Kang Hwee Gee J:

(Enclosure 51)

This is an application of the 4th defendant to set aside the order of Steve Shim J (as he then was) allowing the plaintiff's appeal against the order of the registrar in setting aside judgment in default obtained by the plaintiff against the 4th defendant earlier.

The Background

The plaintiff bank had by a facilities agreement granted to the 1st defendant company banking facilities of RM3,000,000. The facilities was secured inter alia, by the personal guarantee of the 2nd, 3rd, 4th and 5th defendants.

The 1st defendant defaulted in repayment. The plaintiff sued the 1st defendant as the principal debtor and the 2nd, 3rd, 4th and 5th defendants as guarantors.

The writ of summons were duly served on the 1st, 2nd, 3rd and 5th defendants. They entered appearance and subsequently filed their defence to the plaintiff's claim.

As for the 4th defendant however, he could not be located at his last known address. Ultimately he had to be served with the summons by substituted service, by a notice in the Malay Mail and on the notice board of the court.

Having failed to appear on the effective date, judgment in default of appearance was subsequently entered against him by the plaintiff on 15 June 1998.

On 18 November 1998 the 4th defendant applied to set aside the judgment in default of appearance which had been entered against him before the registrar.

On 4 January 1999 the registrar allowed the 4th defendant's application to set aside judgment in default.

The plaintiff appealed against the registrar's decision.

The hearing came before Steve Shim J on 17 January 2000. The 4th defendant's counsel did not turn up. Nevertheless, Steve Shim J proceeded to hear the plaintiff's appeal in his absence. His Lordship allowed the appeal and restored the judgment in default obtained by plaintiff against 4th defendant.

Hence this application by the 4th defendant (encl. 51) to set aside the said order.

The Issue

At the heart of this application is the issue of whether an appeal from the decision of the registrar to a judge in chambers heard in the absence of one party may be set aside.

Counsel for the plaintiff contends that once the judge in chambers had considered the application on the merit by hearing the plaintiff as in this case, his decision cannot be set aside. She/he relied on Delcont (M) Sdn. Bhd. v. Motor Sport International Ltd & Ors[1996] 1 CLJ 450, the factual matrix of which appears to be on all fours with the instant case.

In that case the plaintiff had appealed against the decision of the registrar allowing the defendant to set aside the issue and service of the writ of summons and statement of claim. At the hearing of the appeal to the judge in chambers, neither the defendant nor his counsel was present although the latter had been duly served with the notice of hearing. Nevertheless, the court proceeded to hear the plaintiff's submission and upon reserving judgment, allowed the plaintiff's appeal.

Upon the defendant applying to set aside the decision, Kamalanathan Ratnam JC (as he then was) held that a party who failed to appear in an appeal to a judge in chambers from the decision of the registrar cannot apply to set aside a decision which had been heard on the merit. His only recourse was to appeal against that decision.

That decision appears to have departed from the established principle in Loo Chay Meng v. Ong Cheng Ho (Gamuda Sdn Bhd garnishee)[1990] 1 MLJ 445 read with Permata Chartered Merchant Bank Bhd v. Hiew Fook Realty (Holdings) Sdn Bhd & Ors [1992] 1 MLJ 73.

In Loo Chay MengVC George J held that an inter partesapplication heard in the absence of a party is an ex partehearing and an order made therefrom is an ex parteorder made in chambers and therefore the court making the order has the jurisdiction to set it aside under O. 32 r. 6 which provides that:

The Court may set aside an order made ex parte.

In the subsequent case of Permata Merchant Bankthe same judge held that there was