QBE Supreme Insurance Bhd

- vs -

Syarikat Chemas Pemborong Sdn Bhd

Judgment

Abu Mansor J

1. On 18 April 1984 the plaintiffs herein took out a summons under Ord. 14, Rules of the High Court, praying for final judgment in this action against the second and third defendants for the amount claimed in the Statement of Claim with interest and costs to be taxed. In support of this application, the plaintiffs’ manager, Cheng Kam Meng, swore an affidavit dated 25 January 1984 setting out the details of the plaintiffs’ claim wherein at para 3 of the said affidavit he summarised:

   The second defendant, Chu Yun and the third defendant, Yip My Chua (f), jointly and severally with the First, Fourth, Fifth and Sixth Defendants, are and were at the commencement of this action justly and truly indebted to the abovenamed Plaintiffs in the sum of $120,260.35 in connection with their (the Defendants’) guarantee and indemnity given to the Plaintiffs consequent upon the Plaintiffs issuing a counter indemnity in favour of their (the Plaintiffs’) bankers, the Bumiputra Mercant Bankers Bhd, in consideration of which Bumiputra Merchant Bankers in turn issued the banker’s guarantee of $120,260.35 in favour of the Sabah Ports Authority.

2. In opposition, the second and the third defendants put in their affidavits dated 16 June 1984 and 7 August 1984 respectively. In para 19 of second defendant’s affidavit, among other defences, he denied signing the said letter of indemnity (in his personal capacity) and in paras 6 and 7 of the third defendant’s affidavit she also denied signing the letter of indemnity and therefore denies liability to the plaintiffs in the said sum.

3. At the hearing of the Ord. 14 Summons on 5 November 1984, Mr. CI Robertson for the plaintiffs, pursuant to an earlier notice, made an application to cross-examine the second and the third defendants on their respective affidavits citing Ord. 38, r 2(3) of the Rules of the High Court 1980 and in support the case of Chong Chow Fong v Ban Tuck (Malaysia) Sdn Bhd [1983] 2 CLJ 25. Miss Chong Poh Shan for the second and third defendants objected to this application on the ground that there will surely be denials by the defendants and in the absence of other evidence and having to rely solely on the answers given in the cross-examination, the Court would still have difficulty in giving summary judgment. I considered this application and at the end of which, exercising my discretion, I turned down Mr. Robertson’s application as I agree with the defendants’ counsel’s submission that if I were to grant it the obvious will happen in cross-examination, and in the absence of any expert evidence of handwriting, the Court will be in no better position to decide that question and in the end the result would be the Court would be placed in no better position than if it had not allowed cross-examination. In other words, it would not have served any purpose. The cost of the application was agreed at $60.00.

4. Mr. Robertson then proceeded to submit on the Ord. 14 Summons. Contrary to expectation however, he only wished to proceed instead to ask for an order that the defendants be given conditional leave to defend this action by the second defendant and the third defendant depositing into Court the amount of the claim in the sum of $120,260.35. In adopting this course of action he told the Court that he was therefore abandoning the prayer for final judgment to save the time of the Court we are told. I wish to commend counsel for that consideration.

5. In support of his application, Mr. Robertson submitted that there was reasonable doubt in the second and third defendants’ defences and they therefore cease to be bona fide. For instance, as far as his signature was concerned, the second defendant admitted he executed the business letter P-3 but he denies he executed the letter of indemnity P-6(a) – same as CY-3. The plaintiffs’ counsel further submitted that the first defendant, a limited company, also gave an indemnity. The writ against the first defendant was served on the second defendant as its director and as no appearance was entered judgment was given on 28 March 1984. He did not, however, deny that the signature in the indemnity against the company was not his. So much for the second defendant but in respect of the third defendant Mr. Robertson did not submit anything. In short, Mr. Robertson says that the second and third defendants’ defences were sham and therefore he prays that they be allowed to defend conditionally.

6. In reply, Miss Chong Poh Shan pointed to para 5 of the plaintiffs’ own reply dated 19 September 1984 which in fact admitted that P-6(a) and CY-3 were, when received from the Plaintiffs’ agent in Tawau, indeed blank insofar as the first page was concerned. The plaintiff’s employee then duly filled in P-6(a) and leaving CY-3. Only P-6(a) was returned to their said agent for verification of signature and that of the name of the attesting witness. The plaintiffs further added that P-6(a) and CY-3 are the plaintiffs’ standard cyclostyled documents identical in all material terms. In para 7(a) of the same reply, the plaintiffs further stated that their solicitor wrote to the attesting witness, Ho Yun Kiong, and obtained the reply P-17 to the effect that the second defendant did sign P-6(a) and CY-3 in his and his wife’s presence but he cannot vouch for the signature of the third Defendant as the second defendant took the form back to his house.

