Export-Import Bank of Malaysia Berhad v Countywood Sdn. Bhd., 10-12-2007

JudgeJustice Datuk Ian H.C. Chin
Judgment Date10 December 2007
CourtHigh Court (Malaysia)
Record NumberCIVIL SUIT NO. K22-280 OF 2001
MALAYSIA

5

Notes of proceedings – Preliminaries

-------------------------------------------------------------------------------------------------------------

MALAYSIA

IN THE HIGH COURT IN SABAH AND SARAWAK AT KOTA KINABALU

CIVIL SUIT NO. K22-280 OF 2001


BETWEEN


EXPORT-IMPORT BANK

OF MALAYSIA BERHAD … PLAINTIFF


AND

COUNTYWOOD SDN BHD … 1ST DEFENDANT

HO YEW KWONG … 2ND DEFENDANT

KONG SING CHU … 3RD DEFENDANT

WONG CHEE TAI … 4TH DEFENDANT



NOTES OF PROCEEDINGS

IN OPEN COURT

10 DECEMBER 2007

10.30 A.M.


Coram: Justice Datuk Ian H.C. Chin

For Plaintiff : Peter Vung

For 3rd Defendant: Chung Jiun Dau

For 4th Defendant: Lee Ai Leng


Vung: Judgment in default had already been entered against the 1st and 2nd Defendants. Have emailed opening speech. [Reproduced below after cropping.]



Opening speech by Plaintiff for trial fixed on 10.12.2007



May it pleases Your Lordship,


Introduction


This trial is in respect of a claim by the Plaintiff against the 3rd and 4th Defendants. Judgment had already been entered against the 1st and 2nd Defendants. [Enclosure 10].


The Plaintiff is at all material times a financial institution incorporated under the Companies Act 1965 with it’s business address at Level 8, UBN Tower, No. 10, Jalan P. Ramlee, P.O. Box 13028, 50796 Kuala Lumpur, Malaysia.


The 1st Defendant is at all material time a company incorporated under the Companies Act with it’s business address at Suite 406B, 4th Floor, Central Building, Jalan Sagunting, 88000 Kota Kinabalu, Sabah.

The 3rd Defendant was at all material times, the Chairman Director and major shareholder of the 1st Defendant. The 4th Defendant was at all material times a Director and shareholder of the 1st Defendant.



The facts of the case


The claim by the Plaintiff against the 3rd and 4th Defendants arose from a Guarantee Agreement dated 20th day of November 1998 (exhibit P3 (59-71), Bundle of disputed documents) whereby the 3rd and 4th Defendants had stood as guarantors for the 1st Defendant as the borrower. The Guarantee Agreement clearly stated that the Guarantors shall jointly and severally guarantee to the Lender the payment and discharge of all the indebtedness and for the performance of the obligations of the Borrower under the Facility Agreement.


The 1st Defendant took out a Revolving Pre-shipment and Post-shipment Supplier Credit Facility Agreement from the Plaintiff in the amount of RM 3,500,000.00 for the purpose of financing export of timber mouldings, sawn timber and other timber products, any other products at the Bank’s sole discretion. Letter of Offer dated 17th day of September 1998 (exhibit P2 1-12, Bundle of Agreed Documents) and the Revolving Pre-Shipment and Post- Shipment Supplier Credit Facility Agreement dated 20th November 1998 (exhibit P2 14-58, Bundle of Agreed Documents). The facility was guaranteed by the 2nd, 3rd and 4th Defendants.


The facts of the case are largely undisputed as the 3rd Defendant had made elaborate admission of the same in his police report dated 07.08.2001 (exhibit P3 117-121, Bundle of Disputed Documents).

By virtue of Board of Directors’ Resolution of Countywood Sdn Bhd dated 19th September 1998, of the 1st Defendant, the 2nd and 3rd Defendant were authorized to sign all documents for and on behalf of the 1st Defendant singly (exhibit P2 13, Bundle of Agreed Documents).


In breach of the above Credit Facility Agreement by the 1st Defendant and the Guarantee Agreement by the 2nd, 3rd and 4th Defendants and despite several reminders and demands made by the Plaintiff, the Defendants failed, refused and neglected to pay the Plaintiff the arrears of the above Credit Facility. Due to the Defendants refusal, failure and negligence to settle the said sum, they have thereby caused the Events of Default in the Credit Facility agreement to come into effect.


