[2022] 1 LNS 2252 Legal Network Series

DALAM MAHKAMAH TINGGI MALAYA DI PULAU PIINANG

DALAM NEGERI PULAU PINANG, MALAYSIA
[RAYUAN SIVIL NO: PA-12ANCC-12-12/2020]

ANTARA

SARASWATHI NADARAJAN
(No. K/P: 740213-07-5334) … PERAYU

DAN

HONG LEONG BANK BERHAD

[No. Syarikat: 97141-X]
(yang telah mengambil alih perniagaan aset-aset
dan liabiliti EON BANK BERHAD melalui
suatu Perintah Letakhak Mahkamah Tinggi
Kuala Lumpur bertarikh 17.6.2011) … RESPONDEN

ALASAN PENGHAKIMAN

[1] The appellant/defendant was dissatisfied with the decision of the

learned Sessions Court Judge (“SCJ”) for allowing the
respondent/plaintiff’s application pursuant to Order 14A of the Rules
of Court 2012 and filed an appeal against the said decision. Having
heard the appeal I dismissed the said appeal with costs. The parties
shall be referred to as they were in the lower court.

Facts

[2] The 1 st defendant signed a Hire and Purchase Agreement dated

21.7.2010 with the plaintiff with respect to one LVD CNC Turrent
Punch Press machine for a. total amount of RM911,625.00 for a
period of 60 months. The 2 nd defendant who was one of the directors
of the 1 st defendant stood as guarantor. All together the 1 st and the 2 nd

1
[2022] 1 LNS 2252 Legal Network Series

defendants executed there agreements namely, the Hire and Purchase

Agreement, the Guarantee Agreement and the Supplemental
Agreement. The 1 st defendant subsequently went into default. The
plaintiff caused a notice of demand to be issued dated 15.5.2015
followed by a Notice of Termination. The plaintiff thereafter filed the
suit to recover its losses against the defendants vide Civil Suit No:
B52NCC-30-06/2016. The 3 rd and 4 th defendants were also the
directors of the 1 st defendant.

[3] The plaintiff filed for an Order 14 application against the

defendants and before the application was heard the 1 st defendant
entered into a consent judgment (“Order”) with the plaintiff where the
former agreed to bear the liability and the plaintiff to withdraw the
action against the 3 rd and 4 th defendants while the 2 nd defendant
remained and the Sessions Court struck out the application. However,
the Order was not fully complied with by the 1 st defendant.
Meanwhile bankruptcy proceedings against the 2 nd defendant was
taken by the plaintiff based on the Order. The 2 nd defendant’s
application to set aside the Bankruptcy Notice was dismissed by the
learned Deputy Registrar. The High Court allowed the 2 nd defendant’s
appeal holding that the Order did not bind the 2 nd defendant as it was
entered and recorded between the plaintiff and the 1 st defendant and
that the suit against the 2 nd defendant in Civil Suit No: B52NCC-30-
06/2016 had yet to be determined.

[4] The plaintiff thereafter took out another Order 14 application

against both defendants. The Sessions Court dismissed the said
application. Subsequently the plaintiff applied to amend the pleadings
which was allowed vide Enclosure 53. Against this decision the 2 nd
defendant appealed to the High Court and the appeal was allowed. The
plaintiff then filed for an Order 14A application (Enclosure 124)
against both defendants and this application was allowed by the
learned SCJ.

2
[2022] 1 LNS 2252 Legal Network Series

Decision of the Sessions Court

[5] The three questions posed were:

(a) Sama ada Defendan Kedua adalah terikat oleh Perjanjian

Jaminan Sewa Beli bertarikh 21.7.2010 dan Supplemental
Agreement bertarikh 17.1.2012?

(b) Sama ada Defendan Kedua adalah terikat dengan Penyata

Akaun dan/atau Sijil Keberhutangan (Certificate of
Indebtedness) yang dikemukakan oleh Plaintif?

(c) Sama ada liabiliti Defendan Kedua telah dilepaskan oleh

Penghakiman Persetujuan bertarikh 11.4.2016?

The learned SCJ answered all the three questions in the affirmative.

Submissions

Appellant

[6] The learned counsel for the 2 nd defendant argued that the three
questions did not finally determine the plaintiff’s claim as there were
issues of facts raised in the affidavits affirmed by the 2 nd defendant.
He contended that premised on the Order entered between the 1 st
defendant and the plaintiff, the plaintiff has no longer any valid claim
against the 2 nd defendant. He submitted that the Order was binding on
ail parties and in support of this contention he cited among others the
cases of Ganapathy Chettiar v. Lum Kum Chun & Ors [1981] 1 LNS
59 and Kattayat Mohandas s/o CP Narayana Menon v. Mangalam a/p
Sinniah & Anor [2011] 1 LNS 494. And this too has absolved the 2 nd
defendant from being bound by the Certificate of Indebtedness. In
addition he submitted that the said Order has estopped the plaintiff
from proceeding with Enclosure 124 because the 1 st defendant has
taken full responsibility to pay the plaintiff as stipulated in the said

3
[2022] 1 LNS 2252 Legal Network Series

Order. He further argued that Enclosure 124 ought not to be

entertained as the Sessions Court had earlier on dismissed the
plaintiffs application under Order 14A and the plaintiff was caught by
the doctrine of res judicata. Therefore the learned counsel submitted
that the learned SCJ erred in allowing Enclosure 124.

