JUDGMENT

Abdul Malik Ishak J:

The defendant was the registered proprietor of two pieces of properties held under Grant 14519, Lot 2659, Mukim Senai-Kulai, Johor Bahru ('Lot 2659') and Grant 18576, Lot 365 in Bandar Kota Tinggi, Johor Bahru ('Lot 365'). Lots 2659 and 365 were charged by the defendant to Arab-Malaysian Merchant Bank Berhad ('AMMB') under one legal charge pursuant to the National Land Code 1965 ('NLC'). On 18 January 1996, AMMB obtained a High Court order for the sale of both these Lots by way of a public auction. Prior to 19 January 1995, the defendant had agreed to sell to the plaintiff Lot 2659 for the purchase consideration of RM3.2 million. However, on 19 January 1995, when the parties were at the office of the plaintiff's previous solicitors, Rozinah Nizaruddin S. Gunapati & Co. for the purpose of executing the sale and purchase agreement ('said agreement'), the defendant had a sudden change of heart and decided that he was not prepared to sign the said agreement as some other party had apparently made him a better offer for Lot 2659. Further negotiations took place between the defendant and the plaintiff's solicitor by the name of Gunapati. It was the latter that advised the plaintiff to pay an additional sum of RM100,000 to the defendant to which the plaintiff finally agreed. A personal cheque for RM10,000 was then drawn in favour of the defendant with the balance to be paid on the completion date of the said agreement. On 19 January 1995 the parties signed the said agreement. Under the said agreement, the balance of the purchase price shall be paid by the plaintiff to the defendant within three months of the date of the said agreement with an extension of another three months subject to the payment of interest on the balance of the purchase price at the rate of 10% per annum on daily basis. Since Lot 2659 was charged to AMMB, it was the common agreement and understanding of the parties that the balance of the purchase price shall be utilised for the redemption of Lot 2659. This was to enable the defendant to comply with his obligation of transferring an unencumbered title to Lot 2659 to the plaintiff on the completion date. In due course, the plaintiff deposited a sum of RM72,000 to its solicitors Rozinah Nizaruddin S. Gunapati & Co. being the interest payable to the defendant for the three months' extension of the completion date. The completion date was duly extended to 18 July 1995.

On 23 May 1995, Foo & Woon acting on behalf of the defendant wrote to Mohd. Akhir & Partners the solicitors for AMMB informing the latter that the plaintiff as purchaser of Lot 2659 will be ready to pay the balance of the purchase price of RM2,880,000 on or before 18 July 1995. In the same letter, the defendant's solicitors stated that Robert & Stanley Realty Sdn. Bhd. with whom the defendant had obviously entered into an agreement in respect of the sale of Lot 365 would be ready and willing to pay a sum of RM2.3 million to redeem Lot 365 on 6 August 1995. As the total redemption amount to AMMB for these two Lots was in the region of RM4.2 million to RM4.3 million, the defendant had requested AMMB to allow separate redemptions of these two Lots and to fix the redemption sums of Lots 365 and 2659 at RM2.3 million and RM2 million respectively. AMMB's solicitors wrote to the solicitors for the defendant and the plaintiff on 9 June 1995 where it purported to agree to separate redemptions of Lot 2659 and Lot 365 but, in effect, it did not agree to such separate redemptions. It was apparent that AMMB only fixed one redemption sum of RM4,470,244.25 as at 31 May 1995. It was AMMB's stand that the entire sale proceeds of Lot 2659 shall be applied towards part payment of the redemption sum and that the balance of the redemption sum shall be paid from the proceeds of Lot 365. In other words, AMMB shall only release the discharge documents in respect of these two Lots upon receipt of the full redemption sum. The refusal of AMMB to fix a