1. ) TRANSKON SDN BHD 2. ) YEE KIM MUN v GETO GLOBAL CONSTRUCTION TECH MALAYSIA SDN BHD

Case Significance

Confirms that a penal notice cannot be endorsed on a purely monetary judgment, since its effect would be enforcement by committal, and addresses the prerequisites to proceeding against a guarantor and the disallowance of interest.

This High Court decision, on appeal from the Sessions Court, concerns a supplier's claim for the price of goods, the liability of a guarantor, and the propriety of endorsing a penal notice on a money judgment. The respondent supplier had claimed the outstanding price for self-climbing platform modules supplied to the first appellant for a construction project, and the second appellant had guaranteed the first appellant's obligations. The Sessions Court, after a full trial, gave judgment for the supplier, and the appellants appealed while the first appellant's counterclaim for damages had been rejected. The Court first held that the trial judge had not erred in finding that the supplier had not breached the sale contract, the required modules having been supplied, and that the claim, including agreed variations, was properly allowed against the first appellant. It then addressed whether a notice of demand was required before proceeding against the guarantor, and held that the proceedings against the guarantor were premature. On interest, it disallowed the monthly interest that had been imposed on the outstanding sum. On the penal notice, it held that a penal notice cannot properly be endorsed on a purely monetary judgment, because its effect would be to enforce a money judgment by committal, displacing the other modes of execution provided by the rules. The Court therefore allowed the appeal in part, holding the proceedings against the guarantor premature, disallowing the interest and the penal-notice endorsement, while upholding the remainder of the Sessions Court's judgment, and ordered the parties to bear their own costs. The judgment is significant for confirming that a penal notice is not available on a purely monetary judgment and for its treatment of the prerequisites to enforcing a guarantee. The decision is a useful statement of two enforcement points of general importance: that a guarantor is not to be pursued before the contractual prerequisites to his liability are satisfied, and that the coercive machinery of a penal notice has no place on a judgment that sounds only in money.