Alasan Penghakiman GS 22-159-2008
IN THE HIGH COURT OF MALAYA AT MALACCA
5
IN STATE OF MALACCA, MALAYSIA
CIVIL SUIT NO. : 22 – 159 TAHUN 2008
10
BETWEEN
AFFIN BANK BERHAD
(COMPANY NO. 25046-T)
15
… PLAINTIFF
AND
1.
2.
20
3.
PAU WAH TRADING SDN BHD
… DEFENDANTS
(COMPANY NO.: 231056-A)
REPRESENTATIVE OF TAN LEONG PIOW
@ TAN LEONG TIAN
LOH SEE MOY
(NRIC NO.: 1773469 (OLD) 430211-04-5066 (NEW)
25
GROUNDS OF JUDGMENT
FACTS OF THE CASE
30
[1]
The 1st Defendant was the Plaintiff’s customer at all material times.
Meanwhile the 2nd and 3rd Defendants were the directors of the 1st
Defendant Company.
[2]
35
The Plaintiff had agreed to grant the 1st Defendant credit facilities
as follows:
1
Alasan Penghakiman GS 22-159-2008
5
Type of Facility
10
Amount
a.
OD/FDR
-
RM 30,000.00
b.
TL 1 (BP)
-
RM 80,000.00
c.
TL II (BP)
-
RM 100,000.00
d.
Bank Guarantee
-
RM 100,000.00
e.
OD (NPGS)
-
RM130,000.00
(Hereinafter referred to as the “said credit facilities”)
15
[3]
The following properties were charged to the Plaintiff as securities
for the said credit facilities:
a.
HS (D) 17123 Lot 429 Kawasan Bandar 38 Daerah
Melaka Tengah, Melaka (“Lot 429”);
20
b.
PN 8552 Lot 448 (formerly known as HS (D) PT 432)
Kawasan Bandar 38 Daerah Melaka Tengah, Melaka
(“Lot 448”)
25
(Hereinafter referred to as “the said properties”)
[4]
The 1st Defendant was the registered proprietor of the said
properties.
30
[5]
The 1st Defendant executed a Facility Agreement dated
17.11.1999.
2
Alasan Penghakiman GS 22-159-2008
5
[6]
Meanwhile, the 2nd and 3rd Defendants executed a Guarantee
agreement dated 01.11.1999to jointly and severally guarantee the
repayment of the principal amount of RM440, 000.00 under the said
credit facilities.
10
[7]
The 1st Defendant had breached the terms and conditions of the
letters of offers, the charge documents and the said Facility Agreement.
The Plaintiff issued Notices of Demands to the 1st, 2nd and 3rd Defendants
on 12.7.2001 claiming the entire outstanding amount of RM 346,948.43
calculated as at 31.5.2001. The demand against the 1st, Defendant was
15
in respect of the banking facilities and the 2nd and 3rd Defendants were in
respect of the letter of guarantee dated 1.11.1999.
[8]
On 5.6.2002, the Plaintiff commenced two foreclosure actions vide
Originating Summons No. 24-237-2003 and 24-238-2003to dispose of
20
the said properties executed in favour of the Plaintiff.
[9]
On 18.4.2003 the Plaintiff filed a civil suit MT2-22-52-2003
claiming against the 1st, 2nd and 3rd Defendants the balance amount
owing to the Plaintiff of RM 375,594.64 calculated as at 31.3.2002.
25
[10] The Plaintiff applied for summary judgment against the 1st,2nd and
3rd Defendants in suit MT2-22-52-2003 but was refused by Senior
Assistant Registrar. The Plaintiff appealed against the said order on
3.8.2004. The appeal was subsequently withdrawn.
30
.
[11] Lot 429 was redeemed by the 1st Defendant at the price of
RM115, 000.00 on or around 10.07.2003.
3
Alasan Penghakiman GS 22-159-2008
5
[12] Meanwhile, Lot 448 was sold by way of public auction on
16.03.2005 for RM145, 000.00.
[13] On 6.4.2007, the Plaintiff filed in their Notice of Discontinuance of
the civil suit MT2-22-52-2003.
10
[14] Approximately one year after the discontinuance of such action,
the Plaintiff issued the second Notice of Demand dated 30.5.2008 to the
1st, 2nd and 3rd Defendants claiming the entire outstanding amount of RM
334,873.37 calculated as at 29.2.2008 as shown below15
(i) Overdraft (OD/FDR)
-
RM 27,845.44
(ii) Overdraft
-
RM 307,027.93
(NPGS)
RM 334, 873.37
20
[15]
On 29.8.2008, the Plaintiff commenced a fresh civil suit 22-159-
2008claiming against the 1st, 2nd and 3rd Defendants the balance amount
owing (shortfall) of RM 334,873.37 calculated as at 29.2.2008.
THE DEFENDANT’S DEFENCE AND COUNTER-CLAIM
25
[16] In a nutshell the 1st and the 3rd Defendants’ defence are as follows:
a)
that the Plaintiff’s suit is statute barred pursuant to Section
6(1) of the Limitation Act 1953;
30
b)
that the Notice of Discontinuance that was filed in the 2003
suit barred the Plaintiff from refilling the 2008 suit;
4
Alasan Penghakiman GS 22-159-2008
5
c)
that the doctrine of “estoppel” and “res judicata’ applies in
this case ;
d)
that the Plaintiff’s suit herein is based on documents that
have been extinguished when the Plaintiff filed the 2003 suit
10
against the Defendants; and
e)
In its counter-claim the 1st and 3rd Defendants have alleged
that the Plaintiff has breached its duty of care as the
Chargee and seeks damages and costs against the Plaintiff
15
for its alleged loss.
THE PRELIMINARY ISSUES
[17] There are 3 preliminary issues that must be resolved at the outset
as follows:
20
The admissibility of Exhibit IDP-15
[18] In the midst of trial the 1st and the 3rd Defendants’ solicitor objected
to the Plaintiff’s solicitor tendering the detail extracted from the
25
statement of accounts of Exhibit P27 and P28 because the document is
a computer generated document to which certificate pursuant to Section
90A of the Evidence Act 1950 has not been produced. The said
document was only marked as exhibit IDP-15.
30
[19] Exhibit IDP-15 is the statement of account dated 29.02.2008
prepared by PW2. During examination in chief, PW-2 admitted that she
had prepared the statement of account. PW2 is the maker of the
document.
5
Alasan Penghakiman GS 22-159-2008
5
[20]
During cross examination, PW-2 explained that exhibitIDP-15 is
the detail extracted from the statement of accounts found on Exhibit P27
and P28. She further explained that whilst exhibit P27 and P28 are
computer generated statements of accounts, exhibit IDP-15 was just the
summary of Exhibit P27 and P28. Exhibit IDP-15 was prepared by PW2.
10
[21]
The outstanding sum is the same as in exhibit IDP-15. Having not
objected to P27 and P28, the Defendant’s objection raised on exhibit
IDP-15 cannot be sustained. Plaintiff’s solicitor submitted that the
Defendants’ solicitor objection on the admissibility of exhibitIDP-15 on
15
the grounds of failure to comply with the certificate pursuant to Section
90A of the Evidence Act 1950, is unfounded.
[22]
In light of the objection taken, a certificate pursuant to Section
90A (2) Evidence Act 1950 was filed into court on 10.12.2012. However,
20
the Defendants’ solicitor objected to the delay in filing the said certificate
as well, on the grounds that the certificate must have been filed together
with the statement of account. There is no basis for the Defendant’s
argument that the certificate must be filed together with the statement of
account.
25
[23]
In my opinion, a certificate under Section 90A (2) is not the only
method to prove a document was produced by a computer. The witness
may give oral evidence to the same effect. Section 90A (4) of the
Evidence Act 1950 states:
30
“(4) Where a certificate is given under subsection (2), it shall be
presumed that the computer referred to in the certificate was in
good working order and was operating properly in all respects
6
Alasan Penghakiman GS 22-159-2008
5
throughout the material part of the period during which the
document was produced.”
[24] The authority on this point is found in the case of AHMAD NAJIB
ARIS v PP (2009) 2 CLJ, 800 (Federal Court):
10
“(5) A certificate under s. 90A(2) of the Evidence Act 1950 is not
the only method to prove that a document was produced by a
computer 'in the course of its ordinary use' under s. 90A(1) of
the Evidence Act 1950. Section 90A (6) deals with the
15
admissibility of a document which was not produced by a
computer in the course of its ordinary use and is only deemed
to be so. The fact that a document was produced by a
computer in the course of its ordinary use may be proved by
the tendering in evidence of a certificate under s. 90A (2) or by
20
way of oral evidence. Such oral evidence must consist not only
of a statement that the document was produced by a computer
in the course of its ordinary use but also of the matters
presumed under s. 90A (4).”
25
[25]
Exhibit IDP-15 is a computer generated document. It was
prepared by PW 2 to show a summary of account in Exhibit P27 and
P28to which the Defendant solicitor did not object at all.PW2 is the
maker of exhibitIDP-15 and was in Court to testify that the document
was produced by a computer in the course of its ordinary use.The
30
requirement of a certificate to prove the document tendered was
produced by a computer in the course of its ordinary use is permissive
and not mandatory. The fact can also be established by oral evidence. I
absolutely agree with the above case of AHMAD NAJIB ARIS v PP
7
Alasan Penghakiman GS 22-159-2008
5
(See also GUNASEGARAN A/L PARARAJASINGAM v PUBLIC
PROSECUTOR [1997] 3 MLJ 1, 11, STANDARD CHARTERED BANK
v MUKAH SINGH [1996] 3 MLJ 240 (HC) and Evidence Practice And
Procedure Second Edition By Augustine Paul at page 640).
10
[26]
The certificate pursuant to Section 90A (2) Evidence Act 1950,
however, was filed into court on 10.12.2012. The delay in tendering the
said certificate does not have any effect on exhibit ID-15 if the Court
allows it.
15
[27]
In light of the evidence and the authorities above, the
requirements of Section 90A (4) has been complied and exhibitIDP-15
can be admitted and marked as Exhibit P15. Exhibit P15 contains the
statement of the balance outstanding as at 18.7.2005 for OD/FDR and
OD/FDR.
20
Order 15 Rule 6A (4) of the Rules of Court 2012.
[28]
During trial, the 1st and the 3rd Defendants’ solicitor raised
another objection in respect of the Plaintiff’s suit against the 2nd
25
Defendant, being the representatives of the deceased, Tan Leong
Piow (Wakil-Wakil Diri kepada Tan Leong Piow). Tan Leong Piow @
Tan Leong Tian had died on 24.10.2006. The Plaintiff has filed this
action against the 2nd Defendant on 29.8.2008. It is alleged by the 1st
and the 3rd Defendants’ solicitor that the Plaintiff’s suit against the 2nd
30
Defendant cannot be maintained for non-compliance of Order 15 Rule
6A (4) of the Rules of Court 2012.
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Alasan Penghakiman GS 22-159-2008
5
[29]
Order15 Rule 6A Rules of Court 2012provides as follows-,
“6A. (1) Where any person against whom an action would
have lain has died but the cause of action survives, the
action may, if no grant of probate or administration has been
made, be brought against the estate of the deceased .
10
(2) Without prejudice to the generality of paragraph (1), an
action brought against 'the personal representatives of A. B.
deceased' shall be treated, for the purposes of that
paragraph, as having been brought against his estate.
(3) An action purporting to have been commenced against a
15
person
shall
be
treated,
if
he
was
dead
at
its
commencement, as having been commenced against his
estate in accordance with paragraph (1), whether or not a
grant of probate or administration was made before its
commencement.
20
(4) In any such action as is referred to in paragraph (1) or (3):
(a) the plaintiff shall, during the period of validity for
service of the summons, apply to the Court for an
order
25
appointing
a
deceased's
estate
proceedings
or,
person
for
if
a
the
grant
to
represent
purpose
of
of
probate
the
the
or
administration has been made for an order that the
personal representative of the deceased be made a
party to the proceedings, and in either case for an
order that the proceedings be carried on against the
30
person appointed or, as the case may be, against
9
Alasan Penghakiman GS 22-159-2008
5
the personal representative, as if he had been
substituted for the estate;
(b) the Court may, at any stage of the proceedings and
on such terms as it thinks just and either of its own
motion or on application, make any such order as is
10
mentioned in sub-paragraph (a) and allow such
amendments (if any) to be made and make such other
order as the Court thinks necessary in order to ensure
that all matters in dispute in the proceedings may be
effectually and completely determined and adjudicated
15
upon.”
