GUST COLLECTION (M) SDN. BHD. v 1. ) GAIN COLLECTION SDN. BHD 2. ) CHAN KONG WAH 3. ) CHAN ZHI MIN 4. ) CHAN ZHI YUN

Case Significance

Illustrates the strict approach to a much-delayed application to set aside a regularly obtained default judgment: an unexplained thirteen-month delay, valid substituted service and the absence of a meritorious defence defeat the application.

This High Court decision in the Commercial Division at Kuala Lumpur concerns an application for an extension of time and leave to set aside a judgment in default of appearance made some thirteen months after the judgment was entered. The plaintiff, Gust Collection (M) Sdn Bhd, had obtained a default judgment against the corporate first defendant and three individual guarantors for arrears of RM1,474,484 for the supply of clothing and fashion accessories, together with a related investment, and had relied on a personal guarantee and indemnity dated 13 October 2023. All four defendants applied for an extension of time to set the default judgment aside, and for additional relief in the nature of certiorari and mandamus to stay execution and to compel the plaintiff's solicitors to hand over the cause papers. The court identified the primary questions as whether leave to extend time should be granted having regard to the reasons for the delay, whether service of the writ had complied with the rules, whether the judgment had been regularly obtained, and whether the defendants had a meritorious defence. On service, the court was satisfied that the plaintiff had exhibited all the material required for a proper substituted service, carried out in accordance with the rules, and that the defendants had notice of the proceedings, so the judgment was regular. On delay, it held that the defendants, as business owners in commerce, had not adequately explained the thirteen-month delay in appointing solicitors and had shown no prejudice of a kind that would make the delay excusable, nor produced credible evidence of a meritorious defence. It held that the certiorari and mandamus prayers were flawed and inappropriate and unsupported by any justification. Accordingly the court dismissed the application with costs of RM3,000. The judgment is a useful illustration of the strict approach to a much-delayed application to set aside a regularly obtained default judgment.