D3 22 636 2008 (Encl. - 14)

IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR
(COMMERCIAL DIVISION)
SUIT NO: D3-22-636-2008
HSBC BANK MALAYSIA BHD

V
NICHOLAS PATRICK RADFORD
GROUNDS OF JUDGMENT
The Plaintiff is seeking to enter summary judgment against the

Defendant pursuant to O.14 Rules of the High Court 1980 application as
per Encl 14. The application is supported by an affidavit affirmed on
8.10.2009.
Facts
By a letter of offer dated 15.3.2005 the Plaintiff granted to Out of Asia
Sdn. Bhd. (the Company) the following Credit Facilities:a) Overdraft of RM200,000.00; and
b) Bankers Acceptance of RM500,000.00
The Credit Facilities were granted as working capital and to facilitate
financing of imports or local purchase of goods. The said Facilities were
subject to certain terms and conditions. The terms and conditions were
duly accepted by the Company. The Defendant, a British national was
one of the directors of the Company together with two other individuals,
-2-
Yeap Cheang Teik (Yeap) and Ding Teck Hing (Ding). The Defendant
and Yeap set up the Company as a venture to supply goods
manufactured in Malaysia to Laura Ashley limited, a retailer in the United
Kingdom. The Defendant was one of the Guarantors of the Credit
The Company defaulted in making payments. The Plaintiff then initiated
this action claiming for the following:
i.
the excess sum of RM178,519.03 due as at 27.8.2009 together

with interest thereon at the rate of 2.25% per annum above the
BLR calculated on a
daily basis monthly rests to date of full
payment; and
ii.
the sum of RM157,132.31 due as at 27.8.2009 for the Bankers

Acceptance together with interest thereon at the rate of 2.50% per
annum above the BLR calculated on a daily basis monthly rests to
date of full payment and additional interest of 1% per annum from
28.8.2009 to date of full payment
The Defendant contends that there are triable issues namely:a) that the Defendant had resigned as a director of the Company and
is therefore not liable;
b) that the there was a variation of the Agreement
which had
prejudices him and therefore he I discharged from any obligation;

c) that the Plaintiff owes a duty of care to him as guarantor and had
failed to monitor the use of the Banking Facilities by the Company;
d) that the Plaintiff had allowed the Company to make use of the
Import Line Facility although the Companys enterprise was at the
-3-
material time not economically viable and therefore the plaintiff

was negligent in allowing the draw downs on the Import Line;
e) that the Plaintiff had commenced the suit prematurely as the
Plaintiff had granted to the Company until April 2011 to settle the
sums due under the Banking Facilities.
In his Affidavit the Defendant averred that when the business venture fell
through the Defendant had notified and wrote to Yeap that the company
be wound up and the liabilities of the Company be crystallized to protect
the Companys creditors. The Defendant had also indicated to Yeap of
his intention to resign as a director of the Company. According to the
Defendant despite his proposal that the Company be wound up Yeap
proceeded with the business and continued to borrow from the Plaintiff,
By doing so the Plaintiff had acted in a manner detriment to the
Defendant and the indulgences amount to a variation of the Agreement.
The Letters of Guarantee are one of joint and several guarantees and in
a joint and several guarantee the Creditor is at liberty to decide which of
the co-guarantors it wishes to recover the debt. Clause 6 of the Letters
of Indemnity stipulates that,
.our liability shall be that of a primary debtor and not merely as a
guarantor and you shall be at liberty .to determine, enlarge or vary
any credit to the Principal.and no act or omission on your part shall
exonerate us/any of us or any such person or discharge or diminish the
validity of this guarantee or our liability hereunder.
-4-
The Defendant, as the director of the Company had duly signed the
Letters of Guarantee and therefore subjected himself to the terms and
conditions of the said Letters of Guarantee. Abdul Malik Ishak,J in Allied
Granite Marble Industries Sdn. Bhd. v. Chin Foong Holdings Sdn.
Bhd. & Ors [2000] 5 CLJ 71 observed that,
In a joint and several guarantees, the creditor is placed in an enviable
position since it can decide as to which of the co-guarantors it wishes to sue
for the recovery of the debt;The creditor too is also at liberty to pursue the
matter further by going after the other guarantors if the debt is not fully paid
up.
The Defendant had conveyed his intention to resign in 2006 but he had
not taken appropriate action to do so. The searches conducted at the
Malaysian Commission of Companies by the Plaintiff on 30.10.2006 and
24.3.2008 show that the Defendant remains as a director of the
Company. Even if he had resigned he is still personally liable under the
Letters of Indemnity which he had duly signed. There is nothing in the
law which stipulates that if a director resign he is not liable for a loan
which he had given a personal guarantee.
In Bank Negara Malaysia v. Mohd Ismail [1992] 1 CLJ 627 the
Supreme Court held that the duty of a Judge does not end as soon as
the fact is asserted by one party, or denied or disputed by the other on
affidavit. The Judge has a duty to reject such assertion or denial if such
assertion or denial is equivocal or lacking in precision or is inconsistent
with undisputed contemporary documents or is inherently improbable.
Under an O.14 application, the duty of a Judge does not end
as soon as a fact is asserted by one party, and denied or disputed
by the other on affidavit. Where such assertion, denial or dispute
-5-
is equivocal or lacking in precision or is inconsistent with

