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Case Significance

Illustrates that summary judgment will be entered on a clear contractual debt supported by a personal guarantee where the defendants raise only peripheral objections, such as non-stamping or a third party's default, and no genuine triable issue.

This High Court decision concerns an application for summary judgment under Order 14 of the Rules of Court 2012 on a claim founded on an investment agreement and a personal guarantee. The plaintiff's claim was premised on an Investment Agreement it had entered into with the first defendant company and a personal guarantee given by the second defendant, the director of that company. As the defendants raised no procedural objection, the principal question was whether they had raised any issue or question in dispute that ought to be tried, or whether there was some other reason for a trial, within the meaning of Order 14 rule 3. The plaintiff relied on authority that a guarantor who signs a personal guarantee is liable for the sums owed by the principal, and contended that the agreement and guarantee, both dated the same day, established a clear contractual liability. The defendants resisted, but the court found their answers wanting: a technical objection based on the non-stamping of a document did not go to the root of the debt and could be regularised, and the defendants' affidavit was vague and lacking in material particulars, while an arrangement said to involve a third party had no bearing on the present claim. The court held that the defendants had furnished no credible evidence of fraud or misrepresentation and no legal basis to negate their contractual obligations, and that mere assertions or the unexplained failure of a third party to perform could not defeat a clear contractual liability, especially where the second defendant had given a personal guarantee. Finding no triable issue, the court allowed summary judgment with each defendant ordered to pay costs of RM2,500.00. The judgment illustrates that a bare denial and peripheral objections will not resist summary judgment on a clear contractual debt supported by a guarantee.