T Selventhiranathan J:

Two notices of appeal were filed herein in respect of the decision of the learned senior assistant registrar ["the registrar"] allowing the plaintiff to sign final judgment on an application under O. 14 of the Rules of the High Court 1980 ["Order 14 application"] against the first, second, fourth and sixth defendants. The first notice of appeal in encl. (31) was filed by the fourth and sixth defendants while the second notice of appeal in encl. (32) was filed by the first and second defendants.

The registrar had, on a separate O. 14 application taken out by the plaintiff, similarly allowed the plaintiff to sign final judgment against the fifth defendant. However, the fifth defendant did not appeal against the said decision.

As for the third defendant, judgment in default of appearance had also been entered against him and there is no evidence in the file to indicate that any action has been taken by him to apply to set the judgment aside.

The plaintiff's claim against all the defendants was preceded by a letter of agreement on the part of the first defendant to accept a tender issued by a company called PNS Development Sdn Bhd ["PNS"] for the first defendant to construct a total of one hundred and seventy-five units of terraced houses in Province Wellesley, Penang for PNS. The agreement was subject to the compliance by the first defendant of the various terms and conditions stipulated therein. One of the terms which the first defendant had to comply with before the commencement of the construction works was the execution of a performance bond in favour of PNS in the form of a bank or insurance guarantee for the sum of RM442,977.55, which constituted 5% of the contracted sum of RM8,859,551 for the construction works in question.

At the request of the defendants and one Ching Ngew Hoe ["Ching"], the plaintiff issued an insurance guarantee bearing number 12335/IG/94 dated 5 September 1994 ["the insurance guarantee"] in favour of PNS for the sum of RM442,977.55. In consideration of the plaintiff issuing the insurance guarantee, the defendants and Ching executed letters of indemnity dated 3 September 1994 in favour of the plaintiff whereby they undertook to indemnify the plaintiff in respect of all payments made by the plaintiff pursuant to the performance bond constituted by the insurance guarantee.

On 12 September 1997, PNS called upon the performance bond by making a demand upon the plaintiff to pay over the sum of RM442,977.55 on the ground that the first defendant had failed and refused to fulfil its obligations under the contract entered into between the first defendant and PNS. As a result, the plaintiff through a covering letter dated 9 October 1998 extended to PNS a cheque for the sum of RM442,977.55 as payment. Consequently, the plaintiff demanded indemnification from the defendants and Ching for the said sum pursuant to the letters of indemnity.

It is pertinent to note that under the insurance guarantee the defendants were required to and did deposit a cash collateral in the sum of RM44,297.76 with the plaintiff. The plaintiff agreed to pay interest at the rate of 2% per annum on this collateral with effect from 7 November 1994.

In the circumstances, according to the plaintiff, the actual amount which was therefore due and owing by the defendants, after deducting the cash collateral deposited with the plaintiff and interest accrued thereon, stood at RM395,203.93. In respect of this amount, Ching had paid a sum of RM100,00 to the plaintiff to discharge his liability under the letter of indemnity which he had executed. The plaintiff had agreed to this, leaving the balance of RM295,203.93 to be settled by the defendants.

Since the applicable facts of this case were the same in respect of the first, second, fourth and sixth defendants, the issues raised by them were determined without specific reference to the individual arguments on their behalf.

The primary issue raised by the defendants con