MALAYAN BANKING BERHAD [Company No.: 3813-K] 1. ) KUMPULAN LIZIZ SDN BHD [Company No.: 72218-M] 2. ) LIEW AH KAU [Identity Card No.: 520803055179] 3. ) GHAZALI BIN ABDUL HALIM [Identity Card No.: 550520025137] PIHAK KETIGA 1. ) DSE CONSTRUC

MALAYAN BANKING BERHAD [Company No.: 3813-K] 1. ) KUMPULAN LIZIZ SDN BHD [Company No.: 72218-M] 2. ) LIEW AH KAU [Identity Card No.: 520803055179] 3. ) GHAZALI BIN ABDUL HALIM [Identity Card No.: 550520025137] PIHAK KETIGA 1. ) DSE CONSTRUC

The court refused summary judgment and striking out because the material disclosed credible allegations that the bank's role went beyond passive lender (assignment, irrevocable instructions, powers of attorney and agency features), and there were substantial disputes of fact — alleged diversion of contract proceeds, alleged misrepresentations (PAJ arrangement) and potential breaches of statutory/ fiduciary duties — which required full trial and could not be resolved on affidavit evidence; allegations of fraud undermine reliance on conclusive evidence clauses and a certificate of indebtedness; accordingly there were triable issues and the applications failed.

Citation
AA-22NCC-12-07/2020 (Mahkamah Tinggi)
Parties
Plaintiff: Malayan Banking Berhad; 1st Defendant: Kumpulan Liziz Sdn Bhd; 2nd Defendant: Liew Ah Kau; 3rd Defendant: Ghazali bin Abdul Halim; 1st Third Party: DSE Construction Sdn Bhd; 2nd Third Party: Pembinaan Azam Jaya Sdn Bhd; 3rd Third Party: Ho Hup Construction Company Berhad
Court
High Court
Jurisdiction
Malaysia
Judgment Date
6 December 2021
Case Number
AA-22NCC-12-07/2020 (Mahkamah Tinggi)
Procedural Posture
Civil Application (summary Judgment and Striking Out) / Decision on Applications (grounds of Judgment)
Outcome
Plaintiff's applications for summary judgment and to strike out the counterclaim dismissed
Legal Topics
Summary Judgment, Striking Out, Fiduciary Duty, Banker's Duty of Care (quincecare), Confidentiality/statutory Duty, Guarantor Liability, Assignment of Contract Proceeds, Diversion/misappropriation of Funds, Third Party Claims
Source Language
Malay/English
Banking Law Contract Law Tort (negligence/fraud) Civil Procedure Professional Ethics Summary Judgment Striking Out Fiduciary Duty +6 more

Case Brief

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Parties

Malayan Banking Berhad

Plaintiff

Kumpulan Liziz Sdn Bhd

1st Defendant

Liew Ah Kau

2nd Defendant

Ghazali bin Abdul Halim

3rd Defendant

DSE Construction Sdn Bhd

1st Third Party

Pembinaan Azam Jaya Sdn Bhd

2nd Third Party

Ho Hup Construction Company Berhad

3rd Third Party

Procedural Posture

Civil Application (summary Judgment and Striking Out) / Decision on Applications (grounds of Judgment)

Legal Issues

  1. 1 Whether the banking facilities were repayable from contract proceeds and whether the bank had an active role in collecting those proceeds
  2. 2 Whether the bank owed statutory, contractual or fiduciary duties to the borrower and guarantors and whether those duties were breached
  3. 3 Whether proceeds were diverted by contractors and whether the bank contributed or was complicit

Ratio Decidendi

The court refused summary judgment and striking out because the material disclosed credible allegations that the bank's role went beyond passive lender (assignment, irrevocable instructions, powers of attorney and agency features), and there were substantial disputes of fact — alleged diversion of contract proceeds, alleged misrepresentations (PAJ arrangement) and potential breaches of statutory/ fiduciary duties — which required full trial and could not be resolved on affidavit evidence; allegations of fraud undermine reliance on conclusive evidence clauses and a certificate of indebtedness; accordingly there were triable issues and the applications failed.

Court Disposition

Plaintiff's applications for summary judgment and to strike out the counterclaim dismissed

Orders

  • Plaintiff's application for summary judgment dismissed
  • Plaintiff's application to strike out the counterclaim dismissed