Siti Norma Yaakob J

In his application to set aside a judgment in default entered against him on 31 December 1986, the third defendant, who is sued as a guarantor pursuant to two guarantees, raised the following issues to establish that he has a defence on the merits:

(1) The two guarantees contain past consideration and as such are unenforceable against him.

(2) The judgment in default is entered for sums in excess of that claimed in the statement of claim.

At the material time the third defendant was a director of the first defendant, and together with another director, the second defendant, had given two separate personal guarantees that they will repay within two days of demand all moneys which shall be due to the plaintiff in consideration of the plaintiff making or continuing advances or giving or continuing credit or banking facilities to the first defendant. The limit of the first guarantee dated 17 July 1984 is $285,000 whilst that of the second guarantee dated 24 January 1985 is $150,000.

As at the date of the first guarantee, the plaintiff had already approved banking facilities to the first defendant in the form of a term loan for $90,000 which was disbursed on 10 July