When a Bank Statement Becomes Questionable

 

Insights from the Sabah Development Bank Discussions in Sabah

In Malaysia, including Sabah, a bank statement of account is generally accepted as prima facie evidence of a debt. Courts often rely on such statements to establish the existence of financial obligations. However, this acceptance is not absolute. The enforceability of a statement of account can be successfully challenged if the bank cannot explain or verify its contents when disputed. The ongoing discussions surrounding the SDB matter highlight how these principles may come into play in practice.

 

Prima Facie Evidence and Its Limits

Bankers’ Books (Evidence) Act 1949: A copy of an entry in a banker’s book is admissible as evidence of a transaction.

 

Rebuttable Presumption: This presumption is not conclusive. If challenged, the bank must prove the accuracy of the entries.

 

Duty of Care: Banks owe a duty of care to customers. Producing statements with errors or unexplained charges exposes them to legal challenge.

 

Burden of Proof

In disputes, the burden of proof lies with the bank.

 

The bank must demonstrate that the figures in the statement are accurate and that the transactions occurred as recorded.

 

If the bank cannot explain certain entries, it fails to meet this burden.

 

This principle is central to the current SDB discussions, where unexplained entries raise serious doubts about the reliability of the bank’s records.

 

Challenging the Statement

Customers are not powerless when faced with questionable statements. They have the right to:

 

Dispute incorrect or unexplainable entries within a specified time frame.

 

Trigger the onus on the bank to investigate, rectify, or provide satisfactory evidence.

 

Once a credible objection is raised, the bank must respond with clarity and documentation. Silence or inadequate explanation undermines its claim.

 

Conclusive Evidence Clauses

Many bank contracts include a “conclusive evidence” clause, stating that a certificate of indebtedness issued by the bank is final.

 

Malaysian courts have ruled that such clauses do not prevent customers from showing manifest errors.

 

Examples of manifest errors include duplicate charges or amounts inconsistent with signed agreements.

 

Once proven, the statement loses its conclusive status.

 

Challenging an Unexplained Statement

If a bank cannot explain entries in a statement of account, several factors apply:

 

Manifest Error: Clear mistakes strip the statement of its evidentiary weight.

 

Burden of Proof Shifts: Once a discrepancy is shown, the bank must provide supporting documentation.

 

In the SDB discussions, the inability to explain certain entries highlights the fragility of relying solely on statements without proper verification.

 

Situation in Sabah

The legal framework in Sabah mirrors that of Peninsular Malaysia:

 

Governed by the Financial Services Act 2013 and the Evidence Act 1950.

 

Cases in the High Court of Sabah and Sarawak require banks to satisfy the court that their records are reliable under the Bankers’ Books (Evidence) Act 1949.

 

This ensures that customers in Sabah enjoy the same protections against unexplained or erroneous statements as those in Peninsular Malaysia.