Introduction

[1] This is an appeal by the appellants against the decision of the Court of Appeal which allowed the respondent's appeal against the decision of the High Court at Kuala Lumpur dated 23 May 2007. Before the High Court, the appellants were the defendants and the respondent was the plaintiff. We shall refer to the parties as they were before the High Court. We heard this appeal on 22 February 2010 wherein we had allowed this appeal by the defendants. We now give our reasons in arriving at our decision.

Background Facts

[2] The relevant background facts leading to the present appeal by the defendants may be summarized as follows:

(a) On 11 May 2006 the plaintiff filed a writ of summons and statement of claim against the defendants for alleged breach of contract.

(b) The defendants filed a statement of defence and a counter claim dated 12 June 2006 against the plaintiff alleging inter alia, that the