Guarantors cannot unilaterally discharge their obligations without the creditor's consent; summary judgment may be granted if no triable issues exist.

This an Appeal by the 3^rd Defendant against the Senior Assistant Registrar decision dismissing with costs the 3^rd Defendant application to set aside summary judgment by the SAR against the 3^rd Defendant.

The Facts

The Plaintiff's claim against the Defendant is for breach of a loan facility amounting to HK$15,000,000.00 (Loan Facility). The 1^st Defendant was the Borrower and the 3^rd Defendant one of the Guarantors. Together with the 4^th, 5^th and 6^th Defendants, the 3^rd Defendant executed a Letter of Guarantee. The Plaintiff has claimed for the sum of RM$16,256,863.59 as at 30.4.2006 together with interest and costs.

The Plaintiff filed a summary judgment application against the 1^st and 3^rd Defendant on 25.1.2007 claiming for the judgment sum with interest and costs. The matter was fixed before the Senior Assistant Registrar (SAR) and judgment was entered against the 1^st Defendant on 2.7.2007. On 29.9.2007 the SAR allowed the Plaintiff's Summary Judgment against the 3^rd Defendant.

The 3^rd Defendant then filed an application to set aside the summary judgment on 13.6.2008. On 11.12.2008 the SAR dismissed the application with costs. On 19.12.2008 the 3^rd Defendant filed an appeal to the Judge in Chambers against the decision of the SAR.

The 3^rd Defendant submitted that the SAR had erred in law when he/she dismissed the application. The 3^rd Defendant submits that:

a) the 3^rd Defendant has defence with merits which could only be determine at a full trial. The Defendant had raised triable issues as the 3^rd Defendant contended that he had terminated and revoked the Letter of Guarantee. According to the 3^rd Defendant the letter of Guarantee was revoked by a letter dated 23.11.2005.

b) there were irregularities in obtaining the judgment. The 3^rd Defendant submits that pursuant to the 'Doctrine of Election' the Plaintiff should not have entered judgment against the 3^rd Defendant after entering judgment against the 1^st Defendant;

c) that there were procedural improprieties that were overlooked by the SAR. The 3^rd Defendant had appeared before the SAR for the decision for Enclosure 17 on 24.9.2007 unrepresented. The 3^rd Defendant had informed the SAR that he would require more time to appoint a solicitor. Therefore the Court proceeding with the matter is a procedural impropriety.

The Plaintiff submitted that there are no bona fide defences or issues to be tried. The 3^rd Defendant cannot unilaterally discharge himself from all his liabilities as a Guarantor without getting prior approval of the Plaintiff. Even if the Plaintiff received the letter it does not necessarily mean that the Plaintiff had accepted the request/proposal of the 3^rd Defendant to be discharge as a Guarantor. Abdul Malik Ishak, J in Allied Granite Marble Industries Sdn. Bhd. v. Chin Foong Holdings Sdn. Bhd. & Ors, observed that:

"... In a joint and several guarantees, the creditor is placed in an enviable position since it can decide as to which of the co-guarantors it wishes to sue for the recovery of the debt; ... The creditor too is also at liberty to pursue the matter further by going after the other guarantors if the debt is not fully paid up."

His Lordship Visu Sinnadurai, J in Malayan Banking Bhd v. Teguh Consolidated Sdn Bhd & Anor & Another Case, at pg 268, observed that:

"The rules of Court providing for summary disposal of cases are intended to be invoked in clear and obvious cases - cases where defendants have no defences or where pleadings disclose no causes of action ..... these very provisions are often invoked in cases where they ought not to be invoked."

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