An Appellate Court cannot reverse a judgment solely on abandoned claims if the legal standing is not grounded in existing pleadings.

[1] This is an appeal by the appellant, Sadar Mohd Roshan Khan (the plaintiff in the High Court) against the decision of the Court of Appeal which had set aside the judgment of the Kuala Lumpur High Court given in his favour. He had since passed away. On 18 March 2013, his son Raja Iftikar Ahmad Khan was substituted as a party to this appeal.

[2] The High Court had allowed the appellant's claims for a declaration that Perwira Affin Bank Berhad (the respondent) was not entitled to uplift his Fixed Deposit Receipt No 049675 ('FDR') which was pledged to the respondent as security for an overdraft facility of RM300,000.00, without his consent and accordingly ordered the respondent to refund the FDR to him with interest at 8% per annum from 18 March 1993 until realisation. The High Court found that the respondent was in breach of contract by uplifting the FDR without the appellant's consent. The Court of Appeal however allowed the respondent's appeal and set aside the judgment of the High Court on the ground that the appellant's cause of action was for the tort of negligence, which it had abandoned and not for breach of contract.

[3] On 27 January 2011, the appellant was granted leave to appeal to this Court against the decision of the Court of Appeal on the following questions of law:

(1) When evidence is led without objections at trial, can an Appellate Court reverse the decision of the High Court on the sole ground that the cause of action in negligence has been abandoned?; and

(2) Is a plaintiff entitled to declarations of rights as pleaded?

Background Facts

[4] The undisputed facts of the case are as follows:

(a) Sadar Mohd Roshan Khan (PW1) was, prior to his death, the sole proprietor of a firm known as Omar Khayam Enterprise ("OKE").

(b) On 18 March 2013 his son, Raja Iftikar Ahmad Khan (PW2) was substituted as a party to this appeal.

(c) OKE was given various banking facilities by the respondent amounting to about RM15 million as at August 1990.

(d) On 13 April 1990, the appellant informed the respondent that he had authorised PW2 to sign all cheques on behalf of OKE in respect of OKE's Account No: 1102052687 ("the Account").

(e) By another letter dated 16 April 1990, the appellant informed the respondent that he had authorised PW2, to operate the Account and to do all things necessary to protect the respondent's interest. The letter further states that the appellant:

"agree to be responsible for due repayment of money due to you on the account or otherwise and purported to have been incurred on my/our behalf or on behalf of my/our firm by the authorised person whether such liabilities have been or shall be incurred in usual course of business or not and notwithstanding any default, omission, negligence or fraud on the part of the authorised person."

(f) On 22 December 1990, the respondent granted OKE an additional overdraft of RM300,000.00 ("the OD").

(g) The OD was secured by the FDR of RM200,000.00 vide FDR No 049675 dated 15 January 1991; and a personal guarantee of PW2.

(h) The terms and conditions of the FDR are contained in the Memorandum of Deposit dated 15 January 1991 which was executed by PW1 and PW2 in favour of the respondent. Paragraph 6 of the Memorandum of Deposit states:

"You are at liberty at any time to withdraw the deposit made under the said Deposit Receipt No 049675 or any Fixed Deposit from time to time substituted for or replacing the same and to apply the proceeds thereof in or towards the discharge of my/our accounts without reference to one/us. And a statement signed by anyone of your officer as the amount for the time being owing on my/our account shall be final and conclusive evidence against me/us for all purposes."

(i) On 31 January 1991, the appellant applied to the respondent to transfer the banking facilities enjoyed by OKE to Omar Khayam Enterprises Sdn Bhd ("the c