Introduction

[1] This is an appeal by the appellant/defendant against the decision of the Kuala Lumpur High Court dated 28 February 2013 which dismissed the appellant/defendant's counterclaim for the sum of RM3,009,254.23 against the respondent/plaintiff.

[2] We heard the appeal on 13 August 2014, after which we adjourned the matter for consideration and decision. We now give our decision.

[3] In this judgment, the parties will be referred to as they were in the High Court.

Background Facts

[4] The chronology of events leading to the counterclaim of the defendant can be summarised as follows:

(i) the plaintiff entered into a sale and purchase agreement dated 24 May 2003 ("the agreement") with a company known as Jeram Permata (Cheras Sdn Bhd) ("JP"), in which, in consideration of JP agreeing to sell a piece of land and constructing on the said land 226 medium cost apartments as staff quarters for the Jabatan Bomba Dan