This case concerns a construction contract between the plaintiff and the 1st defendant where the 1st defendant retained $144,474 that was not paid to the plaintiff. To secure this debt, the 2nd defendant, as managing director of the 1st defendant, signed a letter acknowledging the debt and guaranteeing payment. However, the court found that the letter did not constitute a valid contract of guarantee against the 2nd defendant as it lacked consideration and did not clearly make the 2nd defendant liable for the 1st defendant's debt. The court also accepted the 2nd defendant's testimony that he signed under duress and coercion, supported by two police reports. Therefore, the plaintiff failed to establish the 2nd defendant's liability.
This case concerns a construction contract between the plaintiff and the 1st defendant where the 1st defendant retained $144,474 that was not paid to the plaintiff. To secure this debt, the 2nd defendant, as managing director of the 1st defendant, signed a letter acknowledging the debt and guaranteeing payment. However, the court found that the letter did not constitute a valid contract of guarantee against the 2nd defendant as it lacked consideration and did not clearly make the 2nd defendant liable for the 1st defendant's debt. The court also accepted the 2nd defendant's testimony that he signed under duress and coercion, supported by two police reports. Therefore, the plaintiff failed to establish the 2nd defendant's liability.
This case concerns a construction contract between the plaintiff and the 1st defendant where the 1st defendant retained $144,474 that was not paid to the plaintiff. To secure this debt, the 2nd defendant, as managing director of the 1st defendant, signed a letter acknowledging the debt and guaranteeing payment. However, the court found that the letter did not constitute a valid contract of guarantee against the 2nd defendant as it lacked consideration and did not clearly make the 2nd defendant liable for the 1st defendant's debt. The court also accepted the 2nd defendant's testimony that he signed under duress and coercion, supported by two police reports. Therefore, the plaintiff failed to establish the 2nd defendant's liability.
[SUIT NO: 22-201-2008-III] BETWEEN TAN SENG LEONG CONSTRUCTION SDN BHD (COMPANY NO. 1!2-D" A COMPANY INCORPORATED AND REGISTERED IN MALAYSIA UNDER THE COMPANIES ACT# 1$% AND HA&ING ITS REGISTERED AND BUSINESS ADDRESS AT 18' 1 ST (LOOR LOT ) HUI SING GARDEN COMMERCIAL CENTRE $''0 KUCHING SARAWAK * PLAINTI(( AND (1" MASPOH SDN BHD (COMPANY NO. 12%)12-T" A COMPANY INCORPORATED AND REGISTERED IN MALAYSIA UNDER THE COMPANIES ACT# 1$% AND HA&ING ITS REGISTERED ADDRESS AT LOT 1!2 (1 ST (LOOR" SECTION %' KTLD +ALAN PADUNGAN $'100 KUCHING SARAWAK * 1 ST DE(ENDANT (2" POH SU KIANG (WN KP. )%111$-1'-0!$" C,O MASPOH SDN BHD LOT 1!2 (1 ST (LOOR" SECTION %' KTLD +ALAN PADUNGAN $'100 KUCHING SARAWAK * 2 ND DE(ENDANT BE(ORE THE HONOURABLE MR. +USTICE DATUK LINTON ALBERT IN OPEN COURT 1 CONTRACT: Guarantee - Liability of guarantor - Sum retained by 1 st defendant which had not been settled - Whether Letter of Acknowledgment of Debt cum Guarantee rendered 2 nd defendant liable to settle sum if 1 st defendant defaulted - Whether a mere promise to transfer personal property - Whether guarantee was without consideration - Whether 2 nd defendant signed Letter of Acknowledgment of Debt cum Guarantee under duress and coercion - Whether Letter of Acknowledgement of Debt cum Guarantee not binding on 2 nd defendant [P-./01/2234 5-./6 .7./041 189 2 0: :9290:.01 :/46/449: ;/18 5<414 1< =9 1.