ALLIANCE BANK MALAYSIA BERHAD 1. ) SONGMART MALAYSIA SDN BHD 2. ) TAN BOON KOK 3. ) TENG KOK GUAN 4. ) TAN AH MAI 5. ) MERCURIUS CAPITAL INVESTMENT LIMITED 6. ) SONGMART HOLDINGS SDN BHD

JA-22NCC-32-05/2023 Kand. 73 30/10/2024 16:23:24 DALAM MAHKAMAH TINGGI MALAYA DI JOHOR BAHRU DALAM NEGERI JOHOR DARUL TAKZIM GUAMAN NO.: JA-22NCC-32-05/2023 ANTARA ALLIANCE BANK MALAYSIA BERHAD …...PLAINTIF DAN 1. SONGMART MALAYSIA SDN BHD 2. TAN BOON KOK 3. TENG KOK GUAN 4. TAN AH MAI 5. MERCURIUS CAPITAL INVESTMENT LIMITED 6. SONGMART HOLDINGS SDN BHD ..DEFENDAN-DEFENDAN GROUNDS OF JUDGMENT [Enclosures 19 & 27] Introduction [1] These are two applications filed by the Plaintiff seeking for summary judgments under O. 14 of the Rules of Court 2012 (“ROC”) against – (a) the 1st, 2nd, 3rd, 4th and 6th Defendants in Enclosure 19; and (b) the 5th Defendant in Enclosure 27. 1 S/N G5DRltmv70GTFlbo0QDiw **Note : Serial number will be used to verify the originality of this document via eFILING portal [2] As a background of facts, at the request of the 1st Defendant, the Plaintiff via letters of offer dated 28.2.2022, 18.3.2022 and 16.6.2022 offered the 1st Defendant, inter alia, an overdraft facility of RM1.5 million (“Overdraft Facility”) and trade facilities totalling RM10.5 million (“Trade Facilities”). The Overdraft Facility and the Trade Facilities are collectively referred to as the “Banking Facilities”. The Trade Facilities comprised of, among others, letters of credit, trust receipts, bankers acceptance and shipping guarantee facilities and each had a sub-limit of RM10.5 million. [3] The 1st Defendant accepted the Plaintiff’s offer and the Banking Facilities were disbursed and made available to the 1st Defendant’s use. [4] The 1st Defendant utilized the whole Overdraft Facility and for the Trade Facilities, the 1st Defendant utilized bankers acceptance totalling RM7,289.500.00. [5] The terms and conditions of the contract between the 1st Defendant and the Plaintiff are in writing and they are housed within the letters of offer referred to earlier and the facilities agreement dated 22.6.2022 (“Facilities Agreement”) which the 1st Defendant executed. [6] In consideration of the Plaintiff granting the Banking Facilities to the 1st Defendant, all the Defendants executed the following letters of guarantee to guarantee the repayment of all sums due and owing to the Plaintiff from time to time under the Banking Facilities: (a) the 2nd, 3rd and 4th Defendants executed the letter of guarantee dated 22.6.2022; 2 S/N G5DRltmv70GTFlbo0QDiw **Note : Serial number will be used to verify the originality of this document via eFILING portal (b) the 5th Defendant executed the letter of guarantee dated 28.10.2022; and (c) the 6th Defendant executed the letter of guarantee dated 22.6.2022. [7] As the 1st Defendant defaulted in the repayment of the sum due, the Plaintiff through its solicitors served a notice of demand the arrears from the 1st Defendant, which was the sum of RM4,878,366.25. [8] A notice of demand dated 11.4.2023 for the arrears was also served on the remaining Defendants in their respective capacities as guarantors of the Banking Facilities to demand for the arrears. However, none of the Defendants settled the arrears nor did they respond to the notices of demand. [9] Accordingly, the Plaintiff proceeded to terminate the Banking Facilities. A notice dated 25.4.2023 was sent by the Plaintiff through its solicitors to the 1st Defendant to notify the latter of the termination and to demand repayment of the total owed under the Banking Facilities, which was RM8,872,130.79 calculated as at 19.4.2023 together with further interest accruing. [10] The sum of RM8,872,130.79 was made up of RM1,514,243.28 owing under the Overdraft Facility and RM7,357,887.51 owing in respect of the bankers acceptance. [11] Of the sum of RM7,357,887.51 for the bankers acceptance facility, the principal sum used was RM7,289,500.00. From this, bankers acceptance totalling RM5,496,500.00 had matured and since the 1st Defendant failed to repay the sum on or before the maturity date, the accrued interest on these 3 S/N G5DRltmv70GTFlbo0QDiw **Note : Serial number will be used to verify the originality of this document via eFILING portal was RM68,387.51 as of 19.4.2023. The remaining principal sum of RM1.793 million of the bankers acceptance utilized had not matured at of 19.4.2023. [12] The Plaintiff through its solicitors also sent a notice dated 25.4.2023 to the 2nd to 6th Defendants to demand from them as the guarantors to the 1st Defendant the sum of RM8,872,130.79 calculated as at 19.4.2023 together with further interest accruing. Neither the 1st Defendant nor its guarantors paid the sum demanded by the Plaintiff. They also did not respond to the notices dated 25.4.2023. As such, on 10.5.2023, the Plaintiff commenced this suit against all Defendants to recover the sum owed under the Banking Facilities. [13] On 14.6.2023, the 1st and 6th Defendants filed their statement of defence while on 27.6.2023 the 2nd, 3rd and 4th Defendants filed theirs. However, the 1st and 6th Defendants were wound up on 7.8.2023 and 14.8.2023, respectively. [14] The 5th Defendant only filed its statement of defence on 31.10.2023. [15] On the request of learned counsels for all parties and premised on these two applications involving the same facts and nature, I allowed them to be heard together. The Plaintiff’s preliminary objection [16] During the hearing of these applications, the Plaintiff raised a preliminary objection against the 5th Defendant on the ground that the affidavit in reply filed by the latter on 15.12.2023 was out of time as the direction given by the Deputy Registrar that the affidavit must be filed on or before 19.11.2023. Although the 5th Defendant filed the affidavit in reply on 15.12.2023, the affidavit was filed without leave of the Court and this, in the 4 S/N G5DRltmv70GTFlbo0QDiw **Note : Serial number will be used to verify the originality of this document via eFILING portal Plaintiff’s view should be the cogent reason for the Court not to admit the affidavit in reply. [17] In furtherance of that, the Plaintiff averred that since there is no affidavit from the 5th Defendant to deny the positive assertions of material facts in the Plaintiff’s affidavit, then such all material facts asserted by the Plaintiff must be admitted as decided in Ng Hee Thoong & Anor v. Public Bank Berhad [1995] 1 CLJ 609 where the Court of Appeal speaking through Gopal Sri Ram JCA (as the Lordship then was) held – "Now, it is a well settled principle governing the evaluation of affidavit evidence that where one party makes a positive assertion upon a material issue, the failure of his opponent to contradict is usually treated as an admission by him of the fact so asserted: Alloy Automotive Sdn. Bhd. v. Perusahaan Ironfield Sdn. Bhd. [1986] CLJ Rep 45; [1986] 1 CLJ 45; Overseas Investment Pte. Ltd. v. O'Brien [1988] 2 CLJ 238; [1988] 3 MLJ 332." [18] In refuting the preliminary objection, the 5th Defendant submitted that the Court should admit the affidavit in reply as there was no intention by it to simply delay the filing of the affidavit. The 5th Defendant further explained that the filing was done on 15.12.2023 because of the deponent of the affidavit in reply is a Singaporean working in Bangkok. The affidavit was quickly filed upon the deponent affirmed it in Singapore immediately after he returned to Singapore. [19] Here, the question before this Court is whether the 5th Defendant’s affidavit in reply must be rejected just because it was not filed within time. [20] To address this issue, it is pivotal to note that O. 2 r. 3 of the Rules of Court (“ROC”) prevents any preliminary objection if it is based on non- 5 S/N G5DRltmv70GTFlbo0QDiw **Note : Serial number will be used to verify the originality of this document via eFILING portal compliance of any provision of the Rules unless the non-compliance has occasioned a substantial miscarriage of justice or a prejudice to the other party. The provision reads – Preliminary objection for non-compliance of rules not allowed (O. 2, r. 3) 3. A Court or Judge shall not allow any preliminary objection by any party to any cause or matter or proceedings only on the ground of non-compliance of any provision of these Rules unless the Court or Judge is of the opinion that such non- compliance has occasioned a substantial miscarriage of justice or occasioned prejudice that cannot be cured either by amendment or an appropriate order for costs or both. [21] On the delay in filing of any document including the affidavit in reply in the present case, O. 3 r. 5(1) of the ROC gives the court the discretion to extend any specified time required by the Rules. The provision says – Extension of time (O. 3, r. 5) 5. (1) The Court may, on such terms as it thinks just, by order extend or abridge the period within which a person is required or authorized by these Rules or by any judgment, order or direction, to do any act in any proceedings. [22] Nevertheless, it has to be underscored that like any other discretionary power, it should not be exercised with whim and fancy. The Federal Court in National Union of Bank Employees v. Director General of Trade Unions & Anor [2013] 7 CLJ 957; [2013] 6 MLJ 167 laid the key principles on O. 3 r. 5 of the ROC as follows: "[27] The grant of extension of time by the court is one of discretion by virtue of O. 3 r. 5 of the RHC. The principle to be applied by the court is settled. In Saeed U Khan v. Lee Kok Hooi [2001] 5 MLJ 416, it was held that, the court should consider certain factors, when exercising its discretion to extend time, namely: (1) the delay in 6 S/N G5DRltmv70GTFlbo0QDiw **Note : Serial number will be used to verify the originality of this document via eFILING portal making an application; (2) whether or not there are cogent reasons for the litigant not to have made the application within the prescribed time; and, (3) the likelihood and degree of prejudice, as well as injustice to the opposite party should the court exercise its discretion. In the present appeal, the application for extension of time was made before the hearing of the judicial review application and the respondents were not prejudice by this application as they had been duly served with all the cause papers prior to the application itself. In exercising its discretion, the court must have regard to justice. This is in line with the provision in O. 1A of the RHC (see Maxwell v. Keun [1928] 1 KB 645; Walker v. Walker[1967] 1 WLR 327)". [23] In Public Services Commission Malaysia & Anor v. Vickneswary RM Santhivelu [2008] 6 CLJ 573 Zaki Tun Azmi PCA (as the Lordship then was) highlighted the responsibility of the applicant to explain the reasons for the delay in complying an order of the court when the Lordship held – (33) in order for the court to decide whether any delay is reasonable or not, the appellant must have been given the opportunity to explain the reasons for such delay and this can only be done if such delay was pleaded and becomes an issue to be considered by the court. See Harbhajan Singh v. Suruhanjaya Pasukan Polis Malaysia & Anor [2002] 4 CLJ 85,Tai Choi Yu v. Government of Malaysia & Ors [1994] 2 CLJ 174, Gimstern Corp (M) Sdn Bhd & Anor v. Global Insurance Co Sdn Bhd [1987] 1 CLJ 123; [1987] CLJ (Rep) 102 [24] In Tong Kim Soo v. Tirai Prospektif Sdn Bhd [2020] 3 CLJ 353, Kamaludin Said JCA held that – “[14] Be that as it may, it is always trite that the granting of extension of time was discretionary to be exercised by the judge in each particular case. The factors to be considered were: (i) the length of the delay; 7 S/N G5DRltmv70GTFlbo0QDiw **Note : Serial number will be used to verify the originality of this document via eFILING portal (ii) the reasons for the delay; (iii) the chances of the appeal succeeding; and (iv) the degree of prejudice to the would-be respondent if the application was granted.”. [25] As held by the Court of Appeal in Thiruchelvasegaram Manickavasegar v. Mahadevi Nadchatiram [1998] 4 CLJ 883, the primary consideration in exercising discretion to extend time is whether the party can clearly demonstrate that there was no intention to ignore or flout the rule and that the failure to obey was due to extraneous circumstances. Haidar Mohd Noor JCA (as the Lordship then was) when delivering the judgment of the court said – In this respect we can do no better than to quote the view of Ward LJ in Hytec Information Systems Ltd. v. Coventry City Council [1997] 1 WLR 1666 at p. 1875: The basis of the rule is that orders of the court must be observed and the court is entitled to expect its officers and counsel who appear before it are more observant of that duty even than the litigant himself. It would then be for the defendant to explain or give reasons for her disobedience to the order of the court before the court could exercise its discretion. Sir Nicholas Browne - Wilkin, V-C, in Re Jokai Tea Holdings Ltd. [1993] 1 All ER 630, at p. 637 of the report has also expressed his views: In my judgment, in cases in which the court has to decide what are the consequences of a failure to comply with an order, unless the relevant question is whether such failure is intentional and contumelious. The court should not be astute to find excuses for such failure since obedience to orders of the court is the foundation on which its authority is founded. 8 S/N G5DRltmv70GTFlbo0QDiw **Note : Serial number will be used to verify the originality of this document via eFILING portal But if a party can clearly demonstrate that there was no intention to ignore or flout the order and that the failure to obey was due to such extraneous circumstances, such failure to obey is not to be treated as contumelious and therefore does not disentitle the litigant to rights which he would otherwise have enjoyed. [26] In our present case, the Deputy Registrar instructed the 5th Defendant to file the affidavit in reply on or before 19.11.2023. However, on the 19.11.2023, the 5th Defendant’s solicitors sent a letter to the Court and copied to the Plaintiff’s solicitors requesting an extension of time be given for the 5th Defendant to file the affidavit on 23.11.2023. On 23.11.2023, the 5th Defendant filed the unaffirmed affidavit in reply (Enclosure 32) on the ground that the deponent is a Singaporean working in Bangkok and would only return to Singapore on 8.12.2023. [27] This complete narrative of facts was explained to the Court by the 5th Defendant’s solicitors during the pre-trial case management on 7.12.2023. Subsequently, the 5th Defendant was allowed to file the affirmed affidavit on 18.12.2023. On 15.12.2023, the 5th Defendant filed the affidavit in reply (Enclosure 35). [28] Based on the above facts, I agree with the 5th Defendant that it has a genuine reason for the delay and clearly there was no intention on its part to simply ignore or flout the rules. Hence, I dismiss the Plaintiff’s preliminary objection. 9 S/N G5DRltmv70GTFlbo0QDiw **Note : Serial number will be used to verify the originality of this document via eFILING portal Conditions for summary judgment [29] Since these applications relate to summary judgment, it is important to highlight the requirements under O. 14 r. 1 of the ROC 2012 which have to be met before an application for summary judgment is considered. They are:- (a) the defendant must have entered an appearance; (b) the statement of claim must have been served on the defendant; and (c) the affidavit in support of the application must comply with the requirements of O. 14 r. 2 of the ROC. [30] In National Company for Foreign Trade v. Kayu Raya Sdn. Bhd. [1984] 1 CLJ (Rep) 283, the Federal Court held that if, these conditions are satisfied, the plaintiff will have established a prima facie case and he comes entitled to judgment. The burden then shifts to the defendant to satisfy the Court why judgment should not be given against him. [31] In similar veins, in Cempaka Finance Bhd v. Ho Lai Ying & Anor [2006] 3 CLJ 544, the Federal Court held that once those conditions are fulfilled, the burden then shifts to the defendant to raise triable issues. [32] Now the question is whether the 2nd, 3rd, 4th and 5th Defendants have succeeded in establishing triable issues. The Defendants’ arguments [33] The 2nd, 3rd and 4th Defendants argued that there are triable issues in this action and thus, the Plaintiff’s application for summary judgment should 10 S/N G5DRltmv70GTFlbo0QDiw **Note : Serial number will be used to verify the originality of this document via eFILING portal be dismissed. The 2nd, 3rd and 4th Defendants mounted the following as the triable issues: (a) the claim against the 2nd, 3rd and 4th Defendants being guarantors is premature and wrong in law because the Plaintiff ought to have exhausted all legal avenues to recover monies due under the Banking Facilities before initiating this suit; (b) the Plaintiff will be unjustly enriched if these applications are allowed because this claim is without taking into consideration of the sale proceeds of the 37 properties which have been charged to the Plaintiff and now pending completion of the sale; and (c) the interest for the default rate in overdraft facility increased by the Plaintiff from 1.0% per annum (0.50% above BLR) to a total of 5.00% above BLR is excessive and contravenes s. 75 of the Contract Act 1950 as the amount of the increased interest is contrary to public policy and unreasonable. [34] Whereas the 5th Defendant raised the following as triable issues: (a) the Plaintiff is wrong to withdraw and terminate the Banking Facilities when the 1st Defendant did not utilize them up to the approved limit. In the Agreement Facilities, the utilization of the Trade Facilities by the 1st Defendant must not exceed RM10.5 million whereas in the Plaintiff’s notice, the amount utilized by the 1st Defendant was only RM7,337,131.08; 11 S/N G5DRltmv70GTFlbo0QDiw **Note : Serial number will be used to verify the originality of this document via eFILING portal (b) the notice of termination and withdrawal of the Banking Facilities by the Plaintiff was wrong and premature (similar to the 2nd, 3rd and 4th Defendants’ argument); (c) the Plaintiff is not entitled to enter the summary judgment when the value of the securities pledged (37 properties) to the Plaintiff far exceeds the purported outstanding sum; and (d) the interest claimed to be payable to the