SMEB Asset Management Sdn Bhd v Panji Timor Holdings Sdn Bhd & Ors

Appellant(s): SMEB ASSET MANAGEMENT SDN BHD(yang mengambil alih urusan perniagaan dan kontrak-kontrak pembiayaan Small Medium Enterprise Development Bank Malaysia Berhad melalui perintah perletakkan hak bertarikh 26-01-2015)

Respondent(s):

• Panji Timor Holdings Sdn Bhd
• Shahrul Radzlin Bin Mohd Idris
• Azlinah Binti Abd Jalil

• YA Datuk Wong Kian Kheong
• YA Dato' Faizah Binti Jamaludin
• YA Datuk Leonard David Shim

• A bank granted two loan facilities totalling RM15 million to a company for a hotel development, with its two directors/shareholders executing a joint and several guarantee as "principal debtors" (not mere sureties); the plaintiff later acquired the bank's rights by vesting order.
• After the company defaulted, receivers and managers were appointed and sold the charged land; the plaintiff then sued the company and its two guarantors for the shortfall, while the company counterclaimed for an alleged surplus from the sale proceeds.
• At trial the plaintiff's own witnesses admitted an error in the amount originally demanded and sought to rely on a corrected certificate of indebtedness and a computer-generated statement of accounts to prove a lower "correct sum due"; a post-trial application to amend the pleadings to reflect this was filed only after submissions had concluded.

• Whether the High Court erred in refusing to admit the certificate of indebtedness and the computer-generated statement of accounts, particularly regarding compliance with s 90A of the Evidence Act 1950, and whether it was permissible to rely on a Court of Appeal authority that had since been reversed by the Federal Court.
• Whether a solicitor's affidavit filed to support a late amendment application breached the Legal Profession (Practice and Etiquette) Rules 1978, and whether the High Court properly exercised its discretion in refusing the amendment application made after trial had concluded.
• Whether the High Court committed a "plain error of fact" in finding there was a surplus owing to the company (rather than a sum due to the plaintiff), and whether the guarantors' liability under the guarantee was correctly addressed, together with the propriety of an assessment-of-damages order made absent any bifurcation order.

• The Court of Appeal held that both the certificate of indebtedness and the computer-generated statement of accounts should have been admitted under s 90A, as there was sufficient oral evidence from the plaintiff's officer establishing ordinary computer use; relying on a Court of Appeal decision reversed by the Federal Court was also a legal error, as the stare decisis doctrine required that reversed rationes do not bind lower courts unless later restored.
• The Court nonetheless dismissed the first appeal (against refusal of the late amendment), holding that appellate intervention was unwarranted given the lateness of the application, the risk of significant delay/prejudice, and that the discretion exercised by the trial judge was not shown to be unjust — though it emphasised that the solicitor's affidavit was not improper since it addressed undisputed facts.
• The second appeal was allowed: the trial judge's finding of a surplus was a plain factual error unsupported by the evidence; the original claim was allowed for the corrected sum due (awardable even under the general prayer for relief), the counterclaim was dismissed, the assessment order for damages (made without a bifurcation order) could not stand, and the guarantors were held liable as principal debtors under the guarantee, independent of the company's own defence.