[30]
It is submitted by the 1st and the 3rd Defendants’ solicitor that the
Plaintiff had not complied with Order 15 Rule 6A (4) (a) Rules of Court
2012 for failing to apply a grant of probate or administration appointing a
20
personal representative of the deceased to be made a party to the
proceedings.
[31]
The Plaintiff’s solicitor replied that the cause of action does not
cease on the death of the deceased. The action may be brought against
25
the estate of the deceased, where no grant of probate or administration
has been made – Order 15 Rule 6A (1) Rules of Court 2012. DW1
gave evidence that a grant of probate or administration had not been
taken out in respect of the deceased’s estate.
30
10
Alasan Penghakiman GS 22-159-2008
5
[32]
Order 15 Rule 6A (2) Rules of Court 2012provides as follows:
“Without prejudice to the generality of paragraph (1), an
action brought against “the personal representatives of A.B.
deceased” shall be treated, for the purposes of that
paragraph, as having been brought against his estate.”
10
[33]
The Federal Court in the case of KERAJAAN MALAYSIA v
YONG SIEW CHOON [2005] 4 CLJ 537 held that the object of Order 15
Rule 6A of the Rules is to provide a remedy where there is no person in
15
law who can be sued. It is therefore superfluous to state that even where
no grant of probate or of administration has been made to the estate of a
deceased person Order 15 Rule 6A will have no application if there is, in
law, a person who can be sued.
20
[34] At all material times, Messrs Morgan Karupiah only represents the
1st and the 3rd Defendants, and therefore the Plaintiff’s solicitor informed
the Court that Mr. Morgan did not have the locus to defend the 2 nd
Defendant. No application to strike out this suit had been filed by the 2nd
Defendant to date.
25
[35] No Statement of Defence was filed by the 2nd Defendant.
[36]
Mr. Morgan did not represent the 2nd Defendant, however, it is my
opinion that Mr Morgan has the right to raise objection in respect of the
30
Plaintiff’s suit against the 2nd Defendant as his clients were sued
together with the 2nd Defendant. At the outset the Court has asked the
Plaintiff’s solicitor whether a letter of administration for the estates of the
2nd Defendant has been issued to any person to represent the
11
Alasan Penghakiman GS 22-159-2008
5
2ndDefendant. The Plaintiff’s solicitor admitted that there was no such
letter of administration issued on any person appointed as personal
representative of the deceased.
[37]
10
The 3rd Defendant is the wife of the deceased. It was submitted
by the Plaintiff’s solicitor that all cause papers and notification of the trial
have been served on the 2ndDefendant; however no representative of
the deceased appeared in court. Neither did the 3rd Defendant.
[38]
15
The 1st and the 3rd Defendants’ solicitor submitted that the
Plaintiff failed to apply a grant of probate or administration within 6
months i.e. “during the period of validity for service of the
summons” under Order 15 Rule 6A (4) (a) to do the following-
(i)
20
“appointing a person to represent the deceased's estate for
the purpose of the proceedings”, or;
(ii)
“appointing the Official Administrator, when there is no
administrator for the estates of Tan Leong Piow @ Tan
Leong Tian, the deceased, under Order 15 Rule 6A (5A)
and Section 39 Probate and Administration Act, 1959.”
25
[39]
The Plaintiff continued with this action against all the Defendants,
especially the 2nd Defendant, who is not a legal entity after 6 months
30
from the date of filing (29.8.2008).
[40]
The decision of the Court of Appeal in YONG SIEW CHOON v
KERAJAAN MALAYSIA [2003] 2 MLJ 150 in my opinion gives a clear
12
Alasan Penghakiman GS 22-159-2008
5
direction on the applicability of Order 15 Rule 6A(4) Rules of Court
2012. The Court of Appeal held that if Order 15 Rule 6A (4) Rules of
Court 2012is not complied “It follows that the respondent’s suit in
the present instance is an illegality and therefore a nullity”
(paragraph G pages 157).
10
“Failure to observe the terms of Order 15 Rule 6A (4) of the RHC
would therefore deprive a plaintiff of the beneficial effect of Order
15 Rule 6A and thereby activate the principal rule of substantive
law governing such action so as to render the action already
15
commenced a nullity”(see held (1) at line I page 150 and line A
at page 151 and line F/ G page 156 it is said:
“Returning to the present case, we would observe that the
respondent was perfectly entitled (by reason of Order 15
20
Rule 6A of the RHC) to commence the action in the manner
intituled. But having done so, it did nothing else save to
prosecute the action to judgment. In other words, there was
blatant none compliance with Order 15 Rule 6A (4) of the
RHC”
25
At line G/H at page 156 as follows:
“ It is our judgment that while Order 15 Rule 6A of the RCH is
a remedial provision of adjectival law, it is important that a
30
litigant who seeks to take advantage of it must comply with
its terms before he or she may take advantage of any
provision of substantive law.”
13
Alasan Penghakiman GS 22-159-2008
5
And at line G at page 157 as follows:
“In the present case, the action was commenced in
accordance with the permissive provision in Order 15 Rule
6A (1) of the RHC. But it was prosecuted in defiance of
the mandatory provision of Order 15 Rule 6A (4)of the
10
RHC which is the only provision that enables an action
to be kept on foot. So, non-compliance of Order 15 Rule
6A (4) of the RHC is not a mere irregularity, it runs
counter to a point of substantive law, namely, that an
action cannot be maintained against the estate of a
15
deceased person in the absence of the extraction of
letters of representation. It follows that the respondent’s
suit in the present instance is an illegality and therefore
a nullity.”
20
[41]
The Federal Court in KERAJAAN MALAYSIA v YONG SIEW
CHOON [2005] 4 CLJ 537 referred to earlier by the Plaintiff’s solicitor
commented the decision of the Court of Appeal in YONG SIEW CHOON
v KERAJAAN MALAYSIA [2003] 2 MLJ 150. After reading the
judgment of the Federal Court, it is my opinion that the Federal Court
25
judgment did not say the decision of the Court of Appeal is wrong. It
says only to the effect that “there has been no analysis of its
inapplicability to proceedings for the recovery of tax in the light of
relevant provisions in the Act itself. Such a discourse may have
resulted in a different conclusion.”
30
[42]
In that case, it involved a tax matter where the Income Tax Act
contains specific provisions in the Act to make the executors liable. The
14
Alasan Penghakiman GS 22-159-2008
5
decision of the Federal Court is more peculiar to the facts in that case
and where there has been an “executor” appointed to administer the
estates of the deceased. Augustine Paul FCJ (as he then was) held that“[8] There can be no dispute that the judgment of the Court of
Appeal is on excellent exegesis on Order 15 Rule 6A. But it is a
10
misfortune that
there
has
been no
analysis
of
its
inapplicability to proceedings for the recovery of tax in the
light of relevant provisions in the Act itself. Such a
discourse may have resulted in a different conclusion.
15
[10] Thus, the object of Order 15 Rule 6A is to provide a
remedy where there is no person in law who can be sued. It is
therefore superfluous to state that even where no grant of
probate or of administration has been made to the estate of a
deceased person O.15 r. 6A will have no application if there is,
20
in law, a person who can be sued. An executor de son tort
is such a person. As The Law of Wills, Probate Administration
and Succession in Malaysia and Singapore by Mahinder Singh
Sidhu says at page 146:
"[11] In matters relating to the assessment and chargeability to
25
tax of the estate of deceased persons there are specific
provisions in the Act to make the executors liable. They are as
64(1) and 74(1) of the Act.”
[43]
30
In this instance case, the facts are different and very straight
forward where there has been no letter of administration has been
made for an order that the personal representative of the deceased
15
Alasan Penghakiman GS 22-159-2008
5
be made a party to the proceedings. The Plaintiff has sued a personal
representative to the deceased, Tan Leong Piow @ Tan Leong Tian. It
is the Plaintiff’s solicitor contention that therefore superfluous to state
that even where no grant of probate or of administration has been made
to the estate of a deceased person Order 15 Rule 6A will have no
10
application if there is, in law, a person who can be sued. However, I am
of the view that before this contention can be accepted, there must be “a
person” identified who intermeddles with the goods of the deceased,
or does any other act characteristic of the office of executor or
administrator (executor de son tort) be made a party to this
15
proceeding.
[44] Therefore, it is my opinion that the decision of the Court of Appeal
in YONG SIEW CHOON v KERAJAAN MALAYSIA is the law to be
followed on the applicability of Order 15 Rule 6A (4) and formed the
20
basis of my judgment.
[45]
From the facts, the 1st Defendant executed a Facility Agreement
meanwhile; the 2nd and 3rd Defendants executed a Letter Guarantee to
jointly and severally guarantee the repayment of the principal amount
25
under the said credit facilities. They were sued together in one action.
Having found the Plaintiff’s action against the 2ndDefendant is a nullity for
having prosecuted its case in defiance of the mandatory provision of
Order 15 r 6A (4),it is my opinion that the Plaintiff’s claims against 1st,
and 3rd Defendants are also a nullity.
30
16
Alasan Penghakiman GS 22-159-2008
5
Non-attendance of the 3rd Defendant
[46] The Plaintiff’s solicitor submitted that the 3rd Defendant in this suit
did not attend court through-out trial and was never called by the
Defence to give evidence. This issue was raised by the Plaintiff at the
10
start of the Defendant’s case. No letter of explanation or a medical
certificate in respect to the 3rd Defendant was ever produced by the
Defence despite the objection by the Plaintiff. She referred the case of
JAAFAR SHAARI & SITI JAMA HASHIM V. TAN LIP ENG & ANOR
[1997] 4 CLJ 509where at page 16his Lordship Gopal Sri Ram has said
15
that “…for, once a defendant in civil proceedings elects not to call
evidence, then all the evidence led by the Plaintiff must be
assumed to be true.”She also referred to the case of MALAYAN
BANKING BERHAD v. JOSEPH VIJAY KUMAR A ARULNATHAN
[2011] 1 LNS 825which says-
20
"The learned counsel for the Defendant, Mr. Sakthy Vel
informed the Court that the Defendant had no case to present
because the
Defendant,
Mr Joseph
Vijay Kumar
a/l
Arulnathan was not in attendance in court since he is
25
presently in Europe. In this circumstance, the learned counsel
was aware that he had an uphill task since his failure to call
evidence will lead to the presumption that all the evidence led
by the Plaintiff must be assumed to be true. This principle was
held in the case of Jaafar Shaari & Siti Jama Hashim v. Tan
30
Lip Eng & Anor [1997] 4 CLJ 509. In this case the court held
that once a Defendant in a civil proceeding elects not to call
evidence, then all the evidence led by the Plaintiff must be
assumed to be true”
17
Alasan Penghakiman GS 22-159-2008
5
[47] I have found the Plaintiff’s action against the 1st, 2nd and
3rdDefendants is a nullity. For the sake of argument whether judgment in
default should be entered against the 3rdDefendant for failing to attend
Court throughout the proceeding, I cannot agree with the Plaintiff’s
10
solicitor. In this case the 3rdDefendant is represented by his solicitor until
the end of the trial. I am also of the opinion that the fact that the
3rdDefendant is absence it does not mean that the Plaintiff did not have
to proof its case. It is trite law that the Plaintiff must proof its case on the
balance of probabilities.
15
[48]
The non-attendance of the 3rdDefendant to give evidence would
only give rise to an “adverse inference” to the Defendants’ case. While
the cases cited are of general principles, it is entirely up to the
Defendants to proof their case. The Defendants’ solicitor has deemed it
20
fit to call DW1 as witness for the Defendants, then it is up to the Court to
exercise its discretion whether there have been some evidence, however
weak, adduced by DW1 on the matter in question before the court is
entitled to draw the desired inference: in other words, there must be a
case to answer on that issue.
