Low Hop Bing J:

Appeal

This is an appeal in encl. (36) filed by defendant 1 against the decision of the learned registrar who had on 25 July 2003 entered summary judgment in favour of the plaintiff under O. 14 of the Rules of the High Court 1980.

A reference hereinafter to an order and rule is a reference to that order and rule in the Rules of the High Court 1980 unless the context otherwise requires.

Factual Background

The plaintiff's claim against defendant 1 is for:

1. a sum of RM358,937.25 as at 13 May 2002 being arrears under bankers acceptance granted by the plaintiff to defendant 1; and

2. interest at 10.3% p.a. accruing at daily rest on the principal sum of RM300,000 with effect from 14 May 2002 to the date of full realisation.

Vide plaintiff's letter of offer dated 30 May 1997 to defendant 1 ("the letter of offer") which defendant 1 has accepted, and on the basis of the letter of guarantee executed by defendants 2 and 3, the plaintiff gave defendant 1 the following banking facilities:

1. an overdraft against outport cheques for RM80,000; and

2. letters of credit, trust receipt and bankers acceptance for RM300,000.

The repayment and tenure of the aforesaid banking facilities are expressly stated as follows:

Overdraft against - This facility is subject to periodic review

outport cheques and payable on demand

Letters of Credit - sight/90 days

Trust Receipt - 90 days payable at the end of each period

Bankers Acceptance - Up to 90 days but subject to a minimum

of 21 days, payable at the end of each

period.

Prior to the letter of offer, the plaintiff has given defendant 1 overdraft facility for RM200,000 vide letter of offer dated 26 December 1996, which was subsequently increased to RM300,000 vide letter of offer dated 13 January 1997, which was again increased to RM400,000 vide letter of offer dated 24 February 1997, secured by way of fixed deposit and guaranteed by defendants 2 and 3.

On 13 April 2002, the plaintiff uplifted the fixed deposit amounting to RM434,772.27 on grounds of defendant 1's default.

Bankers acceptances No. 554801 dated 1 March 2000 and 554802 dated 27 March 2000 matured on 23 May 2000 and 22 June 2000 respectively, but defendant 1 had defaulted on these maturity dates, as a result of which the plaintiff vide letter dated 26 August 2000 had to reschedule these facilities in order to ensure regularisation by defendant 1.

Defendant 1 vide letter dated 15 October 2001 made counter proposals for regularisation. As these counter proposals were not acceptable to the plaintiff, the plaintiff vide letter dated 8 March 2002 demanded payment of the outstanding sum.

Vide letter dated 16 April 2002, the plaintiff withdrew the overdraft facility, letters of credit and trust receipt, and claimed a sum of RM356,740.26 due under bankers acceptance as at 15 April 2002. The other facilities have been set off against the fixed deposit.

Plaintiff's Right To Review

Mr. Zulhasmi bin Zakaria, learned counsel for the defendant, submitted that the plaintiff has no right to review the facilities of letters of credit, trust receipt and bankers acceptance, as defendant 1's account has been well maintained, relying on Bank Bumiputra Malaysia Bhd. Kuala Trengganu v. Mae Perkayuan Sdn. Bhd. & Anor [1993] 2 CLJ 495 ('Mae Perkayuan').

In response, Mr. Kee Tong Kiak, plaintiff's learned counsel contended that the plaintiff's right to review is contained in the letter of offer and that Mae Perkayuan, supra, concerns a fixed loan which is distinguishable from the banking facilities herein.

The plaintiff relied on:

1. Overseas Union Bank Ltd. v. Ming Ann Holdings Sdn. Bhd. [1995] 2 CLJ 287;

2. Malayan Banking Berhad v. Lim Chee Leng & Anor. [1985] CLJ 203 (Rep) [1985] 1 CLJ 154; [1985] 1 MLJ 214; and

3. Standard Chartered Bank v. Menang S K Brothers Enterprise Sdn Bhd & Anor [1993] MLJU 1 442.

I shall now consider Mae Perkayuan, supra, cited for the defendant.

In Mae Perkayuan, supra, Mae Perkayuanbeing desirous of de