Lord Diplock:

[1] This is an appeal from an interlocutory order of the Federal Court of Malaysia. The question that it raises is whether an action (herein called "the New Action") brought by the respondent against the appellant in the High Court in Borneo by a Writ and Statement of Claim dated May 16, 1972 ought to be summarily dismissed as frivolous and vexatious. The principal relief sought in the New Action was to set aside a judgment entered against the respondent on December 27, 1969 in a previous action (herein called "the Old Action") between the same parties for the sum of $718,266.85, due under an agreement of November 21, 1968. The appellant's application to set aside the Writ and all subsequent proceedings in the New Action was based on the inherent jurisdiction of the Court to prevent abuse of its process. Affidavit evidence was adduced by each party. Upon consideration of this evidence the High Court (Lee Hun Hoe J) was satisfied that the New Action was frivolous and vexatious and brought "to defeat the course of justice in the hope of delaying the execution of a judgment", sc. in the Old Action. He, accordingly, set aside the proceedings.

[4] It all starts with a transaction between the appellant and the respondent which took place in November 1968. The respondent was a landowner and property developer in Sabah. At that time he had embarked upon a project for developing a new satellite town upon land that he owned in Lahad Datu. He was also the managing director of a company Southern Estate Sendirian Berhad ("Southern Estate") of which he and his wife were the sole shareholders. Southern Estate had hired from the appellant nineteen tractors in respect of which it was indebted to the appellant for amounts exceeding $2m. On November 21, 1968, the respondent entered into a written agreement with the appellant ("the Agreement") whereby in consideration of the appellant's refraining from taking legal proceedings to recover these sums from Southern Estate, the respondent undertook and guaranteed as principal debtor the payment to the appellant on demand of the total amounts owing by Southern Estate. By cl 2 of the Agreement no demand was to be made on the respondent for full payment of the debt so long as he complied with certain conditions. For the purposes of this appeal it is only necessary to refer to two of them. By cl 2(3) he was required upon request by the appellant to execute a charge over all lands owned by him except the lands comprised in his New Town project in Lahad Datu; and by cl 2(5) he was required to pay