The principle of res judicata prevents relitigation of issues already adjudicated, reaffirming that a party must prove its loss in breach of contract claims.

[1] Lembaga Pembangunan Perumahan Dan Bandar Sabah (LPPB) owned a piece of land situated at Taman Bukit Sepanggar, Jalan Sepanggar, Kota Kinabalu Sabah (the said land). The appellant and one Dato' Paduka Khairuddin Abu Hassan (KAH) negotiated with LPPB with a view to securing a joint venture agreement (the JV agreement) between LPPB and the respondent to develop the said land into a housing project (the project) wherein the respondent would be appointed the sole developer for the project.

[2] It resulted in due course in a shareholders' agreement (the agreement) dated 27 April 2011 entered into by the appellant (referred to in the agreement as "SS"), KAH, the respondent, Datuk Hoe Tze Fook (HTF) and Lee Fuei Siong (LFS) both of whom were the shareholders and Directors of the respondent.

[3] The agreement is, by virtue of cl 2.1, expressed to be conditional upon execution of the JV agreement between LPPB and the respondent. By cl 3.2, the parties to the agreement agreed with the following stipulation:

"3.2 The company agree and undertake with SS & KAH that it shall pay a sum of Ringgit Malaysia Three Million Six Hundred Thousand (RM3,600,000.00) only being consultancy and facilitation of the services rendered as defined herein (hereinafter referred to as "the Consultation Fee") to SS and KAH in the following manner.

(a) A Sum of Ringgit Malaysia Two Million One Hundred Thousand (RM2,100,000.00) only (hereinafter referred to as "refundable deposit") is now or heretofore paid to SS and KAH and/or its nominee or assign, COSMOTINE SDN BHD (Co No: 849014-3H) a company incorporated in Malaysia and having its principal place of business at No 14, Jalan Pandan 7/2, Pandan Jaya, 55100 Kuala Lumpur (hereinafter referred to as "the Party A's Nominee (the receipt of which Party A hereby expressly acknowledged) by the company being a Refundable Deposit which sum shall be refunded by SS and KAH to the company in the event the joint venture agreement between LPPB and the company is not executed within 14 days from the date of this agreement;"

[4] It is to be noted that cl 2.1 of the agreement also contains a similar stipulation that if the JV agreement was not executed in the above stipulated manner, both the appellant and KAH were required to refund to the respondent the refundable deposit forthwith.

[5] Following the execution of the agreement, HTF paid Cosmotine Sdn Bhd (Cosmotine) a sum of RM2,300,000.00 being the refundable deposit comprising RM2.1 million and an additional sum of RM200,000.00. In return, Cosmotine deposited its CIMB Bank Berhad Cheque Bearing No 119674 post dated to 30 December 2011 in the same amount (the said cheque) with HTF. However, nothing turned out the way it was expected. The appellant and KAH failed to secure the JV agreement between LPPB and the respondent within the specified period of 14 days from the date of the execution of the agreement. HTF thereupon presented the said cheque to the bank for payment on 31 January 2012 but was dishonoured. In consequence of that, the respondent demanded the refund of the sum of RM2.3 million from the appellant and KAH. However, no refund of the sum was made by the appellant and KAH.

[6] In the event, on 28 August 2012, HTF commenced an action against Cosmotine at the Kuala Lumpur High Court vide Writ No: 22 NCVC-1009- 08-2012 (the HTF suit) for the recovery of the sum of RM2.3 million, interest at 5% per annum thereon and costs. HTF next proceeded with an application for leave to enter summary judgment against Cosmotine which was allowed by the learned High Court Judge on 6 December 2012.