Banks can use computer-generated statements to recover loans, rules court

Banks can rely on computer-generated statements of accounts to prove outstanding loans in court, provided a bank officer gives evidence confirming that the records were produced by a computer used in the ordinary course of business.

The Court of Appeal clarified this today in overturning a High Court decision that had dismissed a bank’s claim to recover RM689,207 from a borrower and two personal guarantors.

Justice Wong Kian Kheong, who delivered the ruling, said the High Court had wrongly excluded the bank’s certificate of indebtedness and computer-generated statements of accounts.

Wong, who sat with Justices Faizah Jamaludin and Leonard David Shim, said the documents were admissible under Section 90A(1) of the Evidence Act 1950 because a bank officer had verified and signed the certificate.

The bank officer had also testified that the statements were generated by the bank’s computer in the ordinary course of business.

Wong said the officer had also confirmed that the computer was functioning normally, and that the defendants had not produced any evidence to contradict his testimony.

The appellate court said the High Court had, therefore, erred in excluding the documents as evidence.

The dispute arose from two loan facilities totalling RM15 million granted by SME Bank to Panji Timor Holdings Sdn Bhd for a hotel project in Seremban, Negeri Sembilan.

After the borrower defaulted on the payments, receivers and managers appointed by the bank sold the land and the incomplete hotel for RM15 million in 2014.

SMEB Asset Management Sdn Bhd, which took over the bank’s business and financing contracts, later sued to recover the outstanding debt.

Panji Timor counterclaimed, alleging that the sale had generated a surplus of about RM3.92 million, which should be returned to it.

The Court of Appeal allowed the bank’s appeal against the High Court’s decision on the substantive issues and ordered the three defendants to pay RM689,207 jointly and severally.

It also dismissed the counterclaim.

However, it dismissed the bank’s separate appeal against the High Court’s refusal to allow amendments to its statement of claim.

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