25
[49] In TAKAKO SAKAO (F) v NG PEK YUEN (F) & ANOR [2009] 6
MLJ 751, Gopal Sri Ram FCJ at page 759 said that“Where, as here, the first respondent being a party to the
30
action provides no reasons as to why she did not care to
give evidence the court will normally draw an adverse
inference.” See Guthrie Sdn Bhd v Trans-Malaysian
Leasing Corp Bhd [1991] 1 MLJ 33 See also Jaafar bin
18
Alasan Penghakiman GS 22-159-2008
5
Shaari & Anor (suing as Administrators of the Estate of
Shofiah bte Ahmad, deceased) v Tan Lip Eng & Anor
[1997] 3 MLJ 693 where Peh Swee Chin FCJ said: “The
respondents had chosen to close the case at the end
of the appellants’ case. Although they were entitled
10
to do so, they would be in peril of not having the
evidence of their most important witness and of
having an adverse inference drawn against them for
failing
to
call
circumstances
15
such
demand
evidence
it.”There
should
are
two
the
other
authorities that are of assistance on the point. In
Wisniewski v Central Manchester Health Authority [1998]
PIQR 324, Brooke LJ when delivering the judgment of
the Court of Appeal quoted from a number of authorities
including the following passage from the speech of Lord
20
Diplock in Herrington v British Railways Board [1972] AC
877:
And at Page 760 his Lordship said25
“The appellants, who are a public corporation, elected to
call no witnesses, thus depriving the court of any positive
evidence as to whether the condition of the fence and
the adjacent terrain had been noticed by any particular
servant of theirs or as to what he or any other of their
30
servants either thought or did about it. This is a
legitimate tactical move under our adversarial system of
litigation. But a defendant who adopts it cannot complain
if the court draws from the facts which have been
19
Alasan Penghakiman GS 22-159-2008
5
disclosed all reasonable inferences as to what are the
facts which the defendant has chosen to withhold.”
Brooke LJ then went on to say this:
From this line of authority I derive the following principles
10
in the context of the present case:
(1)
In certain circumstances a court may be entitled to
draw adverse inferences from the absence or silence of
a witness who might be expected to have material
15
evidence to give on an issue in an action.
(2)
If a court is willing to draw such inferences,
they may go to strengthen the evidence adduced on
that issue by the other party or to weaken the
20
evidence, if any, adduced by the party who might
reasonably have been expected to call the witness.
(3)
There
must,
however,
have
been
some
evidence, however weak, adduced by the former on
25
the matter in question before the court is entitled to
draw the desired inference: in other words, there
must be a case to answer on that issue.
(4)
30
If the reason for the witness’s absence or silence
satisfies the court, then no such adverse inference may
be drawn. If, on the other hand, there is some credible
explanation given, even if it is not wholly satisfactory, the
20
Alasan Penghakiman GS 22-159-2008
5
potentially detrimental effect of his/her absence or
silence may be reduced or nullified.
The other case is Crawford v Financial Institutions
Services Ltd (Jamaica) [2005] UKPC 40, where Lord
10
Walker of Gestingthorpe when delivering the advice of
the Privy Council said:
It is well settled that in civil proceedings the court may
draw adverse inferences from a defendant’s decision not
15
to give or call evidence as to matters within the
knowledge of himself or his employees.
[5]
20
Sarkar on Evidence (16th Ed) at p 1837 states:
It is the bounden duty of a party personally knowing the
whole circumstances to give evidence and to submit to
cross-examination. Non-appearance as a witness would
be the strongest possible circumstance to discredit the
truth of his case Gurbakhsh v Gurdial AIR 1927 PC 230.
25
THE ISSUES
The issues that fall to be considered are as follows:
30
Whether the Plaintiff’s suit is barred by Section 6(1) of the
Limitation Act 1953
[50] The Defendants alleged that the Plaintiff’s cause of action accrued
from the date of the Plaintiff’s letter of demand to the Defendants, i.e.
21
Alasan Penghakiman GS 22-159-2008
5
12.07.2001; hence the Plaintiff’s suit is barred by Section 6(1) of the
Limitation Act 1953.
[51] The 1st and 3rdDefendants’ solicitor submitted that in 2002 the
Plaintiff recalled banking facilities and the 1st Defendant’s account with
10
the Plaintiff became a “non-performing loan” (NPL). Recovery file was
sent to Plaintiff’s Head Quarters. Plaintiff issued Notice of Demand to the
1st Defendant claiming the entire outstanding loan of RM346, 948.43,
under all the five Charges on 12.7.2001.
Plaintiff issued Notice of
Demand to the 2nd and 3rd Defendants claiming the entire outstanding
15
loan of RM346, 948.43, under the Individual Guarantee dated 1.11.1999
on 12.7.2001,
[52] There were 3 suits filed against the Defendants in 2002/2003;
20
(a)
Originating Summons24-237 TAHUN 2002 – Under
Sec. 256 KTN 1965 for an order to auction off Lot
448
(b)
25
Originating Summons24-238 TAHUN 2002 – Under
Sec. 256 KTN 1965 for an order to auction off Lot
429
(b)
Civil Suit 22-52 TAHUN 2003 –Cause of action under
Individual
30
Guarantee
1.11.1999by
2nd
and
3rd
Defendants.
[53] The date of 12.7.2001 is significant. The Plaintiff commenced this
present action (No. 22-159-2008) against the1st Defendant based on the
22
Alasan Penghakiman GS 22-159-2008
5
facility agreement dated 17.11.1999 and against the 2nd and 3rd
Defendants based on the individual guarantee dated 1.11.1999. The
Plaintiff’s action which was filed on 29.8.2008 is clearly barred under
Section 6(1) of the Limitation Act 1953.
10
[54] The Plaintiff had filed the first suit MT2-22-52-2003 on 18.4.2003
against the 1st, 2nd and 3rdDefendants for the recovery of RM 375,594.64
inclusive interest as at 31.3.2002.
[55] On 2.8.2004, Plaintiff applied for summary judgement but was
15
refused by the Senior Assistant Registrar. Plaintiff appealed against the
said order but later withdrew the notice of appeal.
[56] On 6.4.2007, Plaintiff filed in notice of discontinuance, withdrawing
the entire actions against the 1st, 2nd and 3rd Defendants.
20
[57] Therefore, it was submitted that the cause of action against the 1st,
2nd and 3rd Defendants accrued from the date of demand 12.7.2001.
[58] The Plaintiff’s solicitor submitted that this argument is flawed.
25
[59]
It was submitted by the Plaintiff’s solicitor that the Defendants had
guaranteed the repayment of all sums given by the Plaintiff to the 1st
Defendant under the Facility Agreement. The Plaintiff has the right and
authority to commence and or exercise any of the remedies allowed
30
against the Defendants pursuant to the security documents to recover
whatever sum that is still unsatisfied. The Charge document clearly
stipulates that:
23
Alasan Penghakiman GS 22-159-2008
5
On page 29:
“9. If the amount realised by the Bank on a sale of the said land
under the provisions of the National Land Code after
deduction and payment from the proceeds of such sale of
10
all fees dues costs rents rates taxes and other outgoings
on the said land is less than the amount due to the Bank
and whether at such sale the Bank is the purchaser or
otherwise the Chargor shall pay to the Bank the
difference between the amount due and the amount so
15
realized and until payment will also pay interest on
such balance at the Prescribed Rate.”
On page 40:
“57.
If the amount realised by the Bank on a sale of the said
land under the provisions of the National Land Code after
20
deduction and payment from the proceeds of such sale of
all fees dues costs rents rates taxes and other outgoings
on the said land is less than the amount due to the Bank
and whether at such sale the Bank is the purchaser or
otherwise the Chargor shall pay to the Bank the
25
difference between the amount due and the amount so
realized and until payment will also pay interest on
such balance at the Prescribed Rate PROVIDED THAT
nothing herein contained shall be construed as imposing
and obligation… upon the Bank to exhaust its remedy or
30
power to sell in pursuant to this Charge… the Chargor
hereby irrevocably and unconditionally agrees and consent
to the Bank commencing separate proceedings or
24
Alasan Penghakiman GS 22-159-2008
5
enforcing other remedies and exercising any other rights
simultaneously with any action, proceedings or remedies
which the Bank may commence or enforce against the
Chargor… and without having exhausted its right to sell or
proceed against the said land.”
10
[60] At all material times, the proceeds from the sale of Lot 429 and Lot
448 could not extinguish the entire debt of the Defendants. The witness
statement of PW-2 (WSP-2) said this:
15
“5.Q: What did the Plaintiff set off from the sale proceeds of
Lot 429?
A:
Lot 429 was sold for RM115, 000.00. On 19.12.2003
a sum of RM57, 141.07 from the sale
20
proceeds was
used to settle Term Loan 1 and a sum of RM57,
858.93 as a partial settlement of the OD (NPGS).
6. Q: What did the Plaintiff set off from the sale proceeds
of Lot 448?
25
A
: Lot 448 was sold for RM145, 000.00. The 10% of the
auction proceeds, i.e. RM14, 500.00 was used to settle
Term Loan 2 on 26.03.2005. The outstanding balance
of RM90, 434.67 under Term Loan 2 was fully settled
30
on 18.07.2005. The balance of the auction proceeds of
RM40, 065.33 was used to settle part of the OD
(NPGS) on 18.07.2005.
25
Alasan Penghakiman GS 22-159-2008
5
[61] The Plaintiff’s solicitor submitted that the entire transaction of how
the monies were utilized by the Plaintiff to offset the proceeds from the
outstanding amount can be seen in the form of a statement of account
dated 29.02.2008 prepared by the PW-2 (Q&A No: 7; WS-P2), marked
10
as Exhibit P15. In any event the Plaintiff’s statement of account as at
29.02.2008 is also found on Exhibit P14, Exhibit P27andExhibit P28.
She referred to the authorities of RHB BANK BERHAD v SIM ENG
YEN & ANOR (2006) 1 LNS 189 and CHEN HEN PING @ TIAN SEOW
HOCK & ORS v INTRADAGANG MERCHANT BANKERS (M) BHD
15
(1995) 3 CLJ 690.
[62] Therefore upon deducting the proceeds of sale from the outstanding
amount, a balance sum of RM334,873.37 as at 29.02.2008 is still due
and owing from the Defendants.
20
[63]
In the case of TAN KONG MIN v MALAYSIAN NASIONAL
INSURANCE SDN BHD (2005) 3 CLJ 825 (FEDERAL COURT) it was
held that:
“From the reading of clause 7 it was obvious that prior to the
25
auction, it would not be possible for the respondent to
ascertain the exact amount that could be realized from the
sale of the land and whether there would remain any excess
amount due to the respondent. It followed therefore that the
respondent could only enforce its right against the personal
30
liability of the appellant under clause 7 when the sale had
been conducted and the excess amount due, if any, had
been ascertained.”
26
Alasan Penghakiman GS 22-159-2008
5
On page 80:
“Only after the auction was conducted on 16 March 1992 and
a sum of RM80, 100 was realized from the sale did the
respondent manage to ascertain that a sum of RM336,
015.52 was still due and owing from the appellant to the
10
respondent with interest still accruing thereon until full
settlement.”
[64] The cause of action in this case accrued once the amount due and
owing has been determined upon the sale of the properties. Section 6(1)
15
of the Limitation Act 1953 is not applicable to the present case. The
limitation period was therefore 12 years and not 6 years as argued by
the Plaintiff’s solicitor.TAN KONG MIN v MALAYSIAN NASIONAL
INSURANCE SDN BHD (2005) 3 CLJ 825 (FEDERAL COURT)
20
At page 71 - 72:
“[1] On the facts, Section 6 could not apply in view of the
express exclusion of 'any action to recover money secured
by any mortgage of or charge on land' in Section 6(5)(b) of
25
the Act. The action was thus not founded on a claim on
contract under Section 6. The applicable provision was s. 21.
Section 21(1) specifically refers to an action to recover
moneys secured by a charge which is an action in personam,
whereas Section 21(2) specifically refers to a foreclosure in
30
respect of mortgaged personal property which is an action in
rem. The limitation period was therefore 12 years from the
date when the right to receive the money accrued or 12
27
Alasan Penghakiman GS 22-159-2008
5
years from the date on which the right to foreclose accrued,
respectively. There was thus no need to answer question (2).
[3] A cause of action normally accrues where there is in
existence a person who can sue and another who can be
10
sued and when all the facts have happened which are
material to be proved to entitle the plaintiff to succeed.In the
instant case, the point in time where all the material facts
were said to be in existence to render the cause of
action complete would be after the sale had been
15
conducted and the differential amount remaining due to
the respondent had been ascertained. On the facts, the
earliest possible date the respondent could bring an action
against the appellant under clause 7 was on 16 March 1992 the date the property was sold by auction. Since the
20
respondent's cause of action arose on 16 March 1992, its
action against the appellant filed on 17 January 1995 was
filed well within the time prescribed in Section 21(1) of the
Act. Lim Kean v. Choo Koon [1969] 1 LNS 94; [1970] 1 MLJ
158 (folld); Credit Corporation (M) Bhd v. Fong Tak Sin
25
[1991] 2 CLJ 871; [1991] 1 CLJ 69 (Rep); [1991] 1 MLJ 409
(folld)”
[65] She also referred to WAN AHMAD WAN SALLEH & ANOR v
30
BANGKOK BANK BHD (1998) 4 CLJ SUPP 257andHONG KONG &
SHANGHAI BANKING CORP. LTD v WAN MOHD WAN NGAH (1991)
2 CLJ (Rep) 732.Based on these authorities, the Plaintiff has 12 years
and not 6 years to file this suit. The balance proceeds for Lot 448 was
28
Alasan Penghakiman GS 22-159-2008
5
received by the Plaintiff on 18.07.2005, as such the 12 years would
only lapse on 17.07.2017. The 2008 suit was filed well within time.
[66] The Defendants did not file any application to strike out this suit on
the grounds of limitation.
10
[67] After hearing from both solicitors for the Plaintiff and Defendants,
based on the authorities submitted and under Clause 57 of the Charge
agreement, I agree with the Plaintiff’s solicitor that the cause of action
accrues once the amount due and owing has been determined upon the
15
sale of the properties. In this case limitation accrues from the date the
balance proceeds for Lot 448 was received by the Plaintiff on
18.07.2005 or after sale of Lot 448 on 16.3.2005.
[68] The amount due and owing has been determined upon the sale of
20
the properties as shown in P15. As at 18.7.2005 the outstanding balance
OD/FDR and OD/NPGS is RM 21,620.12 and RM 238,819.75
respectively. Then, the outstanding balance as at 29.8.2008 would show
the amount of RM 29,240.41 for OD/FDR and RM 322,307.32 for
OD/NPGS. However, from the facts, I have found the Plaintiff
25
commenced
this
present
action
(No.22-159-2008)
against
the
Defendants 3 years later for the amount of RM334, 873.37 inclusive of
interest as at 29.2.2008. PW 1 and PW 2 in their evidence confirmed
that there was delay in filing the said action. The outstanding balance
amount in P15 seems to be correct because on the face of it, the overall
30
interest and service charged on OD/FDR was RM 6,225.31 and on
OD/NPGS was RM 68,208.17.
29
Alasan Penghakiman GS 22-159-2008
5
[69] I have also found that civil suit MT2-22-52-2003which was filed on
18.4.2003 against the 1st, 2nd and 3rd Defendants for the recovery of RM
375,594.64 inclusive interest as at 31.3.2002 was withdrawn on
6.4.2007. The notice of discontinuance was filed on the same date.
.
10
[70] The next issue is whether by withdrawing of the civil suit MT2-2252-2003 by filing a notice of discontinuance, the Plaintiff is estopped
from filing a fresh suit in 2008 over the same subject matter of the claim.
If the balance proceeds for Lot 448 were received by the Plaintiff on
18.07.2005, it is my view that the civil suit MT2-22-52-2003 should have
15
been amended to show the final outstanding amount due and owing.
This was never done and my considered opinion is that the doctrine of
“estoppel” applies in this case.
The effect of the Notice of Discontinuance
20
[71] A Notice of Discontinuance dated 06.04.2007 was filed by the
Plaintiff in the 2003 which is marked as Exhibit P26.
[72] The discontinuance of an action is governed by Order 21 Rules of
Court 2012, particularly the following provisions:
25
Order 21 Rules 2(4)
“If all the parties to an action consent, the action may be
withdrawn without the leave of the Court at any time before
30
trial by producing to the Court a written consent to the action
being withdrawn duly signed by all the parties.”
30
Alasan Penghakiman GS 22-159-2008
5
[73] On the facts of this case, both parties had signed a Notice of
Discontinuance, the manner of which is prescribed in Form 32 provided
in the Rules of Court 2012. A perusal of Form 32 would show that there
is no requirement to state the words, “with liberty to file afresh”. The
Plaintiff’s solicitor submitted that if it was the intention of the parties to
10
discontinue the 2003 suit “without liberty to file afresh”, and then it ought
to have been stated clearly on the Notice of Discontinuance. However,
there was none.
[74] She referred to the case of TETANGGA AKRAB SDN BHD v
TUAN JAWIE & ORS (2005) 7 CLJ 531,
“In my view, not only has the court not made any final ruling
15
it has for that matter not made any ruling whatsoever due to
the circumstances leading to the withdrawal of the summons
for leave to issue 3rd party notice and the notice of
discontinuance.
20
Furthermore, in the notice of discontinuance, there is no
clause to the effect that there is no liberty to file afresh.”
[75] It is the Plaintiff’s solicitor contention that the Defendants’ solicitor
who had also signed the Notice of Discontinuance did not amend the
25
same to include the words “without liberty to file afresh”, because at all
material times, the intention of the parties was to re-file a fresh suit for
the balance outstanding sum upon determination of the same from the
proceeds of sale. The Defendants’ solicitor had already waived his rights
to object at this juncture because he always had the liberty to amend the
30
Notice of Discontinuance when it was forwarded to him for approval and
execution.
31
Alasan Penghakiman GS 22-159-2008
5
[76] It is further contended that the intention of the Plaintiff to re-file a
fresh suit can be clearly seen in the Plaintiff’s letter to its previous
solicitors dated 05.04.2007 in Exhibit P18, which reads as follows:
10
“We refer to both your facsimiles of 04/04/2007 on the above
matter.
As advised by your good selves, please proceed to
withdraw the existing suit with liberty to file afresh and
15
with no order as to costs to the said withdrawal.”
[77] Exhibit P18 was duly signed by PW1 and PW2. On the instruction
of the Plaintiff, the solicitors proceeded to file the notice of
discontinuance on 06.04.2007.
20
[78] She relied on the case AYER HITAM TIN DREDGING MALAYSIA
BHD v Y.C. CHIN ENTERPRISE SDN BHD (1994) 3 CLJ 133
(Supreme Court) and KANDASAMI KALIAPPA GOUNDER V MOHD
MUSTAFA SEENI MOHD (1983) CLJ (Rep) 7.
25
[79] She submitted that in any event, the question that begs to be
answered is what the effect of discontinuance is, and this can be seen in
Order 21 Rule 4, which provides:
“Subject to any terms imposed by the Court in granting leave
30
under rule 3, the fact that a party has discontinued an
action or counter claim or withdraws a particular claim
made by him therein shall not be a defence to a
32
Alasan Penghakiman GS 22-159-2008
5
subsequent action for the same, or substantially the
same, cause of action.”
[80] Although Order 21 Rule 4, governs a situation where the action is
discontinued with leave of court, it is her submission that the same
10
reasoning should apply in a case where the action is discontinued
without leave of court. Hence, the Defendant is refrained from raising the
issue of the discontinuance of the 2003 suit as its Defence.
[81] The filing of a notice of discontinuance does not bar the Plaintiff
from filing a subsequent action for the same or substantially the same
15
cause of action. She relied on the authority of HONG LEONG FINANCE
BHD v. MAXDOUBLE CONSTRUCTION (M) SDN BHD & ORS
[2009] 7 CLJ 38,
At page 213:
“Whether the Defendants' Liabilities Have Been Discharged
20
By the Discontinuance of the Previous Suit:
[18]A discontinuance of the action is not necessarily an
abandonment of a claim to release the defendants of all
obligations under the action.
25
[19] A discontinuance in respect of a suit filed in court it is to
be appreciated is merely a discontinuance of the suit and not
a withdrawal of any claim in that suit against the other party
unless the parties are agreed that such discontinuance shall
30
operate as a full discharge of the latter's obligation.
33
Alasan Penghakiman GS 22-159-2008
5
[20]Indeed Order 21Rule 4 specifically provides (with respect
to the discontinuance with leave from the court) that "Subject
to any terms imposed by the court in granting leave under
Rule 3, the fact that a party has discontinued an action or
10
counterclaim or withdrawn a particular claim made by him
therein shall not be a defence to a subsequent action for the
same, or substantially the same, cause of action." It would
appear
that
the
withdrawal
in
this
instance
is
discontinuance without leave under Order 21 Rule 2 but
the same reasoning should apply.”
15
(See
AFFIN
BANK
BHD
v.
JOSEPH
THAMBIRAJAH
[2004] 6 CLJ 201,)
20
[82] Further, according to her, there is not an iota of evidence that the
Defendants have been fully discharged of their liabilities under the
Facility Agreement. Although the Defendant alleges that there was an
oral agreement that the debt is fully extinguished and on that basis the
Plaintiff discontinued its action, this is a misconceived argument. It is
25
also contrary to DW1’s admission in cross examination in respect to the
1st Defendant’s indebtedness. Defendant’s allegation that there was at
all material times an agreement between the Plaintiff’s officers in the
Melaka branch and the Defendant that the debt is fully extinguished
upon the sale of the 2nd property (Lot 448), is baseless and cannot be
30
maintained. DW-2 admitted during cross-examination that there was no
correspondence from either party to confirm this alleged agreement.
34
Alasan Penghakiman GS 22-159-2008
5
[83] Finally, she based her argument by referring to the case of BANK
ISLAM MALAYSIA BERHAD v MUSTAFFAR @ MUSTAFFA YACOB
& ANOR (2012) 1 LNS 548:
“[29] The overall probabilities of the case also do not
10
support the Defendant’s allegation. It is not in dispute that
the facilities given involved such a huge amount and until
and unless approval is given by the top management of the
Plaintiff, no bank officer would be authorized to give such
representation. In this regard, the Court agrees with the
15
judgment of my learned sister, Rohana Yusuf J, in the case
of Utama Merchant Bank Bhd v Dato’ Mohd Nadzmi Mohd
Salleh (2009) 6 CLJ 371, when Her Ladyship said:
“(2) The defendant owed the burden of proving that the
20
representations and assurances had concluded an oral
collateral agreement which co-existed with the written
agreements. However, when viewed objectively in the
context of a banking arrangement, the representations
which were allegedly made to the defendant by the officers
25
of the plaintiff were inherently incredible. No bank officer
would be authorized to give such representations as were
allegedly given by the plaintiff’s representatives….The
alleged representations were clearly and extravagantly
unusual for the plaintiff’s officers to make. The defendant
30
ought to have known that it obviously fell outside the
plaintiff’s officers’ authority or scope of employment to make
such representations…”
35
Alasan Penghakiman GS 22-159-2008
5
[84]
In this case, the notice of discontinuance filed by the Plaintiff on
6.4.2007contains
the
express
words
“Plaintif
samasekali
memberhentikan tindakan ini terhadap defendan pertama, defendan
kedua dan defendan ketiga tanpa perintah mengenai Kos. With all
due respect to the Plaintiff’s solicitor, it does not make sense for the
10
Plaintiff’s solicitor to contend that the Defendants’ solicitor who had also
signed the Notice of Discontinuance did not amend the same to include
the words “without liberty to file afresh”. The burden of proof that the
notice of discontinuance contains the words “with liberty to file a fresh”
lies with the Plaintiff. The intention appears on the said notice of
15
discontinuance is to completely (samasekali) withdrawn the action
against the Defendants. Therefore, it is my considered opinion that the
Defendants’ solicitor waiving his rights to object at this juncture does not
arise.
20
[85] It is my considered opinion that the said notice of discontinuance is
an absolute withdrawal of action against the Defendants. It clearly shows
the intention of parties to put the litigation process to an end. The
Plaintiff’s letter to its previous solicitors dated 05.04.2007 in Exhibit
[P18],which she claims contain the advised to withdraw the existing
25
suit with liberty to file afresh and with no order as to costs to the
said withdrawal” was with due respect not meant for civil suit MT2-2252-2003 but for Originating Summon No. 24-37-2002 (24-237-2002
(foreclosure proceeding of Lot 448).
30
[86] Referring back to the case of HONG LEONG FINANCE BHD v
MAXDOUBLE CONSTRUCTION (M) SDN BHD & ORS [2008] 6 MLJ
868, Kang Hwee Gee J said as follows36
Alasan Penghakiman GS 22-159-2008
5
“Whether the defendants' liabilities have been discharged by
the discontinuance of the previous suit
[21] A discontinuance in respect of a suit filed in court it is to
10
be appreciated is merely a discontinuance of the suit and not
a withdrawal of any claim in that suit against the other party
unless the parties are agreed that such discontinuance
shall operate as a full discharge of the latter's obligation.
15
[23] There is no evidence that the parties had agreed to
release the defendants from their obligations by the
discontinuance. On the contrary the plaintiff's letter dated 21
July 2000 to the defendants stated clearly that the withdrawal
was 'with liberty', a term commonly used to reserve the right
20
of a party to file an action afresh.
[87] In HONG LEONG FINANCE BHD, the withdrawal was 'with
liberty'. It my considered opinion in this case that the words “Plaintif
sama sekali memberhentikan tindakan ini terhadap defendan
25
pertama, kedua dan ketiga tanpa perintah mengenai kos” must
surely mean withdrawing the entire cause of action “without liberty” and
when both parties signed the said notice, it strengthened their purpose
and intention to put the dispute to an end. There is no application by the
Plaintiff to set aside the notice of discontinuance to alter its position that
30
there is a mistake or for some other reasons. Therefore, the agreement
to discontinue the actions must be given effect as a full discharge of the
Defendants obligation.
