IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR
(COMMERCIAL DIVISION)
SUIT NO. D1-22-187-2006
BETWEEN
ASEAMBANKERS MALAYSIA BERHAD
(Company No : 15938-H)
…
PLAINTIFF
[yang telah mengambil alih hak dan
Kuasa Mayban Securities Sdn Bhd
Melalui perintah Perletakhakkan bertarikh
29.8.2006 dan berkuatkuasa 3.1.2007]
AND
… DEFENDANT
LOW AH SUAN
GROUNDS OF DECISION
1
1.
Enclosure (26) is the plaintiff’s application under Order 14A rule (1) of
the Rules of the High Court 1980 (“RHC 1980”).
Facts of the case
2.
Upon the defendant requests via the Individual Trading Account
Application From the plaintiff as a stock broking firm agreed to offer the
defendant a short term facility of RM3.0 million (“STF”) vide the plaintiff’s
letter dated 14.7.2004 for purpose to purchase stocks and shares listed on
the Bursa Malaysia Securities Berhad (“Bursa”) by opening a share trading
account no. SF205A with which the defendant accepted the same on
15.7.2004 by signing on the plaintiff’s letter of offer dated 14.7.2004 (“Offer
Letter”). A short term facility agreement dated 15.7.2004 was entered into
by the plaintiff and defendant (“Facility Agreement”).
Further, a
memorandum of deposits of securities and letter of set-off was provided by
the defendant in favour of the plaintiff (“Memorandum of Security/Set-Off”).
3.
Thereafter, the defendant had utilised the STF to trade shares in
Bursa. However, the plaintiff alleged that the defendant did not utilised the
STF satisfactorily and had defaulted the payment of outstanding contra
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losses thereby had breached the terms and conditions of the STF that
caused the plaintiff to demand for payment of the outstanding losses.
4.
The plaintiff had issued a letter dated 5.7.2005 to the defendant to
demand for settlement of the outstanding losses in the sum of
RM2,315,648.93 and accumulated interest of RM17,947.34. In response to
the plaintiff’s demand, the defendant has made a settlement proposal to the
plaintiff. In consideration of the plaintiff accepting the defendant’s proposed
settlement, the defendant had on 20.7.2005 by a letter in writing dated
20.7.2005 agreed to undertake to indemnify the plaintiff against all losses,
costs, damages, expenses, claims and demands which the plaintiff may
incur or sustain by reason of carrying out the settlement proposal and in
event of the default with the terms of settlement. (“1st Settlement
Proposal”).
5.
However, the defendant had defaulted payment and failed to comply
with the terms of the first settlement proposal. Hence, the plaintiff’s via its
previous solicitors, Messrs A. Zahari & rakan-rakan issued a letter dated
8.8.2005 to demand for settlement of the total of outstanding sums of
RM2,347,373.89. In response to the said demand, the defendant had via
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her letter dated 14.9.2005 proposed for settlement of the outstanding sums
by way of installments of which was accepted the plaintiff had accepted
vide a letter dated 4.10.2005 (“2nd Settlement Proposal”). The defendant
had settled one installment of RM125,000.00 on 11.11.2005 but defaulted
the remaining installment payments under the 2nd Settlement Proposal.
6.
Subsequently, the party agreed on the repayment of the outstanding
losses by restructuring of STF via a plaintiff’s letter dated 10.7.2006 with
which the defendant had accepted by executing on the same on 24.7.2006
(“3rd Settlement Proposal”). Thereafter, the 3rd Settlement Proposal has
been varied on the quantum of installment and the date of the installment
commence only by a letter dated 11.9.2006. However, the plaintiff alleged
that the defendant had failed to comply with the terms of the 3 rd Settlement
Proposal.
The plaintiff via its current solicitors, Messrs Affendi Zahari
issued a letter dated 12.3.2007 to demand for settlement of outstanding
sums under the 3rd Settlement Proposal.
7.
