Arifin Zakaria J:

This is an application by the 1st and 2nd defendants for a preliminary question or issue to be tried before the trial of this action pursuant to O. 14A or O. 33 r. 2 of the Rules of the High Court 1980 ("the RHC"). The question or issue as formulated by them is whether the plaintiffs (other than the 13th, 14th and 15th plaintiffs) have the locus standito commence this action based on the facts as evidenced by the pleadings before the court. The 13th, 14th and 15th plaintiffs are not involved in this application because the bank (15th plaintiff) is already joined in as a party to this action. The 1st and 2nd defendants contended this question or issue ought to be disposed of prior to the trial of this action on the ground that in the event the court were to answer the question or issue in the negative then the plaintiffs' action herein ought to be dismissed.

The facts leading to this action which are relevant to this application may briefly be stated as follows. The plaintiffs are the purchasers of various parcels in the buildings to be constructed by the 1st defendant on the land belonging to the 2nd defendant. To finance the purchase of the said parcels each of the plaintiffs had entered into a loan cum assignment agreement with the respective financial institution in which the plaintiffs assigned all their rights and interest under the sale and purchase agreement ("SPA") to the respective financial institution. This fact is pleaded in para. 3 of the amended statement of claim. The plaintiffs in their claim further alleged that the 1st and 2nd defendants had committed several breaches of the SPA and on that premise the plaintiffs pray for, inter alia, that the SPA be declared null and void.

The guiding principles to be followed in dealing with an application such as this is clearly stated by Kang Hwee Gee J in Thanaraj a/l Manikam & Ors. v. Lower Perak Tamil Co-operative Society[1997] 4 MLJ 82 at p. 88 where he said:

Ideally, the procedure for the defendant to adopt was to plead the issue in their statement of defence under O. 18 r. 11 of the RHC 1980. He could then follow up by an application under O. 33 r. 2 and if it appears to the court that the decision on the preliminary issue substantially disposes of the cause or matter or renders the trial of the cause or matter unnecessary, the court may then act under O. 33 r. 5 to dismiss the plaintiffs' action (see Supreme Court Practice 1985 18/11/1 p 276). Under O. 33 r. 2 however, the defendant need not plead the issue of law in his statement of defence and a formal application need not be made.

It is clear to me firstly, that the issue of law raised in this instance would not require the ascertainment of any facts beyond those that appear in the pleadings and secondly that a decision on the issue if favourable to the defence would render the trial unnecessary which could only lead to much savings and costs. I therefore fail to see why the defendant should not be allowed to proceed with their application.

Similarly I find that the question posed by the 1st and 2nd defendants if decided in their favour would bring an end to this suit. This certainly would save costs and time which would otherwise be expanded to deal with other issues in the case. On that premise I therefore allowed the 1st and 2nd defendants to proceed with their application.

The material issue before me is, what is the nature of the various assignments found in the present case, is it an absolute or non-absolute assignment? The applicable test is found in the leading case of Nouvau Mont Dor (M) Sdn. Bhd. v. Faber Development Sdn. Bhd.[1985] 1 CLJ 56; ([1985] CLJ (Rep) 231). There the Federal Court at pp. 61-62 (at pp. 234-235) stated, what is now considered as the guiding test on this question, which read as follows:

In our judgement and it seems clear from the authorities above-mentioned, whether or not an assignment is an absolute one (not purporting to be by way of charge only) wi