JUDGMENT

Abdul Wahab Patail J:

[1] Enclosure 18 is an appeal to the judge in chambers against the decision of the deputy registrar refusing to grant the plaintiff's application for leave to enter summary judgment under O. 14 of the Rules of the High Court 1980 (PU(A) 50/1980). The appeal is dealt with by a rehearing. Having heard the parties, the court allowed the appeal with costs.

Case For Plaintiff

[2] The case for the plaintiff is that pursuant to various letters of offer, the terms of which were duly accepted by a company called Kian Furniture Manufacturing S/B ("KFM") (formerly known as Cheng Giap Furniture Sdn. Bhd.), the last of which was the letter of offer dated 6 May 2003 ("facilities agreement"), the plaintiff granted to KFM various banking facilities including, inter alia, a bank guarantee facility of up to RM300,000; a term loan facility for RM399,999.92; an Import Line of up to a limit of RM1,900,000 and a Foreign Exchange Contract Line of up to a limit of RM50,000 (collectively known as the said "banking facilities").

[3] The banking facilities are secured by:

a) an all monies debenture dated 1 December 1994 over the fixed and floating assets of Cheng Giap Furniture Sdn Bhd;

b) a 2nd legal charge dated 1 December 1994, over the property held under GM57, Lot 841, Mukim of Damansara, District of Petaling;

c) a Joint and Several Guarantee dated 25 September 1994 (1st guarantee) executed by all directors of KFM, being respectively Ng Tien Beng, Ng Hiak Hing & Ng Tien Woo for RM2.5million;

d) a joint and several guarantee dated 8 May 1998 (2nd guarantee) executed by all directors of KFM, being respectively Ng Tien Beng, Ng Hiak Hing & Ng Tien Woo for RM300,000.

[4] The 1st, 2nd defendants and Ng Tien Woo @ Ng Thian Woo agreed and guaranteed as principal debtor and not merely as surety, they agreed that a certificate signed by the duly registered officer of the plaintiff as to the amount at any time owing by KFM to the plaintiff shall be conclusive evidence as against them of the amount so owing.

[5] KFM had utilized the said banking facilities but failed to make payment due to the plaintiff pursuant to the said facilities agreement. On the request of KFM, the plaintiff by way of a letter dated 19 November 2003 ("letter of indulgence") agreed to grant KFM an indulgence until 31 March 2004 ("indulgence period") for settlement of the banking facilities subject to terms and conditions. Again KFM defaulted. The plaintiff by way of its solicitor's letter to KFM, dated 31 May 2004, terminated and recalled the banking facilities. KFM failed, refused and/or neglected to repay the outstanding sum under the said banking facilities or any part thereof.

[6] KFM has made part payment of the term loan which has been accepted by the plaintiff, on a without prejudice basis and reserved their right to claim the outstanding debt due.

[7] By way of a letter dated 31 May 2004, issued by its solicitors Messrs. Skrine, to the 1st, 2nd defendants and Ng Tien Woo @ Ng Thian Woo, the plaintiff demanded the following payments pursuant to the 1st and the 2nd guarantees:

a) Payment of the total sum of RM1,772,538.49 due as at 23 May 2004 together with interest thereon from 24 May 2004 until the date of full payment; and

b) Cash cover amounting to RM43,000 for bank guarantees issued.

[8] Ng Tien Woo @ Ng Thian Woo had passed away on 12 September 2001 and letters of administration dated 17 February 2003 had been granted to the 2nd defendant, appointing the 2nd defendant as the administrator of the estate of the 3rd defendant. In consequence thereof, a letter dated 29 July 2004, was issued by its solicitors, Messrs. Skrine, to the 2nd defendant as administrator of the 3rd defendant's estate, which demanded full payment of the debt.

[9] The 1st defendant and the 2nd defendant as guarantors, and the 2nd defendant as administrator of the estate of Ng Tien Woo @ Ng Thian Woo have defaulted in making payment pursuant to the terms and conditions of the