchange of affidavits between the parties, the learned senior assistant registrar (‘SAR’) allowed the plaintiff’s application under O 27 r 3 of the RHC 1980 on 14 July 2006.

Being dissatisfied with the learned SAR’s decision, the first defendant appealed to the judge in chambers. On 29 October 2007, the learned judicial commissioner dismissed the first defendant’s appeal with costs. Hence the present appeal before this court.

The first defendant (the appellant in this appeal) in his defence denied borrowing any money from the plaintiff. His contention is that the monies were for the plaintiff’s investment in the first defendant’s company, namely Vioceworkz Sdn Bhd and that parties were actually bound by the terms of an oral collateral agreement between them.

The first defendant alleged that it was orally agreed in principle between them that the plaintiff would inject capital as and when required by the said company. The first defendant claimed that the various loan agreements executed by him and the plaintiff were mere façade and that the plaintiff’s attempt to enforce those loan agreements by filing the suit was done in ba