Further the 3rd and 4th Defendants are also liable to the Plaintiff not merely as guarantors but also as principal debtors under the Guarantee Agreement. Clause 2.1 of the Guarantee Agreement stated that “in consideration of the Lender agreeing at the request of the Borrower and of the Guarantors to grant the Facility to the Borrower, the Guarantors hereby jointly, severally, unconditionally and irrevocably guarantee as a continuing obligation, to the Lender as principal debtors and not merely as sureties, on demand the repayment by the Borrower of the indebtedness and the performance of the obligations of the Borrower under the Facility Agreement”


Three releases were made by the Plaintiff as per the drawdown made by the 1st Defendant in the amount of RM 800,000.00. Thus, the Plaintiff’s claim against the 3rd and 4th Defendants is for the sum of RM 800,000.00 released to the 1st Defendant. Statement of account dated 21st September 2001 (exhibit P3 122, Bundle of disputed documents).


The issues to be tried


The issues to be tried before this Honourable Court are :


  1. Whether the 3rd and 4th Defendants is liable to the Plaintiff under the Guarantee Agreement dated 20th November 1998 for the sum of RM 800,000.00 disbursed to the 1st Defendant.


  1. If the answer to the above issue is in the affirmative, whether the 3rd and 4th Defendants is liable to pay the Plaintiff interest as prayed for in the amended statement of claim or at such rate as the court thinks fit or at all.


The 4th Defendant have requested the following issues to be tried, to which the Plaintiff have no objection namely:


  1. Whether there were false assurances and misrepresentations given by the Plaintiff which induced the 4th Defendant into executing the Guarantee.


  1. Whether there are several condition precedents for the drawdown of the loan which were not fulfilled before the loan was drawdown.


  1. Whether the Plaintiff was negligent in disbursing the sum of RM 800,000.00 to the 1st Defendant without sufficient collateral.


  1. Whether the Plaintiff had unilaterally varied the terms of their Offer and the Facility Agreement.


  1. Whether the Plaintiff has breached its duty of care to the 4th Defendant as a guarantor under the Facility Agreement.


  1. Whether the loan was disbursed in accordance with Bank Negara Guidelines and the Facility Agreement.


The 3rd Defendant have requested the following issues to be tried to which the Plaintiff have no objection, namely:


  1. Were the 3 alleged drawdown made by the Plaintiff on 7th January, 1999 in accordance with the terms of the Facility granted to the 1st Defendant and/or the guidelines issued by Bank Negara Malaysia.


10. Did the 3 alleged transactions purportedly financed by the Plaintiff exist and are they genuine transactions available for financing under the Facility granted to the 1st Defendant.


11. Did the Plaintiff breach its duty of good faith or duty of care towards the 3rd and 4th Defendants in making the 3 alleged drawdown under the Facility.

12. Are the 3rd and 4th Defendants liable under the Guarantee Agreement dated 20th November, 1998 for the 3 alleged drawdown made in the total sum of RM 800,000.00.


13. Did the Plaintiff make the representations to the 3rd and 4th Defendants prior to the granting of the Facility to the 1st Defendant and prior to entering into the Guarantee Agreement with the 3rd and 4th Defendants.


14. Is the Plaintiff estopped from pursuing the 3rd and 4th Defendants as guarantors or otherwise.


The Letter of offer (exhibit P2 1-12, Bundle of Agreed Documents), Clause 5.4 of the Facility Agreement (exhibit P2 14-58, Bundle of Agreed Documents) and Clause 10.7 of the Guarantee Agreement (exhibit P3 59-71, Bundle of Disputed Documents) expressly provide that a certificate of indebtedness or statement of account signed by one of the Plaintiff’s officer shall be conclusive evidence of the 3rd and 4th Defendants’ liability. Such a certificate of indebtedness has indeed been issued.(exhibit P3 122, Bundle of Disputed Documents).


The conclusive evidence clause enables the Plaintiff by producing a certificate of indebtedness by its officer to dispense with legal proof of the actual indebtedness of the 3rd and 4th...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT