AMBANK (M) BERHAD MANGKUBUMI SDN BHD

WA-22NCC-187-05/2020 Kand. 93 04/06/2025 11:59:29 DALAM MAHKAMAH TINGGI MALAYA DI KUALA LUMPUR DI DALAM WILAYAH PERSEKUTUAN, MALAYSIA (BAHAGIAN DAGANG) GUAMAN SIVIL NO.: WA-22NCC-187-05/2020 ANTARA AMBANK (M) BERHAD … PLAINTIF DAN MANGKUBUMI SDN BHD [NO. SYARIKAT: 200101010800 (546556-H)] … DEFENDAN J U D GM E N T (Enclosure 8) [1] This was the Plaintiff’s application under Order 14 of the Rules of Court 2012 (“ROC”) for summary judgment against the Defendant for RM4,560,183.26, together with interest and costs (“this Application”). [2] Having read out the broad grounds when delivering my decision on this Application, this written Judgment shall now serve as the complete and definitive version of my reasons. A] SALIENT BACKGROUND FACTS [3] The facts of this matter are largely not in dispute and they are as follows: [4] On 18.10.2016, the Plaintiff and Kosi Engineering Sdn Bhd (“Kosi Engineering”) entered into a Domestic Recourse Factoring Agreement under which Kosi Engineering absolutely assigned its book debts consisting of certified progress claims (Interim Certificates of Payment or “ICPs”) issued by the Defendant, to the Plaintiff (“Factoring Agreement”). S/N h7rb6KGkNEefC00C5Qy0fw **Note : Serial number will be used to verify the originality of this document via eFILING portal [5] Also, on 18.10.2016, Kosi Engineering issued a Notice of Assignment to the Defendant (“Notice of Assignment”), referring to the Factoring Agreement and incorporating its key terms by clause on each of its certified progress claims. The Defendant acknowledged and accepted the said Notice. [6] On 28.9.2016, the Plaintiff issued a Letter of Offer to Kosi Engineering (“Letter of Offer”) which prescribed the form and content of each ICP legend. [7] Kosi Engineering issued ICPs numbered 3–31. ICPs 3–15 and 17 were fully paid by the Defendant. ICPs 18 to 31, which remain unpaid, form the subject of the Plaintiff’s claim for RM4,560,183.26 as at 31.10.2019. ICP 16 was never assigned to the Plaintiff. [8] From December 2016, each of the Plaintiff’s monthly Statement of Account (“Statements”) sent to the Defendant bore the following legend/clause: “The indebtedness shown on this statement has been assigned by your supplier to AmBank (M) Berhad. Only we can give a valid discharge for the indebtedness. Any claims or queries must be referred to AmBank (M) Berhad quoting your account number”. “All items and balances shown in this statement will be considered correct unless the Bank is notified in writing of any discrepancy within 10 days from the date of this statement. All enquiries concerning exceptions and errors should be addressed to:” (own emphasis added) [9] The Defendant did not lodge any written objection within that 10- day period. [10] The Plaintiff exhibited in its Affidavit in Support the monthly Statements covering ICPs 3–15 and 17, as well as ICPs 18–31. The Defendant, however, denied receiving all such Statements except for four dated 15.4.2019, two dated 26.4.2019, and one dated 23.5.2019. I find it implausible that the Defendant did not receive the other Statements, considering both the regular dispatch of these Statements and the Defendant's possession of the Letter of Offer, which would reasonably have informed it of the total financing advanced to Kosi Engineering and the assigned book debts. S/N h7rb6KGkNEefC00C5Qy0fw Page 2 of 11 **Note : Serial number will be used to verify the originality of this document via eFILING portal [11] In its Defence and correspondence, the Defendant admitted only RM656,145.00 (by reference to a separate Sessions Court judgment) and alleged the remainder to be tainted by irregularities: absence of JKR certification, lack of Authorised Officer’s signature, lack of “chop” on invoices, non-compliance with the Letter of Offer requirements and even criminal forgery. B] PLAINTIFF’S SUBMISSIONS [12] Learned counsel for the Plaintiff, Mr Kingston Tan, advanced the following submissions, which may be summarised as follows: i) The Plaintiff’s cause of action against the Defendant is premised on an absolute assignment of book debts which is separate and distinct from its contractual claim against the assignor (AMDB Factoring Sdn Bhd (formerly known as Arab-Malaysian Enterprises Sdn Bhd) v. Iszajaya Sdn Bhd & Ors [1997] 5 MLJ 402; Showa Factoring (M) Sdn Bhd v. Fokus Integrated Sdn Bhd [2001] 3 CLJ 56). ii) The Defendant’s part payments of ICPs 3-15 and 17 operate as clear admissions of liability and of the balances stated (MBF Factors Sdn Bhd v. Keh Hua t/a Jag Trading [2004] 1 CLJ 