>9: ?0-944 .7@99:.] C.49(4" @929@@9: 1<: Allied Granite arble !ndustries Sdn "hd #$ %hin &oong 'oldings Sdn "hd ( )rs *2+++, - %L. /1 0refd1 L97/4-.1/<0 @929@@9: 1<: Contracts Act 1950, ss. 10, 14, 15, 79, 80 2 +UDGMENT The Pl ai nt i ff had successful l y coml et ed t he const ruct i on of ei !ht "l oc#s of 4$st orey semi $det ached aart ment s and 10 uni t s of si n!l e st or ey t er r ace houses for t he %efendant &hi ch &as ai d for "y t he %efendant e'cet t he sum of ()*14, 474, 00 r et ai ned "y t he %efendant for r el ease t o t he Pl ai nt i ff onl y aft er t he e'i r y of 12 mont hs aft er t he i ssuance of t he occuat i on er mi t s for t he aar t ment s and t he t er r ace hous es . The occuat i on er mi t s f or t he aar t ment s and t er r ace hous es &er e i s s ued on 7. 4. 2005. +y a ,et t er of Ac#no&l ed!ment of %e"t cum -uar ant ee dat ed 21. 12. 200. t he 2 n d %ef endant , as t he )ana!i n! %i r ect or of t he 1 s t %ef endant ac#no&l ed!ed t hat t he 1 s t %ef endant o&ed t he r et ent i on money t o t he Pl ai nt i f f and i n hi s er sonal caaci t y r omi sed t o ma#e !ood t he f ul l amount of t he r et ent i on money o&ed t o t he Pl ai nt i f f i n t he e/ent t hat t he 1 s t %ef endant coul d not ma#e f ul l ayment t o t he Pl ai nt i f f "y 20. 1. 2007. 0 n t he e/ent t he 1 s t %ef endant di d not ma#e t he ayment as a!r eed and t he Pl ai nt i f f commenced t hi s act i on on 17. 10. 2008. 1o much f or t he Pl ai nt i f f 2 s l eaded cl ai m. The t ri al of thi s act i on only concerned t he 2 n d %efendant "ecause 3 ud!ment a!ai nst t he 1 s t %efendant had al r eady "een o"t ai ned ri or t o t he commencement of t he t r i al . The 2 nd %efendant2s leaded defence &as that the ,etter of Ac#no&l ed!ment of %e"t cum -uar ant ee &as o"t ai ned "y dur ess and coer ci on and t her efor e /oi d and of no effect &hat soe/er "ut "efor e det er mi ni n! t hi s asect of t he case, i t i s t r i t e t hat t he Pl ai nt i f f mus t f i r s t es t a"l i s h i t s cl ai m a!ai ns t t he 2 n d %ef endant . * 4ence, the "urden is on the Plaintiff to ro/e that the ,etter of Ac#no&l ed!ment of %e"t cum -uar ant ee r ender s t he 2 n d %ef endant l i a"l e t o ay t he sum r et ai ned "y t he 1 s t %ef endant &hi ch had not "een set t l ed "y t he 1 s t %ef endant . The sol e &i t ness for t he Pl ai nt i ff &as i t s mana!i n! di r ect or , one Tan Ah )ee 5 Tan 1en! ,eon! &hose t est i mony essent i al l y r ei t er at es t he Pl ai nt i ff2 s l eaded cl ai m i ncl udi n! most i mor t ant l y t he r oduct i on of t he ,et t er of Ac#no&l ed!ment of %e"t cum -uar ant ee on &hi ch t he l i a"i l i t y of t he 2 n d %efendant hi n!es, &hi ch &as admi t t ed. 6or coml et eness i t i s er has ar or i at e t o r er oduce t he cont ent s of t he document &hi ch &as admi t t edl y si !ned "y t he 2 n d %efendant . 0 t st at es as fol l o&s7 8)9 P:4 1; <0 A=- 0 C7 4.1119$ 1*$ 5079 as mana!i n! di r ect or of )A1P:4 1%= +4%, i s admi t t ed )A1P:4 1%= +4% &as o&e TA=- 19=- ,9:=- C:=1T(;CT0 := 1%= +4% ()**0, 000. 