HUSSEIN KHAMIS SDN BHD v SMALL MEDIUM ENTERPRISE DEVELOPMENT BANK MALAYSIA BERHAD

Case Significance

Illustrates that a claim founded on an alleged oral settlement will fail on a no-case-to-answer submission where a single recollection is contradicted by the contemporaneous documentary record: the plaintiff bears the initial burden under sections 101 and 102 of the Evidence Act 1950, and unreliable oral evidence cannot discharge it.

This High Court decision at Kuala Lumpur concerns a submission of no case to answer at the close of the plaintiff's case in a banking dispute that turned on whether a multimillion-ringgit settlement had been concluded orally. The plaintiff, Hussein Khamis Sdn Bhd, had obtained Islamic financing facilities from the defendant, Small Medium Enterprise Development Bank Malaysia Berhad (SME Bank), secured over its factory land, and sought a redemption statement to discharge the facilities on selling the land. Its pleaded case rested on two allegations: that the redemption figure had increased unexplained between two of the bank's letters, and — crucially — that at a meeting in January 2023 between the plaintiff's director and the bank's chief executive officer, the bank had agreed to accept a full and final settlement of only the principal sum of RM7,791,324, conditional on the plaintiff obtaining similar profit waivers from two other financing banks. The plaintiff said it obtained those waivers but that the bank reneged and demanded a higher sum, which it paid under protest, and it claimed the difference of RM5,423,750.44. At the close of the plaintiff's case, the bank submitted that there was no case to answer. Applying sections 101, 102 and 114(g) of the Evidence Act 1950 and the Wisniewski principles on adverse inferences, the court weighed the plaintiff's single recollection of an oral agreement against the objective contemporaneous documents, in particular a letter showing the matter remained under evaluation. It held that the plaintiff's evidence, taken at its highest, was so contradicted by the contemporaneous documents and the witness's own concessions that no reasonable tribunal could conclude a binding agreement for RM7,791,324 had been reached, so that the plaintiff had failed to discharge its initial burden of proof and the legal burden never shifted. The court upheld the submission of no case to answer and dismissed the claim with costs fixed at RM35,000.