37
Alasan Penghakiman GS 22-159-2008
5
[88] In ANNIE QUAH LAY NAH v SYED JAFER PROPERTIES SDN
BHD & ORS [2007] 1 MLJ 225, the Court of Appeal held that-
“In the present instance, it is the case for the respondents in
10
the first appeal that the notice of discontinuance was good.
On the other hand, the appellant in the first appeal argues
that this was a case in which discontinuance with leave was
necessary so that the notice of discontinuance was bad.
The short answer to that argument is that no proceedings
15
were ever brought by the appellant in the first appeal to set
aside the notice of discontinuance. So, for present and all
other purposes the notice of discontinuance was and
remained valid as a matter of pure procedural law. And if this
were the only argument, then the first appeal is doomed to
20
failure. But Mr. Joginder Singh raised a second and far more
formidable argument in support of his appeal. He says that
the second respondent in the first appeal is estopped by its
conduct from relying on the notice of discontinuance. In my
judgment there is merit in this submission.
25
[7] Now, it is a general rule — applying strict principles
of adjectival law — that once an action has been
withdrawn
by a notice
of
discontinuance, there
is
nothing left on which the court may adjudicate.”
30
[89] The notice of discontinuance was filed on 6.4.2007 after 2 years
from the date of determination of full amount due and owing (short falls)
38
Alasan Penghakiman GS 22-159-2008
5
which date was on the 18.7.2005. The second notice of demand to the
Defendants was issued on 30.5.2008, 3 years later. There were no
concrete explanations from the Plaintiff’s witnesses regarding the delay.
From the facts, the Plaintiff has discharged the Defendants from any
debt or claim against the Defendants after they withdrew the claim in
10
2007 and the filing of the present suit 3 years later is an “afterthought”
after realizing their mistake.
[90] In EON BANK BHD v EDWINA LAU [2006] MLJU 19, David
Wong Dak Wah, JC (now a Court of Appeal Judge) held that:15
“In any event, it is my finding that the notice of
discontinuance dated 2.2.1990 filed by the Plaintiff in
respect of Originating Summons No KG 221 of 1988 was
effective despite the fact no leave was obtained by the
Plaintiff under Order 21 Rule 3(1) and (2) of the Rules of the
20
High Court. This court is now armed with Order 1A of
the Rules of the High Court which dictates that I look at the
justice of the case and not only to technical noncompliance
of the rules. Here from the agreed facts and the tendered
documents, one can easily discern why there was a
25
discontinuance of Originating Summons No.KG 221 of 1988
in 1990. The parties had come to an agreement as to the
repayment of the then outstanding loan amount and one of
the terms must have been the discontinuance of the suit.
Pursuant to the aforesaid agreement, the Plaintiff filed the
30
notice of discontinuance and served the same on the
Defendant who did not question the validity until now. Further
during the period from May 1990 to August 1998, the
39
Alasan Penghakiman GS 22-159-2008
5
Defendant had part payments towards her indebtedness of
the 1989 Order, (see paragraphs 10 and 11 of Statement of
Agreed Facts). So for all intent and purpose, the parties had
treated the notice of discontinuance as effective. In any
event her conducts including silence for more than 10 years
10
estopped
her
from
questioning
the
validity
of
the
discontinuance.”
[91] Coming back on the issue of security that was created by the
Charge. The Plaintiff’s solicitor submitted that the security is a continuing
15
security and cannot be extinguished so long as there is still an
outstanding amount due and owing to the Plaintiff. Whilst it is true that
clause 7 of the Charge gives such protection to the Plaintiff in that
manner, however, it is my view that once the Plaintiff on his own conduct
discontinued the entire actions against the Defendants, it follows that the
20
security is also discontinued and therefore extinguished. The case of
ANNIE QUAH LAY NAH “that once an action has been withdrawn by
a notice of discontinuance, there is nothing left on which the court may
adjudicate” and the case of EON BANK BHD that“ her conducts
including silence for more than 10 years estopped her from questioning
25
the validity of the discontinuance” followed. The cases referred by the
Plaintiff’s solicitor such as AFFIN BANK BHD v. ZULKIFLI ABDULLAH
[2006] 1 CLJ 438,SAEMAH MAHADI v PUBLIC BANK BHD (1998) 2
CLJ SUPP 70,AMMERCHANT BANK BHD v TOTALHILL SDN BHD &
ANOTHER CASE (2008) 3 CLJ 845, ARAB MALAYSIAN FINANCE
30
BERHAD v SUKMA VILLA SDN BHD (2001) 1 LNS 333, and RHB
BANK BHD v ALOM INDUSTRIES SDN BHD (2007) 5 CLJ 138 are
distinguished.
40
Alasan Penghakiman GS 22-159-2008
5
[92] The same applies to the individual guarantee given by the 2nd and
3rd Defendants. The limitation period for individual guarantee is 6 years.
[93] The facts in JOSEPH THAMBIRAJAH v BANK BURUH (M) BHD
10
[2008] 2 MLJ 773 is quite similar with the facts in this case asanalysed
in the table below-:
JOSEPH THAMBIRAJAH
i.
Loan
given
respondent
debtor”
to
by
THIS CASE
the Loan
given
“principal “principal
Pembinaan
by the
debtor”
Plaintiff
Pau
Wah
Damo Trading and guaranteed by 2nd
3rd
Defendant
sunder
individual
guarantee
dated
and guaranteed by appellant and
and 2 others
1.11.1999.
ii.
“principal debtor” failed to “principal debtor” failed to pay
pay back the loan
iii.
back the loan
On 23.12.1980, respondent On 12.7.2001, Plaintiff issued
issued notice of demand to the first notice of demand under
“principal debtor” including the said guarantee
the appellant and 2 others
iv.
Summary judgment entered On 18.4.2003, Plaintiff filed the
for the respondent
first
action
against
defendantsMT2-22-52
41
the
-
Alasan Penghakiman GS 22-159-2008
2003.Summary
judgment
against the defendants
were
refused
i.
On
7.11.1991
respondent On
6.4.2007,
Plaintiff
with the leave of the Court discontinues the first action with
withdrew actions against the the consent of the defendants
appellant
ii.
On
without order as to cost.
4.5.1992,
issued
new
respondent On 30.5.2008, second notice of
notice
of demands was issued against
demands to the appellant the
“principal
and I month after that issued defendant.
debtor”,
On
1st
11.7.2008,
another notice of demands to Plaintiff issued second notice of
the appellant on 8.6.1992
2ndand
demands
to
defendant
sunder
3rd
individual
guarantees dated 1.11.1999.
On 23.11.1992, respondent On 29.8.2008, Plaintiff filed the
filed new action against second
action
against
appellant and after full trial defendants-22-159-2008.
the Court rule in favour of
the
respondent.
The
appellant appeal to Court
of Appeal. The Court of
Appeal
allowed
the
appellant’s (the guarantor)
appeal with cost.
iii.
5
42
the
Alasan Penghakiman GS 22-159-2008
5
[94] In allowing the guarantor’s appeal, The Court of Appeal held as
follows“(1)
The liability of the appellant, and correspondingly the
respondent’s cause of action arose from the first notice of
10
demand dated 23 December 1980, which launched the first
suit against the principal borrower and the guarantors
including the appellant, on 11 March 1981. In any event, if
the cause of action did not accrue on 23 December 1980,
then it certainly did on 11 March 1981. Since the second
15
suit was only filed on 23 November 1992, it would be
barred by limitation. (See paragraph 17)”
[95]
The Plaintiff’s cause of action in this case begins from the date of
issuance of the notice of demands which was dated 12.7.2001 and the
20
limitation date ended on 12.7.2007. Based on the case of JOSEPH
THAMBIRAJAH, which facts are similar with this case, it is submitted by
the Defendants’ solicitor that the entire second action against the
guarantor, the 3rd Defendant under the individual guarantee dated
1.11.199 is barred by limitation and ought to be dismissed.
25
[96] In that event, the issue of “estoppels” also applies in this case. The
notice of discontinuance which was filed on 6.4.2007 did not contain the
words “with liberty”. The case of JOSEPH THAMBIRAJAH which is a
unanimous decision of the Court of Appeal continues to say30
“(2) The respondent itself had applied to delete the words
‘struck off with liberty’ which was a clear representation by
the respondent that there would be closure of the matter.
43
Alasan Penghakiman GS 22-159-2008
5
Thus, the doctrine of estoppels as expounded in Boustead
Trading (1985) Sdn Bhd v Arab Malaysia Merchant Bank
[1995] 3 MLJ 331 is applicable in this case and the
respondent ought to be estopped from filling the second suit
(see paragraph 21).”
10
Whether the Defendants owe the Plaintiff a sum of RM334, 873.37
as at 29.02.2008 being the shortfall between the outstanding sum
and the proceeds of sale
[97] Assuming I am wrong in my decision over the above issues,
15
whether the Plaintiff is entitled to recover the shortfall between the
outstanding sum and the proceeds of sale.
[98] The Plaintiff’s solicitor submitted that the Defendant counsel
proceeded to drive the issue that the actual outstanding sum ought to
20
have been RM115,594.64 only and he derived this figure by deducting
RM260,000.00 being the proceeds of sale from the outstanding sum of
RM375,594.64 (RM375,594.64 - RM260,000.00 = RM115,594.64). The
Plaintiff’s solicitor further submitted that this is a flawed conception of
any banking practice, system or mechanism. It has been established
25
through documentary evidence and that of the witnesses for the Plaintiff
that the proceeds of sale for Lot 429 and Lot 448 were not received by
the bank on the same day, but were received in stages between the
years 2003 to 2005.
30
[99] The Plaintiff’s solicitor further submitted that the balance
redemption sum for Lot 429 was paid by the Defendant on or around
12.12.2003, whereas the balance proceeds of sale for Lot 448 was only
received by the Plaintiff on or around 18.07.2005.There was still a
44
Alasan Penghakiman GS 22-159-2008
5
balance sum under the Facility Agreement after the disposal of Lot 429
on or around 12.12.2003 and the debt was not fully extinguished.
Between
12.12.2003
until
18.07.2005,
there
was
no
payment
whatsoever from the Defendant towards the balance debt, hence
interest accrued on the balance sum. Therefore, it is illogical to deduct
10
the sum of RM260, 000.00 from the entire outstanding debt of the
Defendant.
[100]
In the midst of the trial, the learned Defendant counsel for the
first time raised the issue of alleged negligence on the part of the Plaintiff
15
in failing to commence this suit in the year 2005 when the shortfall was
determined on or around 18.07.2005.
[101]
The Plaintiff’s solicitor submitted that this issue has never been
pleaded by the Defendants and the Plaintiff objected to this issue during
20
trial. A perusal of the Statement of Defence and Counter-Claim would
show that at all material times, the Defendants had only pleaded delay
and alleged negligence on the part of the Plaintiff in disposing Lot 448
and that is the basis of the Defendants’ counter-claim for damages. The
learned counsel for the Defendant pointed out paragraph 4 of page 19,
25
paragraph 8 a, b, c, d of page 23.
[102] A perusal of the entire paragraph 4 of page 19 of the Statement of
Defence (page 19-21 of Bundle A) would show that at the most, the
Defendants had only pleaded that, ‘(iii) sebaliknya pada 16.3.2005,
30
selepas hampir 4 tahun kelewatan, Plaintif telah menjual Lot 448
tersebut dengan secara lelongan dengan harga RM145,000.00 sahaja,
(v) Plaintif telah cuai mendapatkan harga jualan yang patut munasabah
45
Alasan Penghakiman GS 22-159-2008
5
dan semasa apabila menjual Lot 448 tersebut dan juga melewatkan
penjualan selama 4 tahun.’
[103] A perusal of page 23, paragraph 8(a) – (d) which are the
Defendants’ prayers for counter-claim would also show that the
10
Defendants are seeking damages and losses as a result of the alleged
delay and negligence in disposing Lot 448, and nothing more.
[104] It is trite law that a party is bound by its own pleadings –
AMANAH BUTLER (M) SDN BHD v YIKE CHEE WAH (1997) 2 CLJ 79
15
(Court of Appeal)
[105] She submitted that it was never pleaded by the Defendants that
the Plaintiff was negligent in not filing the suit in 2005. These are 2
different issues according to her because the basis of the Defendants’
20
counter-claim is that of the alleged delay and negligence as a chargee in
disposing Lot 448.
