Ahmad Fairuz JCA:

[1] This is an appeal against the decision of the High Court at Ipoh allowing the plaintiffs application for leave to withdraw its claims against the second and third defendants with liberty to file a subsequent action against the second and third defendants based on the same cause of action (hereinafter referred to as "the said application").

[2] The second and third defendants (the appellants in this appeal) were sued as guarantors of a loan advanced by the plaintiff/respondent to the first defendant. The respondent's application for summary judgment against the appellants were allowed by the High Court. The appellants appealed to the Court of Appeal which allowed the appeal and directed that the respondent's suit be entered for trial within 30 days from 16 January 1995 (see the Court of Appeal's decision in [1995] 1 AMR 622). The respondent, instead, filed the said application. The reasons for the said application were stated in the respondent's affidavits and the learned High Court judge had correctly stated those reasons in his grounds of judgment thus:

The plaintiffs' reason for wanting to discontinue their claim was based on the decision of the Court of Appeal which was to the effect that the respective notices of demand against both the second and third defendants were not sent to their proper addresses. The plaintiffs apparently think that they would be bound to fail in their action against the second and third defendants for the lack of evidence of proper service of the notices of demand. As such they were of the view that there was no proper demand made on the defendants.

[3] These reasons, according to the appellants, would cause the respondent to fail in its claims against the appellants. Hence, the granting of an order in terms of the said application by the learned judge had definitely prejudiced the appellants and had put them at a disadvantage. In support of this contention, the appellants' counsel had referred this Court to Mallal's Digest of Malaysian and Singapore Case Law 188 to 1988 (4th edn 1994 Reissue), para 69 which reads:

Action - Discontinuance of - Whether leave to file action afresh should be granted - Whether application prejudicial to defendants

P had earlier obtained summary judgment against D. D had later successfully appealed against the decision of the senior assistant registrar As triable issues had been raised by D, the Court ordered that the matter should go for trial. An early hearing date was accordingly fixed by the senior assistant registrar However, a day before the hearing date. P applied for an order that they be at liberty to withdraw the action against D and to file afresh against all of D. P averred that they did not serve a notice of demand on D, the guarantors, before filing the writ and that their application was to preempt the possibility of D stating at the trial that they had not been served with the demand. Held dismissing P's application: Taking into account all the circumstances of the case, it was too late in the day for P to make the application since the further delay would be unfair and detrimental to D. Alternatively, the learned judge gave P the liberty to withdraw the action against D without the Court granting P leave to file the action afresh.

Development & Commercial Bank Bhd v. Mohd Samsudin Shafie & Ors Civil Suit No:488 of 1983 High Court Ipoh (Abdul Malek) 3 April 1989.

[4] On the issue of service of the notices of demand, the Court of Appeal (at p 628 and 629) said:

In the first place, there is the challenge as to the service of the notices of demand which is a sine qua non for the foundation of legal liability under the contracts of guarantee in the present case. As pointed out earlier, there was here a clear and unequivocal assertion that there was no demand ever received. The letters of demand were, as I have already pointed out, sent to addresses that were different from that appearing on the guarantees... The respondent Bank may well