Amfinance Berhad v Varusai Mohd Bin Zainal Abidin, 08-02-2011

Judgment Date08 February 2011
CourtHigh Court (Malaysia)
Record NumberS5-22-396-2004



SUIT NO: S5-22-396-2004


AMFINANCE BERHAD (Nombor Syarikat 67108-U)

(formerly known as Arab Malaysian Finance Berhad

and before that as MBf Finance Berhad). ...PLAINTIFF



(No. KP 8031054) …DEFENDANT

The Judgment of Judicial Commissioner

Tuan Lee Swee Seng


This is the story of a Borrower who complained that he had been defamed by his Lender in the information furnished by the Lender to the Central Credit Referencing and Information System (CCRIS) set up by Bank Negara.


The Defendant bought an apartment from a Developer, Sri Suajaya Sdn Bhd in 1993. The Sale and Purchase Agreement was dated 15 November, 1993. It was designated as Unit No. C-15-13A, 15th Floor, Block C, Sri Suajaya Condominium, Setapak, Kuala Lumpur (the Property). It measures about 1,187 sq ft. The purchase price was RM154,000.00. It appeared that the project and development was managed by MBf Property Services Sdn Bhd. Indeed MBf Property Services Sdn Bhd had signed the Sale and Purchase Agreement as 'Attorney' for the Developer.

The Defendant took a loan from MBf Finance Berhad. The brochure of the Developer stated the following:

No Interest Home Purchase Plan. Just pay 10% of the price and not a sen more on interest until your home is completed with C.F. (subject to 90% loan). Any loan interests incurred during period of construction will be PAID by the developer.”

The Defendant understood by the brochure that he needed to pay only 10% of the purchase price and the balance 90% would be paid from the Loan taken and that he would not be required to pay the interests on the loan that were being released progressively against the Architect's Certificate of Completion. In short the Defendant would only need to pay the instalments on the Loan once the Certificate of Fitness for Occupation had been issued.

The Loan taken was for RM138,600.00 and a Loan Agreement as well as a Deed of Assignment was executed by the Defendant with the Plaintiff's predecessor, MBf Finance Berhad.


Problem started when the Plaintiff’s predecessor , MBf Finance Berhad, asked the Defendant by their letter dated 17 February 1996, to do the following:

We wish to inform that your Housing Loan with us has been fully released. The Temporary Certificate of Fitness has been issued on 31st January 1996.

Please be advised that you are to service the current month (Feb’96) interest which will be due on 1st March 1996 and to commence your monthly instalment of RM1,793.45 on 1st March 1996.”

The Defendant refused to pay the instalments on the ground that he is not legally obliged to do so until a Permanent Certificate of Fitness is obtained for the property.

The Plaintiff sued for the breach of the Loan Agreement dated 20 January 1995. The Plaintiff alleged that by a Notice of Demand through its solicitors Messrs K K Lim & Associates dated 14 July, 2003 the Plaintiff had claimed for the payments of all arrears of instalment payments then together with interests failing which the Plaintiff would terminate the Loan Facility. Further by Notice of Termination dated 10 September, 2003 through the same solicitors, the Plaintiff recalled the said Loan Facility and demanded for the sum of RM292,348.48 due as at 8 September 2003 together with interest accruing until the date of full settlement at the rate of 10.40% p.a. (inclusive of 1% p.a. of default interest) calculated on a daily basis from 9 September 2003 until date of full and final settlement.

The Plaintiff claimed for this amount in its Statement of Claim.


The Defendant alleged in paragraph 2.2.4 of its Defence and Counterclaim that MBf Property Services Sdn Bhd had represented to him that whatsoever interests on the loan during the period up to the issuance of a Certificate of Fitness shall be borne by the Developer. The Defendant said he was not liable to pay until a permanent Certificate of Fitness had been issued.

The Defendant by paragraph 5 of the Defence and Counterclaim admitted that he did not make any instalment payments to the Plaintiff because he was dissatisfied that only a Temporary Certificate of Fitness had been issued. The Defendant continued in paragraph 6 thereof that the Defendant had not received any notice or further claims until the Plaintiff’s Notice of Demand dated 14 July 2003 that is some 6 years after the first notification to commence paying the monthly instalment dated 17 February 1996.

