JUDGMENT

Lee Swee Seng JC:

Prologue

[1] The 5th defendant (D5) said he did sign a shares sale agreement in that only two pages of the agreement was shown to him and that he was asked to sign at the designated places. He is a Director of the 1st defendant (D1) that had agreed to purchase all the shares of the plaintiff in a company called Plant & Maintenance Engineering Sdn Bhd ("the company"). He said that the 3rd defendant who was with him during the signing had represented to him that the agreement was for the purchase of a company and that they will later sell the company. He was at all times represented by a firm of solicitors who acted for D1 and also the Directors of D1 who are the 2nd to the 5th defendants (D2 to D5) herein. Little did he realise, as he contended, that the agreement also incorporated a guarantee by all the Directors of D1 for the purchase price of RM750,000.00.

[2] When the plaintiff sued for the balance sum of RM630,000.00 since RM120,000.00 had earlier been paid, D5 sought to disclaim liability on the ground that he did not know that what he signed was a Guarantee Agreement as well and that his own solicitors did not explain the agreement to him. In short he was trying to deny liability on ground of non est factum. Judgment had earlier been entered against the other defendants after a trial. This trial against D5 had come later as there had been a judgment in default earlier entered against him which was subsequently set aside and hence this trial. This judgment shall explore whether in the circumstances of this case such a defence is available to him vis-a-vis the plaintiff.

Parties

[3] The plaintiff as vendor had entered into a shares sale agreement ("agreement") dated 20 May 2008 with D1 as purchaser for the sale of all its shares in Plant & Maintenance Engineering Sdn Bhd for RM750,000.00. All the Directors of D1 who are as follows also signed the agreement as Guarantors: Hazrath Farukh Bin Abdullah as 2nd defendant (D2), SS Thanasekaran ("Thana") as 3rd defendant (D3), Suhaimi Bin Hassan as 4th defendant (D4) and Mahaviknaraj a/l Maharathan as the 5th defendant (D5).

Problem

[4] There was a balance RM630,000.00 not paid by D1 to the plaintiff under the agreement which the plaintiff had sued for in this action against D1 and the guarantors D2 to D5. Clause 8 of the agreement reads: "Guarantee by the Purchaser's Directors". It provides as follows:

"8.1 In consideration of the vendor entering into this agreement or other valuable consideration and as a separate and independent obligation, the guarantors hereby jointly and severally, unconditionally and irrevocably, guarantee to the vendor:

(a) full and timely payment of all amounts due to the vendor pursuant to this agreement in accordance with cl 3 and other provisions of this agreement;

(b) .....

(c) agree to indemnify the vendor on demand against any loss and expense the vendor may incur as a result of or in connection with any failure or neglect on the part of the purchaser to pay any part of the consideration or perform/comply with the terms of this agreement.

8.2 The guarantee referred to in cl 8.1 ("guarantee") is a continuing guarantee and shall remain in full force and effect so long as any sums remain due by the purchaser to the vendor or any of the obligations of the purchaser under this agreement have yet to be fully performed or satisfied."

[5] Clause 8.6 further provides that:

"As a separate and alternative stipulation, the guarantors unconditionally and irrevocably agrees that any sum expressed to be payable by the purchaser under this agreement but which is for any reason (whether or not now existing and whether or not known or becoming known to any party) not recoverable from the guarantors on the basis of a guarantee shall nevertheless be recoverable from the guarantors as if it was the sole principal obligor."

[6] D5 in his defence said that he was requested by D3 to meet him at a coffee shop in Bangsar where he was aske