Plaintiff is excessive, inaccurate and incorrect (similar to the 2nd, 3rd and 4th Defendants’ argument). Whether the Plaintiff’s claim against the Defendants being guarantors is premature and wrong in law [35] The first issue raised by the Defendants is on the argument that the Plaintiff ought to have exhausted all legal avenues to recover monies due under the Banking Facilities before initiating this suit. The Defendants submitted that a total of 37 properties has been charged to the Plaintiff as securities for the repayment of the Banking Facilities. The said properties have been sold for a price of RM25 million. Further, the 1st and 6th Defendants have been wound-up in August 2023 and thus, the Plaintiff should have sold the 1st and 6th Defendants’ assets in satisfaction of the monies due and owing to the Plaintiff before commencing this suit. Hence, the Defendants argued that the suit as well as these applications are premature and wrong in law because the Plaintiff ought to have exhausted all legal avenues to recover monies due under the Banking Facilities before initiating this suit. [36] On this issue, it has to be noted that clause 6.1(b) of the Letter of Guarantee (the terms in all the letters of guarantee are almost identical) 12 S/N G5DRltmv70GTFlbo0QDiw **Note : Serial number will be used to verify the originality of this document via eFILING portal states that the Plaintiff is not obliged to exhaust any of its rights, powers or remedies against the Defendants. The clause reads – 6.1 Principal Debtor & Primary Obligations: Although as between the Customer and the Guarantor, the Guarantor is surety for the Customer, yet between the Bank and the Guarantor for the purposes of this Guarantee, the Guarantor agrees that he is and will be treated and deemed to be the principal debtor of the Guaranteed Liabilities and his obligations and liabilities under this Guarantee are those of principal debtor or primary obligor and not merely as surety. The Guarantor further agrees that – (a) … (b) the Bank is not obliged before taking any step to enforce any of its rights or remedies under or in connection with this Guarantee: (i) to make any demand on, or sue, or commence any legal proceedings or take any step or action or obtain judgment against, the Customer or any Surety, guarantor or any other person, or otherwise enforce or seek to enforce any right or claim against, or any security or other guarantees which he Bank may have from or against, the Customer or any surety, guarantor or other person for or in respect of all or any part of the Guaranteed Liabilities; or (ii) to exercise or exhaust any of its rights, powers or remedies against the Customer or any surety, guarantor or other person for in connection with the recovery of all or any part of the Guaranteed Liabilities; or (iii) to make or file any claim or proof in a bankruptcy, liquidation, dissolution, administration or insolvency of the Customer or any surety, guarantor or other person. 13 S/N G5DRltmv70GTFlbo0QDiw **Note : Serial number will be used to verify the originality of this document via eFILING portal [37] At this point, I find instructive the Supreme Court case of Low Lee Lian v. Ban Hin Lee Bank Bhd [1997] 2 CLJ 36 where the apex court allowed a chargee or creditor to pursue any or all remedies to recover monies lent, including enforcing the charge against the chargor, suing the principal debtor upon the personal covenant in the loan agreement, proceeding against the guarantor, and pursuing all these courses simultaneously or successively. The court held that – Now, it is trite that a chargee/creditor may pursue any or all remedies to recover monies lent by him. He may enforce his statutory charge against the chargor by way of proceedings in rem under s. 256 of the Code. He may sue the principal debtor (who may or may not be the chargor) upon the personal covenant contained in any loan agreement that was entered into between the parties. He may proceed against the surety who has guaranteed the loan. And he may pursue all of these courses simultaneously, contemporaneously or successively. See, China and South Sea Bank Ltd. v. Tan [1989] 3 All ER 839, 842. [38] In light of the above, it is axiomatic that the Plaintiff is entitled to pursue its claim against the Defendants even if the former has yet to obtain any judgment against the 1st Defendant or even if the 37 properties charged as securities have not been fully liquidated. Thus, the Defendants’ argument that this suit is premature is untenable. Whether the interest claimed to be payable to the Plaintiff is excessive and contravenes