409). iii) The Defendant’s failure to object within 10 days to the statements gives rise to estoppel, rendering the balances conclusive (Boustead Trading (1985) Sdn Bhd v. AMMB [1995] 3 AMR 2871 (FC); KGN Jaya Sdn Bhd v. Pan Reliance Sdn Bhd [1996] 2 CLJ 611 (CA)). iv) No triable issue arises in the Plaintiff’s claim with respect to the factoring agreement. The claim is for a liquidated sum, supported by unequivocal documentary evidence, and summary judgment is appropriate as a matter of course. (Arab Malaysian Merchant Bank v. Sin Hiap Enterprise [1989] 2 CLJ 980; MBF Finance (supra)). S/N h7rb6KGkNEefC00C5Qy0fw Page 3 of 11 **Note : Serial number will be used to verify the originality of this document via eFILING portal C] DEFENDANT’S SUBMISSIONS [13] The submissions of learned counsel for the Defendant, Dato Sukhdev Singh Randhawa, may be summarised as follows: i) Several conditions set out in the Letter of Offer and Assignment were not complied with. ii) Certain ICPs are invalid for lack of JKR certification or for not being signed by the Authorised Officer, Tan Sri Zainudin bin Karjan (“Tan Sri Zainudin”), as required by the Letter of Offer. iii) The Plaintiff’s invoices lacked the requisite “chop” reflecting the assignment. iv) The pending police investigations arising from police reports lodged by the Defendant, which involve allegations of forgery and fraud, create triable issues necessitating a full trial. v) “Without prejudice” correspondence cannot be used to disguise material facts; the issues must be fully ventilated at trial (Gumusut-Kakap v. Sabah Shell Petroleum [2017] MLRHU 702). D] ANALYSIS AND FINDINGS i) Validity of Assignment and Liability [14] I agree with learned counsel for the Plaintiff, Mr Kingston Tan, that the Plaintiff’s cause of action against the Defendant, being based on an absolute assignment of book debts, constitutes a separate and distinct legal action from its contractual claim against the assignor (AMDB Factoring (supra); Showa Factoring (supra); Hong Leong Leasing Sdn Bhd v. Far East Knitting Sdn Bhd [1996] 2 AMR 1886). [15] In an absolute assignment, the assignee acquires the complete benefit of the debt and is entitled to sue the debtor directly upon S/N h7rb6KGkNEefC00C5Qy0fw Page 4 of 11 **Note : Serial number will be used to verify the originality of this document via eFILING portal providing proper notice (Arab Malaysian Merchant (supra); MBF Factors (supra)). No further proof of debt is required. [16] The assignee in an absolute assignment becomes directly entitled to the debt once notice has been given. The Defendant’s obligation to the Plaintiff arose immediately upon receipt of the Notice of Assignment and the monthly Statements issued thereafter, which include the legends (Arab Malaysian Merchant (supra); Hong Leong Leasing (supra)). ii) Estoppel and Admissions [17] The Defendant’s payments of ICPs 3–15 and 17 constitute admissions of liability and of the correctness of the Plaintiff’s Statements. [18] The Statement expressly provided that, in the absence of written notice of discrepancies within 10 days, the balances stated would be conclusive (MBF Factors (supra)). The Defendant gave no such notice and is therefore estopped from doing so now (Boustead Trading (supra); KGN Jaya (supra); Chong Yoong Choy v. UOL Factoring Sdn Bhd [1996] 2 CLJ 605 (CA); MBF Factors (supra); Hong Leong Leasing (supra)). iii) Collateral Requirement for JKR Certification or Authorised Officer’s Signature [19] The Defendant contends that there was an oral collateral requirement for JKR certification or approval by Tan Sri Zainudin. [20] I am unable to accept the Defendant’s contention for the following reasons: i) There is no documentation supporting this contention. ii) The Notice of Assignment itself imposed no such conditions. In this regard the Defendant alleged that the “authorized official” under the Letter of Offer is Tan Sri Zainudin, however: a) The Defendant is not privy to the Letter of Offer between the Plaintiff and Kosi Engineering. The Defendant is S/N h7rb6KGkNEefC00C5Qy0fw Page 5 of 11 **Note : Serial number will be used to verify the originality of this document via eFILING portal clearly not a party to the Letter of Offer and hence cannot invoke any of its terms. b) In any event, Clause 8(b) of the Letter of Offer merely states: “Notification A Letter of Notification shall be issued to the Factored Customer. This notification must be acknowledged by an authorized official of the Factored Customer and returned to the Bank” (own emphasis added) c) The Letter of Offer does not name the “authorized official”. d) In so far as the Notice of Assignment is concerned, it was accepted and signed by Tan Sri Zainudin on behalf of the Defendant. Nowhere in the Notice of Assignment is it stated that Tan Sri Zainudin is the sole “authorized official” with authority to sign documents on behalf of the Defendant. iii) The Defendant pleaded in its Defence that “valid” ICPs bear the signatures of four of the Defendant’s officers under the “Prepared,” “Checked (Site),” “Verified” and “Concurred” parts of the ICPs and additionally Tan Sri Zainudin. The Defendant further pleads that it has, in the past, made payments where the work was certified by JKR, in which “valid” ICPs were issued bearing the abovementioned signatures, including that of Tan Sri Zainudin. However, the Defendant has not produced any of these allegedly “valid” ICPs bearing Tan Sri Zainudin’s signature. iv) The ICPs exhibited by the Plaintiff in its Affidavit in Support bear the Defendant’s four officers’ signatures and the Certified True Copy signed by the Defendant’s Chief Executive Officer, Dato’ Ir. Marhalim Mohamed. v) Past practice shows that payment of ICPs was made without JKR certification or Tan Sri Zainudin’s signature. S/N h7rb6KGkNEefC00C5Qy0fw Page 6 of 11 **Note : Serial number will be used to verify the originality of this document via eFILING portal [21] I emphasise that the fact previous payments were made without JKR certification or Tan Sri Zainudin’s signature seriously undermines the Defendant’s argument. iv) “Chop” on Tax Invoices [22] First and foremost, the Defendant is not privy to the Letter of Offer and is not entitled to rely on its terms to escape liability (Arab Malaysian Merchant (supra)). As stated earlier, the Plaintiff’s claim against the Defendant (assignee) is separate and distinct from any claim it may have against Kosi Engineering (assignor). [23] The ICPs and invoices remain payable in the absence of such “chop”. [24] Earlier ICPs lacking the “chop” were nonetheless paid, demonstrating it is not a payment condition. v) Privity and Discretion under Clause 2(a) of the Factoring Agreement [25] The Defendant argues that it is not privy to the Factoring Agreement and contends that the Plaintiff’s reliance on Clause 2(a) is misplaced, which clause grants the Plaintiff absolute discretion to accept debts for factoring. However, the Notice of Assignment, which binds the Defendant, expressly incorporates this term, which is to be reflected or stated by legend on each of Kosi Engineering’s certified progress claim. The Notice of Assignment, inter alia, states as follows: “This is to inform you that we have acquired the services of AmBank (M) Berhad who have under our arrangement with them agreed to purchase in its absolute discretion the certified progress claims due from you, now and in the future pertaining to the Contract stated above, who under our arrangement with them have been assigned all our present and future certified progress claims under the abovesaid contract. On each of our certified progress claims we will stamp AmBank (M) Berhad’s legend as follows:- “Payable to AmBank (M) Berhad (8515-D), Level 16, Menara Dion, Jalan Sultan Ismail, 50250 Kuala Lumpur who has purchased this account. S/N h7rb6KGkNEefC00C5Qy0fw Page 7 of 11 **Note : Serial number will be used to verify the originality of this document via eFILING portal Remittance must be made directly to AmBank (M) Berhad and AmBank (M) Berhad alone is authorised to give a valid discharge for the payment of the sum due. Any objection to this bill or its terms must be reported to AmBank (M) Berhad within 14 days after its receipt.” (When making payment, please make cheque payable to “AmBank (M) Berhad-Trade Services" [Account No 001-201 -101767-8]). (own emphasis added) [26] Clause 2(a) of the Factoring Agreement grants the Plaintiff absolute discretion to accept any debts offered by the Kosi Engineering as it deems fit. The Plaintiff exercised this discretion consistent with Clause 2(a) by accepting and purchasing ICPs 3- 31, and it is evident from the Defendant’s part payments that it acknowledges and accepts the factoring arrangement. [27] The Defendant’s reliance on this privity argument is inconsistent with its previous position, where it invoked the terms of the Letter of Offer, to which it is equally not privy, to avoid liability. vi) Police Reports and Criminal Allegations [28] Three police reports were lodged regarding the ICPs. The second police report dated 4.3.2020 does not allege any criminal wrongdoing by the Plaintiff. The first police report concerns ICP 