GROUNDS OF JUDGMENT

1. By two Guarantees dated 27.06.1997, the Defendant granted by guarantee to the Plaintiff an option to resell 2 pieces of land to the Defendant at the repurchase price and on the terms and conditions contained in the said guarantees. The said lands were lands which the Plaintiff had agreed the same day to purchase from Defendant's wholly-owned subsidiary Capital Land Sdn. Bhd. (the Vendor) and were part of a project developed by the said subsidiary. The option was subsequently exercised by the Plaintiff but the Defendant failed to repurchase the said lands from the Plaintiff.

2. The issues agreed to be tried are as follows:-

(a) Whether late payment of the 2nd instalment of the purchase price for the land identified as Lot No. 1739 constituted a breach of the Sale and Purchase Agreement dated 27.06.1997 in respect of the said Lot No. 1739;

(b) If the said delay in payment did constitute a breach under the said Sale and Purchase Agreement for the said Lot 1739, did such delay and/or breach invalidate the said Guarantee dated 27.06.1997 given by the Defendant for Lot No. 1739.

3. The Vendor was the developer of a "homestead orchard" project known as Bukit Emas Homestead Orchard in Mukim Triang, Daerah Bera, Negeri Pahang Darul Makmur. It developed and sold the agricultural lands with basic infrastructure works in the said project.

4. The Vendor was a wholly-owned subsidiary of the Defendant at all material times.

5. The Plaintiff purchased 2 pieces of agriculture land in the Bukit Emas Homestead Orchard from the Vendor on 27.06.1997.

6. At the request of the Defendant, the Plaintiff entered into 2 Supplemental Agreements with the Vendor and the Registered Proprietor dated 27.06.1997 wherein the Plaintiff agreed, inter alia , for the Vendor to provide maintenance services to the said 2 lands and the Plaintiff agreed to pay maintenance charges at the rate of RM200.00 per acre per month to the Vendor on the terms and conditions contained therein.

7. In consideration of the Plaintiff entering into the said Supplemental Agreements at the request of the Defendant, the Defendant gave the Plaintiff a guarantee and undertaking to repurchase from the Plaintiff the said lands before the expiration of 5 years from the date of the above-said Sale and Purchase Agreements, at a price twice the purchase price paid by the Plaintiff to the Vendor, the wholly-owned subsidiary of the Defendant. At any time before 26.06.2002 the Plaintiff could require the Defendant to repurchase the said lands.

8. The 2nd paragraph of Guarantee states as follows:-

"We the undersigned hereby irrevocably guarantee and undertake with you, the Purchaser the option to accept our once only offer to re-purchase from you of the said Lot for the sum of Ringgit Malaysia ... ... ... (RM ... ... ...) only being twice the amount of Purchase Price of the said Lot as stated in the SPA, (hereinafter be referred to as "the Guarantee Offer") subject to the terms of payment being 10% of the Re-Purchase Price to be paid by the Guarantor as purchaser to you upon execution of the Re-Purchase Agreement and the remaining 90% of the Re-Purchase Price to be paid by the Guarantor as purchaser to you on or before three (3) months from the date of the Re-Purchase Agreement and subject to the terms and conditions thereto SUBJECT ALWAYS to the following conditions: ...

1 THE TERMS Of THE GUARANTEE

(a) The Guarantee Offer shall be made by us ONCE only within period commencing from the date of the delivery of vacant possession of the said Lot by the Vendor to you as the Purchaser under the SPA until 26th day of June 2002 [the expiration of the 5th year of the SPA] (hereinafter be referred to as "the Period");

(b) The Guarantee Offer shall be made by us ONCE only and at any one time during the Period;

(c) In the event that you, the Purchaser shall have rejected the Guarantee Offer OR shall have failed to give us a written notice on your exercise of the option to accept the Guarantee Offer wit