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2012 MarsdenLR 893
HIGH COURT MALAYA KUALA LUMPUR
CHING YIK DEVELOPMENT SDN BHD & ANOR – Appellant
Versus
WORDWARE DISTRIBUTORS (M) SDN BHD & ANOR – Respondent
[Civil Suit No: D-22NCC-1795-2010]
A judgment can only be set aside if the writ was not properly served; if validly served, defendants must demonstrate a valid defense to overturn the judgment.
Headnote:(A) Rules of the High Court 1980 - Order 42 r 13 and O 92(4) - Service of writ - Validity of judgment in default - Writ served on defendant with acknowledgment; no valid challenge to service made - Judgment ultimately confirmed for a lesser amount due to subsequent payments - Proper legal principles established include: irregular judgment can be set aside if writ not properly served, but if validly served, defendants must show a defense on merits (Paras 18, 20, 26).
(B) Contracts Act 1950 - Sections 93 and 99 - Guarantors' liability in co-surety situations clarified; liabilities equally shared unless otherwise established (Paras 47, 62).
Facts of the case:
Plaintiffs sought recovery on loans given to a company where defendants are co-guarantors - Judgment in default entered for amounts claimed, subsequently acknowledged to be excessive (Paras 6, 44, 68).
Findings of Court:
Default judgment varied against both defendants reflecting accurate sums; efforts to mislead by defendant regarding service noted (Paras 19, 21, 65).
Issues: Whether the service of writs was valid and propriety of the judgments entered against defendants for incorrect sums.
Ratio Decidendi: Valid service leads to regular judgment; defendants must provide defenses to contest unless claiming irregularity based on improper service; court retains discretion to amend judgments (Paras 20, 26, 52).
Result: Judgment varied to RM1.8 million against one defendant and RM710,498.90 against the other; action against one defendant struck out.
| Table of Content |
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| 1. validity of service of writ (Para 1 , 2) |
| 2. background of plaintiffs and loan details (Para 3 , 4 , 5 , 6) |
[1] The sequence of events that unfolded in this case is not unfamiliar to many involved in the litigation process. A judgment in default of appearance is entered against a defendant and after some time when a bankruptcy action is taken against the defendant, the defendant now says the judgment was irregularly obtained as the writ was not properly served and that the judgment ought to be set aside.
[2] This case explores the issue of whether the writ served by AR registered post is validly served at the address of the defendant but acknowledged by someone else. It also discusses the issue of whether a judgment in default entered for a correct sum should be set aside or varied when at the point of applying to set aside the sum owing has now been ascertained to be less than the judgment sum entered.
Parties
[3] The 1st plaintiff (P1) is a third-party chargor that had charged its land in Ipoh to Bank Islam Malaysia Bhd ("the bank") for a loan given by the bank to the 1st defendant (D1), the borrower. The 2nd plaintiff, Chong Chee Chung, is a guarantor of the loan together with the 2nd defendant (D2). D2 is also a director and shareholder of D1.
[4] The bank gave a loan of RM2,890,000.00 on 29 June 2004 to D1 and D1 had defaulted in the loan repayments. The bank then proceeded on 28 May 2007 with a writ action against D1, D2 and P2 and subsequently obtained judgment against D1, D2 and P2 on 25 February 2009.
[5] The bank had also proceeded on 5 December 2008 with an originating summons in the Ipoh High Court against P1 for an order for sale on P1's land in Ipoh that had been charged to the bank for the loan to D1 to recover the sum of RM2,394,610.38.
[6] Feeling the heat of the pressure the plaintiffs commenced an action in this Court on 23 September 2010 against the defendants praying that:
(a) (i) that D1 and D2 pay the sum of RM2,394,610.38 to the bank to satisfy and settle the loan forthwith; or
(ii) that D1 and D2 pay the sum of RM2,394,610.38 to P1 and P2 forthwith;