17, which the Defendant now claims is false, however, ICP 17 was paid without objection. [29] The third police report dated 17.12.2020 is the only report alleging criminal wrongdoing against the Plaintiff, and it arises from settlement negotiations. In this police report, the Defendant alleged, inter alia, that this action initiated by the Plaintiff constitutes a criminal offence. [30] I have earlier ruled, when dismissing Enclosure 57 (the Defendant’s application for, inter alia, leave to use the Defendant’s affidavit containing the privileged correspondences), that those negotiation letters are privileged communications concerning negotiations that did not result in a settlement (Rush & Tompkins Ltd v. Greater London Council & Anor [1988] 3 All ER 737; Dusun Desaru Sdn Bhd & Anor v. Wang Ah Yu & Ors [1999] 5 MLJ 449). S/N h7rb6KGkNEefC00C5Qy0fw Page 8 of 11 **Note : Serial number will be used to verify the originality of this document via eFILING portal [31] The ICPs are the Defendant’s own documents, issued by it in the ordinary course, and the Plaintiff is entitled to treat them as correct and valid. [32] In any event, there is no specific plea of forgery or fraud in the Defence and bare allegations do not create triable issues (Bank Negara Malaysia v. Mohd Ismail [1992] 1 MLJ 400; [1992] 1 CLJ (Rep) 14). vii) “Without Prejudice” Communications [33] “Without prejudice” correspondence may be admitted when refusing to do so would leave one side or the Court under a false impression. In other words, if a “without prejudice” letter contains facts or admissions that are directly relevant to the Court’s understanding of the case, it may be read in to correct any misconception (Gumusut-Kakap (supra)). [34] Therefore, even if the “without prejudice” letters are admitted, they are for the limited purpose of accuracy and do not necessarily give rise to genuine disputes that require a full trial or, in other words, triable issues. E] CONCLUSION [35] The Plaintiff has fulfilled the requirements of an Order 14 ROC application, thereby shifting the burden onto the Defendant to provide a satisfactory explanation as to why summary judgment should not be entered against it. [36] In this regard, the Defendant has failed to raise any triable issue or some other reason to be a trial (Bank Negara Malaysia (supra); National Company for Foreign Trade v. Kayu Raya Sdn Bhd [1984] 1 CLJ (Rep) 283). S/N h7rb6KGkNEefC00C5Qy0fw Page 9 of 11 **Note : Serial number will be used to verify the originality of this document via eFILING portal [37] For the reasons stated above, I allowed this Application with costs. Enclosure 29 (the Defendant’s application for consolidation) is dismissed, as it is now academic. Dated this 8th day of May, 2025 -SGD- (WAN MUHAMMAD AMIN BIN WAN YAHYA) Judge High Court of Malaya, Kuala Lumpur (Commercial Division (NCC 3)) COUNSEL FOR THE PLAINTIFF Kingston Tan (Kwong Ho Qong together with him) Messrs Heiley Hassan Tan & Partners Unit No. A-3A-4, Megan Avenue 1, No. 189, Jalan Tun Razak, 50400 Kuala Lumpur Tel: 03-27704948 Emel: gen@hhtpartners.com COUNSEL FOR THE DEFENDANT Dato Sukhdev Singh Randhawa Messrs Azlan Shah Sukhdev & Co. No. 34-2, Tingkat 1, Jalan 14/22, 46100 Petaling Jaya, Selangor Tel: 03-79602617 Emel: zackrandhawa@hotmail.com S/N h7rb6KGkNEefC00C5Qy0fw Page 10 of 11 **Note : Serial number will be used to verify the originality of this document via eFILING portal LEGISLATION / RULES CITED Rules of Court 2012 ▪ Order 14 CASES CITED 1. AMDB Factoring Sdn Bhd (formerly known as Arab-Malaysian Enterprises Sdn Bhd) v. Iszajaya Sdn Bhd & Ors [1997] 5 MLJ 402 2. Arab Malaysian Merchant Bank v. Sin Hiap Enterprise [1989] 2 CLJ 980 3. Boustead Trading (1985) Sdn Bhd v. AMMB [1995] 3 AMR 2871 4. Bank Negara Malaysia v. Mohd Ismail [1992] 1 MLJ 400; [1992] 1 CLJ (Rep) 14 5. Chong Yoong Choy v. UOL Factoring Sdn Bhd [1996] 2 CLJ 605 6. Dusun Desaru Sdn Bhd & Anor v. Wang Ah Yu & Ors [1999] 5 MLJ 449 7. Gumusut-Kakap v. Sabah Shell Petroleum [2017] MLRHU 702 8. Hong Leong Leasing Sdn Bhd v. Far East Knitting Sdn Bhd [1996] 2 AMR 1886 9. KGN Jaya Sdn Bhd v. Pan Reliance Sdn Bhd [1996] 2 CLJ 611 10. MBF Factors Sdn Bhd v. Keh Hua t/a Jag Trading [2004] 1 CLJ 409 11. National Company for Foreign Trade v. Kayu Raya Sdn Bhd [1984] 1 CLJ (Rep) 283 12. Rush & Tompkins Ltd v. Greater London Council & Anor [1988] 3 All ER 737 13. Showa Factoring (M) Sdn Bhd v. Fokus Integrated Sdn Bhd [2001] 3 CLJ 56 S/N h7rb6KGkNEefC00C5Qy0fw Page 11 of 11 **Note : Serial number will be used to verify the originality of this document via eFILING portal