Abdul Malik Ishak JCA (delivering judgment of the court)

THE PARTIES

I shall, for convenience, refer the parties in the following manner. Arab-Malaysian Finance Bhd will be referred to as the plaintiff, while Razshah Enterprise Sdn Bhd will be referred to as the defendant guarantor.

The plaintiff was, at all material times, a licensed finance company incorporated in Malaysia and presently it goes by the name of Am-Finance Bhd.

The defendant guarantor is a company incorporated in Malaysia and it is the registered proprietor of fifty-three (53) pieces of land held under qualified title deeds HS(D) 6975/81 to 7027/81 Lot No PT 37692 to Lot No PT 37744 — all in the Mukim of Ulu Kinta, Perak (‘the said lands’).

FACTS OF THE CASE

By way of a loan agreement dated 6 July 1983 (see pp 62–74 of the additional appeal record (‘AAR’)), the plaintiff agreed to grant a term loan of RM2.4m (‘the loan’) to Wan Mokhtar bin Wan Endut (‘the borrower’) upon the terms and conditions stipulated therein. The borrower was one of the directors of the defendant guarantor.

On 16 June 1983, the defendant as a guarantor executed a first legal charge over the said lands in favour of the plaintiff in order to secure rep