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MALAYSIA
IN THE HIGH COURT AT KUALA LUMPUR
(COMMERCIAL DIVISION)
SUIT NO. D-22NCC-2119 OF 2010
BETWEEN
RHB BANK (MALAYSIA) BHD
AND
… PLAINTIFF
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MOCCIS TRADING SDN BHD … DEFENDANT
BEFORE THE HONOURABLE JUDGE
Y.A. DATUK DR. HAJI HAMID SULTAN BIN ABU BACKER
IN CHAMBERS
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JUDGMENT
This is my judgment in respect of the plaintiff’s claim for summary judgment for the sum of RM 61,818,425.86 with interests and costs.
The factual matrix of the case will appear to be complicated but the issues are simple and straight forward and have been captured in the submission of the plaintiff (enclosure 14). The said submission must be read with this judgment for comprehensiveness.
Brief facts
1. As early as 1996 the plaintiff had granted to the defendant a Revolving
Credit Facility (RCF1) and (RCF2) of RM 20 million each. The facilities were secured by assignment of contract papers (i.e. receivables). The defendant had difficulty in honouring its commitments and in consequence as early as the year 2002 set terms for

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25 restructuring of RCF1 and RCF2. The defendant could not comply with the terms necessary for restructuring to take place.
2. In the instant case inter alia paragraph 19 of the defence to counterclaim must also be read to appreciate the defendant’s case.And also the fact that no objections on issues relating to triable issues were taken at the earliest opportunity to appreciate the genuineness of the defence and counterclaim.
3. About the year 2005 the defendant entered into a Debt Restructuring
Agreement with the plaintiff and 17 other financial institutions. Here,it must be noted that the defendant had expressly acknowledged and admitted the sums due and owing to the plaintiff in respect of RCF1 and
RCF2 and that such sums due as at 30.6.2004 were RM 22, 632, 096.41 and RM 17, 031, 319.04 respectively.
4. As per the Debt Restructuring Agreement the defendant was given the indulgence to repay the loans from receivables (defendant’s debtors) to be paid into an account of defendant’s name and all the loans must be paid over a period of 5 years.
5. The Debt Restructuring Agreement also provided for the appointment of a Monitoring Accountant, who was expressly agreed upon to be the defendant’s agent. The Monitoring Accountant was to monitor the defendant’s collection of the outstanding receivables and to arrange for payment of sums collected out of the defendant’s account, to the financiers. The plaintiff had received a sum of RM 485, 151.65 from the monitoring accountant before the accountant was terminated by the defendant. The plaintiff complains that after the termination, the defendant has failed to remit any further payments to the plaintiff whether from collected receivables or otherwise.

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6. The plaintiff says the defendant had committed the events of default under the Debt Restructuring Agreement inter alia as follows: (i) failed to pay the sums as required under the agreement; and (ii) suspended and/or terminated the services of monitoring accountant in breach of the terms of the agreement.
7. The plaintiff says, in consequence of the events of default occurring the financiers can terminate the agreement. And the financiers had terminated the Debt Restructuring Agreement by a letter dated 7.5.2009 through their solicitors.
8. Upon termination the financiers are entitled to demand all sums outstanding from the existing facilities. The plaintiff by its solicitor’s letter dated 1.10.2010 had demanded full payment of the sum due and owing under RCF1 and RCF2.
9. The plaintiff has summarised the triable issues raised by the defendant as follows:- (i) the plaintiff’s action is time-barred and there was no admission of debt by the defendant; (ii) value of the assigned receivables has not been accounted for by the plaintiff; (iii) error in the amount outstanding and certificate of indebtedness; (iv) letters dated
4.9.2003 and 7.5.2009 are defective; (v) plaintiff was negligent by failing to monitor the conduct of the Monitoring Accountant, and in failing to enforce the receivables.
10. Parties have relied on the following cases namely:- Citibank NA v. Ooi
Boon Leong & Ors [1981] 1 MLJ 282; Cempaka Finance Bhd v. Ho
Lai Ying (trading as KH Trading) & Anor [2006] 2 MLJ 685; National
Company for Foreign Trade v. Kayu Raya Sdn Bhd [1984] 2 MLJ 300;
Bank Negara Malaysia v. Mohd Ismail [1992] 1 MLJ 400; OCBC Bank
(Malaysia) Bhd v. Belton Springs Industries Sdn Bhd & Anor [2005] 7
CLJ 358; Abdul Mulok Awang Damit v. Perdana Industries Holdings

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Bhd [2003] 3 CLJ 497; Nouvau Mont Dor (M) Sdn Bhd v. Faber
Development Sdn Bhd [1985] CLJ (Rep) 231; Kabatasan Timber
Extraction Company v. Chong Fah Shing [1969] 1 LNS 63; Southern
Finance Berhad (formerly known as United Merchant Finance Bhd) v.
Sun City Development Sdn Bhd & Anor [2006] 6 MLJ 673; Affin Bank
Bhd v. Datuk Ahmad Zahid Bin Hamidi [2005] 3 MLJ 361; Malayan
Insurance (M) Sdn Bhd v. Asia Hotel Sdn Bhd [1987] 2 MLJ 183.
10. I have read the application, affidavits and submission of the parties in detail. I take the view that the plaintiff’s application must be allowed.
My reasons inter alia are as follows:-
(a) The defendant’s allegation of triable issues is not supported by contemporaneous objections or documents at the relevant period.
And the arguments raised are misconceived taking into consideration the terms of the Debt Restructuring Agreement, and clear admission of liability for the respective sums set out in the
Schedule. It is trite that mere allegation without supporting documents cannot stand as triable issues. In addition the allegations raised militate against the agreed terms.
(b)
The defendant’s argument on limitation is misconceived taking into consideration that time to commence the action under the Debt
Restructuring Agreement will arise only upon the plaintiff making the demand. The demand in the instant case was made on
1.10.2010 and I agree with the submission of the learned counsel for the plaintiff that there is no question of any limitation period setting in, taking into consideration the acknowledgment of liability as well as section 26 of the Limitation Act 1953 and the terms agreed by the parties.

