Peh Swee Chin FCJ:

[1] This appeal raises difficult and complicated questions of law between a borrower of money for the payment of the purchase price of some land which he had bought by agreement and the lender of the said money to whom the borrower had assigned his right title and interest in the said land to the lender. The questions arise out of the matter of rates of interest payable on money lent in such a security transaction.

[2] The appellant/borrower entered into a loan agreement with lender/respondent dated 26 March 1984 and entitled "Loan Agreement cum Assignment" whereby the appellant borrowed RM60,000 and agreed to pay interest thereon. In consideration thereof, the appellant inter alia, "assigns unto the Lender all his rights, title and interest in the said lot... by way of security for Loan hereby granted".

[3] The payment of the rates of interest is of crucial importance in this appeal and the relevant cl 1(i), (ii) and (iii) provide as follows:

1(i) To repay to the Lender on demand the Loan together with interest thereon at the rate of twelve per centum (12%) per annum (hereinafter referred to as "the Prescribed Rate" which expression shall where the context s