JUDGMENT

1. There are two similar applications taken out by the plaintiff dated 24.7.1998 and 29.8.1998 respectively. In the firstapplication (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 thatjudgment 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 mustbe 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

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 additionalRM1.2 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 1stdefendant.

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 ofthe 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 RM3,337,365.03in 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 operatethe 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 andthe 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 BUILDING SDN BHD & ORS v UNITED MALAYAN BANKING CORPORATION BHD [1993] 3 MLJ 36

“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 RHCare 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 86AG of Duchy of Lancaster v L & NW Rly Co [1892] 3 Ch 277Wenlock v Moloney & Ors [1965] 1 WLR 1238[1965] 2 All ER 871). The authorities further show that if there is a pointof law which requires serious discussion, an objection should be taken on the pleadings and the point set down for argument under O 33 r 3 (which is in pari materia with our O 33 r 2 of the RHC) (see Hubbuck & Sons Ltd v Wilkinson, Heywood & Clark Ltd (supra). The court must be satisfied that there is no reasonable cause of action or that the claims are frivolous or vexatious or that the defences raised are not arguable."

8. In opposing the two applicationsof the plaintiff, the learned counsel for the 1st, 2nd and 3rd defendants submitted that the recall by the plaintiff of the term loan and overdraft facilities was contrary to the provisions of the plaintiff’s two letters of offer dated 12.10.1994 and 25.11.1995and also the Term Loan and Facility Agreements. It was alleged that the plaintiff should have carried out a proper review of the banking facilities granted thereto pursuant to the “review clause“ before recalling the said facilities. In support of thiscontention the learned counsel for the 1st, 2nd and