JUDGMENT

Raja Azlan Shah Acting LP:

The brief facts of this matter are that in consideration of guarantee agreements dated 1 June 1976 for the sum of RM5 million in respect of a fixed loan to the 1st respondent for that amount and letters of guarantee and indemnity dated 1 September 1976 for credit facilities for the purchase of bills of exchange by the 1st respondent for the sum of RM9 million executed by the 2nd, 3rd and 4th respondents, the appellant granted to the 1st respondent banking facilities to that end, and on the respondent's failure to comply with notices of demand for the outstanding sums due the appellant took out a specially indorsed writ in these proceedings on 12 November 1979 claiming against the respondents the sum of RM8,540,846.34 being the aggregate of the amounts then due and outstanding and the accrued interest thereon.

The appellant however in its statement of claim did not state that the respondents had in fact as security for the credit facilities to be given to the 1st respondent lodged with the appellant shares (which according to the respondents had as at February 1981 a total market value exceeding RM11 million excluding bonus issue shares) under 4 memoranda of deposit of shares and powers of attorney in its favour. Nor was there any reference therein to some subsequent arrangement between the parties that culminated in a consolidation agreement dated 25 October 1978 and the lodging of private caveats by the appellant against certain lands belonging to the respondents. The respondents filed their defence together with a counterclaim by the 1st respondent on 20 December 1979 and 12 January 1980 the appellant delivered a reply and defence thereto. On 6 February 1980 the appellant took out a summons to strike out the defence and counterclaim but on 20 February 1980 the respondents applied also by summons for leave to file a fresh defence and for the 1st respondent to amend its counterclaim. The record also discloses an amended defence and counterclaim dated 31 March 1980 and another undated defence and counterclaim. There is however an order made on 5 June 1981 giving leave to the respondents to file a fresh defence within 7 days and, pursuant thereto no doubt, a defence was filed on behalf of the respondents on 10 June 1981. For good measure to close this episode on pleadings we should perhaps mention that when unconditional leave was granted on 9 January 1982 to the respondents to defend this action, they were also granted leave to file an amended defence and counterclaim within 30 days, and this was done on 20 February 1982.

The appellant took out on 16 June 1981 an O. 14 summons for summary judgment against all the respondents for the sum of RM3,490,113.26 together with interest at 8% per annum from judgment until realisation and of course for costs. The lesser amount asked for as against the sum of RM8,540.846.34 claimed in the statement of claim is explained by the fact that between January and September 1980, after the issue of the writ in this action and without reference to or the knowledge of the respondents, the appellant had disposed of the shares lodged with it as security for the loan, overdraft and purchase of bills of exchange although the fact of such deposit of shares had not been disclosed or adverted to by the appellant in its claim, and according to the supporting affidavit affirmed by the appellant's solicitor a sum of RM5,657,763.79 realised from such sale had been credited to the account of the 1st respondent; the amount for which summary judgment is sought is accordingly the amount due and owing as at the date of issue of the O. 14 summons.

The appellant's application for summary judgment was heard by the Senior Assistant Registrar who entered judgment for the appellant in terms thereof on 20 August 1981, but on appeal therefrom the learned Judge set aside the Registrar's order on 9 January 1982 and gave the respondents unconditional leave to defend.

The short point that ar