Chong Siew Fai CJ (Sabah & Sarawak):

[1] The appellant/plaintiff (assignee) appeals against the decision of the Judge in chambers who overruled the Senior Assistant Registrar and set aside the judgment in default of appearance obtained by the assignee against the respondent/2nd defendant (guarantor) with costs.

[2] The relevant facts of the case may be summarised as follows:

By a hire-purchase agreement dated 15 March 1982 the Malayan Finance Corporation Berhad (the Finance Company) let to one Sin Yew Lee Mining Sdn Bhd (the hirer), on hire-purchase, a hydraulic excavator for the price of RM179,250 payable as follows:

(a) RM37,500 as deposit;

(b) the balance thereof by monthly instalments of RM5,906.25 each commencing on 15 April 1982 and thereafter on the 15th day of each succeeding month.

[3] By a letter of guarantee dated 15 March 1982, the guarantor guaranteed the due payment of all sums and the due performance and observance of all terms and conditions by the hirer contained in the hire-purchase agreement, and also undertook to indemnify the Finance Company against all loss or damage that might be sustained by the Finance Company under the hire-purchase agreement.

[4] In breach of the hire-purchase agreement, the hirer fell into arrears of payment of the monthly instalments. The hydraulic excavator was repossessed on 11 November 1982 and the value thereof was assessed by a licensed adjuster to be RM85,000.

[5] By a Deed of Assignment dated 18 January 1983 the Finance Company assigned to the appellant/plaintiff (assignee) all the former's benefit right title and interest in the hire-purchase agreement. The relevant clause of the Deed reads:

The Assignor hereby assigns unto the Assignee ALL the benefit right title and interest of the Assignor in or under the said agreement of the 15 March 1982 together with the right so far as may be necessary to demand performance or sue for and enforce the same in the name of the Assignee TO HOLD the same unto the Assignee absolutely.

[6] We would add here, and it was never disputed before us, that benefits and rights of hirepurchase agreements are choses in action, assignment of which are recognised in law as illustrated in Spellman v. Spellman [1961] 2 AER 498 CA.

[7] The notice of assignment, however, was not given to the guarantor till 12 April 1985 ie more than 2 years and 2 months after the deed of assignment was executed, but, be it noted, before the commencement of the action now under appeal.

[8] By a letter dated 12 April 1985 the assignee demanded payment by the guarantor a sum of RM53,326 being the amount made up of the balance of the outstanding instalments (less statutory rebate) plus costs of and incidental to the repossession of the excavator minus the value thereof. Failing to obtain payment as demanded, the assignee on 21 September 1985 began the action presently under appeal against the hirer and the guarantor as the 1st and the 2nd defendants respectively. The guarantor was duly served by substituted service but failed to enter appearance. Judgment in default was accordingly entered against him on 30 September 1986 for the sum claimed, interest and costs.

[9] The guarantor sought to set aside the default judgment but was refused by the Senior Assistant Registrar. On appeal, the learned Judge, as stated at the commencement of this judgment, set aside the default judgment. Hence this appeal by the assignee.

[10] In setting aside the default judgment, the decision of the learned Judge rested solely on issues relating to assignment. She regarded (in our opinion, erroneously) the assignment "an equitable chose in action", and, as such, considered that notice of assignment must be given within a reasonable time and that "a time lapse of 2 years can hardly be described as being reasonable". She continued:

It is true that cl 3(6) of the guarantee contemplates the assignment of the rights of the 1st defendant under the hire purchase agreement and the 2nd defendant's liability to meet