[106] Therefore it is her submission that these issues ought to be
excluded from this Court’s consideration. She relied on few authorities
25
as follows-
ABDUL RAHMAN BIN ABDUL KARIM v ABDUL WAHAB
BIN ABDUL HAMID (1996) 2 CLJ 455:
30
"It is now trite law that when a party, in giving his oral
evidence in Court, deviates from his pleaded defence, then
his account as narrated to the Court must surely be suspect.
Cases must be decided on the issues on the record; and if it
46
Alasan Penghakiman GS 22-159-2008
5
is desired to raise other issues these must be placed on the
record by amendment. Accordingly, the defence was bound
by its statement of defence, and was not allowed to adduce
facts which were not pleaded".
10
JANAGI v ONG BOON KIAT (1971) 2 MLJ 196:
“A statement of claim and the defence (together with the
reply, if any) constitute the pleadings in a civil action. It is on
the examination of the pleadings that the Court notices the
differences which exist between the contentions of the
15
parties to the action. In the words the matters on which the
parties are at issue are determinable by an examination of
the pleadings. An issue arises when a material proposition of
law or fact is affirmed by one party and denied by the other.
The Court is not entitled to decide a 'suit on a matter on
20
which no issue has been raised by the parties. It is not the
duty of the Court to make out a case for one of the parties
when the party concerned does not raise or wish to raise the
point. In disposing of a suit or matter involving a disputed
question of fact it is not proper for the Court to displace the
25
case made by a party in its pleadings and give effect to an
entirely new case which the party had not made out in its
own pleadings. The trial of a suit should be confined to the
pleadings on which the parties are at variance. If the parties
agree to a factual position then it is hardly open to the Court
30
to come to a find into, different from such agreed facts. The
only purpose in requiring pleadings and issues is to ascertain
47
Alasan Penghakiman GS 22-159-2008
5
the real difference between the parties and to narrow the
area of conflict and to see just where the two sides differ.
It was not open to the learned Magistrate to fly off at a
tangent as it were and disregard the pleadings in order to
reach a conclusion that he might have thought was just and
10
proper. It was held by Scrutton LJ in the case of Blay v.
Pollard & Morris [1930] 1 KB 628 at p. 634:
Cases must be decided on the issues on record; and if it is
desired to raise other issues they must be placed on the
record by amendment. In the present case the issue on
15
which the Judge decided was raised by him without
amending the pleadings and in my opinion he was not
entitled to take such a course.”
[107] Another interesting point to note is that it was never an issue in
20
the Issues to be tried. In any event, she said pursuant to Clauses 7.02
and 10.06 of the Charge in Exhibit P4 (b), the Defendants have
agreed to bear all cost, expenses and interests on such shortfall.
[108] During the Re-Examination DW1gave evidence for the first time
25
about a bank guarantee that has been pledged for RM100, 000.00 which
he alleged had been cashed by the Plaintiff. This was never pleaded in
the Statement of Defence or Examination in Chief and was raised for the
first time during Re-Examination. This is totally unfair on the Plaintiff as
the Plaintiff has been deprived of cross-examining DW1 on this issue.
30
There is no evidence whatsoever about a bank guarantee pledged with
the bank. DW1’s evidence is unsupported and unsubstantiated with any
documentary evidence. The bank’s statement of accounts which have
48
Alasan Penghakiman GS 22-159-2008
5
been admitted and marked as Exhibit P27 and P28 is conclusive
evidence of the Defendant’s indebtedness. In the case of BORNEO
HELICOPTERS SDN BHD v. SABAHAIR AVIATION SDN BHD &
ANOTHER [2012] 5 CLJ 684, it was held:
“No documentary evidence was produced at the trial from
10
which this fact can reasonably be inferred. Every opportunity
presented itself to Borneo Helicopters to place such an
important statement on record, yet strangely this was never
done.”
15
Is the sum claimed proved?
[109] The Plaintiff’s solicitor referred to the oral testimonies of PW1 and
PW2 who both had worked on the Defendant’s account/file from the time
the file was transferred to the HQ on default of the loan. They were able
20
to answer questions posed in cross-examination comfortably with
confidence and certainty. Much of this was due to their background and
source of information. PW1's knowledge of the matters in issue stems
not merely from the Plaintiff's files, records and accounts relating to the
facilities which had been transferred from the Melaka Branch, but from
25
the time spent in carrying out the recovery action. The records referred
to were also those kept in the ordinary course of business of the Plaintiff.
[110]
PW-2 on the other hand testified that she had been liaising with
the Melaka Branch on this account. Aside from the oral testimonies of
30
PW1 and PW2, the Plaintiff tendered documentary proof of its claim.
Various letters of offer and facilities agreements and Statements of
Accounts were produced.
49
Alasan Penghakiman GS 22-159-2008
5
[111] Statements of Accounts presented in evidence by the Plaintiff as
to the amount due and owing to the Plaintiff signed by PW1 and PW2,
the persons authorized to sign such statements and certificates. Both
the Statements of Accounts and the Certificates of Indebtedness were
prepared under the relevant provisions of the facility agreement as well
10
as the guarantees.
[112] The Defendants' own letters when negotiating the settlement of the
outstanding sums further testify to there being no doubt in the minds of
the Defendants as to the operation and accuracy of the accounts
15
maintained with the Plaintiff. The Defendants' concern was always to
find a way to settle the outstanding sums. This is clear from the
correspondence between the parties.
[113] The Plaintiff's witnesses have competently and confidently
20
explained their calculations of the various principal sums and interests;
and how the accounts have been kept. These sums were specified in
the notices of demand issued to the Defendants. There were no
protests. One can only infer and conclude on a totality of the evidence
before his Court that the Defendants themselves must have been
25
satisfied with the accuracy of the sum claimed. See DAVID WONG HON
LEONG v NOORAZMAN BIN ADNAN [1995] 4 CLJ, 155
[114]
Aside from the fact that the claim against the 1st Defendant has
been proved, it has also been proved that the guarantors were also sent
30
letters of demand. They, too, failed to settle. As guarantors and
consistent with the respective contracts of guarantees, and as provided
under Section 79 of the Contracts Act 1950the 2nd and 3rdDefendants
50
Alasan Penghakiman GS 22-159-2008
5
are obliged to answer for the default of the 1st Defendant. See RHB
BANK BERHAD v. SENI MAJU SDN BHD & ORS (2012) 1 LNS 530
[115] With due respect to the Plaintiff’s solicitor, the issue raised by the
Defendant’s solicitor on the alleged negligence on the part of the Plaintiff
10
in failing to commence this suit in the year 2005 surfaced during the time
the Plaintiff’s witnesses gave evidence regarding the shortfall which the
witnesses said were determined on or around 18.07.2005. In any event,
even if such allegation was made, I am of the opinion that it did not
prejudice the Plaintiff because had the 2003 suit not been discontinued,
15
the cause of action against the Defendants can still be proved and the
Statement of Claim can be amended at any time to update the current
outstanding balance amount. The discontinuation of actions only occurs
in 2007 therefore; the issue of negligent of the Plaintiff for failing to
commence this suit in the year 2005 does not arise. In my opinion, the
20
issue raised here will become relevant for the Defendants to show
whether the amount claims in 2008 is the correct amount due and owing
after taking into account the proceeds of sale of Lot 429 and Lot 448 in
2003 and 2005 respectively.
25
[116] Be as it may, I have perused the Defendants’ solicitor submission,
he did not raise the said issue in his submission of the said delay as an
important issue but merely stating the facts that the issue has been
pleaded in paragraphs 1(d), of 1.1 at page 18 &paragraphs 4(g) (iii),
(v) &paragraphs 6 & 7 at pages 21/22 of the Statement of Defence &
30
paragraph 8 at page 23 of the Counter Claim.
[117]
However, as correctly pointed out, a perusal of the Statement of
Defence and Counter-Claim would show that at all material times, the
51
Alasan Penghakiman GS 22-159-2008
5
Defendants had only stating the facts that the Plaintiff had withdrawn
Civil Suit MT2-22-52-2002 on 6.4.2007 and pleaded delay and alleged
negligence on the part of the Plaintiff in disposing Lot 448 and that is the
basis of the Defendants’ counter-claim for damages. I will deal with it
later in my judgment.
10
[118]
For the purpose of this judgment, the Defendants’ solicitor
admitted in his submission that the Statement of Defence and CounterClaim is based on the delay on the part of the Plaintiff in disposing Lot
448 or as he put it in the alternative that the Plaintiff failed to file an
15
action against the Defendants after 3 years after the sale of Lot 448 on
16.3.2005 and or after “shortfall” and interest has been “ascertained”
on 14.3.2005.
[119]
20
It was submitted by Defendants’ solicitor that since 23.10.2008,
when the Defendant filed and served their Statement of Defence on the
Plaintiff, he had on several occasions pleaded the issue of delay
“directly or indirectly” to the Plaintiff in filing this action 3 years after
Lot 448 was auction off on 16.3.2005 and this issue is within the full
knowledge of Plaintiff’s solicitor. In any event he submitted that the law
25
allows him to raise it even if is not pleaded in his pleading. He referred to
the cases of SUPERINTENDENT OF LANDS AND SURVEYS (4TH DIV)
& ANOR v HAMIT BIN MATUSIN & ORS [1994] 3 MLJ 185andWISMA
PUNCA EMAS SDN BHD v DR. DONAL R. O’HOLOHAN [1987] 1 MLJ
393.
30
[120] In the case of BOUSTEAD TRADING (1985) SDN BHD v ARAB
MALAYSIAN MERCHANT BENK BERHAD [1995] 3 MLJ 331where an
issue of estopel was not pleaded but the Federal Court went to say-, “A
court may permit a litigant to argue an unpleaded estoppel if it is in
52
Alasan Penghakiman GS 22-159-2008
5
the interests of justice to do so. It is a matter within the discretion
of the judge who must have due regard to all the circumstances of
the case including any prejudice that may be caused by the
affected party being taken by surprise.
10
[121]
From the facts, the foreclosure proceedings on Lot 429, Lot 448
and actions to recover the amount and owing of RM375,594.64as at
31.3.2002 were filed by the Plaintiff in 2002. The second action was filed
by the Plaintiff on 29.8.2008 claiming the outstanding balance ofRM334,
873.37as at29.2.2008. In Jun 2003, Lot 429 was sold by “private
15
treaty” for the price of RM115, 000.00 and on16.3.2005; Lot 448 was
auction off at the price of RM145, 000.00. The Plaintiff received the total
proceeds of sale of both lands which is RM260, 000.00 on 18.7.2005.
[122]
20
PW1 admitted in her evidence, that once the payment comes in,
she can ascertain within a month, (Q619: “18th August 2005 – cut of
point, Right? A: Agreed”). As at 18.7.2005, the Plaintiff should have
ascertained the shortfall and interest then still due by the 1stDefendant.
[123]
25
The Defendants’ solicitor submitted that from the Plaintiff’s letter
dated 14.3.2005,the Plaintiff had in fact “ascertained” the amount of
“shortfall” and interest as at 16.3.2005 asRM342, 125.47. The Plaintiff
then directed their lawyer to take further action. No action was taken
until this second suit was filed claiming an amount with almost the same
amount found in the first suit which was completely withdrawn. The first
30
suit was for RM375, 594.64as at 31.3.2002 and in this case was for
RM334, 873.37as at 29.2.2008. (Plaintiff’s letter dated 14.3.2005 is at
page 2 Plaintiff’s Supplementary Bundle C)
53
Alasan Penghakiman GS 22-159-2008
“We refer to your facsimile of 14th March 2005 on the above
5
matter.
We append below the outstanding balance as at 16/03/2005 for
your further action:10
Facility
Outstanding as at 16/03/2005
Overdraft (NPGS)
RM240, 180.58 (dr)
Term Loan
RM101,944.89 (dr)
15
RM342,125.47 (dr)
Yours faithfully
For AFFIN BANK BERHAD
SD.
20
SD.
JAMILAH BEGUM BT MOHD SHARIFF
ROHAIDAH BT
MOHD RIDZUAN”
[124]
The Defendant’s solicitor further reiterated that the evidence by
PW1 and PW2 that “the cut off point to ascertain the shortfall and
25
interest was 18.7.2005”after the auction of Lot 448 on 16.3.2005, is not
true at all. Therefore their evidences are inconsistent with and contrary
to the contemporaneous document.
