A continuing guarantee remains binding despite changes in bank identity or structure, as long as the parties' intention is clear, ensuring all signatories are liable for the debts incurred under the agreements.

DATO' MARY LIM THIAM SUAN J

A tale of two banks

First, there were two banks. Then, there was one. Over the course of some ten odd years, the 1st Defendant entered into arrangements for various banking facilities with the two banks at different points in time. The 2nd to the 9th Defendants stood as guarantors of the various banking facilities. The first set of banking facilities will be referred to as "the DCB facilities" while the second set will be referred to as "the BU facilities".

The single bank now claims for all the banking facilities that the 1st Defendant took with the two banks. The challenge faced by the parties and the Court here is to unravel all those arrangements before the respective Defendants' liabilities, if any, can be determined. These are material facts.

The first bank - the DCB Facilities Between 1994 and 1995, the 1 Defendant was granted various banking facilities by the first bank; then known as "Development & Commercial Bank Berhad" [D & C Bank]. The first can be found in a letter of offer dated 4.2.1994 [1st letter of offer] and a facility agreement dated 12.7.1994 [1st facility agreement]. Inter alia, it included an overdraft of RM1.15 million and a letter of guarantee of RM350.000.00 [1st Facilities].

Through a second letter of offer dated 1.6.1994 [2nd letter of offer] and facility agreement dated 1.9.1994 [2nd facility agreement], D & C Bank granted the 1st Defendant additional banking facilities of inter alia, an overdraft of RM5 million and a letter of guarantee of RM3 million [2nd Facilities].

By letter dated 3.11.1994 [3rd letter of offer], D & C Bank amended the provision of "security" under item (d) in the 2nd letter of offer.

On 17.12.1994, D & C Bank changed its name to DCB Bank Berhad [DCB Bank].

The 1st Defendant then renewed the 1st Facilities and the 2nd Facilities upon the terms and conditions found in letter of offer dated 19.8.1995 [4th letter of offer]. The 1st Facilities and the 2nd Facilities were secured inter alia by the following:

(i)a joint and several guarantee dated 12.11.1994 executed bythe 2nd to the 6th Defendants - 1st guarantee

(ii)a deed of assignment of the contract proceeds dated 1.9.1994executed between D & C Bank and the 1st Defendant[Pembinaan YCS Berhad] - 1st assignment

(iii)a deed of assignment of the contract proceeds dated 9.11.1994executed between D & C Bank and the 1st Defendant [DanecCorporation Sdn Bhd] - 2nd assignment

(iv)a deed of assignment dated 9.5.1995 executed between DCBBank and the 1st Defendant [Ho Hup Construction CompanyBerhad] - 3rd assignment

(v)a deed of assignment dated 13.2.1996 executed between DCBBank and the 1st Defendant [Dekon Sdn Bhd] -4th assignment

(vi)a deed of assignment dated 28.6.1996 executed between DCBBank and the 1st Defendant [Europlus Corporation Sdn Bhd forDrainage works to terrace factory Phase 1 & 2 at Bandar BukitBeruntung] - 5th assignment

(vii)a deed of assignment dated 16.6.1997 executed between DCBBank and the 1st Defendant [Noble Rights Sdn Bhd for drainageworks for Rancangan Perumahan dan Perusahaan Lot No 1722Mukim of Serendah] - 6th assignment Under the terms of both facilities as found in the letters of offer and the agreements, the 1st Defendant was to pay DCB Bank inter alia interest at the rate of 2.5% per annum over and above the Base Lending Rate from time to time; and additional interest in the event the 1st Defendant exceeded the limit of the overdraft facility.

On 1.7.1997, there was another name change. This time, DCB Bank changed its name to RHB Bank Berhad. The related letters and documents must now be read to accord with the change in D & C Bank's name to DCB Bank and later to its present name of RHB Bank Berhad.

The second bank - the BU Facilities Between 1995 and 2002, the 1st Defendant took out several other facilities with the second bank, Bank Utama (Malaysia) Berhad [Bank Utama]. The first facility can be found in Bank Utama's letter of offer dated 4.10.1995 [5th letter of offer] and facility agreem