CREDIT GUARANTEE CORPORATION MALAYSIA BERHAD v 1. ) ETERNAL GLOBAL FRONTIER SDN BHD 2. ) AQUEKARAM BIN MOHD NASIR 3. ) HASSIMAH BINTI HASHIM

Case Significance

Illustrates how the parol evidence rule in sections 91 and 92 of the Evidence Act 1950 and an entire-agreement clause together exclude reliance on pre-contractual representations in a lending dispute.

This High Court decision arose from consolidated suits between Credit Guarantee Corporation Malaysia Berhad and a borrower company together with its guarantors. The credit company sued to recover sums outstanding under a finance facility, the proceeds of a contract with FGV having been assigned to it, while the borrower counter-claimed for damages, contending that a delay in disbursing monies to its suppliers had caused contracts awarded by FGV to be terminated. The central legal question was whether the borrower could rely on representations said to have been made by officers of the credit company, before the facility documents were signed, that disbursement would occur within a particular time frame. The Court held that it could not. Because the parties' bargain had been reduced to writing, the agreement had to be read within its four corners, and sections 91 and 92 of the Evidence Act 1950 excluded evidence sought to contradict, vary or add to the written terms save within the statutory provisos. The Court applied the settled principle in Tindok Besar Estate Sdn Bhd v Tinjar Co, and treated the entire-agreement clause (clause 13) as a further bar, estopping the borrower from relying on any understanding outside the document. That clause was construed as containing the "full and complete understanding between the Parties" and as superseding all prior arrangements, so no extraneous obligation could be read into the facility. Drawing on Berjaya Times Square Sdn Bhd v Twingems Sdn Bhd and Bank Perusahaan Kecil & Sederhana Malaysia Bhd v Iskandar Zulkarnain Zainal Abidin, the Court declined to admit the alleged representation. On the debt itself, the Certificate of Indebtedness was treated as conclusive evidence of the amount outstanding. The judgment is a clear working illustration of how the parol evidence rule and an entire-agreement clause operate together to shut out pre-contractual assurances in commercial lending disputes.