JUDGMENT

1. This is the plaintiff's application dated 21st May, 1998 to enter judgment under O. 14 Rules of the High Court 1980 against the defendant for breach of agreements in a sum of RM12,971,097.63. The application is supported by three affidavits of Hii Chang Pee @ Hu Chang Pee affirmed on 20th May, 1998; 20th June, 1998 and 3rd October, 1998. In opposition are three affidavits of Tan Sri Dato' Paduka Ting Pek Khiing affirmed on 15th June, 1998; 18th July, 1998 and 16th October, 1998. The plaintiff alleged that the defendant has no defence to the plaintiff's claim as per its Statement of Claim.

2. The plaintiff entered into two Agreements of Sale of Timber logs; one dated 30th August, 1989 (Exhibit HCP 1) in respect of forest timber licence T/0339 (the 1st Agreement), and the other dated 21st September, 1989 (Exhibit HCP 2) in respect of forest timber licence T/0340 (the 2nd Agreement). Under these Agreements, the defendant agreed to sell and the plaintiff agreed to buy all timber logs extracted under these licences, on the following terms: [3]

1st Agreement

(a) ;The agreed rate of RM240.00 per hoppus ton of merehantable logs of all species extracted comprising of 60% of Meranti, Kapur, Keruing and Selangau Batu, and 40% of low grades of the above species;

(b) ;The purchase price at RM240.00 is made up of contract fee of RM170.00 and a premium of RM70.00 per ton. This premium is paid to the defendant excluding royalties, premia, native cess and export duties, to be paid to the relevant authorities, by the plaintiff;

(c) ;A minimum of 144,000 tons of logs per year, is guaranteed purchase by the plaintiff;

(d) ;Upon execution of the 1st Agreement, the plaintiff shall deposit with the defendant a security deposit of RM20,000,000.00 paid in advance; and

(e) ;Of the premium of RM70.00 per ton payable by the plaintiff to the defendant, RM20.00 shall be deducted progressively from the deposit, and the balance of RM50.00 to be paid to the defendant by the 3rd day of each month.

3. Similar terms as found in the 1st Agreement are repeated in the 2nd Agreement, with certain modifications:

(a)&(b) ;The rate or purchase price is RM260.00 made up of contract fee of RM170.00 and a premium of RM90.00;

(d) ;The security deposit is RM15,000,000.00; and

(e) ;Of the premium RM90.00 per ton payable, RM40.00 shall be deducted progressively from the deposit, and the balance of RM50.00 per ton to be paid to the defendant by the 3rd day of each month.

4. At the onset of the hearing, learned counsel for the plaintiff in his written submission made a startling application, that is, the plaintiff would proceed only on the issue of conditional leave to be given to the defendant by way of payment into court the whole sum claimed or any reasonable sum of the whole sum or alternatively to furnish Bank Guarantee of the said sum [4] claimed on the ground that the defence was not bona fide or shadowy or a sham, and he cited Qbe Supreme Insurance Bhd & Ors v Syarikat Chemas Pemborong Sdn Bhd & Ors (1986) 1 MLJ 56 , in support of its contention. I will deal with this later on in the judgment.

5. The learned counsel of the defendant raised a preliminary objection to the application as it required notice. As no notice had been given the defendant was caught by surprise. Further, it was a departure from what was pleaded, and in the Summons In Chambers (Encl. 10) the plaintiff stated that the defendant had no defence.

6. Learned counsel for the plaintiff replied that no notice was required as this matter was raised in paragraph 25 of Hii Chang Pee's Affidavit in Reply (No. 2) affirmed on 3.10.98, and it was acknowledged by the defendant in its Third Affidavit in Opposition of Tan Sri Dato' Paduka Ting Pek Khiing affirmed on 16th October, 1998. Thus the objection was a non-starter.

7. With respect the plaintiff's counsel seems to be under a misapprehension that the court may dispense with the normal O. 14 procedure and proceed straight away to hear whethe