Mahadev Shankar J:

This is an application to set aside a third party notice and to strike out a purported statement of claim filed by the 2nd defendant against the third party.

The plaintiff (Pacific) entered into an equipment lease agreement (the said agreement ) with the first defendant (Senanti) in respect of a bulldozer.

At the time the second defendant was a director of Senanti. So was the third party. Both of them signed a guarantee and indemnity annexed to the said agreement for its due performance.

The third party was also a director of Pacific at all material times.

Pacific alleges that Senanti defaulted. So it terminated the said agreement repossessed and sold the bulldozer, and brought this action, inter alia, for the total amount of the unpaid rentals for the entire duration of the said agreement. Summary judgment was given in the first instance by the Senior Assistant Registrar. The defendants appealed. I set aside that judgment and gave unconditional leave to defend. My reasons are already set out in a previous judgment.

The second defendant issued third party notice after service of the writ of summons and the statement of claim.

Order 16 r. 4(2) of the Rules of the High Court permits a third party who has been served with a third party notice to make an application to set it aside if seven days after he has entered an appearance, the defendant has failed to take out a third party summons for directions. Appearance was entered on 30 April 1987. The application to set aside was filed on 7 May 1987, before seven clear days had expired.

So it was premature. On 8 May 1987, the summons for directions was applied for. On 3 July 1987, a consent order was made by the Senior Assistant Registrar on this summons that the second defendant serve his statement of claim on the 3rd party within fourteen days but the third party do file his defence, "within 14 days from the date the Court decides the summons in chambers filed on 7 May 1987 to set aside the third party notice".

The summons in chambers had two prayers. The first was pursuant to O. 16 r. 4(2). The second prayer was to strike out a "statement of claim" dated 24 April 1987 on the grounds set out in O. 18 r. 19(1) the chief of which is that it disclosed no reasonable cause of action.

Having had the benefit of further arguments I would observe as follows.

The document dated 24 April 1987 was not a statement of claim. It was in fact the third party notice. The rules require the use of Form 22 which requires the defendant to state the grounds of the claim. The third party's solicitors description of the grounds in the notice as a "statement of claim" is a misnomer.

By consenting to the order on the summons for direction the third party's solicitors acquiesced in the validity of the third party notice. A formal statement of claim was delivered on 11 July 1987, pursuant to the order for directions.

But to put an end to any further doubts as to the merits I propose to treat the third party's objections under O. 18 r. 19 as being related to this statement of claim which is in very similar terms to the grounds referred to earlier.

In the third party's affidavit (encl. 21), he admits he is a co-guarantor; but he says it is Pacific's prerogative to sue a guarantor of its choice. In para. 3 of his affidavit he avers that for the purpose of these proceedings he could not be made liable under the guarantee. The only reason given is that in law the second defendant is not entitled to make him a third party as an indemnifier or contributor for the reason that the right to contribution "will only arise after the second defendant has first fully settled all outstanding debts due to the plaintiff which he has not done so, to my knowledge".

The case upon which his solicitors rely is Bank Bumiputra Malaysia Berhad v. Darnaz Enterprise Sdn. Bhd. & Ors. [1986] 2 MLJ 223 where the following passage appears at p. 224.

The 2nd third party's co-sureties, that is, the second to the fi