Ramly Ali J:

The plaintiff is and was at all material times an insurance company carrying on business as insurer in accordance with the Insurance Act 1963. The plaintiff's claim against the defendants is for arrears of premium as at 31 August 1989, for a sum of RM1,284,018.26 for Motor Insurance and RM157,538.49 for Non-Motor Insurance (total of RM1,441,556.75) arising out of a chief agency agreement dated 13 March 1987. The plaintiff and the 1st defendant entered into a chief agency agreement dated 13 March 1987 and in consideration of the plaintiff entering into the chief agency agreement, the 2nd and 3rd defendants, who were the shareholders and directors of the 1st defendant executed a letter of guarantee, to guarantee and indemnify the payment of all insurance premiums which shall be due and owing to the plaintiff in respect of the chief agency agreement. The plaintiff contends that in breach of the chief agency agreement the 1st defendant failed to remit insurance premiums to the plaintiff as stipulated under the said agreement.

By mutual consent, the said chief agency agreement was terminated as a result of the 1st defendant's breaches of the express terms, conditio