undisputed contemporary documents or other statements by the
same deponent or is inherently improbable in itself, then the Judge
has a duty to reject such assertion or denial, thereby rendering the
issue as not triable. In our opinion, unless this principle is adhered
to, a Judge is in no position to exercise his discretion judicially
under an O.14 application. Thus, apart from identifying the issues
of fact or law, the Court must go one step further and determine
whether they are triable. This principle is sometimes expressed by
the statement that a complete defence need not be shown. The
defence set up need only show that there is a triable issue.
However in this case the issues raised by the Defendant are not issues
which need to go for full trial. In National Company for Foreign Trade
v Kayu Raya Sdn Bhd [1984] 2 MLJ 300, the Federal Court has stated
as follows,
We think it appropriate to remind ourselves once again that in
every application under O.14, the first considerations are (a) whether
the case comes within the order and (b) whether the plaintiff has
satisfied the preliminary requirements for proceeding under O.14.
For the purposes of an application under O.14, the preliminary
requirements (i)
the defendant must have entered an appearance;
(ii) the statement of claim must have been served on the

Defendant;
(iii) the affidavit in support of the application must comply
with the requirements of r 2 of the O.14.
-6-
.... If the Plaintiff fails to satisfy either of these considerations, the

summons may be dismissed. If however, these considerations are
satisfied, the plaintiff will have established a prima facie case and he
becomes entitled to judgment. This burden then shifts to the
defendant to satisfy the court why judgment should not be given
against him.
Having considered the affidavits filed and the submissions by both

Counsels, and applying the principle expounded in the aforesaid case I
find that this is an appropriate case for Summary judgment against the
Defendant and therefore the application by the Plaintiff in Enclosure 14
is allowed with cost.
sgd.
( HASNAH BINTI DATO MOHAMMED HASHIM )
Judicial Commissioner
High Court of Malaya
Kuala Lumpur.
5 July 2010
Counsels:
For the Plaintiff [Pn. Eileen Othman Messrs Benjamin Dawson]
For the Defendant [Pn. Sharlini Messrs Bodipalar Ponnudural De
Silva]

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IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR

HSBC BANK MALAYSIA BHD

The Plaintiff is seeking to enter summary judgment against the

the excess sum of RM178,519.03 due as at 27.8.2009 together

daily basis monthly rests to date of full

the sum of RM157,132.31 due as at 27.8.2009 for the Bankers

prejudices him and therefore he I discharged from any obligation;

material time not economically viable and therefore the plaintiff

is equivocal or lacking in precision or is inconsistent with

the defendant must have entered an appearance;

(ii) the statement of claim must have been served on the

.... If the Plaintiff fails to satisfy either of these considerations, the

Having considered the affidavits filed and the submissions by both

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