s. 75 of the Contract Act 1950 [39] The second issue raised by the Defendants is on the default interest increased by the Plaintiff. The Defendants argued that the interest for the default rate in overdraft facility increased by the Plaintiff from 1.0% per annum (0.50% above base lending rate (BLR)) to a total of 5.00% above BLR is 14 S/N G5DRltmv70GTFlbo0QDiw **Note : Serial number will be used to verify the originality of this document via eFILING portal excessive and contravenes s. 75 of the Contract Act 1950 as the amount of the increased interest is contrary to public policy and unreasonable. [40] The question before the court is whether the interest imposed by the Plaintiff infringes public policy and is excessive? [41] On the issue of contravening public policy, I find there was no explanation offered by the Defendants on how the interest imposed by the Plaintiff is contrary to public policy. Be that as it may, it is pivotal to note that page 6 of the letter of offer says – INTEREST RATE UPON RECALL OF FACILITIES In the event the Credit Facilities are recalled by the Bank, interest at the Bank’ prevailing Current Account Excess Rate or 1.00% p.a. above the prescribed rate, whichever is higher, shall be charged on the amount(s) outstanding until the date of full settlement. [42] It is clear from the above clause, that the Plaintiff’s right to increase the interest is a contractual right which has been agreed upon. As such there is no basis for the Defendants now to say that the increase in the interest upon recall of the Banking Facilities is contrary to public policy. The parties including the Defendants have agreed that the interest rate would be increased in the event the 1st Defendant defaults on the repayment. [43] At this juncture, it became necessary to highlight that the contractual right to increase the interest rate upon default in payment of a banking facility has long been recognized in this country. In Standard Chartered Bank Malaysia Bhd v. Arivalagan Krishnan & Anor [2001] 4 CLJ 168 Low Hop Bing 15 S/N G5DRltmv70GTFlbo0QDiw **Note : Serial number will be used to verify the originality of this document via eFILING portal J (later JCA) when dealing with the question of variation of interest raised by the defendant in that case held – As such, it is crystal clear that the plaintiff in accordance with this clause is allowed to vary its rate of interest at any time and from time to time. The bank, also in accordance with cl. 6.04(3), does not have to give notice of change of rate of interest, and failure to do so shall not prejudice or have the effect of invalidating any variation. My view is fortified by the judgment of the Court of Appeal in Foo Yoke Foon v. Public Bank Bhd[2000] 3 CLJ 405. In that case, the charge documents stipulated interest at 18% per annum. They also provided for variation of interest at the instance of the respondent as well as penalty interest to be imposed. The documents were executed by the appellant in the presence of his own solicitors. Hence, the Court of Appeal held that "the appellant could not be heard to say that the variation of interest by the respondent was a unilateral act. Written notice to vary interest or to impose penalty interest is not a must." A similar situation prevails in the instant case. [44] The next question is whether the interest imposed by the Plaintiff is unreasonably excessive or exorbitant. To support the Defendants’ argument they referred to the Federal Court decision in Realvest Properties Sdn Berhad v. Co-operative Central Bank Ltd (in receivership) [1996] 3 CLJ 823; [1996] 2 MLJ 461. [45] Upon perusal of the interest imposed by the Plaintiff, with respect, I do not agree with the Defendants that the imposed rate is caught by s. 75 of the Contract Act. Firstly, I find that the element of interest here is a contractual agreed default interest rates and not a penalty as advocated by the Defendants. Secondly, on the issue of excessiveness, it is incumbent upon the Defendants to establish that the interest imposed by the Plaintiff is excessive or unreasonably high. My view is fortified by the case of Pusat Bandar Damansara Sdn Bhd & Anor v. Yap Han Soo & Sons Sdn Bhd [2000] 16 S/N G5DRltmv70GTFlbo0QDiw **Note : Serial number will be used to verify the originality of this document via eFILING portal 1 CLJ 346; [2000] 1 MLJ 513, where the Court of Appeal speaking through Siti Norma Yaakob JCA (as the Ladyship then was) held at pg. 524: "To bring that increased or penalty interest within the ambit of s. 75, it must first be shown that it was excessive in nature. The fact that it was