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(c)
The defendant’s argument that the plaintiff did not account for the value of the assigned receivables is misconceived as in the instant case the terms of the agreement clearly says that the assignment of receivables stands only as security and it is the duty of the defendant to pay the sums due which may be through the receivables. There is no obligation on the part of the plaintiff to collect the receivables. Under the assignment terms it is the duty of the defendant to collect as agent for the plaintiff all sums due under the receivables and remit such sums to the plaintiff at monthly or other intervals. I agree with the submission of the learned counsel for the plaintiff which reads as follows:-
“If this contention by the defendant is accepted, then any bank which has been given such an assignment of monies or proceeds from a contract as security would be placed in a ridiculous position where it would have to treat the loan as reduced/settled as soon as the assignment was executed.
This is not a legally or commercially sound contention.”
(d)
The defendant’s argument that the amount outstanding and certificate of indebtedness is erroneous is misconceived taking into consideration that the defendant has acknowledged the debt outstanding in the Debt Restructuring Agreement. The defendant’s circuitous argument referring to a letter on 26.2.2002 relating to a restructuring proposal which did not materialize will also stand as misconceived argument. In addition, the defendant’s allegation that it has made 25 payments to the plaintiff but some of the sums were not taken into account will also stand as misconceived as the affidavit evidence clearly shows that the defendant has mixed payments sum in respect of other facilities with the sums paid for
RCF1 and RCF2 facilities. It must be noted that at all material times the defendant has not made any objection as to the statement

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6 D-22NCC-2119-2010 of accounts and very importantly the statement of accounts and certificate of indebtedness, issued by the plaintiff are conclusive evidence of the defendant’s indebtedness to the plaintiff. I agree with the submission of the learned counsel for the plaintiff that the defendant is bound by the statement of accounts and certificates of indebtedness, on the facts of the instant case.
(e) The defendant’s allegation that the letter dated 4.9.2003 and
7.5.2009 are allegedly defective on the facts of the instant case is misconceived taking into consideration the admission of the defendant in the Debt Restructuring Agreement. The defendant did not at the material time dispute the contents of the said letters or the amounts set out in the Debt Restructuring Agreement. In
OCBC Bank (Malaysia) Bhd v. Belton Springs Industries Sdn Bhd
& Anor (supra) , the court had this to say:-
“As at all material times the defendant did not make any complaint over the statement of accounts and the letter of demand, the non query of the accounts creates an estoppels against the defendant.”
(f)
The defendant’s argument that the plaintiff was allegedly negligent in failing to monitor the conduct of the Monitoring Accountant and not collecting the debts due under the receivables also stands as frivolous taking into consideration the facts of the case and various terms agreed by the parties. For example Clause 9.1(g) of the Debt
Restructuring Agreement expressly states:-
“… notwithstanding any of the foregoing, … the Financiers shall not be responsible for any act, negligence or default of the Monitoring
Accountant, whether in the performance of its duties or otherwise.”
(g) After giving much consideration to the submission of the learned counsel for the defendant I am satisfied that the defendant’s have not demonstrated any triable issues.

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10. For reasons stated above I allow the plaintiff’s application for summary judgment (enclosure 6) prayers (a) and (b) with costs as per RHC 1980.
Disposal of case on point of law – Defence and Counterclaim
11. As agreed by the parties on 28.2.2011 that in the event the summary application is allowed it will be appropriate for the court on its own motion pursuant to Order 14A of RHC 1980 to consider whether the defence and counterclaim ought to be struck out as it only reflects the triable issues raised in the application for summary judgment. I am mindful of the decision in Diamond Peak Sdn Bhd & Anor v. Tweedie
[1980] 2 MLJ 31 where the Federal Court had stated that the court is not empowered to dismiss the action in an application for summary judgment. However the court is not prohibited from dealing with the relevant issues under new Order 14A of RHC 1980. In Orix Credit
Malaysia Sdn Bhd v. M/s Belquip Sdn Bhd & 3 Ors [2008] 1 LNS 744,
I have made the following observation:-
“In view of this judgment, the defendants are given the liberty to file the necessary application to strike out the plaintiffs' claim as the Federal Court in Diamond Peak Sdn Bhd & Anor v. Tweedie [1980] 2 MLJ 31 had stated that the court is not empowered to dismiss the action in an application for summary judgment. Now the new amendment to the Rules of High Court
Order 14A gives the court wider powers at any stage of proceedings to determine any question of law etc, where such determination will finally determine the entire cause or matter or any claim or issue therein.”
12. After having given much consideration to the defence and counterclaim and the facts of the instant case and grounds of judgment stated above, I take the view that the defence and counterclaim must be struck out. In consequence the defence and counterclaim is struck out with no order as to costs.
I hereby order so.

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(Y.A. DATUK DR. HAJI HAMID SULTAN BIN ABU BACKER)
Judge
High Court
Kuala Lumpur
Date: 1 st March 2011
For Plaintiff:
Yoong Sin Min (Lee Weng Shinh with her),
Messrs. Shook Lin & Bok,
Kuala Lumpur
For Defendant:
Alvin John (V.Vishnu Kumar with him),
Messrs. Alvin John & Partners,
Selangor