Before this application, the party has agreed on the common agreed
facts to be tried for the purpose of the trial of this suit. The common agreed
facts are as follows :
4
(i)
melalui suatu Perintah Mahkamah Tinggi Kuala Lumpur
bertarikh 29.8.2006 di bawah Guaman No: D1-24-251-2006
kesemua hak, remedi, kuasa, akaun dan kepentingan Mayban
Securities Sdn Bhd (No. Syarikat: 165630-M) telah diletakhak
kepada Aseambankers Malaysia Berhad berkuatkuasa pada
3.1.2007;
(ii)
atas permintaan dan permohonan defendan kepada plaintif
pada 15.6.2004 di mana dipersetujui oleh plaintif untuk
membuka satu akaun Margin “Short Term Facility” untuk
berdagang dan berniaga dalam pembelian dan penjualan
saham-saham yang disenaraikan di Bursa Malaysia Securities
Berhad;
(iii)
plaintif telah meluluskan permohonan defendan untuk “Short
Term Facility” bagi had jumlah sebanyak RM3,000,000.00
melalui surat tawaran bertarikh 14.7.2004 di mana telah
dipersetujui
oleh
defendan
pada
15.7.2004
menandatangani pada surat tawaran tersebut;
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dengan
(iv)
suatu Perjanjian “Short Term Facility” bertarikh 15.7.2004 telah
dimasuki di antara plaintif dan defendan;
(v)
defendan telah memberi suatu Memorandum of Deposit of
Securities untuk “Short Term Facility” bertarikh 15.7.2004
kepada plaintif sebagai balasan kepada “Short Term Facility”
yang diberikan;
(vi)
defendan telah memberi suatu Letter of Set-Off untuk “Short
Term Facility” kepada plaintif.
8.
The common issues to be tried as agreed between the party are as
follows :
(i)
samada melalui surat bertarikh 20.7.2005 yang dikeluarkan
oleh defendan kepada plaintif merupakan satu pengakuan
keberhutangan dan liability untuk membayar kepada plaintif
secara indemnity terhadap apa-apa kerugian, faedah, kos dan
lain-lain yang dialami oleh plaintif;
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(ii)
samada Remiser berkod No. 502 telah dibenarkan atau boleh
untuk membuat transaksi jual beli saham untuk defendan;
(iii)
samada defendan memberi arahan kepada Mohd Rafliz Mohd
Takir
untuk
membuat
transaksi
jual
beli
saham
yang
dipertikaikan dalam akaun defendan;
(iv)
samada seorang yang tidak diberi arahan atau kuasa oleh
defendan telah membuat transaksi pembelian dan penjualan
saham dalam akaun defendan.
9.
Based on the common agreed facts and issues to be tried, counsel
for the plaintiff contends that the substance of the issues party at variance
could be reduced to two (2) questions are as follows :
(i)
whether there letter dated 20.7.2005 issued by the defendant to
the plaintiff is an admission of debt to indemnify the losses
including interest and whatsoever costs flowed thereof;
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(ii)
the sell and buy transaction in securities that caused the losses
were unauthorized by the defendant from crux of the
combination in issues of (2), (3) and (4) of paragraph 8 above.
10.
Thus, the plaintiff submitted that the present suit is fit and proper case
to proceed with Order 14A 1980 RHC to finally determine the entire matter
based on the following grounds :
(a)
The facts of the present case are clear and plain.
(b)
The defences raised by the defendant were substantially bare
denials.
(c)
There were clear and unambiguous admissions of debt and
legal liability of the outstanding losses due to the plaintiff made
by the defendant on three (3) separate occasions to settle the
indebted amounts to the plaintiff.
(d)
The clear admission of debt and legal liability was made
personally by the defendant.
8
The Law
11.
Order 14A RHC reads as follows:
Rule 1. Determination of questions of law or construction.
(O.14A, r. 1).
a. The Court may upon the application of a party or of its own
motion determine any question of law or construction of any
document arising in any cause or matter at any stage of the
proceedings where it appears to the Court that-
(a) such question is suitable for determination without the full
trial of the action; and
(b) such dermination will finally determine the entire cause
or matter or any claim or issue therein.
12.
Order 14A rule 1 RHC 1980 enables the High Court to determine any
question of law or construction of document where it appears to the court
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that such question is suitable for determination without the full trial of the
action and such determination will finally determine the entire cause or
matter or any claim or issue therein. Where the construction of document
will finally determine an issue under Order 14A and that issue is a dominant
feature of a case, the High Court ought to proceed to so determine such
issue.
13.
The ambit of Order 14A of RHC 1980 was discussed by the Court of
Appeal in the case of Petroleum Nasional Bhd v Kerajaan Negeri
Terengganu [2004] 1 MLJ 8. Delivering the judgment of the Court of
Appeal, Mohd Noor Ahmad JCA (as he then was) held at page 19 as
follows :
“In a nutshell, the order enables the court to determine any question of law or
construction of document where it appears to the court that such question is
suitable for determination without the full trial of the action and such
determination will finally determine the entire cause or matter or any claim or
issue therein. The order is new to our civil procedure and hence, the few
local decisions of the High Court on the ambit of O 14A are not instructive.
For that reason, we are inclined to refer to foreign cases decided on the
equivalent of our O 14A. In Korso Finance Establishment Anstalt v John
10
Wedge (unreported, February 15 1994 (CA) Transcript No 14/387), the
English Court of Appeal laid down the following principles on the ambit of O
14A:
(1) An issue is ‘a disputed point of fact or law relied on by way of
claim or defence’.
(2) A question of construction is well capable of constituting an
issue.
(3) If a question of construction will finally determine whether an
important issue is suitable for determination under O 14A and
where it is a dominant feature of the case a court ought to
proceed to so determine such issue.
(4) Respondents to an application under O 14A are not entitled to
contend they should be allowed to hunt around for evidence or
something that might rum up on discovery which could be relied
upon to explain or modify the meaning of the relevant document.
If these were material circumstances of which the court should
take account in construing the document, they must be taken to
have been known, and could only be such as were known, to the
parties when the agreement was made, hi the absence of such
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evidence the court should not refrain from dealing with
the application (see The Supreme Court Practice 1999 Vol 1 para
14A/2/5).
In the same case, it was held:
In my judgment the question of construction is well capable of
constituting an issue in the cause or matter. An issue may be said to
be a disputed point of fact or law relied on by way of claim or defence.
In the present case the determination of the question of construction
one way or the other will finally determine an important issue, namely
whether the respondents are primarily liable under the agreement. If
the determination is in favour of the appellant it will finally determine
the entire matter ...
The whole case does not have to be disposed of. It is sufficient if substantial
matters can be disposed of.
The real question in this case at the end and really crucial one it seems to
me is: will the Court be able to dispose of the case or the major part of the
case or the most significant issue in the case under Order 14A dealing with
the matter today. (at p 17C of the Transcript).
12
Clearly one would prefer the facts to have been simpler, but the fact that they
are complicated does not rule out the use of the Order. (at p 7 of the
Transcript).
In my judgment, having rightly decided that the issue could properly be
disposed of without evidence and discovery, if he decided on the side of the
plaintiffs, it would determine the action. In any event the question of
construction was a dominant feature of the case, and the judge ought to
have proceeded to determine that issue. The postscript to his judgment,
which refers to the desirability of the parties, as the judge put it, ‘having their
day in court’, should have been tempered by the reflection that Order 14 A
has lately been provided to avoid that expense and to assist parties in the
efficient disposal of their actions. (at p 8 of the Transcript) (Emphasis added).
14.
Similarly, the Court of Appeal in Dream Property Sdn Bhd v Atlas
Housing Sdn Bhd [2007] 6 CLJ 741 held as follows :
“Upon a reasonable reading of prayer (1) in the plaintiff’s application, there
was no doubt that the plaintiff was seeking a construction of a document ie,
the Agreement, in particular cl. 12 and special conditions (1) and (3) thereof.
O. 14A r. 1(1) of the RHC enables the High Court to determine any question
of law or construction of document where it appears to the court that such
question is suitable for determination without the full trial of the action and
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such determination will finally determine the entire cause or matter or any
claim or issue therein. Where the construction of a document will finally
determine an issue under O. 14A and that issue is a dominant feature of a
case, the High Court ought to proceed to so determine such issue. In the
light of the above analysis, the plaintiff's application came within the ambit of
the "construction of document" that is expressly provided in O. 14A r. 1(1) of
the RHC. (paras 37, 38, 39, 40, 41, 120 & 121) (emphasis added).”
15.
In Bank Kerjasama Rakyat Bhd & Ors v Haji Mat @ Mat Shah
bin Haji Ahmad @ Sapuan [2007] 3 MLJ 541 the High Court held that:
“I accept the submission of counsel for the plaintiffs that an application for
summary judgment under Order 14 is different in nature from an application
under Order 14A.
whereas under Order 14 the scope of the enquiry is
restricted to discovering whether there is a triable issue on the plaintiffs’
case, under Order 14A the scope of enquiry includes an examination of the
affidavit evidence to discover whether the plaintiff’s claim ought to be granted
in those cases where the court can justifiably dispense with oral evidence to
arrive at a finding and decision.” (emphasis added)
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Admission of Debt
16.
The plaintiff contended that the letters by the defendant dated
20.7.2005 and 14.9.2005 is an admission of debt and thus it is asking the
court to determine if the letters constitute an admission of debt and if so, it
will finally determine the entire matter.
