A personal guarantee is enforceable if duly executed, with established consideration and no evidence of duress, allowing for summary judgment when no triable issues are present.

JUDGMENT

Quay Chew Soon J:

Introduction

[1] This action is based on a personal guarantee given by the Defendant ("D") in favour of the Plaintiff ("P"). The personal guarantee relates to certain payments for the works performed by P under a construction contract.

[2] P filed an application dated 8 January 2024 vide encl 14 for summary judgment against D. Enclosure 14 is made under O 14 of the Rules of 2012 .

[3] On 20 March 2024, I allowed encl 14 and entered summary judgment against D. It is my finding that D does not have a valid defence against P's claim, let alone any triable issue. Here are the grounds of my decision.

Background Facts

[4] By a letter of award dated 2 July 2018, Prisma Bumiraya Sdn Bhd ("employer") appointed Simbo! Era Sdn Bhd ("main contractor") as the main contractor for a certain project ("project"). D is a director of the employer.

[5] By a letter of award dated 13 January 2020 ("letter of award"), the main contractor appointed P as a domestic subcontractor to carry out the works stipulated under the letter of award ("works") in relation to the project.

[6] Pursuant to a personal guarantee dated 28 April 2021 signed by D ("personal guarantee"), D agreed to pay to P for the works which has been carried out by P on the project.

[7] The salient provisions of the personal guarantee are as follows:

(a) Clause 1: D will pay to P "any sum or sums not exceeding in total an amount equivalent to Ringgit Malaysia Eight Million Ten Thousand Two Hundred Twenty Six and Cents Seventy Two (RM8,010,226.72) Only ('Outstanding') for the work done certified and billed by the Company [ie P] to Main Contractor between November 2020 to March 2021 or such part thereof which shall become debt due and payable upon receipt a notice of demand in writing"]

(b) Clause 2: D is liable for late payment interest as follows - "any arrear in payment from the due date of payment to the date of full settlement before as well as after judgment, the Company [ie P] shall be entitled to an interest rate of 10% per annum"]

(c) Clause 6: D "irrevocably and unconditionally undertake to indemnify] and to keep the Company [ie P] indemnified from any and whatsoever losses, damages, fines, penalties, costs, professional legal fees on both party to party and solicitor client basis and any such liability or losses arising from the enforcement of this Guarantee"] and

(d) Clause 7: '4s a separate and independent stipulation, the Guarantor hereby irrevocably and unconditionally undertake as principal debtor and not merely as surety to pay on demand the guaranteed sum or any part thereof to the Company [ie P] without requiring any proof the Company [ie P] is entitled to such sums".

[8] It is undisputed that P has duly carried out the works. This is recognised through the several progress payment certificates issued by the main contractor. However, the main contractor failed to pay P for the works. There is an outstanding certified sum of RM7,225,590.93 ("outstanding sum"), which is still due and owing to P for the works.

[9] Arising from the main contractor's failure in paying the outstanding sum, P had, via its letter dated 4 May 2021 exercised its right to terminate the letter of award. Consequently, P is entitled to be paid the retention sum in the amount of RM1,058,364.21 on 4 May 2021, which is the date of termination of the letter of award.

[10] The brief particulars of the outstanding sum, and their respective due dates, are set out in the table below:

[11] Pursuant to cl 1 of the personal guarantee, P had, via its solicitors, issued a written notice of demand dated 30 August 2023 to D, demanding for the outstanding sum. D did not reply to the said notice of demand.

[12] P commenced the instant suit and filed for summary judgment vide encl 14. P seeks for the following against D:- (a) RM7,225,590.93, being the outstanding sum; (b) interest at the rate of 10% per annum on the outstanding sum, calculated from the relevant respective due dates until the date of payment.

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