Raja Azlan Shah Ag (Malaya) CJ (delivering the judgment of the Court):

This was an appeal from an order of the High Court at Kuala Lumpur allowing the application by the respondents, as the second defendants in the action, that the judgment entered against them in default of appearance be set aside. We dismissed the appeal on 30 May 1978.

The appellants claimed a sum of $73,402.80 being the amount alleged to be owing by the first defendants, Syarikat Baiduri (M) Sdn. Bhd, on an overdraft account. The respondents were sued as guarantors for the first defendants. The specially endorsed writ was filed on 16 March 1976 and served on the respondents on 31 March 1976. On 23 June 1976, the appellants obtained judgment against the respondents in default of appearance.

The application to set aside the judgment was made by summons-in-chambers dated 18 October 1977. One ground stated in the affidavit in support of the application is that at the time when the writ was served the respondents were engaged in major administrative reorganisation, and from 22 March 1976 till the end of June 1976 they were busy transferring files and personnel from the Contracts Unit to the newly set up Overdraft Unit of the Loans Div and in the process this matter lost the attention which otherwise would have been given. Another ground is that the writ when served, was handed to an officer who was no longer with the relevant division and he had failed to forward it to the appropriate officer. All of these alleged facts were not refuted by the appellants. As to the merits of defence the respondents relied on Cl 13 of the guarantee agreement executed by them on 11 January 1974, which reads as follows:-

This Guarantee shall be valid for a period of eight calendar months from the data hereof, computing for this purpose, the month in which this guarantee is executed by us (irrespective of the number of days of the month then remaining) as one calendar month and any demand hereunder to be valid shall be made not later than thirty days from the date of the expiry of the period of this Guarantee.

According to evidence the demand was made on the respondents on 17 June 1975. It was therefore contended by them that the demand was made out of time. Learned counsel for the appellants argued that the time limit was null and void in view of s. 29 of the Contracts Act, which reads:

Every agreement, by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights, is void to that extent."

The learned Judge held that Cl 13 of the guarantee agreement was not caught within the ambit of the provisions of s. 29 of the Contracts Act. That in my opinion is a question of law. The true construction of a document is a question of law for the court, and it is no part of the court's function at this stage of the litigation to decide difficult questions of law which call for detailed argument and mature considerations. These are matters to be dealt with at the trial.

In any event the learned judge found that prima facie there was an issue which should go for trial. He also found that the grounds relied upon by the respondents were sufficient grounds for setting aside the judgment in default.

It is clear that the application to set aside the judgment in default was made under O. 13 r. 10 of the Rules of the Supreme Court. The rule provides:

Where judgment is entered pursuant to any of the preceding Rules of this Order, it shall be lawful fr the court or a judge to set aside or vary such judgment upon such terms as may be just.

The rule gives the Court a discretion which must be exercised judicially. It is axiomatic that if the judgment is regular, then it is an inflexible rule that there must be an affidavit of merits, that is, an affidavit stating facts showing a defence on the merits. An appellat