JUDGMENT

1. This is an application by the plaintiff dated 28.8.1998 (enclosure 21) under Order 18 rule 19 of the Rules of the High Court 1980 and also under the inherent powers of the court under Order 92 rule 4.

2. In this application, the plaintiff urged the court to strike out the defence of the 2nd defendant herein and judgment be accordingly entered against him for the amount as claimed in the Statement of Claim together with interest and costs. The said application is supported by the Affidavit of Chan Hua Yean, the Branch Manager of the plaintiff and affirmed on 27.8.1998.

3. From the outset, it must be noted that Judgment in Default of Appearance had been entered by the plaintiff against the 1st and 3rd defendants on 10.8.1998. [2]

4. In this case, the plaintiff is a licensed finance company incorporated in Malaysia with a branch office in Kuching. By an Equipment Lease Agreement dated 29.12.1995 (hereinafter referred to as the "said Agreement"), the plaintiff as the lessor agreed to lease and let and the 1st defendant as the lessee agreed to take on lease and hire from the plaintiff, the equipments as described in "Appendix A" annexed to the said Agreement for an initial period of 60 months at a monthly rental of RM6,125.00.

5. According to the plaintiff, the 2nd and 3rd defendants together with another person who had been adjudged a bankrupt, jointly and severally agreed to guarantee the due performance of the said Agreement by the 1st defendant.

6. As usual in cases of this nature, the 1st defendant defaulted in the payment of the monthly rentals which then lead the plaintiff to take out this action against the defendants herein.

7. It is pertinent to note that in the instant application, the 2nd defendant did not take out any affidavit in reply to the plaintiff's Affidavit affirmed on 27.8.1998 in support of this application.

8. In deciding whether the 2nd defendant's defence is both frivolous and vexatious as alleged by the plaintiff, this court must abide by the principles as reiterated by Mohamed Dzaiddin SCJ in the case of BANDAR BUILDER SDN BHD & ORS v UNITED MALAYAN BANKING CORPORATION BHD [1993] 3 MLJ 36 , where His Lordship enunciated at page 43 as follows:-

"The principles upon which the court acts in exercising its power under any of the four limbs of O 18 r 19(1) of the RHC are well settled. It is only in plain and obvious cases that recourse should be had to the summary process under this rule (per Lindley MR in Hubbuck & Sons Ltd v Wilkinson, Heywood & Clark Ltd [1899] 1 QB 86), and this summary procedure can only be adopted when it can be clearly seen that a claim or answer is on the face of it 'obviously unsustainable' (see AG of Duchy of Lancaster v L & NW Rly Co [1892] 3 Ch 277)." [3]

9. Apart from the 2nd defendant's defence, there is no other evidence adduced by the 2nd defendant to oppose the plaintiff's application herein. Essentially, there are only two points raised by the 2nd defendant in his defence. In paragraph 3 of his defence, the 2nd defendant alleged that since the plaintiff did not repossess the equipments as described in "Appendix A" annexed to the said Agreement upon the default of the 1st defendant in making the monthly payment as agreed, it was "unfair and unconscionable" in the words of the 2nd defendant, for the plaintiff to demand for payment of the full amount of the Agreed Loss Value from the 2nd defendant.

10. It must be remembered that the exercise for repossession of the equipments in the instant case is not a statutory requirement, henceforth any rights and obligations arising thereto between the lessor and the lessee must be construed within the four corners of the said Agreement. With reference to the need for repossession of the equipments by the plaintiff before demanding for payment, the learned counsel for the plaintiff referred this court to Article 17 of the said Agreement which provides that:-

"Article 17. (Default)

(1) ;If the Lessee fails to pay the Rent provi