[125]
30
In JKP SDN BHD v PPH DEVELOPMENT (M) SDN BHD AND
ANOTHER APPEAL [2007] 6 MLJ 239, James Foong JCA (as His
Lordship then was) delivering the judgment of the Court has referred to
the case Tindok Besar Estate Sdn Bhd v Tinjar Co [1979] 2 MLJ 229 at
54
Alasan Penghakiman GS 22-159-2008
5
page 234, where Chiang Meng Tan FJ, said in relation to evidence of
contemporaneous documents and oral evidence at the trial as follows“For myself, I would with respect feel somewhat safer to refer
to and rely on the acts and deeds of a witness which are
10
contemporaneous with the event and to draw the reasonable
inferences from them than to believe his subsequent
recollection or version of it, particularly if he is a witness with a
purpose of his own to serve and if it did not account for the
statements in his documents and writings. Judicial reception
15
of evidence requires that the oral evidence be critically tested
against
the
whole
of
the
other
evidence
and
the
circumstances of the case. Plausibility should never be
mistaken for veracity.”
20
[126] I have considered the Defendant’s solicitor submission on this
point and I did not agree with him. What PW1 and PW2 said in their oral
evidence is true that “the cut off point to ascertain the shortfall and
interest was 18.7.2005”. In fact it was their evidence that they can take
one month or two to ascertain the outstanding amount. However, the
25
outstanding balance as at 16/03/2005 shown on that letter to my mind
had not taken into account the proceeds of sale of Lot 448 which was
auction off on the same date 16.3.2005. The outstanding balance as
at16/03/2005 in the said letter shows the Overdraft (NPGS)
is
at
RM240, 180.58. There was no substantial decreased in the amount of
30
Overdraft (NPGS) if the sales of Lot 448 (RM 145,000.00) is said to have
been taken into account as at 18.7.2005 whereas the outstanding
balance amount in exhibit P15 as at that date is RM 238,819.75.
55
Alasan Penghakiman GS 22-159-2008
5
[127]
PW2 in her evidence said that Lot 448 was sold for RM145,
000.00. The 10% of the auction proceeds, i.e. RM14, 500.00 was used
to settle Term Loan 2 on 26.03.2005. The outstanding balance of RM90,
434.67 under Term Loan 2 was fully settled on 18.07.2005. The balance
of the auction proceeds of RM40, 065.33 was used to settle part of the
10
OD (NPGS) on 18.07.2005.If that is the case then, to my mind the
outstanding amount at 18.7.2005 should be much lesser than RM
238,819.75.
[128]
15
The balance outstanding amount shown in P15 as at 18.7.2005
for OD/FDR is RM 21,620.12 and OD/NPGS is RM 238,819.75.The
combined amount is RM 260,439.87. If a civil suit was filed in 2005to
recover the amount due and owing, the correct amount should have
been RM 260,439.87. The Plaintiff had filed the second suit on
29.8.2008; 3 years later after the outstanding balance had been
20
determined and ascertained on 18.7.2005. The delay in filing this suit
had caused the interest to be charged on the outstanding balance as at
29.8.2008 for the OD/FDR is RM 7,620.28 and for OD/NPGS for a huge
interest of RM 83,527.57.
25
[129]
The Plaintiff’ is claiming against the Defendants in the second
suit for the balance outstanding amount of RM334, 873.37inclusive of
interest as at29.2.2008. The Plaintiff’s first suit was for the recovery of
RM375, 594.64as at 31.3.2002. The amount claimed is not much
different. I believe the amount in 2002 had not taken into account the
30
proceeds of sale of Lot 429 and Lot 448.
[130]
Looking at exhibit P15 again, it stated therein the outstanding
balance as at 29.8.2008 inclusive of interest for OD/FDR is RM
56
Alasan Penghakiman GS 22-159-2008
5
29,240.41 and for OD/NPGS is RM 322, 307.32. Taking into account this
amount less the proceeds of sale of Lot 448 on 16.3.2005, the
outstanding amount due and owing should be lesser than that. This is
quite consistent with the Defendant counsel contention that the actual
outstanding sum ought to have been around RM115, 594.64.This also
10
consistent with the SD1’s evidence during re-examination where he
stated that the bank had cashed in RM 100,000.00 guarantee pledge to
the Plaintiff’s bank at the material time. The Plaintiff’s solicitor in her
submission objected to this evidence since it was never pleaded in the
Statement of Defence or Examination in Chief and was raised for the
15
first time during Re-Examination. This is totally unfair on the Plaintiff as
the Plaintiff has been deprived of cross-examining DW1 on this issue.
[131]
The Plaintiff’s solicitor cannot complain now when she had the
right to object to that piece of evidence if she thinks that it was not
20
pleaded in the Statement of Defence or raised during the examining in
chief or she can asked the court to cross examine DW1. However, it was
not done here to disprove the evidence. When asked by this Court about
the details, the answer by SD1 was that the balance owes to the bank at
the material time was around the figure of RM100, 000.00.In the
25
absence of any challenge to the said evidence and after taking into
account the proceeds of sale and RM 100,000.00 guarantee called up
by the bank, I would think the balance owed to the bank at the material
time was around the figure of RM100, 000.00.
30
[132]
In the circumstances and based on the evidences presented
before this Court, the Plaintiff has not proven its case on the balance of
probability that the amount RM334, 873.37 inclusive of interest as at
57
Alasan Penghakiman GS 22-159-2008
5
29.2.2008 is due and owing by Defendant to the Plaintiff as claim in the
Statement of Claim.
THE DEFENDANT’S COUNTER-CLAIM
10
Whether the Plaintiff had breached its duty or had been negligent
as alleged
[133] The Plaintiff’s solicitor submitted that the Defendant did not
particularize the alleged breach of duty or the alleged negligence in its
pleading. The Defendant merely alleges that the Plaintiff has breached
15
its duty of care as a Charge when it refused to accept the price of
RM165, 000.00 for Lot 448 and took almost 4 years to dispose of the
said property.
[134]
20
This allegation is unfounded and I agree with the submission of
the Plaintiff’s solicitor.
[135]
It is not 4 years as alleged by the Defendants. The first letter
from the Defendant informing the Plaintiff that there was a purported
buyer for Lot 448 for the sum of RM165, 000.00 came from the Messrs
25
Morgan Karupiah on 05.08.2003. An Order for Sale was obtained on
03.09.2004 (a year later) and the Court fixed the auction date on
16.03.2005. Between the date of the Defendant’s letter and the Order for
Sale, there was a lapse of 1 year and 1 month only. Therefore there
was no delay as alleged.
30
[136] Further, if there is any delay at all, it was contributed by the
Defendants themselves. Numerous letters from the Defendant’s
58
Alasan Penghakiman GS 22-159-2008
5
solicitors asking for a postponement of the Order for Sale pending the
disposal of Lot 448 were seen during trial.
[137] Meanwhile the Plaintiff had replied to the Defendant vide letter
dated 05.08.2003 that they are not agreeable to dispose the property at
10
RM165, 000.00.
[138] PW1, explained the reason for the bank’s decision in not accepting
the offer to sell Lot448 at RM165, 000.00.
15
[139]
At all material times, the Defendant had knowledge that the
Plaintiff had counter-proposed a sum of RM185, 000.00 for the disposal
of Lot 448, however maintained the offer of RM165, 000.00 in its entire
letters to the Plaintiff, without any revised offer.
20
[140] Further, the Defendant also put the Plaintiff to believe that the
offer for RM165,000.00 was still in place when at all material times as
at 29.10.2003, the said offer was already withdrawn by the
prospective buyer. However, the Defendant kept on writing to the
Plaintiff with the said offer when there was no longer an offer to begin
25
with.
[141] The deceased/director of the 1st Defendant, Tan Leong Piow wrote
to the Defendant’s solicitor on 29.10.2003, informing the latter that the
intended Purchaser has withdrawn the offer, and requested for another 3
30
months’ postponement. This date becomes crucial in light of the
subsequent events. Hence as at 29.10.2003, there was no longer an
offer for RM165, 000.00 because the bidder had withdrawn his offer.
This was admitted by DW1. (Cross examination of DW1; Page 29
Notes of Proceedings)
59
Alasan Penghakiman GS 22-159-2008
5
93.Q:
Q&A 51 & 52. Encik merujuk kepada mukasurat 390
suatu surat bertarikh 29.10.2003. Encik kata surat ini
sebagai arahan Defendan Pertama bahawa pembeli
telah tarik balik tawaran, setuju.
10
A:
Ya.
96.Q:
Setuju setakat 29.10.2003 tidak ada pembeli untuk Lot
448 kerana pembeli telah tarik balik tawaran.
15
A:
Setuju.
[Also refer to Court’s notes of evidence on page 22-23]
20
[142] However, the Defendant Solicitor kept on writing to the Plaintiff on
numerous occasion asking for the Plaintiff’s consent to dispose of the
property at the offer price of RM165, 000.00 and let on the Plaintiff to
believe that there was a prospective buyer for the said price at all times
and kept adjourning the Order For Sale of Lot 448 pending the ‘consent’
25
of the Plaintiff. (Refer to:
Cross Examination of DW1, page 29 – 30
Notes of Proceedings)
97Q:
Rujuk mukasurat 364, 365, 367, 368, 369, 370 dan
371. Setuju dalam kesemua surat-surat ini peguam
30
Defendan tidak memaklumkan kepada Plaintif bahawa
tawaran RM165, 000.00 tersebut telah ditarikbalik.
A:
Setuju.
60
Alasan Penghakiman GS 22-159-2008
5
98Q:
SetujudalamsuratsuratiniDefendantelahmemohonpenangguhandaripada
Plaintif?
10
A:
Setuju
99.Q:
Walaupun Plaintif telah memberikan arahan pada
29.10.2003 kepada peguam bahawa tawaran telah
ditarik balik.
15
A:
102Q:
Setuju.
Setuju
gambaran
Defendan
dalam
surat-surat
mukasurat 364-371 persetujuan pihak Plaintif belum
20
diperolehi untuk tawaran RM165,000.00 walaupun
pembeli masih belum ada.
A:
Benar
[143] It is plain and obvious that the Defendants at all times was putting
25
the Plaintiff into believing that there was a prospective buyer for RM165,
000.00 in order to postpone the Order For Sale, an act which in my
opinion is not bona fide. Therefore it is totally unfair of the Defendant to
shift the blame entirely on the Plaintiff for the delay in obtaining the order
for sale or in disposing Lot 448.
30
[144] PW1 had explained at length that it was a commercial decision
that the Plaintiff had to make in disposing Lot 448, when the outstanding
61
Alasan Penghakiman GS 22-159-2008
5
debt was still huge and the offer was not sufficient to relinquish the
outstanding debt.
[145] The Plaintiff proceeded with the auction on the date fixed by Court
i.e. 16.03.2005, based on the reserve price at that material time (RM145,
10
000.00), according to the Valuation Report dated 05.01.2005 by Messrs
Henry Butcher. The Plaintiff had acted within its scope and authority at
all material times in disposing Lot 448.
[146] In BANK KERJASAMA RAKYAT v DAYAPLAZA SDN BHD;
15
EMPIRE POSSESSION SDN BHD (INTERVENER) (1998) 5 CLJ 79, it
was held as follows:
On page 462 - 463:
“The Law
20
It was submitted that the plaintiff chargee is under a duty of
care in the conduct of sale to ensure that the interest of the
defendant is not wilfully and recklessly sacrificed.
The duty of chargee in exercising the power to sell under the
National Land Code came for consideration in the local case
25
of Asia Commercial Finance (M) Bhd & Anor v. Development
& Realtor Sdn Bhd [1992] 2 CLJ 1175 (refd) [1992] 2 MLJ
504. There, Edgar Joseph Jr J (as he then was) after
considering
a
long
line
of
authorities
from
other
commonwealth jurisdictions at p. 516 expressed the
30
following opinion:
62
Alasan Penghakiman GS 22-159-2008
5
It is settled law that a chargee in exercising the power to sell
under the Code owes a duty to a chargor which flows from
equity's recognition that a chargor has an interest in the
surplus (if any) arising from the sale.
10
The issue of the appropriate standard of care owed by the
chargee to the chargor is not free from difficulty.
One line of authority is to the effect that a mortgagee's only
duty is to act bona fide in the conduct of the sale (see
Kennedy v. De Trafford; Warnor v. Jacob). In the latter case,
15
Kay J said at p. 224:
... a mortgagee is strictly speaking not a trustee of the power
of sale. It is a power given to him for his own benefit, to
enable him the better to realize his debt. If he exercises it
bona fide for that purpose, without corruption or collusion
20
with the purchaser, the court will not interfere even though
the sale is very disadvantageous, unless indeed the price is
as low as in itself to be evidence of fraud.
