The court upheld that a director's liability under a Guarantee and Indemnity remains absolute and unconditional, allowing summary judgment for the creditor despite claims of dispute regarding the validity of the signature.

JUDGMENT

(Court enclosure nos. 21 and 35)

A. Introduction

[1]This judgment concerns the following two applications (2 Applications):

(1)in court enclosure no. 21 (Enc. 21), the plaintiff company (Plaintiff) has applied for summary judgment against the first defendant (1^st Defendant) for, among others, a sum of RM3,254,012.75 (Claim Sum), pursuant to a “Letter of Guarantee and Indemnity” dated 4.3.2002 [Guarantee/Indemnity (1^st and 2^nd Defendants)] which had been signed by the 1^st Defendant and second defendant (2^nd Defendant); and

(2)the 1^st Defendant has filed an application in court enclosure no. 35 (Enc. 35) for, among others, an order to stay this suit filed by the Plaintiff against three defendants (This Suit) pending the disposal of Shah Alam High Court’s Originating Summons (OS) no. BA-24NCvC-975-06/2022 which has been instituted by the 1^st Defendant against the Plaintiff (Suit 975).

B. Background

[2]The 1^st and 2^nd Defendants were directors of Generasi Nirwana Sdn. Bhd. (GN) while the third defendant (3^rd Defendant) was GN’s “Project Director” [according to paragraph 4 of the Amended Statement of Claim in This Suit (ASOC)].

[3]The Plaintiff had supplied construction materials to GN [Plaintiff’s Supplies (GN)] based on -

(1)Guarantee/Indemnity (1^st and 2^nd Defendants); and

(2)a “Letter of Guarantee and Indemnity” which had been executed by the 3^rd Defendant [Guarantee/Indemnity (3^rd Defendant)].

[4]GN did not pay for the Plaintiff’s Supplies (GN). Hence, the Plaintiff’s solicitors sent, among others, a demand dated 15.11.2021 for the 1^st Defendant [Plaintiff’s Demand (1^st Defendant)] to pay, among others, the Claim Sum to the Plaintiff within 10 days from the date of the Plaintiff’s Demand (1^st Defendant).

C. Legal proceedings

[5]In This Suit -

(1)the Plaintiff has obtained a judgment in default of appearance against the 2^nd and 3^rd Defendants with regard to, among others, the Claim Sum [Default Judgment (2^nd and 3^rd Defendants)];

(2)the Plaintiff has applied for, among others, the following relief in Enc. 21 against the 1^st Defendant -

(a)summary judgment with regard to the Claim Sum; and

(b)interest at the rate of 1.5% per month on the Claim Sum from 1.11.2021 until full payment of the Claim Sum by the 1^st Defendant to the Plaintiff; and

(3)in Enc. 35, the 1^st Defendant has sought for, among others, the following orders from this court -

(a)leave of court for Enc. 35 to be filed by the 1^st Defendant [1^st Prayer (Enc. 35)]; and

(b)a stay of This Suit until the disposal of Suit 975 or any period of time which is deemed just and appropriate by this court [2^nd Prayer (Enc. 35)].

[6]Suit 975 has been filed by the 1^st Defendant against the Plaintiff for the following orders, among others:

(1)the Plaintiff shall hand over to the 1^st Defendant the original copy of Guarantee/Indemnity (1^st and 2^nd Defendants) within 48 hours from the date of the order of the court in Suit 975 [1^st Prayer (Suit 975)];

(2)the original copy of Guarantee/Indemnity (1^st and 2^nd Defendants) shall be sent to the Malaysian Chemistry Department (MCD) for a forensic examination (Forensic Examination) to decide whether the alleged signature of the 1^st Defendant on the Guarantee/Indemnity (1^st and 2^nd Defendants) [Alleged 1^st Defendant’s Signature (Guarantee/Indemnity)] was genuine or not [2^nd Prayer (Suit 975)]. The 2^nd Prayer (Suit 975) also applies for the cost of the Forensic Examination to be borne by the Plaintiff; and

(3)the result of the Forensic Examination shall bind the Plaintiff and 1^st Defendant [3^rd Prayer (Suit 975)].

[7]Notwithstanding the fact that Enc. 21 has been filed prior to the filing of Enc. 35, in the interest of justice, I will decide Enc. 35 before Enc. 21. This is because if Enc. 21 is decided first and if the Plaintiff is granted summary judgment with respect to the Claim Sum, this will render Enc. 35 redundant. In this manner, there will be an injustice to the 1^st Defendant because the merits of Enc. 35 have not been decided by the court. C(2). Shah