JUDGMENT

Alauddin Mohd Sheriff JCA:

The appellants (2nd & 3rd defendants) are guarantors of an overdraft facility with a credit limit of RM300,000 granted by the respondent (plaintiff) to Sim Lim Co. (M) Sdn. Bhd. (4th defendant) pursuant to an overdraft agreement dated 3 April 1980 (exh. P1 at p. 202, Appeal Record). The respondent had vide a letter dated 28 March 1986 (exh. P2 at p. 203, Appeal Record) to the 4th defendant renewed the credit limit of the overdraft facility to RM150,000 and granted Letters of Credit and Bills of Receivables for a credit limit of RM200,000.

The appellants had on 18 April 1980 executed a joint and several guarantee (exh. P6 at p. 210, Appeal Record) which was limited to RM700,000 for all sums of money owing to the respondent on any account of the 4th defendant.

The 4th defendant defaulted in paying the outstanding amount under the facilities and as a result the respondent withdrew the said facilities vide a letter dated 27 April 1988. The liability of the appellants under the guarantee is predicated a demand being made by the respondent in accordance with cl. 15 of the guarantee.

Default in repayment having occurred, the respondent issued three letters of demand to the appellants. The first letter of demand is dated 16 July 1988 (exh. P15 & P16 at p. 35, Appeal Record). The second letter of demand is dated 17 August 1988 (exh. ID17 & ID19 at pp. 36 to 38 Appeal Record). The third letter of demand is dated 18 February 1989 (exh. ID21 & ID23 at pp. 36-38, Appeal Record).

The respondent heard nothing from the appellants. So, on 23 September 1988 the respondent issued a writ accompanied by a statement of claim against the borrower and the guarantors and on 18 December 1989 the respondent obtained judgment in default of defence against the borrower (4th defendant) for the sum of RM185,486.54 and on 27 February 2001, after a trial, judgment was entered against the appellants. Hence this appeal.

In this appeal before us, learned counsel for the appellants raised two issues as follows:

Before we proceed to consider the issues, it would be appropriate for us at this juncture to mention that there were at least two amendments made to the respondent's statement of claim. By the first amendment which took place on 12 August 1989 the respondent added Sim Lim Co. (M) Sdn. Bhd. (the borrower) as the 4th defendant. At the same time the respondent deleted a letter of demand dated 17 August 1988 (ID17 & ID19) against the appellants and separated two (2) letters sent by the respondent's solicitors as follows:

By another amendment in 1994, the respondent reamended para. 4 of the statement of claim to delete the claims in respect of Trust Receipts.

And further at p. 611: