Gunn Chit Tuan SCJ:

The American Express International Banking Corporation (hereinafter referred to as "the plaintiff") is a Singapore-based bank. In 1985, it granted facilities to a Singapore-registered company known as Cornwall Investments Pte. Ltd. The facilities were secured by a guarantee given by two persons including one Tan Loon Swan (hereinafter referred to as "the defendant"). The said guarantee was executed by the defendant on 8 July 1985, and contained a maximum liability clause of S$10.5 million together with interest at 12% per annum from the date of demand to the date of payment (pp. 57 and 63 of the appeal records).

The banking facilities enjoyed by Cornwall Investments Pte. Ltd., were also secured by a pledge of shares made by the company in favour of the plaintiff pursuant to the terms and conditions of a general loan and collateral agreement (pp. 54, 55 of the appeal records). On 23 December 1985, Cornwall Investments Pte. Ltd. and the defendant were notified by the plaintiff of a default by the former in complying with its repayment obligations and the need to meet a shortfall in the collateral value of the pledged shares. On the same day, the plaintiff also demanded payment of the loan amount together with accrued interest of S$293,990.67 (p. 60 of the appeal records). Because Cornwall Investments Pte. Ltd. and the defendant defaulted in complying with the demand of 23 December 1985, the plaintiff caused a letter of demand to be addressed to the defendant through its solicitors on 2 January 1986 (p. 61 of the appeal records).

On 23 February 1986, the plaintiff filed a claim against the defendant describing itself as the American Express International Banking Corporation. But on 11 September 1987, the plaintiff filed a notice correcting its name in the title to the action from American Express International Banking Corporation to American Express Bank Ltd. (see supplementary appeal records).

Pursuant to the said default on the part of the defendant, the plaintiff sold some of the pledged shares on 3 June 1986, and recovered the sum of S$1,335,050 (p. 76 of the appeal records). On 15 September 1987, the plaintiff filed an application for summary judgment in respect of its claim together with a supporting affidavit affirmed by one John Richard Williamson dated 14 September 1987 (pp. 37 to 39 of the appeal records). In that affidavit, the said John Richard Williamson stated that to his own knowledge the amount due to the plaintiff as at 31 August 1987, was S$11,167,714.47. On 29 March 1989, the Senior Assistant Registrar of the High Court at Kuala Lumpur ordered that the plaintiff be at liberty to sign final judgment in the action against the defendant for the sum of S$10,500,000 together with interest thereon at the rate of 12% per annum from 2 January 1986, to date of payment and costs of the suit of RM350. The defendant filed a notice of appeal to the Judge in chambers on 30 March 1989, and before Annuar J raised eight issues as triable issues but only three of them found favour with the learned Judge, namely:

(a) That there was no evidence that the letter of demand had been served on the defendant;

(b) That the guarantee document was not stamped and therefore not admissible;

(c) Uncertainty about the status of the plaintiff.

On 11 December 1990, Annuar J ordered that the order of the Senior Assistant Registrar dated 29 March 1989, be set aside and that the defendant be given unconditional leave to defend the action and also that the plaintiff do pay the defendant the cost of appeal.

The plaintiff, being dissatisfied with the decision of the learned Judge, filed a notice of appeal to this Court on 24 December 1990. Before us, Mr. Yaw, Counsel for the defendant, raised two preliminary objections. Firstly he stated that the defendant had applied to the High Court on 12 April 1991, to strike out the plaintiff's statement of claim on the ground that the solicitors M/s. Skrine & Co., had no authority t