JUDGMENT

1. The plaintiff is a developer of a project called Batu Kawah New Township, on Lot 94, Block 217, Kuching North LandDistrict, Jalan Batu Kawa, Kuching. The plaintiff entered into 36 Sale & Purchase Agreements with the defendant for 36 units of shoplots, office lots and apartment lots, vide Sale & Purchase Agreements (Exhibit N61 - N96 in Ng's second SupplementaryAffidavit). A group of purchasers entered into Sale & Purchase Agreements with the plaintiff in respect of 28 units. All these Sale & Purchase Agreements are in standard contract forms, save for particulars as to price, terms of payment, description andspecification, which vary from one another.

2. On 21st January, 1998 the Sale & Purchase Agreements between the plaintiff and the defendant were terminated unilaterally by the defendant, and following that, on 26th January, 1998some of the purchasers terminated the Sale & Purchase Agreements between them and the plaintiff.

3. The plaintiff claimed that the termination of the Sale & Purchase Agreements was wrong and claimed damages for the wrongful terminationof the agreements. The plaintiff also claimed that there was a conspiracy and, by an inducement by the defendant, the other purchasers terminated their Sale & Purchase Agreements with the plaintiff. On 21st February, 1998, the plaintiff obtained an orderof interim injunction under O. 29 r. l(2A) of the Rules of the High Court, 1980, which prohibits the defendants from doing:-

a) any act which whether directly or indirectly causes or procures a breach or breachesby any purchasers in the project of the plaintiff known as the Batu Kawah New Township being constructed on Lot 94 Block 217 Kuching North Land District of contracts made whether now or hereafter with the plaintiff for the purchase of any shoplots, office lotsor apartment lots in the project of the plaintiff known as the Batu Kawah New Township constructed on Lot 94 Block 217 Kuching North Land District; and

b) from issuing statements intended or calculated to prejudice or undermineconfidence of any banking or financial institutions in the provision of finance to any purchaser in the project of the plaintiff known as the Batu Kawah New Township being constructed on Lot 94 Block 217 Kuching North Land District or to allow drawdown of theloans already taken out by any purchaser or to induce the belief in the general public that the project of the plaintiff known as the Batu Kawah New Township being constructed on Lot 94 Block 217 Kuching North Land District is in jeopardy.

4. This is the defendant's application to set aside the injunction on the ground that the project carried out by the plaintiff was illegal. From the defendant's inquiry on the project, it was found that:-

i) no engineering/building plan had been submitted by the plaintiff to Padawan Municipal Council for approval;

ii) work on the project had commenced in breach of recitals (c) and (d) of Clause 11(1), (2) and (14) of the Sale & Purchase Agreement; and

iii) the plaintiff had misrepresented that the project land was registered in ASSAR Development Sdn. Bhd.

Based on these findings, the defendantdrew the conclusion that the plaintiff had carried out the project illegally, and as such the plaintiff was in breach of the terms of the Sale & Purchase Agreements. Thus the defendant had unilaterally terminated its agreements with the plaintiff. Further,the defendant helped to form an "Action Committee" to represent other purchasers who had the Sale & Purchase Agreements with the plaintiff, in the termination their Sale & Purchase Agreements with the plaintiff. Messrs Battenberg & Talma Advocates,were engaged by the defendant and the Action Committee, and the Advocates were also on the panels of three banks, viz Hongkong Bank, Standard Chartered Bank and Maybank. Purporting to act as advisor Messrs Battenberg & Talma had warned the banks not to disbursethe loans as end finance to the purchasers of the building lots in the project.

Defendant's versi