17.
The defendant submitted that the letters dated 20.7.2005 and
14.9.2005 are not an admission of debt. There are merely proposal letters
for settlement. It was further argued by the defendant that nothing in the
letters point to an admission of the debt of RM2,217,381.30 as claimed by
the plaintiff.
18.
On this issue, the court agrees with the defendant’s submission that
the proposal of 12 monthly installments of RM125,000-00 amounts to a
total sum of RM1,500,000-00 which is a far below the claim of the plaintiff
herein for RM2,217,381-30. Even if it is construed as an admission of a
debt of RM1,500,000-00, it does not finally determine this case as the
plaintiff’s cause of action is for the sum of RM2,217,381.30 and it is not
based on the proposed settlement.
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19.
As such, in my view, the question is not suitable for determination as
it does not finally determine the entire cause or matter between the parties.
No Authorisation For Transaction
20.
The defendant submitted that this case is inappropriate for summary
judgment and a trial is necessary in order to determine whether the
defendant had authorized the purchase of the shares which resulted in
contra losses.
21.
The court finds that the Letter of Authorisation in exhibit “YS-2” Encl.
7 shows that the defendant authorised one Mohd Rafliz bin Mohd Tahir
(Remisier “302”) as her authorized representative to carry out all acts
permissible under the plaintiff’s rules and procedures. The eight (8)
Contract Notes in exhibit “YS-4” shows that the Remisier Code as “502” on
the top right hand corner. This shows that the Remisier Code is different
from the Remisier code of the authorised representative of the defendant
which is Remisier “302”.
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22.
The name of the Remisier with code “502” as can be seen in the five
(5) Contra Statements in exhibit “YS-6” is Azeman bin Ademan. On this
issue, there is no evidence before this court as to whether he had clear
authority from the defendant to conduct the transactions.
23.
The court finds that it is not the defendant’s contention that she did
not authorize any purchase of shares since the opening of the account on
15/6/2004. Rather, it is the defendant’s contention that she did not
authorize the purchase of the shares which resulted in contra losses
specifically the shares transacted in the six (6) contra statements as
exhibited in “YS-6” Enclosure 7. The defendant also stated that she did not
receive the eight (8) contract notes and six (6) contra statements as
exhibited by the plaintiff.
24.
Further, the court finds that the eight (8) contra notes in exhibit “YS-5”
shows purchase of shares amounting to RM3,168,003.40 whereas the sale
of the shares therein amounts to RM3,187,153.30. The sums therein does
not show how the plaintiff sustained a loss of RM2,315,648-93. Although,
the contra statements in exhibit “YS-6” shows the loss of RM2,315,648.93,
it does not correspond to the Contract Notes.
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25.
The court finds that the plaintiff’s contention that the contract notes
were sent by ordinary mail to the defendant is not shown by any evidence
of certificate posting or other evidence of posting. As such, where it is
contradicted by the defendant, a trial must be held to determine the issue.
26.
As such, in my judgment, a factual question, such as that posed by
the plaintiff above should be determined in a full trial, and should not be
determined summarily under Order 14A of the RHC 1980.
27.
It is trite law that, for the court to exercise its power to summarily
dispose off an action under Order 14A of the RHC 1980, there should not
be any dispute by the parties as to the relevant facts, or that the court,
upon scrutinizing the pleadings, concludes that the material facts are not in
dispute. (See the case of Petroleum Nasional Bhd. v Kerajaan Negeri
Terengganu (supra)).
Conclusion
28.
Based on the foregoing reasons and applying the authorities cited
above, the court will not exercise its jurisdiction under Order 14A of the
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RHC 1980 on the basis of facts which are being disputed by the parties.
Thus, the plaintiff’s application is dismissed with costs. I further award the
defendant costs of RM3,000.00.
(Hanipah binti Farikullah)
Pesuruhjaya Kehakiman
Dagang 7
KUALA LUMPUR
Dated : 11.1.2011
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Solicitor for the Plaintiff
Clifford Lee together with
Zaitul Naziah binti Mohd Soib
Messrs Affendi Zahari
Level 9, Wisma KFC
No. 17, Jalan Sultan Ismail
50250 Kuala Lumpur
Solicitor for the Defendant
Tony Woon Yeow Thong
Messrs Woon & Co.
No. 30-1, Jalan Toman 3
Kemayan Square
70200 Seremban
Negeri Sembilan Darul Khusus
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