Zainun Ali J:

This is the 4th defendant's appeal against the decision of the learned judge made on 29 September 1999 whereby judgment under O. 14 was entered against the four defendants including the 4th defendant on the plaintiff's application (encl. 21).

In this appeal, having heard the submissions of both learned counsel for the appellant and the respondent and after having deliberated the matter, we came to a unanimous decision that the appeal has merits and accordingly we allowed the appeal. We now give our reasons.

As a prelude, whilst it is true that a slew of authorities on an O. 14 application has already filled the law reports, we are of the view that the implications of the issues raised may often be obscured at the expense of illuminating the significance of this summary power.

The Facts

The appellant was a former director and shareholder of one HIL Electronics Sdn Bhd ("the company"). Both the 2nd and 3rd defendants were also directors of the company.

The company had borrowed funds from the respondent amounting RM11,250,000 and the commercial credit facility was RM3,000,000.

The appellant sold all his shares in the company to the 3rd defendant in July 1997 and