PAC LEASE BERHAD v 1. ) INSPIRA JAYA SDN. BHD. (DAHULUNYA DIKENALI SEBAGAI TUJUAN BENA SDN. BHD.) 2. ) GREGORY AMOS YOON PENG SUM 3. ) WAN NASIR BIN WAN MUSTAFHA 4. ) YONG PENG YUEN 5. ) IHAA CAPITAL SDN. BHD. 6. ) PARAGRENE LAND BERHAD

Case Significance

Illustrates the evidential burden a defendant must meet to resist Order 14 summary judgment on a financing and guarantee claim, the court holding that bare denials and unproven forgery allegations unsupported by documents raise no bona fide triable issue.

This High Court decision concerns an application for summary judgment under Order 14 of the Rules of Court 2012 by a licensed financier against a corporate borrower and its guarantors. The plaintiff, PAC Lease Berhad, a licensed moneylender operating within the framework of the Moneylenders Act 1951, had extended financing to the first defendant through twelve money-lending agreements, each governing a term loan facility, with instalment repayments, late-payment interest of 8%, and a right to call in the whole outstanding balance on default. As security, the first defendant executed debentures and created charges over 310 pieces of leasehold land, and the remaining defendants signed a letter of guarantee containing a principal-debtor clause, which deemed the guarantors principal debtors on default, and a conclusive-evidence clause. The money was disbursed, the borrower defaulted, letters of demand and termination followed, and the plaintiff sued and applied for summary judgment. The court's task was to separate genuine triable issues from assertions dressed up to divert the matter to trial. It found that the defendants' rebuttal affidavit contained no supporting contemporaneous documents, was heavy on rhetoric and weak on facts, and rested on bare denials and unproven allegations of forgery, which were not supported by any evidence. Applying the principle in the Malayan Banking authority that a defendant must do more than merely deny indebtedness, the court held that the defendants had failed to discharge their burden and had raised no bona fide triable issue. The court noted that all the loan and security documents had been duly stamped, that the sums had been disbursed, and that the defendants had acknowledged receipt of copies, leaving the indebtedness essentially undisputed on the documents. Concluding that the plaintiff had established a clear prima facie case and that justice does not require a trial where there is nothing real to try, the court allowed summary judgment against all the defendants with costs. The judgment illustrates the evidential burden a defendant must meet to resist summary judgment on a financing and guarantee claim.