The Defendant alleged that the Plaintiff’s claim is statute-barred under the Limitation Act 1953 and that alternatively the Defendant is not liable to pay as the Defendant had not been served with an Unconditional Certificate of Fitness by the Plaintiff or the Developer.

Perhaps recalling the philosophy of an ancient warrior that the best defence is an offence, the Defendant had crafted and couched a Counterclaim under what is vaguely a claim for damages for defamation in that the Plaintiff had furnished to Bank Negara Malaysia (BNM) information that the Defendant is indebted to the Plaintiff for the sum of RM326,918.00 since 30 January 1996.

At the eleventh hour before trial on 26 October, 2010, the Defendant put in an application to amend the Defence and Counterclaim. Paragraph 4 of the Defence was amended to include the fact that there was a previous letter of demand from the Plaintiff’s solicitors dated 22 July 1996. It is to be noted that the Plaintiff’s solicitors, Mr Pramjit Singh, had on 15 Septemebr 2010, when appearing together with Mr V Jeya Kumar for the Defendant, indicated to me that the Plaintiff needed time to revert and get client’s instruction on a Letter of Demand issued in 1996 to recall the Loan Amount. If there had been such a letter, then limitation might have set in.

In all fairness to the Plaintiff’s counsel, at the commencement of trial, he informed the Court that the Plaintiff would like to withdraw its Statement of Claim for it had then discovered a Letter of Demand dated 22 July 1996 through its previous solicitors. The Statement of Claim was thus struck out with costs to be taxed.

The Court then proceeded to hear the Defendant’s application to amend his Defence and Counterclaim which was not objected to by the Plaintiff. Besides the amendment to his Defence as above-mentioned, there was an amendment made to paragraph 10 of the Counterclaim to include the fact that the inclusion of the Defendant as a defaulter in CCRIS by the Plaintiff had damaged the Defendant’s personal reputation as well as his business activities and had brought him public odium and as such he has and continue to suffer loss as a result. There was a new paragraph 12.2 of the Counterclaim added to state that the Plaintiff’s reply to BNM dated 4 September 2006 with respect to the complaint of the Defendant was vague and inaccurate with respect to the Plaintiff’s claim against the Defendant.

I must point out here that any amendments to pleadings would relate back to the date of filing of the particular pleading and had it not been for the fact that the Plaintiff was not objecting to it, I would have disallowed it as what was sought to be amended by the addition of a new paragraph 12.2 of the Counter Claim was to make reference to a fact which had not happened when the Defence and Counterclaim was filed. It was a reference to a subsequent event said to have taken place after the filing of the Defence and Counterclaim.

If authority is needed, one can refer to the case of Sio Koon Lin & Anor v. SB Mehra [1981] 1 MLJ 225 where his Lordship Chang Min Tat FJ speaking for the Federal Court said:

“…On the authority of Sneade v Wotherton, etc & Co [1904] 1 KB 295 in which Collins M.R. held at page 297

the writ as amended becomes the origin of the action and the claim thereon indorsed is substituted for the claim originally indorsed,”

The amendment dated back to the date of the original issue of the writ and the action continued as though the amendment had been inserted from the beginning.”

I had allowed it more in the interest of justice and also because the parties here in a civil trial have no objection to the proposed amendment and from the evidential point of view to allow the Defendant to adduce evidence of the said letter. As not to adjourn proceedings further as the trial had been fixed on the same day, the Plaintiff was allowed oral amendment to its Reply and Defence to Counterclaim at paragraph 9 thereof to include the following:

The Plaintiff shall at all times plead absolute and qualified privilege with respect to the amended allegations in paragraph 10 and 12.2 of the Amended Counterclaim.”

Further the Plaintiff amended paragraph 11 of the Plaintiff’s Reply and Defence to Counterclaim to deny the new pargraph 12.2 of the Defendant’s Defence and Counterclaim.

There was no indication that the Defendant thereafter had wanted to put in a Reply to the Plaintiff’s Amended Reply and Defence to Counter claim eventhough the Plaintiff had raised the Defence of qualified privilege.

It goes without saying that parties should avoid making amendments to pleadings at the eleventh hour and here on the date fixed for the trial to proceed. As there had been several case management dates before trial, any amendments ought to have been done earlier. Amendments made on the...

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