an agreed penalty interest as opposed to one that was fixed unilaterally by the appellants, lends support to my conclusion that it could not have been that excessive to enable the respondent to agree to that rate of interest to be charged. On that reasoning the respondent cannot now be heard to complain that the rate of 19% pa on all instalments due as at 30 June 1990, is excessive and under those circumstances that rate of interest cannot be caught by s. 75. [46] Back to the authority referred to by the Defendants, it has to be noted that in Realvest Properties Sdn Bhd (supra), the method of imposing the default interest is different from the present case. In that case, aside from the prescribed 14.5% interest rate principally attached to the loan, a clause (clause 3.2) was annexed to the relevant charge instrument stating that upon default, a separate default interest of 20% per annum was chargeable "on the sum in arrears calculated retrospectively from the due date of such default until the date of payment of the amount thereof". The Federal Court held clause 3.2 of the annexure to the charge in question is void and unenforceable by virtue of s. 75 of the Contracts Act 1950 and the interest calculated by virtue of the said clause 3.2 is irrecoverable. [47] Unlike, in the instant case, the rate of default interest was agreed upon, calculated from the date of default and importantly the increased interest rate from of 1% per annum to a total of 5.00% above BLR was not unreasonable. In the premise of the foregoing, the issue of interest raised by the Defendant is clearly not a triable issue. 17 S/N G5DRltmv70GTFlbo0QDiw **Note : Serial number will be used to verify the originality of this document via eFILING portal Whether the Plaintiff is wrong to withdraw and terminate the Banking Facilities when the 1st Defendant did not utilize the Trade Facilities to the approved limit [48] The Defendants argued that, in the Agreement Facilities, the utilization of the Trade Facilities by the 1st Defendant must not exceed RM10.5 million. However, the amount utilized by the 1st Defendant was only RM7,337,131.08. Thus, in the Defendants’ view, the Plaintiff is wrong to withdraw and terminate the Banking Facilities when the 1st Defendant did not utilize them up to the approved limit. [49] The question here is whether it is wrong for the Plaintiff to terminate the Banking Facilities when the 1st Defendant did not utilize them up to the approved limit? [50] To address this issue, it is undisputed fact that the Trade Facilities are part of the Banking Facilities that all the Defendants by way of letters of guarantee, guaranteed the repayment of all sums due and owing to the Plaintiff from time to time under the Banking Facilities. It is also stated in the Facilities Agreement that, once the 1st Defendant defaulted in the repayment of the sum due under the Banking Facilities and the notice of demand for the repayment was served on the Defendants, the Plaintiff was entitled to terminate the Banking Facilities when none of the Defendants settled the sum demanded. Clause 17.2 of the Facilities Agreement states – 17.2 Rights on Event of Default – Termination and Acceleration The Bank may immediately upon or at any time after any Event of Default occurs or arises (and whether or not the event or default is continuing), and without prejudice to any of its other rights or remedies under or on connection 18 S/N G5DRltmv70GTFlbo0QDiw **Note : Serial number will be used to verify the originality of this document via eFILING portal with this Agreement or any of the other security Documents, by written notice to the Borrower: (a) terminate, recall or cancel the Facilities, whereupon the Bank shall immediately cease to have any further commitments or obligations to the Borrower under the Facilities; and/or (b) declare that the whole of the indebtedness has become immediately due and payable by the Borrower; and/or (c) demand the immediate payment of the whole of the indebtedness by the Borrower to the Bank, AND immediately upon the giving of any written notice by the Bank to the Borrower as mentioned above, the whole of the indebtedness will become immediately due and payable by the Borrower to the Bank, AND the Borrower must immediately, and in any event, within seven (7) days of the date on which the written is served (or deemed as served) on the Borrower (or any longer period, if any, for this purpose as may be decided by the Bank in its discretion and specified in the written notice), pay the whole of the indebtedness (including all unpaid accrued interest) to the Bank together with the interest accruing thereon (both before and after any court order or judgment) until full payment to the Bank. [51] It is clear that the termination of the Banking Facilities allows the Plaintiff to recover the total amount owed by the 1st Defendant under the Banking Facilities notwithstanding one part of the Banking Facilities i.e. the Trade Facilities have been fully utilized or not. [52] Again, I find the Defendants’ averment on this matter is not a triable issue. 