Halim Saad loses appeal, ordered to pay RM2.5m to businessman

TheEdge Fri, Nov 20, 2020 01:55pm - 3 months ago

PUTRAJAYA (Nov 20): Tycoon Tan Sri Halim Saad lost his appeal at the Court of Appeal (COA) last month over a summary judgment entered against him and has been ordered to pay RM2.5 million to businessman Chan Yok Peng.

Justice Datuk S Nantha Balan wrote the judgment in the unanimous decision by a three-member bench that was presided by Datuk Kamardin Hashim, with Datuk Che Mohd Ruzima Ghazali as the other judge.

The decision was made on Sept 18, but the written grounds were made available this week.

The COA ordered Halim to pay RM10,000 costs in dismissing the appeal to set aside the summary judgment as the court found that the High Court judge had not erred in law in arriving at her decision.

The case is over an unpaid loan of RM2.5 million that Halim took from Chan. Halim took a “friendly loan” of RM3 million from Chan in November 2014, as he was in need of funds, which the former Renong Bhd chairman acknowledged through a note dated Nov 13, 2014.

Halim only repaid RM500,000 to Chan, and the payment was made via a cheque which Halim issued from his company Cekal Teguh Sdn Bhd in March 2015. Halim has almost a 99% stake in Cekal Teguh.

Chan had complained of the RM2.5 million that remained unpaid and this resulted in him sending a letter dated Oct 19, 2018, to Halim's office at Midvalley, asking the latter to pay within 14 days of the date of the letter.

As there was no response, Chan's lawyers sent a notice of demand on Dec 4, 2018, for payment of the balance of RM2.5 million within 14 days.

Following that, there was still no response; Chan filed a writ against Halim on Jan 23, 2019.

Halim filed his statement of defence in March 2019, where he acknowledged taking the loan but claimed to have paid the full amount in cash and asked that Chan's claim be set aside. In reply, in that same month, Chan said besides the RM500,000 payment, he had not received any other payments.

On May 3, 2019, Chan applied for a summary judgment be entered on Halim for the unpaid loan, while Halim filed an affidavit opposing the application on May 23, 2019, where he maintained that the remaining amount of RM2.5 million had been paid in full via cash and shares in a public-listed company on Bursa Malaysia.

On July 12 last year, the Kuala Lumpur High Court entered a summary judgment against Halim and directed him to pay RM2.5 million to Chan.

Not appealing against summary judgment at COA detrimental

Justice Nantha Balan wrote that for reasons which are inexplicable and unfathomable, Halim did not appeal against the summary judgment dated July 12 last year, at the COA but chose to amend his statement of defence. Halim claimed that if the RM3 million loan he took existed, it was between Tekad Mulia Sdn Bhd and his own Cekal Teguh.

“I (Halim) have agreed to guarantee payment by Cekal Teguh to Tekad Mulia, and entered an agreement with Chan for the purchase of 40 million shares in Sumatec Resources Bhd, a company which I control.”

Halim's defence seemed to show he was not the borrower, but it was a loan between Tekad Mulia, where Chan is a director and shareholder, and Cekal Mulia, Justice Nantha Balan wrote.

On Dec 3 last year, the High Court dismissed Halim's application to set aside the summary judgment, where the judicial commissioner presiding over the case described Halim's affidavit as “an afterthought” and that he “did not come to court with clean hands”.

Justice Nantha Balan said Halim should have appealed against the summary judgment at the COA but the latter had not done so.

“And if the so-called fresh evidence, fresh information or documents were discovered or unearthed belatedly, and if they are credible, critical, relevant and persuasive to the issue at hand, then the defendant (Halim) could have applied to the Court of Appeal and adduced them as 'fresh evidence' in the very appeal itself,” the COA said.

“It is obvious enough that by July 11 last year, Halim was already seized of the so-called information pertaining to the alleged loan between Tekad Mulia and Cekal Teguh. But as it turned out, he waited almost two months before filing it. The delay is baffling.

“But what is more perplexing is that his averment in his affidavit in support of the loan was between Tekad Mulia and Cekal Teguh. It is clear that in his defence dated March 12, 2019 and in his affidavit in opposition to the summary judgment application, Halim's unequivocal position was that he indeed borrowed from Chan but had repaid the loan in full,” the judge added.

In fact, Justice Nantha Balan said Halim claimed he settled the loan by way of payment in cash and by way of transfer of shares in a public listed company, and later in amending his defence, claimed he never borrowed the money and it was Cekal Teguh that borrowed the RM3 million from Tekad Mulia.

“There is no explanation by Halim as to why he had previously admitted in his defence and in his affidavit to oppose the summary judgment application, that he had borrowed RM3 million from Chan and that he had fully repaid the loan in cash and by way of shares.

“At any rate, Chan's counsel had quite rightly submitted there was evidence of a friendly loan of RM3 million to the plaintiff. In this regard, it has to be borne in mind that Halim is not a simple-minded person or someone who is unfamiliar with commercial matters. We also note that he did not respond to Chan's letter and the letter of demand.

“The non-response to the documents is fatal. Being a person of business, Halim could not have been unaware of the grave implications to himself by not responding to and repudiating the contents of both the letters,” he said.

Justice Nantha Balan then concluded that the High Court judge had not erred in law in arriving at her decision to dismiss the appeal against the summary judgment.

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