GROUNDS OF DECISION

The application by the plaintiff in enclosure 25 was made under O 14A of the Rules of the High , 1980 (RHC). Essentially enclosure 25 requires the Court to determine the validity of the agreements between parties for want of consideration; the validity of the interest charges; and the conclusiveness of the Certificate of Indebtedness. Upon the determination of all these issues in favour of the plaintiff the Court may enter judgments against all the defendants upon the terms stated in the said enclosure 25.

Brief facts

1. Sime Bank Bhd (SBB) granted four loan facilities to four companies namely; BistroAmericana (M) Sdn. Bhd (BAM), BistroAmericana (PJ) Sdn. Bhd (BAPJ), BistroAmericana (SJ) Sdn. Bhd. (BASJ) and BistroAmericana (JB) Sdn Bhd (BAJB). All these four borrowers shall hereafter be referred to collectively as the "Initial Borrowers".

2. All the four loan facilities were secured by a corporate guarantee of Melewar Leisure Sdn Bhd (the first defendant) and the personal guarantees each by Tunku Abdullah Ibni Almarhum Tunku Abdul Rahman (the second defendant) and Tunku Iskandar bin Tunku Abdullah (the third defendant)The Initial Borrowers defaulted in their payment obligations under the loan facilities.

3. All rights and interests of SBB in respect of the Initial Borrowers' loan vested in the plaintiff, Danaharta Managers Sdn Bhd pursuant to Vesting Certificates under s 14 of the Pengurusan Danaharta Nasional Berhad Act 1998 (Danaharta Act) on 1 June 1999 and 15 December 1998 respectively. On 6 May 2002 the balance outstanding debt by the Initial Borrowers were assumed by the first defendant. All the four borrowers confirmed and agreed for the outstanding debt under the loan agreements and the corporate guarantee to be transferred to the first defendant.

4. The outstanding due and owing totaling RM7,738,229.62 from the Initial Borrowers to the plaintiff were partly restructured into a term loan. RM3,000,000.00 was repaid to the plaintiff, whilst the balance debt was novated and taken over by the first defendant. The novated debt was then restructured into four sets of restructuring and novation agreements dated 5 September 2003 and exhibited as exhibits DMSB-3 and DMSB-4, DMSB-6 and DMSB-7 as well DMSB-12 and DMSB-13 to be referred to collectively as the "Novation and Restructuring Agreements". The second defendant and the third defendant entered into three joint and several guarantees and indemnities, with respect to the novated debt of three of the Initial Borrowers namely BAM, BAPJ and BASJ. In respect of novated debt of BAJB, the third defendant alone provides a personal guarantee.

5. The first defendant defaulted in making monthly payment pursuant to the said Novation and Restructuring Agreements. Notice of demand was issued to the first defendant. No payment was made. Letter of demand was then issued to the second and third defendant as guarantors.

Preliminary issues

6. The counsel for the first defendant raised a few preliminary issues. First, learned counsel for the first defendant Encik Yap Mow Jiun (Cik Kavimani Muthayam for the second and third defendants, adopting all his submissions) contended that the application of the plaintiff under O 14A of the RHC is contemptuous of, or contradictory to the earlier order made by this Court which has dismissed the application of the plaintiff under O 14 of the RHC. According to Encik Yap, Wahab Patail J had, in deliberating on the O 14 application remarked in open Court that "there is nothing simple in this matter", then proceeded to dismiss the application of the plaintiff under O 14 of the RHC with costs. The learned judge then granted the defendants unconditional leave to defend this action. It is the contention of the counsel for the defendants that to allow the plaintiff to proceed with another summary proceeding such as this enclosure 25 would be in contradiction to that earlier Order, depriving the defendants from defending themselves which was gra