7. In reply, Mr. Robertson says though the first page of P-6(a) was blank it related merely to matters already within the knowledge of second defendant as it referred to the amount of the loan and the reason for the granting of it.

8. On these facts as disclosed in the affidavits of the parties, the only issue before the Court is therefore whether the Court should give the second and third defendants conditional leave to defend as prayed.

9. It is settled that in an application under Ord. 14 the Court has the power to give unconditional leave to defend or impose such terms as to the giving of security as it thinks fit: Ord. 14, r 4(3).

10. In support of his application for conditional leave to defend, Mr. Robertson cited Fieldrank Ltd v Stein [1961] 3 All ER 681 approved as followed in Cho Chin Huat v Lee Boo Hock [1970] 1 MLJ 112 and in Foong Weng Tat v Vu Siew Chin [1974] 2 MLJ 20 .

11. Before I order the second and third defendants be given conditional leave to defend, I must be satisfied that there is no real substantial question to be tried or that there is no dispute as to facts or law which raises a reasonable doubt that the plaintiffs are entitled to judgment (see Jacobs v Booths Distillery Co [1901] 85 LT 62). I am unable to say that in respect of the third defendant who has managed to raise triable issues whether she did or did not sign the indemnity making her liable personally. Before the trial Court can come to any certain decision in this respect, the Court may need to hear expert evidence on handwriting in addition to other evidence to be led by the plaintiffs. Apart from that there are matters surrounding the signing of the document of indemnity by the third Defendant requiring close scrutiny which only a full and proper trial will help to highlight. For instance, in plaintiffs’ affidavit in reply dated 19 September 1984 we eventually know that the only copy signed and attested was P-6(a) and this was discovered after confirming the matter with the attesting witness, Ho Yun Kiong. Again, if we were to refer to the attestation part of P-6(a) where the supposed signatures of second and third defendants appear making them liable personally by itself without further explanation, it would appear as if the second and third defendants signatures has been attested in front of the said Ho Yun Kiong, whereas in Ho Yun Kiong’s reply dated 30 July 1984 P-17 he stated that only Chu Yun signed and Chu Yun brought the documents back home for his wife to sign and the said Ho Chun Kiong was truthful enough to say that the alleged signature of Yip My Chu was not done in his presence.

12. In regard to the second defendant’s defence it was a different matter. I accept that when the second defendant did sign the indemnity, P-6(a), the first page was blank but he well understood the purpose of the indemnity and the purpose of the loan bearing in mind his standing in the business world. I believe Cheng Kam Meng when he swore in para 6 of his affidavit dated 19 September 1984 that in the course of business he was acquainted with the second defendant’s signature and the signatures appearing in exh P-3, P-6(a) and CY-3 appear to be the same. This is further strengthened by the letter of Ho Yun Kiong dated 30 July 1984 which confirmed that Chu Yun signed three copies of P-6(a), CY-2 and CY-3 not only in his presence but also in that of his wife, Mdm Hing Nyuk Ching. He also confirmed that the said Chu Yun was well aware of what the documents were for and if one were to examine P-6(a) we are to find that the disputed signature of Chu Yun, if believed by the Court, making him liable personally in his personal capacity was in one document and was just below where he signed as Director of the first defendant company, thus lending further credence to Ho Yun Kiong’s statement that the second defendant did sign the indemnity letter. In spite of Ho Yun Kiong’s apparent inaccuracy in that he held out to have attested to third defendant’s signature in P-6(a), I believe him and I make a finding that the second defendant did in fact sign the indemnity in his personal capacity as well and I therefore doubt the bona fide of second defendant’s defence.

13. In view of what I have stated above, I therefore order that the second defendant be given leave to defend on condition that he deposit $120,260.35 as prayed within one month hereof failing which the plaintiffs are to have liberty to sign final judgment. In respect of third defendant, however, she is given unconditional leave to defend for reasons I have given. I order that the cost of the present Ord. 14 application in respect of the second defendant to plaintiffs to be taxed as usual and no order as to cost in respect of third defendant.

Cases

Ban Tuck (Malaysia) Sdn Bhd v Chong Chow Fong [1983] 2 CLJ 25; Stein v Fieldrank Ltd [1961] 3 All ER 681; Cho Chin Huat v Lee Boo Hock [1970] 1 MLJ 112; Vu Siew Chin v Foong Weng Tat [1974] 2 MLJ 20; Booths Distillery Co v Jacobs (1901) 85 LT 62

Legislations

RHC 1980: Ord. 14, Ord. 38 r 2(3).

Representation

CI Robertson for the plaintiffs.

Miss Chong Poh Shan for second and third defendants.