Siti Norma Yaakob J:

Judgment in default of appearance was entered against the 2nd defendant in this suit on 4 December 1986 and on an application to have that judgment set aside, he raised the following issues.

1. That he has not been served with the writ and statement of claim.

2. As a guarantor, there was no proper demand made to him.

3. That he only signed blank copies of the two guarantees on which he is not being sued.

From the affidavit of service, it is very clear that the 2nd defendant was personally served with the writ and statement of claim on 23 July 1986. At the time of service the 2nd defendant admitted that he was the person named as the 2nd defendant in the suit but he however refused to acknowledge receipt of the writ and statement of claim and by his very conduct I consider that he cannot now claim that he has not been served with the writ and statement of claim.

The 2nd defendant is sued on 2 guarantees, the first dated 15 May 1984, the second dated 15 June 1984 but for completeness, the presence of a third guarantee executed by him dated 15 September 1984 is also mentioned in the pleadings. There is a limit of RM20,000 expressed in the first guarantee and it is in respect of spare parts and accessories which had been delivered by the plaintiff to Pemborong Kejuruteraan Awam Larkin, a joint venture firm (the firm) set up by the 1st and 2nd defendants. The spare parts and accessories relate to 2 units of bulldozers which had been delivered to the firm and which were purchased by the firm on terms and conditions as set out in 2 hire purchase agreements dated 15 June 1984 and 15 September 1984.

The 2 units were ordered by the firm pursuant to a sales order dated 12 March 1984 and delivered to the firm on 16 March 1984 and the delivery was acknowledged by the 2nd defendant himself. However, prior to the execution of the first hire purchase agreement on 15 June 1984, the 1st defendant, a manager of the firm and by letter dated 23 May 1984 returned one of the 2 units delivered bearing chassis number 28372 and authorised the plaintiff to transfer the down payments of the returned unit for the purchase of another new unit, model D60E-LK (the substituted unit).

On 23 May 1984, the 1st defendant executed a sale order in respect of the substituted unit and the hire purchase agreement in respect of the substituted unit was executed on 15 June 1984. Payment on this unit is guaranteed by the 2nd defendant, pursuant to a letter of guarantee and indemnity dated 15 June 1984. It is in respect of this guarantee and the earlier guarantee dated 15 May 1984 guaranteeing the payment of the spare parts and accessories that the 2nd defendant is now being sued.

Although the hire purchase agreement relating to the purchase of the substituted unit was executed by the firm with UMW Acceptance & Credit Sdn. Bhd. (UMW Acceptance), it is not disputed that on 5 October 1985, UMW Acceptance assigned all their rights and liabilities under the hire-purchase agreement to the plaintiff. It is also not disputed that the firm defaulted in the payment of all instalments due and other charges incurred under the hire purchase agreement executed on 15 June 1984, for the substituted unit, which loss has been calculated at RM51,825.90 and there was also default in payment of the spare parts and accessories amounting to RM16,201.35.

Under the letter of guarantee and indemnity dated 15 June 1984, the 2nd defendant guaranteed the payment of all hire-purchase instalments and other payments payable under the hire-purchase agreement dated 15 June 1984 and that his liability shall be computed upon the footing that the hire-purchase agreement is fully binding and enforceable against the firm, the hirer. Alternatively, the 2nd defendant has also agreed "to indemnify the plaintiff for all loss or damage suffered and all claims, costs and expenses made against or incurred by the plaintiff in any way arising out of or consequent upon your having entered into such