Yew Huoi, How & Associates | Leading Malaysia Law Firm

LETTER OF DEMAND – IGNORANCE – CONSEQUENCES

My company entered into a Facility Agreement (“FA”) with the bank. I am the guarantor. Due to MCO, we defaulted the loan in the FA. The bank took legal action against my company and demanded the sum from me as guarantor. Can I ignore the letter of demand? What is the legal implication?

  • Legally, not all demand notices must be replied to. Failure to respond does not tantamount to an admission.
  • HOWEVER, failure to response relates to the issue of conduct of a person. The conduct of a person is relevant to how the court value a person’s evidence in court.
  • Therefore, you should not ignore a letter of demand. A valid defence (if any) will be weak in evidence for failure to reply to a letter of demand.

 What if I did not sign the guarantee to the FA as a guarantor and my signature was forged?

  • If your signature is forged, you should immediately reply and state it is forged.
  • You should also lodge a police report for forgery.
  • Failure to do any of the above will weaken your defence of forgery in evidence.

 Why is there such a problem in evidence since the law does not require demand notices to be replied to?

  • The evidentiary presumption arises from the following common-sense approach.
  • This is because under an ordinary course of business, if one man of business states in a letter to another that he has agreed to do certain things, the person who receives that letter must answer it if he means to dispute the fact that he did not agree.
  • This is an ordinary response presumed in commercial cases.
  • Similarly, if your signature is forged, a police report should be lodged.
  • Failure to do so will weaken your case in evidence. Estoppel will set in. Your defence will be perceived as an afterthought.

What should I do when I receive a letter of demand?

  1. Check the timeframe given to you to reply to the demand.
  2. Consult a lawyer as soon as possible.
  3. Instruct your lawyer to immediately reply to the demand.
  4. State your defence clearly and as early as possible.
  5. If there is a defence of fraud and forgery, immediately lodge a police report so that an investigation can be carried out.
  6. Send the documents alleged to be forged for examination by an expert.

Case in point: Small Medium Enterprise Development Bank Malaysia v Lim Woon Katt [2016] 9 CLJ 73

Sorotan Terkini

FAMILY LAW – CHILDREN’S CUSTODY – CUSTODY DISPUTES IN MALAYSIA: ESSENTIAL INSIGHTS ON CHILD WELFARE AND PARENTAL ROLES

In a recent custody dispute, the court emphasized the importance of child welfare, reaffirming the maternal custody presumption for young children unless strong evidence suggests otherwise. In high-conflict situations, the court favored sole custody over joint arrangements to minimize stress on the children. This case underscores that Malaysian parents should provide credible evidence for their claims and focus on practical, child-centered solutions.

Read More »

BREACH OF CONTRACT – DAMAGES – FORESEEABILITY AND FAIRNESS IN FREIGHT LIABILITY CLAIMS

In JSD Corporation v Tri-Line Express [2024] 1 Lloyd’s Rep. 285, the court set a clear precedent on damages for property claims, ruling that only foreseeable and proportionate losses are recoverable. Applying principles akin to Hadley v Baxendale, the court allowed for repair costs if intent to remedy was evident but rejected double recovery, underscoring that damages must reflect actual loss without overcompensation. This decision serves as a guide for Malaysian courts, emphasizing fair and balanced recovery in line with foreseeable damages.

Read More »

ADMIRALTY IN REM – SHIPPING — FUEL OR FREIGHT? COURT CLEARS THE AIR ON GLOBAL FALCON BUNKER DISPUTE

In a decisive ruling on the Global Falcon bunker dispute, the court dismissed Meck Petroleum’s admiralty claim for unpaid high-sulphur fuel, finding that the fuel was supplied not for operational purposes but as cargo. With the vessel lacking necessary equipment to use high-sulphur fuel and evidence pointing to its transfer to another vessel, the court determined that Meck’s claim fell outside admiralty jurisdiction, leading to the release of the vessel and potential damages for wrongful arrest.

Read More »

COLLISION COURSE – COURT WEIGHS ANCHOR DRAGGING AND LIABILITY AT SEA

In a collision that underscores the high stakes of maritime vigilance, the court ruled that Belpareil bore the brunt of the blame for failing to control its dragging anchor and delaying critical warnings. Yet, Kiran Australia wasn’t off the hook entirely—apportioned 30% fault for its limited evasive action, the case serves as a stark reminder: in maritime law, all vessels share responsibility in averting disaster, even when one party’s errors loom large.

Read More »

GENERAL AVERAGE – PIRATE RANSOM DISPUTE: SUPREME COURT RULES CARGO OWNERS LIABLE IN THE POLAR CASE

In the landmark case Herculito Maritime Ltd v Gunvor International BV (The Polar) [2024] 1 Lloyd’s Rep. 85, the English Supreme Court upheld the shipowner’s right to recover a USD 7.7 million ransom paid to Somali pirates under general average. The Court ruled that cargo interests, despite their arguments regarding charterparty terms and insurance obligations, were liable to contribute to the ransom payment. This decision reinforces the importance of clear contractual provisions when seeking to limit or exclude liability in maritime contracts particularly matter relating to general average.

Read More »
ms_MYMY
× Hubungi Kami