Zawawi Salleh JCA (delivering judgment of the court):

[1]This appeal is directed against the decision dated 22 January 2010, rendered at the Shah Alam High Court, dismissing the appellant's claim against the respondent and allowing the respondent's counterclaim against the appellant with costs, after a full blown trial.

[2]We have heard learned counsel appearing for both parties and have carefully perused the record of appeals available before us. In our view, the impugned decision does not suffer from any patent legal infirmity or error to warrant appellate interference. The appeal is accordingly dismissed with cost fixed at RM30,000 and we make further order for the deposit to be refunded.

FACTS OF THE CASE

[3]The essential facts of the case can be briefly stated thus: The genesis of the dispute may be traced back to the event which occurred sometime in June or July 1997, when the appellant was introduced by the respondent by a mutual friend known as Jeffrey Tan (the second respondent in the counterclaim). It was the contention of the appellant that he had given a friendly loan of RM6,500,000 to the respondent on 29 July 1997, at the respondent's request. It was further contention of the appellant that as a security for the friendly loan, the respondent agreed to pledge a property known as Lot No 14716 held under Town Lease No 17127, District of Jesselton, Sabah ('the Kota Kinabalu property').

[4]Therefore, the appellant's claim against the respondent is essentially for the return of the said friendly loan.

[5]As against the appellant's version, the respondent averred that sometime in April 1997, Jeffrey Tan approached the respondent to take over the controlling stake in Rapid Synegy Bhd ('Rapid') from the appellant who was a shareholder and managing director of the Rapid at the material time. Jeffry Tan, as the respondent's nominee, entered into an agreement with the appellant to purchase 8,000,000 Rapid shares owned either directly or indirectly by the appellant for a consideration of RM90,400,000m on 17 June 1997.

[6]The respondent contended that the appellant breached the terms of the Rapid Share Sale Agreement. Negotiations were held between the parties to resolve the breaches committed by the appellant. The appellant agreed to purchase the Kota Kinabalu property belonging to YYF Properties Sdn Bhd at the agreed purchase price of RM10,000,000 as settlement of the aforesaid breaches. YYF Properties Sdn Bhd owned Phileo Allied Bank a principal sum of RM3,500,000. It was agreed that the appellant will pay a sum of RM6,500,000 to the respondent via telegraphic transfer into the respondent's bank account. However, the appellant failed, refused and/or neglected to pay the balance sum of RM3,500,000 to settle YYF Properties Sdn Bhd's principal debt with PhileoAllied Bank.

[7]Therefore, the respondent's counterclaim against the appellant and Jeffery Tan, inter alia, is for them to settle the principle debt of YYF Properties Sdn Bhd of RM3,500,000 together with interest accrued with Phileo Allied Bank Bhd in accordance with the terms of settlement agreement with the respondent.

FINDINGS OF THE TRIAL JUDGE

[8]The learned trial judge, after a detailed discussion of the evidence adduced in the course of trial, held as follows:

(a)that there was no friendly loan as it is hard to believe why a friendly loan agreement could not and was not prepared, and that the said agreement dated 24 July 1997 (exh P1) is not a proper document for the purpose of a friendly loan;

(b)that the Rapid Share Sale Agreement in the form of a letter dated 17 June 1997 (exh D2) was a valid and binding agreement between the appellant and the respondent for the sale of the Rapid shares, and that the appellant was in breach of the Rapid Share Sale Agreement; and

(c)that there was a settlement agreement between the appellant and the respondent in relation to the breach by the appellant of the Rapid Share Sale Agreement, as a result of which the appellant had agreed to purchas