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1993 MarsdenLR 828
SUPREME COURT KUALA LUMPUR
AMANAH MERCHANT BANK BHD – Appellant
Versus
LIM TOW CHOON (THROUGH OFFICIAL ASSIGNEE) – Respondent
[Civil Appeal No: 02-172-93]
[1] This appeal concerns an interpretation of a clause in a letter of guarantee dealing with the service of a notice of demand. The material clause in the guarantee states as follows:
217. Any notice may be served on the undersigned or his/ their executors administrators or legal representatives either personally or by sending the same through the post in an envelope ad- dressed to the last known place of address of the person to be served and a notice so sent shall be deemed to be served on the day following that on which it is posted.
[2] The respondent, who was the second defendant in the action, was sued under the letter of guarantee dated 3 October 1984 (the said guarantee following the default of the principal borrowers, whereby, as a director, he guaranteed to pay the appellant bank all sums due and owing under a revolving bankers acceptance facility granted by the bank to the principal borrowers. His liability was, however, limited to RM2.0 million. Being an "on demand" guarantee, the appellant's solicitors sent him a notice dated 4 March 1988 by AR registered post to his last known address, demanding payment of the amount owing. On 19 May 1988, the bank issued a writ against the guarantors, which was followed with the filing of the statement of claim. By para 4 of the amended statement of claim, the bank alleged that a demand for payment was made to the respondent by the solicitors' letter of 4 March 1988. The respondent denied this allegation in para 12 of the amended defence and put the appellant to strict proof thereof. At the trial of the action, which was confined to the respondent, the learned trial Judge held that there was an issue to be tried on the notice of demand. She stated that the burden was on the bank to prove that the said notice had been sent to and received by the respondent. Hence, the appellant adduced evidence showing that the notice, which was sent by AR registered post, was properly addressed, prepaid and delivered to the post office and acknowledged receipt by the postal authority on 9 March 1988. The appellant also established that the respondent resided and continued to reside at the same address stated in the said guarantee at the date when the notice of demand was sent. In the circumstances, it was contended on behalf of the appellant that by the deeming provision of cl 17, the said notice of demand was received by the respondent on 10 March 1988, a day after the postal authority acknowledged receipt of the said notice for service despite the non-return of the AR card. The learned Judge rejected the above argument.
[3] In dismissing the bank's claim on the ground of non-effective service of the notice of demand, and therefore no cause of action having been established against the respondent, the learned Judge gave the following reasons:
(i) That the deeming provision of cl 17 was only good for notices sent by ordinary post;
(ii) That on the facts of the case before her, it was only upon the return of the AR card with the acknowledgment of receipt that it could truly be said that the letter of demand had been effectively served on the guarantor. Anything short of that could never amount to the letter of demand having been served on the guarantor where posting was done through AR registered post. (See: [1993] 1 MLRH 577, [1993] 2 MLJ 241, 247, 248F; [1993] 2 CLJ 635; [1993] 1 AMR 806).
[4] We observe that the learned Judge had noted in her judgment that a number of authorities were cited before her as to the meaning of the word "post", the difference between ordinary post and registered post, as well as the presumption of receipt. She seemed to find them irrelevant as she was concerned only with the AR registered post. So, in dealing with the issue of service of the notice of demand under cl 17, she proceeded to examine the authorities which dealt with the issue of notices sent by AR registered post as opposed to ordinary post. The first case which she cons
