Shaik Daud J

This is an appeal by the plaintiff from the decision of the senior assistant registrar whereby she allowed an application by the third defendant to have a judgment entered against her to be set aside, on the ground that she has a valid defence to the plaintiff's claim. On 26 June 1986, the plaintiff had obtained a judgment in default of appearance against the third defendant for the sum of RM205,353.24 with interest at the rate of 14.75%pa with monthly rests from 1 December 1985 until payment; RM237,433.50 with interest at the rate of 15.75%pa on the sum of RM203,872.40 from 1 December 1985 until payment and RM4,805.89 with interest at 14.75%pa on RM4,351 from 1 December 1985 until payment.

At the trial before the learned senior assistant registrar, it was the defendant's contention that the judgment in default of appearance entered as stated above is irregular and defective in that it contravenes the then existing O 42 r 12 of the Rules of the High Court 1980 which only allowed for the plaintiff to claim interest of 8%pa from date of judgment. The plaintiff's reply to this was simple — they had applied for an amendment to the default judgment in order to comply with O 42 r 12 and which application was allowed by the learned senior assistant registrar.

The next issue raised by the third defendant is that the plaintiff's claim is based on facilities granted to the first defendant vide the plaintiff's letter of offer dated 10 November 1983. She contends that she is a housewife and was appointed a director of the first defendant to give an impression of bumiputra participation which fact is not uncommon nowadays. She contends that the facilities granted to the first defendant, which the third defendant guaranteed in 1983, had been cancelled on or about March 1985 and replaced with new facilities. This apparently is contained in a letter from the plaintiff dated 8 March 1985 which, inter alia, states that the new offer is to supercede and cancel the previous letter of offer dated 10 November 1983. The third defendant contends that by 8 March 1985, she had already resigned as a director of the first defendant effective 25 January 1985.

The plaintiff contends that the third defendant's application should not be litigated as it was thrashed out some four years ago when she unsuccessfully applied to have the judgment set aside before another High Court.

In an application to set aside a default judgment, the applicant need not prove her defence. What she needs to do is merely to show that she has a defence on the merits. While it is contended by the third defendant that her application to have the default judgment set aside some four years ago before another High Court was unsuccessful, it was based on a different reason entirely. Her earlier application was based solely on the issue of non-service while in this application she is challenging the second letter of offer of new facilities to the first defendant and the plaintiff's assertion that the second offer supercedes and cancels the previous facilities.

It is my considered view that the third defendant has successfully shown that she has a defence. Of course, whether she succeeds or not is not the issue at this stage. The plaintiff's contention that the second offer has nothing to do with the third defendant cannot, to my mind, be a valid contention especially when the new offer contained an express condition that 'a joint and several guarantee of the directors be taken'. It is not denied that by the date of the second offer, the third defendant was no longer a director and as such may well be not liable on the guarantee. I agree with the contention of the third defendant that if the second offer was not meant to supercede and cancel the first offer and third defendant was still meant to be liable under the guarantee executed by her on the strength of the first offer, why, therefore, is there the necessity to request for a fresh joint and several guarantee of