00 as a r et ent i on amount . 0 as di r ect or of )A1P:4 1%= +4% r omi s e &i l l ma#e t he f ul l ayment t o TA=- 19=- ,9:=- C:=1T(;CT0 := 1%= +4%. 0 &i l l t r ans f er my er s onal r oer t y t o ma#e t he t ot al de"t t o TA= 19=- 9,:=- C:=1T(;CT0 := 1%= +4%>. 1ection 79 of the Contracts Act 1950 defines a contract of !uarantee as follo&s7 ABC<01@.51 <2 7?.@.01993# B4?@91C3# BD@/05/D.- :9=1<@3# .0: BC@9:/1<@3 A ?contract of !uarantee2 is a contract to erform the romise, or di s char !e t he l i a"i l i t y, of a t hi r d er s on i n cas e of hi s def aul t . The er s on &ho !i /es t he !uar ant ee i s cal l ed t he ? s ur et y2 @ t he er s on i n r es ect of &hi ch def aul t t he !uar ant ee i s !i /en i s cal l ed t he ? r i nci al de"t or 2 , and t he er s on t o &hom t he !uar ant ee i s !i /en i s cal l ed t he ? cr edi t or 2 . A !uar ant ee may "e ei t her or al or &r i t t en>. 4 0t i s at ent l y cl ear t hat t here i s not hi n! i n t he document t o su!!est t hat t he 2 n d %efendant &oul d erfor m or di schar!e t he l i a"i l i t y of t he 1 s t %efendant t o t he Pl ai nt i ff i n t he sum of ()*14, 474. 00 i f t he 1 s t %efendant defaul t s@ i t &as a mere romi se 2 t o t ransf er my persona1 propert y $ $ $ $ 3 a hr ase so i mr eci se as t o "e caa"l e of many di f f er ent meani n!s. 0 n addi t i on t he al l e!ed !uar ant ee i s &i t hout consi der at i on "y /i r t ue of 1ect i on 80 and i l l ust r at i on A cB t her eof of t he Cont r act s Act 1950. They ar e as f ol l o&s7 AC<04/:9@.1/<0 2<@ 7?.@.0199 Anyt hi n! done, or any romise made, for the "enefit of the rincial de"tor may "e a sufficient consideration to the surety for!i/in! the !uarantee. !LL4S56A5!)7S AaB C A"B C AcB A sells and deli/ers !oods to +. C after&ards, &ithout consideration, a!rees to ay for them in default of 8. The a!reement is /oid>. 4ence, t he Pl ai nt i f f has f ai l ed t o es t a"l i s he t he 2 n d %efendant 2s l i a"i l i t y for t he sum cl ai med and Dui t e aart from t hat 0 al so accet t he 2 n d %efendant 2 s t est i mony t hat he si !ned t he ,et t er of Ac#no&l ed!ment of %e"t cum -uar ant ee under dur ess and coer ci on "ecause t he fi r st ol i ce r eort l od!ed on 19. 1. 2007 A e'hi "i t %*E 1FB and t he 2 n d ol i ce r eor t l od!ed on 2*. 1. 2007 A e'hi "i t %*E 2FB "ot h essent i al l y al l uded t o t he dur ess and coer ci on he descr i "ed i n det ai l i n hi s t est i mony and ar e t her efor e su"st ant i al l y consi st ent &i t h each ot her . 4er e, as t he ,et t er of Ac#no&l ed!ement of %e"t cum -uar ant ee &as r ocur ed "y c o e r c i o n , i t s t a n d s t o r e a s o n t h a t i t d o e s n o t " i n d t h e 2 n d 5 %efendant Asee ALL!8D G6A7!58 A6"L8 !7D4S56!8S SD7 "'D #$ %'! 7 &))7G ')LD! 7GS SD7 "'D ( )6S E 2000F 5 C,G 71@ and, 19CT0 :=1 10, 14 and 15 C:=T(ACT1 ACT, 1950B . 0n t he ci rcumst ances and for t he reasons aforesai d t he Pl ai nt i ff2 s cl ai m a!ai nst t he 2 n d %efendant i s di smi ssed &i t h cost s t o "e t a'ed unl ess a!r eed. D.19: 1. A;-;1T 2010 (LINTON ALBERT# +" &or the plaintiff - Abang 'alit Abang alik9 :s Loke ;ing Goh ( <artners Ad#ocates <uchin! &or the 2 nd defendant - William Wang9 :s Sia Al#in Wong ( <artners Ad#ocates <uchin! .