Lamin Mohd Yunus PCA:

I have had the opportunity of reading the draft judgments of my learned brothers Chong Siew Fai, CJ (Sabah & Sarawak) and Mohamed Dzaiddin FCJ.

My learned brother Mohamed Dzaiddin, FCJ concluded that the plaintiffs' appeal should be dismissed and the defendants' cross-appeal be allowed. My learned brother Chong Siew Fai, CJ (Sabah & Sarawak) on the other hand chose to allow the 1st plaintiff's (Kluang Wood) appeal and that damages be assessed. As for Chew, the 2nd plaintiff, his action was to stand dismissed. The cross-appeal by the 1st defendant (Hong Leong Finance) (to the extent relating to Kluang Wood) be dismissed.

As for myself, I am inclined to agree with the finding of my learned brother Chong Siew Fai, CJ (Sabah & Sarawak) and his reasoning in this appeal. However may I take the liberty to observe on the construction of the letter dated 26 October 1983 (AB 17-22) which was central to the issues raised in this appeal. My learned brother Mohamed Dzaiddin, FCJ said that the critical question here was whether the 1st defendant was legally obliged to secure the syndication of the end-financing of RM26 million. With the greatest of respect, the management committee approved both the Bridging Loan and the End- Financing. The opening paragraph of the aforesaid letter is quite clear for it states:

We refer to your loan application and are pleased to confirm that our Management Committee has approved your Bridging Loan of M$3.5 million and End-Finance of M$26 million subject to the following terms and conditions: (Bold is mine)

I fail to appreciate how this sentence is to be read otherwise that the approval of the two items namely:

the Bridging Loan of M$3.5 million and End-Finance of M$26 million ...

The clear wording of the approval must be given effect to. The aforesaid letter of 26 October 1983 further stipulates the following conditions:

Total End-Financing facilities to be syndicated by HLFB is M$26 million. HLFB will provide facilities of up to M$5.0 million. (Bold is mine)

The first condition states that the "total end-financing facilities to be syndicated by HLFB" and this, in my view, must be capable of conveying the meaning that the 1st defendant (HLFB) undertook to organise and to make available the said facilities. The aforesaid condition does not state that the 1st defendant "shall endeavour" to organise and to make available the required syndicated loans. Pang's oral representation substantiated by the certainty of availability of the end-finance conveyed by the letter of 26 October 1983 together with the undisputed fact that no end-finance at all was available must necessarily constitute a fundamental breach by the 1st defendant (HLFB) that went to the root of the contract. In effect therefore the finding of the learned trial judge was not really misconceived.

With regard to the defence of res judicata, I say nothing more as I am in complete agreement with my learned brother Chong Siew Fai, CJ (Sabah & Sarawak). So also in regard to the costs of this appeal.

Chong Siew Fai CJ (Sabah & Sarawak):

I have read the judgment of my learned brother, Mohamed Dzaiddin, FCJ. With regret, I find myself unable to agree with him except on the issue of liability relating to the initial drawdown on the end-finance. In the circumstance, it is necessary that I set out the reasons for my decision.

Background Facts

The 1st appellant, Kluang Wood Products Sdn. Bhd. (Kluang Wood), was a licensed developer and the registered proprietor of all that parcel of land held under Johore Grant No. 2365 for Lot No. 506 in the district of Johore Bahru (hereinafter referred to as the "said land"). The 2nd appellant, Chew Beng Gim, (deceased and represented by his personal representative in this appeal) was a director of Kluang Wood.

In 1983, Kluang Wood was desirous of developing the said land into a housing project to be known as Taman Mewah comprising of 489 units of different types of houses. The proj