Respondent

[7] The learned counsel for the plaintiff argued that firstly, both the
1 st and 2 nd defendants did not deny executing the three agreements
therefore he submitted that they were bound by the said agreements.
Secondly, he further contended that the Certificate of Indebtedness
was conclusive evidence of the debt owed by the defendants. He
referred to Chen Heng Ping & Ors v. Intradagang Merchant Bankers
(M) Sdn Bhd [1995] 3 CLJ 690 and section 3 of the Banker’s Books
(Evidence) Act 1949. The said certificate was duly served with the
notice of demand on the defendants. The defendants did not dispute
this fact too. Thirdly, the Order dated 11.4.2016 was a consent
judgment entered between the plaintiff and the 1 st defendant. Therein
the plaintiff agreed to withdraw the action against the 3 rd and the 4 th
defendant but not against the 2 nd defendant. And when the High Court
allowed the 2 n d defendant’s appeal against the dismissal of her
application to set aside the Bankruptcy Notice, the learned judge held
that the suit B52NCC-30-06/2016 against the 2 nd defendant had not
been disposed yet. He submitted that the facts were not disputed
therefore the learned SCJ was correct in allowing the O. 14A
application.

Decision

[8] The Federal Court in Thein Hong Teck & Ors v. Mohd. Afrizan
bin Husain & Anor [2012] 2 MLJ 299; Bato Bagi & Ors v. Kerajaan
Negeri Sarawak & Another Appeal [2011] 8 CLJ 766 and Lembaga

4
[2022] 1 LNS 2252 Legal Network Series

Pembangunan industri Pembinaan Malaysia v. Konsortium JGC

Corporation [2015] 6 MLJ 612 have provided clear guidance for
matters which may be dealt with under Order 14A. From the
authorities it is clear that the court can proceed under Order 14A only
when it involves question of law or construction of document which
may dispose of either part or the whole suit and there should not be
any dispute as to the substantial or material facts.

[9] Here, the material facts were the three agreements were duly
executed by both defendants and there was also no dispute that the 1 st
defendant has defaulted, hence failed to satisfy the terms of the Order.
The defendants did not dispute the Certificate of Indebtedness, in
Cempaka Finance Bhd v. Ho Lai Ying & Anor [2006] 3 CLJ 544 at
p.554 Steve Shim CJ (Sabah & Sarawak) speaking for the Federal
Court said,

“A certificate of indebtedness operates in the field of adjectival

law. It excuses the plaintiff from adducing proof of debt. Such a
certificate shifts the burden onto the defendant to disprove the
amount claimed.

In the instant case, the relevant els. 27 and 7.03 of the loan
agreement and guarantee agreement respectively are sufficiently
clear. A clause of this nature has been described as a conclusive
evidence clause. Such a clause has been held to be binding and
valid by courts in Australia and England.”.

Thus, the defendants in particular the 2 nd defendant was bound by the

said certificate.

[10] It is also an uncontroverted fact that the Order was entered

between the plaintiff and the 1 st defendant and that the plaintiff only
agreed to withdraw the suit against the 3 rd and 4 th defendants. As
against the 2 nd defendant the suit B52NCC-30-06/2016 is still alive. !
agree that the facts are not disputed. The fact that the plaintiff did not

5
[2022] 1 LNS 2252 Legal Network Series

appeal against the decision of the Sessions Court in dismissing the

earlier application could not be taken as admission of factual disputes
by the plaintiff. Further the earlier application was under Order 14
which is of a different nature from Order 14A - see Bank Kerjasama
Rakyat Bhd & Ors v. H] Mat Hj Ahmad [2007] 2 CLJ 655.

[11] Therefore, based on the aforesaid reasons l found no reasons to

disturb the decision of the learned SCJ. This matter revolved around
the three agreements, the Certificate of indebtedness and the Order
dated 11.4.2016. The questions posed for determination, to my mind,
would finally dispose of the claim filed by the plaintiff. Therefore, I
dismissed the appeal with costs.

(ABD MAJID TUN HAMZAH)

Hakim
Mahkamah Tinggi Malaya, Pulau Pinang

Dated: 27 SEPTEMBER 2022

COUNSEL:

For the applicant - M/s N Ahilan & Associates

Peguambela dan Peguamcara
No. 45, Bishop Street
10200 PULAU PINANG

Tel : 04-2617516
Faks : 04-2627516

For the respondent - M/s Kek Ooi & Lee Hong

Peguambela dan Peguamcara
53, 1st Floor, Beach Street
10300 PULAU PINANG

Tel : 04-2618845

6
[2022] 1 LNS 2252 Legal Network Series

Faks : 04-2628832

Case(s) referred to:

Ganapathy Chettiar v. Lum Kum Chun & Ors [1981] 1 LNS 59

Kattayat Mohandas s/o CP Narayana Menon v. Mangalam a/p Sinniah

& Anor [2011] 1 LNS 494

Chen Heng Ping & Ors v. Intradagang Merchant Bankers (M) Sdn
Bhd [1995] 3 CLJ 690

Thein Hong Teck & Ors v. Mohd. Afrizan bin Husain & Anor [2012] 2
MLJ 299

Bato Bagi & Ors v. Kerajaan Negeri Sarawak & Another Appeal
[2011] 8 CLJ 766

Lembaga Pembangunan industri Pembinaan Malaysia v. Konsortium

JGC Corporation [2015] 6 MLJ 612

Cempaka Finance Bhd v. Ho Lai Ying & Anor [2006] 3 CLJ 544

Bank Kerjasama Rakyat Bhd & Ors v. Hj Mat Hj Ahmad [2007] 2 CLJ
655

Legislation referred to:

Banker’s Books (Evidence) Act 1949, s. 3

Rules of Court 2012, O. 14, O. 14A