KUALA LUMPUR (May 19): The High Court (Commercial division) on Wednesday (May 17) allowed a businesswoman who is also an investor in ACE Credit (M) Sdn Bhd to obtain a summary judgement amounting to RM2 million against the company directors Datuk Choong Chee Meng and Chang Ai Nee for breach of an investment agreement.

The order was granted by Judicial Commissioner Liza Chan Sow Keng after hearing submissions from both parties and she decided to grant the Order 14 Rules of Court 2012 for a summary judgement to be entered on Choong and Chang.

It is understood that this is the first successful claim made by an investor against ACE Credit, which parent company ACE Holdings Bhd had in March applied to enter into judicial management and the application is pending.

Besides ordering Choong and Chang to pay the initial investment amount of RM2 million, Chan also ordered both to pay the 15% return on the investment based on the daily rate from July 7, 2022, until the full resolution of the matter.

Chan also ordered Choong and Chang to pay RM10,000 in legal fee costs to the 60-year-old businesswoman.

The outcome was confirmed on Friday (May 19) to The Edge by counsel Wan Sarimah Wan Hussain from the Chambers of Shamsul Qamar, on behalf of the businesswoman. The businesswoman filed the suit last Oct 7.

Wan Sarimah appeared with Yougeswary Singam and Faizah Khamaruddin, while Shankar Govinth appeared for Choong and Chang.

A summary judgement is a faster way to recover monies that are owed to a person, and they can be filed on a claim that does not include a claim for libel, slander, malicious prosecutions, false imprisonment, or a claim based on allegations of fraud.

In the businesswoman’s statement of claim, she said that she entered into an investment agreement with ACE Credit on April 7, 2021, resulting in the RM2 million deposited with a maturity date of one year ending April 6, 2022.

As part of the investment agreement, it was agreed that Choong and Chang will be the personal guarantor for ACE Credit and with that, she agreed to put in the investment, and she alleged that it was her legitimate expectation that the defendants would fulfill their contractual obligations to repay her after 14 days of the maturity of the investment agreement on April 6, 2022.

Part of the investment agreement includes a 15% profit return daily until July 6, 2022, which is equivalent to the sum of RM2.075 million in payment (which includes the original investment amount of RM2 million, as well as the return on investment).

She said ACE Credit paid RM300,000 on April 30 last year and on July 6, 2022, the company paid another RM75,000, which is considered a return on the investment over the extension on July 6, 2022.

ACE Credit on July 26, in a letter to her, had requested an extension to pay the investment amount on Aug 30, 2022. Based on the exchange of correspondence dated April 26 and July 26, she said this unequivocally proves and is evidence of the debt owed by ACE Credit to her.

She further claimed that on Aug 30, she failed to receive any payment that was due to her as stipulated in the investment agreement, resulting in her filing a letter of demand, as well as filing the suit.

ACE Credit in its defence alleged that the RM2 million was part of a money-lending agreement, wherein the claimant (the businesswoman) gave a loan to the company with the imposition of 15% interest for 12 months.

Hence, ACE Credit claims that the purported investment agreement is null and void, as the claimant does not possess a money-lending licence under the Moneylenders Act 1951.

ACE Credit further alleged that her claim amounted to a double claim and unjust enrichment.

However, Wan Sarimah in her submissions said that as the defendants admitted their indebtedness to the businesswoman through the payments made, the two directors who are personal guarantors should be held liable under Section 81 of the Contracts Act to pay for the breach of contract. 

Wan Sarimah further told the court that the defendants’ defence that this was not an investment agreement but a money-lending agreement, does not hold water as the agreement itself stipulated that it is an investment agreement.

The lawyer further submitted that the defence does not hold merit and does not raise serious triable issues for the court to consider the matter to go for a full trial, as it was clear that there was a breach of contract to the investment.