19 S/N G5DRltmv70GTFlbo0QDiw **Note : Serial number will be used to verify the originality of this document via eFILING portal Whether the Plaintiff will be unjustly enriched if the application is allowed since this claim is without taking into consideration of the sale proceeds of the 37 properties [53] Another issue raised by the Defendants is on the 37 properties which have been charged to the Plaintiff as securities for the repayment of the Bank Facilities. During the hearing of this application, the Defendants averred that these properties have been recently sold to an interested buyer at the price of RM25 million. Nevertheless, the Defendants admitted that sale of the properties is still pending. In any event, the Defendants argued that if the Plaintiff’s applications are allowed, the Plaintiff will be unjustly enriched as this claim is without taking into consideration of the sale proceeds of the 37 properties. Thus, the Defendants contended that the Plaintiff’s applications are premature as the latter ought to wait until the sale of 37 properties is completed and the proceeds of the sale can be used to satisfy the amount due to the Plaintiff. [54] On this matter, as I alluded to earlier in paras 41, 42 and 43 above and at the risk of repetition, suffice to say that clause 6.1(b) of the Letter of Guarantee allows the Plaintiff to enforce any security even after the commencement of legal action against the Defendants. As decided by the Supreme Court in Low Lee Lian (supra), the Plaintiff being the creditor may proceed against the sureties or pursue all the courses simultaneously, contemporaneously or successively. [55] Again, in the upshot, based on the aforesaid reasons, I find that the Defendants’ argument is not a triable issue. 20 S/N G5DRltmv70GTFlbo0QDiw **Note : Serial number will be used to verify the originality of this document via eFILING portal Conclusion [56] In Citibank NA v Ooi Boon Leong & 2 Ors [1981] 1 MLJ 282, the Supreme Court held that a matter ought to be decided under O. 14 once all the issues are clear and the matter in substance can be decided once and for all without going to trial. [57] Based on the above observation, I find that the Defendants failed to establish to the Court that the existence of any triable issue in their arguments to make out the Plaintiff’s applications for summary judgment deserving to be dismissed. Thus, I allow the Plaintiff’s applications for summary judgment in Enclosures 19 and 27 with costs. Dated: 30.10.2024 -SIGNED- (SHAMSULBAHRI BIN HAJI IBRAHIM) Judge, Johor Bahru High Court Counsels: For the Plaintiff – Clarence Edwin (Nur Diyana Kadir with him); Messrs. Clarence Edwin Law Offices For the 2 , 3 & 4th Defendants – Low Yee Lin; Messrs. Yee & Tan nd rd For the 5th Defendant - Ho Zhi Yee – Messrs. Wong Kian Kheong Cases referred to:  Cempaka Finance Bhd v. Ho Lai Ying & Anor [2006] 3 CLJ 544  Citibank NA v Ooi Boon Leong & 2 Ors [1981] 1 MLJ 282  Low Lee Lian v. Ban Hin Lee Bank Bhd [1997] 2 CLJ 36  National Company for Foreign Trade v. Kayu Raya Sdn. Bhd. [1984] 1 CLJ (Rep) 283 21 S/N G5DRltmv70GTFlbo0QDiw **Note : Serial number will be used to verify the originality of this document via eFILING portal  National Union of Bank Employees v. Director General of Trade Unions & Anor [2013] 7 CLJ 957; [2013] 6 MLJ 167  Ng Hee Thoong & Anor v. Public Bank Berhad [1995] 1 CLJ 609  Public Services Commission Malaysia & Anor v. Vickneswary RM Santhivelu [2008] 6 CLJ 573  Pusat Bandar Damansara Sdn Bhd & Anor v. Yap Han Soo & Sons Sdn Bhd [2000] 1 CLJ 346; [2000] 1 MLJ 513  Realvest Properties Sdn Berhad v. Co-operative Central Bank Ltd (in receivership) [1996] 3 CLJ 823; [1996] 2 MLJ 461  Standard Chartered Bank Malaysia Bhd v. Arivalagan Krishnan & Anor [2001] 4 CLJ 168  Thiruchelvasegaram Manickavasegar v. Mahadevi Nadchatiram [1998] 4 CLJ 883  Tong Kim Soo v. Tirai Prospektif Sdn Bhd [2020] 3 CLJ 353 Legislations referred to:  Contract Act 1950 – s. 75  Rules of Court 2012 - O. 2 r. 3 & O. 3 r. 5(1) 22 S/N G5DRltmv70GTFlbo0QDiw **Note : Serial number will be used to verify the originality of this document via eFILING portal