JUDGMENT

1. There are two similar applications taken out by the plaintiff dated 24.7.1998 and 29.8.1998 respectively. In the first application (enclosure 50), made under Order 18 rule 19(1) of the Rules of the High Court 1980 and under the inherent powers of the court, the plaintiff prayed that the Amended Defence and Counterclaim of the 1st defendant dated 22.7.1998 be struck off and that judgment to be entered against the said 1st defendant. As for the second application (enclosure 61), the plaintiff similarly prayed that the Defence of the 2nd and 3rd defendants dated 17.8.1998 be struck out and that judgment be entered against them. It must be noted that Judgment in Default of Appearance had been entered against the 4th defendant herein by the plaintiff on 8.7.1998.

2. In this case, the plaintiff company is a bank registered under the Companies Act 1965 with a branch office operating in Kuching at No. 35, Lebuh Khoo Hun Yeang. The 1st defendant applied for a term loan facility of RM4.2 million and an overdraft facility of RM1.8 million, both of which were duly approved by the plaintiff vide letter of offer dated 12.10.1994. Both of the abovesaid facilities granted by the plaintiff were for the purpose of part financing the purchase of an 8-storey hotel building situated along Jalan Tan Sri Datuk Ong Kee Hui together with that piece of land held under and described as Lot 82 Section 21 Kuching Town Land District and also as working capital for the hotel business.

3. On 25.11.1995, the plaintiff agreed to the 1st defendant's request to increase the overdraft facility to RM3 million. The purpose for the additional RM1.2 million of overdraft facility was to facilitate the refurbishment of the hotel and also as additional working capital for the running of the said hotel.

4. The total sum of RM7.2 million had been released by the plaintiff to the 1st defendant.

5. By two letters of guarantee dated 5.12.1994 and 18.12.1995 respectively, the 2nd, 3rd and 4th defendants agreed to pay to the plaintiff on demand all the sum of monies owing by the 1st defendant to the plaintiff in respect of the abovesaid facilities granted by the plaintiff to the 1st defendant.

6. This action was commenced by the plaintiff against the defendants herein claiming for the sum of RM4,432,269.03 in respect of the term loan facility and RM3,337,365.03 in respect of the overdraft facility together with the stipulated interest accruing thereof, when the 1st defendant defaulted in the payment of monthly instalments and was in arrears for six months as at 13.10.1997 and that the 1st defendant failed to operate the overdraft account satisfactorily and exceeded the overdraft limit to the extent of RM193,152.72 as at 13.10.1997.

7. In order to determine whether the Amended Defence and Counterclaim of the 1st defendant dated 22.7.1998 and the Defence of the 2nd and 3rd defendants dated 17.8.1998 ought to be struck out, this court agrees with the principles as reiterated by Mohamed Dzaiddin SCJ in the case of BANDAR BUILDER SDN BHD & ORS v UNITED MALAYAN BANKING CORPORATION BHD [1993] 4 CLJ 7; [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). It cannot be exercised by a minute examination of the documents and facts of the case, in order to see whether the party has a cause of action or a defence (see Wenlock v Moloney & Ors [1965] 1 WLR 1238, [1965] 2 All ER 871). The authorities further show that if there is a p