Mahadev Shankar JCA:

YK Fung Securities Sdn Bhd (the appellant - hereinafter 'the defendant') bought two blocks of shares from James Capel (Far East) Ltd ('the plaintiff'). The first block was for 6m shares in Grand United Holdings Bhd ('the GUH shares'). The second was for 5.88m shares in Growth Industrial Holdings Ltd ('the GIH shares'). The total purchase price was S$26,433,600 (the equivalent in ringgit then was over RM30m). When the time to pay and take delivery came, the defendant at first made a part payment and then refused to honour their bargain. The only reason given for this at the time by the defendant was that they did not have the money. On 28 May 1986, the plaintiff filed a writ in the High Court at Ipoh. Judgment was only delivered 9 1/2 years later. The defence was amended three times as the trial progressed. The fourth application to amend was refused. The trial was halted pending an appeal to the (then) Supreme Court which was dismissed. The trial (not counting the interlocutory applications) consumed 17 days. The trial judge ordered the defendant to pay up (see [1996] 2 MLJ 97). We dismissed the defendant's appeal. Our reasons now follow.

The backdrop of this case is the collapse of Pan-Electric Industries Ltd ('Pan- E1') and the activities of one Tan Koon Swan and his associates. The complexity and timing of the successive amendments to the defence can only be properly understood if all the facts are first spelt out.

The Facts Which Cannot Be Disputed

The defendant was carrying on the business of dealing in securities at No 64 Clarke Street, Ipoh. The dealer's licence issued to it on 25 May 1985 reads in material particular as follows:

Securities Industry Act 1973 (Act 112)

(Section 9)

>

Dealer's Licence

Mr Fung Yan Khai

of 251 Jalan President Kennedy,

Off Jalan Kampar, Ipoh

is licensed under the Securities Industry Act 1973, subject to the following conditions:

The licensee, Mr Fung Yan Khai:

(1) shall not carry on a business of dealing in securities otherwise than as a director of YK Fung Securities Sdn Bhd; and such business shall only be carried on at 65 Clarke Street, Ipoh;

(2) shall not establish any branch;

(3) shall immediately notify the Registrar of Companies of any change of the name or style under which his business of dealing in securities is carried on;

(4) shall comply with all the rules and regulations of the Kuala Lumpur Stock Exchange; and

(5) shall return the licence to the Registrar of Companies if the licence be cancelled, revoked or suspended for any reason whatsoever.

The plaintiff is a Hong Kong company carrying on the business of dealing in securities in Singapore. On 1 June 1984, the Singapore Registrar of Companies issued the plaintiff with a dealer's licence under the Securities Industry Act 1973 of Singapore ('the Singapore Act') to remain in force for a year until 31 May 1985. It reads as follows:

Securities Industry Act 1973

(Section 14)

Dealer's Licence

James Capel (Far East) Ltd

of 4 Raffles Quarry ^05-00 Finlayson Green House, Singapore 0104

is hereby licensed as a dealer under the Securities Industry Act 1973, subject to the following conditions:

(1) that the licensee shall forthwith notify the registrar of any change of its directors or secretary or in respect of its members or shareholding of its members;

(2) that the licensee shall forthwith inform the registrar of any matter which may adversely affect its financial position;

(3) that the licensee shall deal only in securities not quoted on the Stock Exchange of Singapore Ltd; and in the case of securities, including foreign securities, quoted on the Stock Exchange of Singapore Ltd, to deal in them only through licensed dealers who are members of the Stock Exchange of Singapore Ltd; and

(4) that the licensee shall, at its own expense, subject itself to a surprise audit by an independent auditor to be selected by the registrar.

Unless previously cancelled, this licence will remain in force for