JUDGMENT

Richard Talalla J:

The plaintiff is a licenced finance company. The 1st defendant under the hand of the 3rd defendant who was the managing director and chairman of the 1st defendant made an application to the plaintiff for a loan of RM1.6 million. The 2nd and 3rd defendants as proposed guarantors gave in writing their personal particulars including their respective addresses as No. 28, Jalan Ibrahim, Segamat, Johor (the said address). That was also the stated address of the 1st defendant although its registered office was stated as being one at Muar. By a letter dated 4 July 1984 the plaintiff offered the 1st defendant a fixed loan of RM2 million upon terms and conditions which included interest at the rate of 15.5% per annum with monthly rests, the period of loan to be not exceeding three years, the security for the loan to be:

(a) a third party first legal charge over land and building held under a certain grant of land and a number of certificates of title and;

(b) joint and several guarantees to be given by the 2nd and the 3rd defendants.

There was also a repayment schedule for payment not later than thirty six months. The servicing of interest was to be on a monthly basis. The 1st defendant under the hand of the 3rd defendant signed the letter dated 4 July 1984 accepting the plaintiff's offer and this constituted a contract of loan between the plaintiff and the 1st defendant (the agreement). The 2nd and 3rd defendants in fulfilment of one of the said terms and conditions each executed a personal guarantee (the guarantees) in favour of the plaintiff. The defendants failed to service the loan despite repeated demands. On 4 October 1986 the plaintiff caused a writ to be issued against the three defendants in these proceedings with a statement of claim pleading the loan, its salient terms, including the guarantees and the said demands and claiming a sum of RM2,146,065.80 with interest and overdue interest thereon at 15.5% per annum an 18.5% per annum respectively, on monthly rests made up as follows that is to say, advance RM2,000,000 interest and overdue interest since November 1985 RM146,065.80. The plaintiff also claimed interest and costs.

On 17 November 1986 the plaintiff applied by summons in chambers returnable before the Senior Assistant Registrar (the SAR) for an order of substituted service of the writ and statement of claim by inter alia posting copies thereof on the front door of the premises at the said address. This summons was supported by two affidavits, one by Encik Ismail bin Saidon (Ismail) affirmed on 11 November 1986 averring that the had personally called at the 2nd and 3rd defendants' place, being at the said address on the 28 October 1986, 1 November 1986, and 8 November 1986 at about 1.00 p.m., 2.30 p.m. and 2.00 p.m. respectively and that on all three occasions he was told by the inmates that the 2nd and 3rd defendants were not in. The other affidavits was affirmed on 11 November 1986 by Encik Lee Rook Leong averring that he was the solicitor in charge of the matter and that the process server had made reasonable effort and used all due means in his power to serve the said writ of summons and statement of claim and that he had made three attempts but was unsuccessful. He also affirmed to a belief that the 2nd and 3rd defendants had full knowledge of the said writ of summons and statement of claim and that the defendants were deliberately trying to evade the service of the process on them. The summons in chambers was heard by the SAR on 16 June 1987 and he made an order allowing the plaintiff's application. On 10 September 1987 Ismail effected such service pursuant to the said order and made an affidavit of service which was duly affirmed on 11 September 1987 and filed on 21 September 1987. Mr. Lee Fook Leong also made an affidavit of service which was duly affirmed on 15 September 1987 wherein he stated that he had on 13 September 1987 at about 12.10 p.m. posted a sealed copy of the order da