JUDGMENT

The plaintiff, Alliance Bank Malaysia Bhd, had extended banking facility to the 1^st defendant, Mangium Sawmill Sdn Bhd. As part of the securities for the banking facility, two joint and several guarantees were signed by the 2^nd, 3^rd and 4^th defendants. Mangium had defaulted in the repayment of the banking facility resulting in this legal action against the defendants. Judgment in default of appearance was entered against Mangium on 09.04.2008. As for 2^nd, 3^rd and 4^th defendant they dispute their liability under the joint and several guarantees.

This dispute as agreed by counsels is to be resolved by the court deliberating on two issues which are:

1. Whether the plaintiff's claim against the defendants as guarantors is founded under the Joint and Several Guarantees dated 12.08.1996 and/or 19.06.1997 to disclose a cause of action against the defendants and if so, what is the liability of the defendants?

2. Whether the plaintiff's claim against the defendants as guarantors under the Joint and Several Guarantees dated 12.08.1996 and/or 19.06.1997 respectively was preceded by demands in accordance with the said Joint and Several Guarantees?

Issue 1:

Whether the Plaintiff's claim against the defendants as guarantors is founded under the Joint and Several Guarantees dated 12.08.1996 and/or 19.06.1997 to disclose a cause of action against the defendants and if so, what is the liability of the defendants?

There is no dispute by the defendants that they had signed the two guarantees and if I understand their counsel, Mr. PK Lim, correctly they are disputing the amount claimed in that it contained interests on interests. In proving its claim, Alliance Bank had produced a certificate of indebtedness in exhibit P8 pursuant to clause 17 of the two guarantees.

P8 reads as follows:

CERTIFICATE OF INDEBTEDNESS AS AT 31^st AUGUST 2007

(Issued pursuant to Clause 17 of the Joint & Several Guarantees dated 12.08.1996 and 19.06.1997)

BORROWER:	MANGIUM SAWMILL SDN. BHD. (FORMERLY KNOWN AS KILANG PAPAN DASATU SDN. BHD.) [CO. NO. 176671-V]
GUARANTOR(S):	LOI HIEN KHONG (NRIC NO. 500117-13-5285) LOI HIEN HUA (NRIC NO. 540301-13-5433) WONG KIN NYUK (NRIC NO. 531009-13-5220)
LOAN A/C. NO(S):	Overdraft Facility - (Account No. 100110010001627) Bankers Acceptance Facility - (BA No. ADA0130101 & ADA0130104)

It is hereby stated and certified that Mangium Sawmill Sdn. Bhd. (formerly known as Kilang Papan Dasatu Sdn. Bhd.) is indebted and liable to Alliance Bank Malaysia Berhad (formerly known as Multi-Purpose Bank Berhad) ("the Lender") in the sum described below.

Particulars in respect of the Overdraft Facility (OD)

RM17,720,266.63 as at 31^st August 2007 with interest accruing at the applicable prescribed rate of 10.25% per annum (2.5% + Base Lending Rate Currently at 6.75% + 1% default interest) from 31.08.2007 to date of payment.

Particulars in respect of the Bankers Acceptance Facility (BA)

RM2,001,725.72 as at 31^st August 2007 with interest accruing at the applicable prescribed rate of 10.25% per annum (2.5% + Base Lending Rate currently) at 6.75% + 1% default interest) from 31.08.2007 to date of payment.

For and on behalf of the Lender

..................................................

Name	:Ho Koon Loy
NRIC No.	:581029-06-5237
Designation	:Assistant Vice President

Clause 17 reads as follows:

"A certificate by an officer of the Bank as to the money and liabilities for the time being due or incurred to the Bank from or by the customer or any admission or acknowledgement in writing by the customer or by any person authorized by the customer of the amount of indebtedness of the customer to the Bank and any judgment recovered by the Bank against the customer in respect of such indebtedness shall be binding and conclusive on us and our executors, administrators, liquidators or other legal representatives and all courts of law or elsewhere shall be conclusive evidence in any legal proceedings against us or our personal or legal representatives."

The effect of such certificate is