In the Australian case of Pendlebury v. Colonial Mutual Life
Assurance Society Ltd. Issacs J stated at p. 699 that 'so long
25
as [the mortgagee] observed specified formalities and acts in
good faith his conduct cannot be challenged'.”
[147] It is the Plaintiff’s solicitor submission that at all material times the
Defendant was represented by solicitors, Messrs MorganKarupiah. The
30
Order for Sale, the Summons for Direction (SFD) and the Order for SFD
were all served on the solicitors and the Defendant did not at any point
63
Alasan Penghakiman GS 22-159-2008
5
of time oppose the foreclosure proceeding, did not set aside the Order
for Sale or the Order for SFD, nor did it challenge the auction.
[148] Based on the evidences and the authorities cited, I agree with her
that it is now too late in the day for the Defendants to raise this issue
10
when they had ample opportunity to do so and it is my finding that there
is no breach of duty of care by the Plaintiff as alleged by the Defendants.
The Plaintiff had acted within its powers as a Chargee in disposing Lot
448.
15
Whether the Defendants suffered loss and damage
[149] In paragraph 9(a) and (b) of its Counter-Claim, the Defendant
prays for loss and damages against the Plaintiff for the alleged breach of
duty of care and negligence as the Chargee and that the loss and
damages are to be assessed.
20
[150] At all material times, the breach was on the part of the Defendant
as the Chargor for having failed to regularize its account and having
failed to settle the shortfall. The Plaintiff merely exercised its rights in
recovering the outstanding debt and all actions taken by the Plaintiff
25
were within the scope and authority of a Chargee.
[151] At all material times, the Defendant did not make any demand for
the alleged loss or damages from the Plaintiff since Lot 448 was
auctioned off on 16.03.2005. Neither did the Defendants raise the issue
30
of delay in disposing Lot 448 nor that was it sold at a sum lower than
RM165, 000.00 at any point of time between the time when the Order for
SFD was obtained and the auction on 16.03.2005.
64
Alasan Penghakiman GS 22-159-2008
5
[152] The Defendant is claiming for losses and damages to be assessed
for the alleged breach of duty and negligence of the Plaintiff as the
Chargee. The Defendant further claims that the said property could have
been sold at RM165, 000.00 when it was offered to the Plaintiff. As I
have already seen, the Plaintiff was not agreeable to disposing Lot 448
10
at RM165, 000.00 because according to PW1, the price was low and not
sufficient to extinguish the outstanding debt, and indicated the price of
RM185, 000.00.
[153] Damages and loss must be strictly proved. The burden is on the
15
Defendant to show that the market price of the property was RM165,
000.00 at that material time. In this case there is not a single document
adduced by the Defendant in the form of a valuation report, to show that
the market price of the property was RM165, 000.00 at the material time
and nothing more.
20
[154] In BANK KERJASAMA RAKYAT v DAYA PLAZA SDN BHD;
EMPIRE POSSESSION SDN BHD (INTERVENER) (1998) 5 CLJ 79:
“The Valuation
25
What is even more fatal to the defendant's case is that even
assuming for the sake of argument that there was a breach of
duty of care by the plaintiff in the conduct of the auction of the
said lands, the burden is on the defendant to prove that the
defendant has suffered damage as a result thereof. This
30
means to say that the defendant has to satisfy the court, on
balance of probabilities that the said lands had been sold at a
price below the market value. Since this issue involves the
65
Alasan Penghakiman GS 22-159-2008
5
valuation of the said lands, therefore, it is necessary for the
defendant to submit its own valuation report to challenge the
valuation report submitted by the plaintiff. This was not done.
In the circumstances, the court is left with no alternative but to
accept the valuation report submitted by the plaintiff.”
10
[155] The Defendant did not adduce a single letter from the proposed
buyer, nor did them call any real estate agent to give evidence of the
market rate of Lot 448 at that material time. What was before the Court
is just a series of letters from the Defendant’s solicitor asking for the
plaintiff’s consent to sell Lot 448 at RM165, 000.00 and continuous
15
adjournments.
[156] As has been submitted, there was no real buyer as at 29.10.2003
and all the subsequent letters from the Defendant’s solicitor to the
Plaintiff on this issue were merely attempts to delay the Order for Sale
20
and to mislead the Plaintiff into believing that there was a buyer. The
Plaintiff instructed its solicitors via letter dated 09.07.2004, to proceed
with the Order for Sale since there is no concrete buyer or a sale and
purchase agreement in respect of Lot 448 from the Defendant.
25
[157]
In RICHARD CURTIS & CO SDN BHD v. KHATIJAH ABDUL
MAJID [2012] 7 CLJ 878 “(10) It is trite that the defendant must prove her claim for
damages. The defendant must not say that she was claiming
30
for this and that without proving her claim by way of
documentary evidence, if not primary, secondary evidence or
oral evidence through her witnesses. On the facts, the
66
Alasan Penghakiman GS 22-159-2008
5
defendant did not produce any evidence to prove her loss
and damage either documentary or testimonial pertaining
to
claims.
(Popular
Industries
Limited
v.
Garment
Manufacturing Sdn Bhd; Tan Sri Khoo Teck Puat & Anor v.
Plenitude Holdings Sdn. Bhd. ;refd)”.
10
[158]
The Defendants who are claiming damages from the Plaintiff had
to show that the loss in respect of which they claimed was caused by the
plaintiff’s wrong and also damages are not too remote to be recoverable.
The Defendants in this case are seeking damages to be assessed and
15
therefore has the burden of proving both the fact and the amount of
damages before they can recover.
[159] The Defendant has failed to prove its claim for damages.
20
CONCLUSION
[160]
The law on the burden of proof is governed by Section 101 and
102 of the Evidence Act 1950. In accordance with Section 101, the
legal burden of establishing that there is money owing from the
Defendant to the Plaintiff lies on the Plaintiff. The burden of establishing
25
that the Plaintiff has breach its duty of care that the loss in respect of
which the Defendants claimed was caused by the plaintiff’s wrong and
also damages lies on the Defendants.
[161]
30
In PROGRESSIVE INSURANCE SDN BHD v RM INSURANCE
UNDERWRITING AGENCY SDN BHD (2003) 5 CLJ 321, the court held
that the Plaintiff only needs to prove its case on a balance of
probabilities.
67
Alasan Penghakiman GS 22-159-2008
5
[162]
After hearing evidence from the Plaintiff’s witnesses and the
Defendant’s witness and after hearing Counsels submissions and also
after reading their written submissions, I find that the Plaintiff has not
proven its claim against the Defendants on the balance of probabilities
and I also find that the Defendants have also not proven their claim
10
against the Plaintiff in their counter claim on the balance of probabilities.
[163]
The Plaintiff’s claim is dismissed with costs.
[164]
The Defendants counter claim is dismissed with costs.
15
Dated: 30 April 2013
20
25
30
35
68
Alasan Penghakiman GS 22-159-2008
5
SOLICITORS:
M/s Jaafar & Menon (Janani Kalikumari) for the Plaintiff
10
M/s Morgan Karupiah (Morgan Karupiah) for the 1st and 3 rd. Defendants
LEGISLATIONS
Rules of Court 2012
Limitation Act 1953
Evidence Act 1950
15
CASES REFERRED:
1
AHMAD NAJIB ARIS v PP (2009) 2 CLJ, 800
2
GUNASEGARAN
A/L
PARARAJASINGAM
v
PUBLIC
PROSECUTOR [1997] 3 MLJ 1
20
3
STANDARD CHARTERED BANK v MUKAH SINGH [1996] 3 MLJ
240 (HC)
4
Evidence Practice And Procedure Second Edition By AUGUSTINE
PAUL at page 640)
25
5
KERAJAAN MALAYSIA v YONG SIEW CHOON [2005] 4 CLJ 537
6
YONG SIEW CHOON v KERAJAAN MALAYSIA [2003] 2 MLJ 150.
7
JAAFAR SHAARI & SITI JAMA HASHIM V. TAN LIP ENG &
ANOR [1997] 4 CLJ 509
8
MALAYAN BANKING BERHAD v. JOSEPH VIJAY KUMAR A
ARULNATHAN [2011] 1 LNS 825
69
Alasan Penghakiman GS 22-159-2008
5
9
TAKAKO SAKAO (F) v NG PEK YUEN (F) & ANOR [2009] 6 MLJ
751
10
RHB BANK BERHAD v SIM ENG YEN & ANOR (2006) 1 LNS 189
11 CHEN HEN PING @ TIAN SEOW HOCK & ORS v INTRADAGANG
MERCHANT BANKERS (M) BHD (1995) 3 CLJ 690.
10
12
TAN KONG MIN v MALAYSIAN NASIONAL INSURANCE SDN
BHD (2005) 3 CLJ 825 (FEDERAL COURT)
13
WAN AHMAD WAN SALLEH & ANOR v BANGKOK BANK BHD
(1998) 4 CLJ SUPP 257
14
15
HONG KONG & SHANGHAI BANKING CORP. LTD v WAN
MOHD WAN NGAH (1991) 2 CLJ (Rep) 732.
15
TETANGGA AKRAB SDN BHD v TUAN JAWIE & ORS (2005) 7
CLJ 531,
16
AYER HITAM TIN DREDGING MALAYSIA BHD v Y.C. CHIN
ENTERPRISE SDN BHD (1994) 3 CLJ 133 (Supreme Court)
20
17
KANDASAMI KALIAPPA GOUNDER V MOHD MUSTAFA SEENI
MOHD (1983) CLJ (Rep) 7
18
JKP SDN BHD v PPH DEVELOPMENT (M) SDN BHD AND
ANOTHER APPEAL [2007] 6 MLJ 239
19
25
HONG
LEONG
FINANCE
BHD
v.
MAXDOUBLE
CONSTRUCTION (M) SDN BHD & ORS [2009] 7 CLJ 38,
20
AFFIN BANK BHD v. JOSEPH THAMBIRAJAH [2004] 6 CLJ 201,)
21
BANK
ISLAM
MALAYSIA
BERHAD
v
MUSTAFFAR
@
MUSTAFFA YACOB & ANOR (2012) 1 LNS 548:
22
30
In ANNIE QUAH LAY NAH v SYED JAFER PROPERTIES SDN
BHD & ORS [2007] 1 MLJ 225
23
EON BANK BHD v EDWINA LAU [2006] MLJU 19
70
Alasan Penghakiman GS 22-159-2008
5
24
JOSEPH THAMBIRAJAH v BANK BURUH (M) BHD [2008] 2 MLJ
773
25
AMANAH BUTLER (M) SDN BHD v YIKE CHEE WAH (1997) 2
CLJ 79 (Court of Appeal)
10
26
AFFIN BANK BHD v. ZULKIFLI ABDULLAH [2006] 1 CLJ 438,
27
SAEMAH MAHADI v PUBLIC BANK BHD (1998) 2 CLJ SUPP 70,
AMMERCHANT BANK BHD v TOTALHILL SDN BHD &
ANOTHER CASE (2008) 3 CLJ 845,
28
ARAB MALAYSIAN FINANCE BERHAD v SUKMA VILLA SDN
BHD (2001) 1 LNS 333,
15
29
RHB BANK BHD v ALOM INDUSTRIES SDN BHD (2007) 5 CLJ
138
30
ABDUL RAHMAN BIN ABDUL KARIM v ABDUL WAHAB BIN
ABDUL HAMID (1996) 2 CLJ 455:
20
31
JANAGI V ONG BOON KIAT (1971) 2 MLJ 196:
32
BORNEO HELICOPTERS SDN BHD v. SABAHAIR AVIATION
SDN BHD & ANOTHER [2012] 5 CLJ 684
33
BANK KERJASAMA RAKYAT v DAYAPLAZA SDN BHD; EMPIRE
POSSESSION SDN BHD (INTERVENER) (1998) 5 CLJ 79
34
25
RICHARD CURTIS & CO SDN BHD v. KHATIJAH ABDUL MAJID
[2012] 7 CLJ 878 -
35
PROGRESSIVE INSURANCE SDN BHD v RM INSURANCE
UNDERWRITING AGENCY SDN BHD (2003) 5 CLJ 321
36
SUPERINTENDENT OF LANDS AND SURVEYS (4TH DIV) &
ANOR v HAMIT BIN MATUSIN & ORS [1994] 3 MLJ 185
30
37
WISMA PUNCA EMAS SDN BHD v DR. DONAL R. O’HOLOHAN
[1987] 1 MLJ 393.
38
BOUSTEAD TRADING (1985) SDN BHD v ARAB MALAYSIAN
MERCHANT BENK BERHAD [1995] 3 MLJ 331
71