Liability and damages due to breach of undertaking and negligence are affirmed, with res judicata preventing re-litigation of established facts.

Introduction

[1] This is an appeal against the decision of the learned Judicial Commissioner ("the JC") of the High Court on 2 June 2021 dismissing the appellant bank's appeal against the Deputy Registrar's decision of 18 December 2020, which had allowed in full, the respondent's claim after hearing his notice of assessment of damages dated 22 August 2019, in turn based on the judgment of 9 November 2015 delivered by the trial Court.

[2] The underlying claim of the respondent against the appellant was for the latter's breach of an undertaking and negligence in executing a discharge of charge which facilitated the transfer of a piece of property to a third party, which caused a loss to the respondent.

[3] Having heard the appeal, examined the appeal records and considered the submissions by parties, we decided to dismiss the appeal and affirmed the decision of the High Court. These grounds of judgment contain the full reasons for our decision.

Key Background Facts

[4] This instant appeal before us is thus concerned with the assessment proceedings, which must plainly follow from the findings made in the liability proceedings. In order to better appreciate the entire case, it is useful for the background facts concerning both proceedings be set out, albeit in summary fashion.

[5] Way back in 1998, as security for the appellant making available banking facilities to one Boo Choon Koy ("the first third party") and Maggie Gan ("the second third party"), three charges under the National Land Code were registered over a property known as Lot No 1710, Mukim 16, Daerah Seberang Perai Tengah ("the Agri-Land"). The first and second third parties in 2001 executed a sale and purchase agreement for the sale of the Agri-Land to Golden Star Dragon Sdn Bhd ("Golden Star"). The respondent was a director and shareholder of the latter at the material time. Payment of RM400,000.00 had also been made by Golden Star as the purchaser as deposit.

[6] However in the year after, based on a deed of rescission dated 30 July 2002 executed between same parties to the sale and purchase agreement, the said agreement was mutually rescinded subject to the terms inter alia that the Agri- Land shall be instead sold to the respondent with a fresh sale and purchase agreement executed and the deposit sum previously paid by Golden Star credited into the respondent's account as deposit sum payable for the fresh sale and purchase agreement.

[7] This led to the entry of a second sale and purchase agreement by the two third parties as vendors, this time with the respondent as the purchaser, for the sale of the Agri-Land at the purchase price of RM1,116,640.00. For present purposes, among the two principal conditions of this agreement were firstly for the respondent to pay the balance purchase price to the vendors' solicitors within 12 months from the date of the agreement, failing which the vendors were entitled to terminate the agreement and forfeit the deposit sum as liquidated damages. Secondly, the purchase price paid under this second agreement was authorised by the vendors to be utilised to redeem the Agri-Land from the appellant bank with the balance sums (if any) to be paid to the vendors upon completion of the sale.

[8] We pause here to state that it is standard banking practice, as typically reflected in legal documentation that one common scenario is that a purchaser makes payment of purchase price towards redeeming the land charge for the loan taken by the vendor over the subject property. The end result is usually for the charge to be discharged by the first financier upon receipt of payment of the redemption sum (and other balance payment) from the purchaser, and for the subje