Abdul Malik Ishak J:

INTRODUCTION

[1]This was the plaintiff's appeal to the judge in chambers in encl 12 against the decision of the learned deputy registrar who dismissed the plaintiff's application under O 14 of the Rules of the High Court 1980 ('RHC'). I allowed the plaintiff's appeal in encl 12 with costs and I, consequently, closed the court file since the matter had been disposed off. I now set out the reasons for doing so.

THE FACTS

[2]The plaintiff is a licensed money lending company under the Moneylenders Act 1951s 2A(2)

[3]The defendant, on the other hand, is an individual residing at No 1, Jalan Padungan, Kuching, Sarawak.

[4]Now, at the request of the defendant and by way of a memorandum of agreement for a loan dated 23 May 1997, the plaintiff granted a term loan facility to the defendant for the colossal sum of RM10m (hereinafter referred to as the 'loanagreement' which has been exhibited as exh 'LTS-1' of the plaintiff's affidavit in encl5). As security for the said loan agreement, the defendant executed a memorandum of deposit of shares dated 23 May 1997 ('the said memorandum') based on the shares of PWE Industries Berhad and/or the shares of Ekran Berhad. Acopy of the said memorandum can be seen in exh 'LTS-2' annexed to the plaintiff's affidavit in encl5.

[5]Acting on the instructions of the defendant vide the defendant's notice dated 23 May 1997, the plaintiff had on 26 May 1997 released the sum of RM10m to Ekran Berhad in accordance with the terms of the loan agreement. The defendant's notice dated 23 May 1997 has been exhibited as exh 'LTS-13' annexed to the plaintiff's affidavit in encl 10. So, as instructed by the defendant, the plaintiff released the sum of RM10m to Ekran Berhad by way of a banker's cheque No 050107 dated 26 May 1997. It can be surmised that three days after the loan was approved vide the loan agreement, the plaintiff released the sum of RM10m to the defendant through Ekran Berhad. That was indeed expeditious and swift.

[6]Pursuant to section 4.01 of the loan agreement, the term loan was for a period of six months from the date of the first draw down and that would be on 26November 1997 ('the loan period'). Further pursuant to section 4.02(a) of the loan agreement, the defendant undertook to repay in one lump sum all amounts outstanding including interests as at the end of the loan period. Unfortunately, the defendant had failed to repay the loan at the end of the loan period and this prompted the plaintiff to file an action in the High Court of Kuala Lumpur vide Suit No D3–22–2499–1998.

[7]The parties met in order to iron out their differences. On 27 October 1998, the plaintiff and the defendant entered into a settlement agreement dated 27 October 1998. Under this settlement agreement, it was agreed, inter alia, that the defendant would pay the plaintiff a settlement sum of RM7,208,611.76 ('the settlement sum'). By virtue of the settlement agreement, suit number D3–22–2499–1998 was discontinued on 11 November 1998 by consent of both the parties. It is interesting to note that the settlement agreement dated 27 October 1998 has been exhibited as exh 'LTS-4' to the plaintiff's affidavit in encl 5 while the notice of discontinuance dated 11 November 1998 is marked as exh "LTS-9' to the plaintiff's affidavit in encl6. It must be borne in mind that the basis and purpose of the settlement agreement found expression in Recitals 'D' and 'E' of the settlement agreement itself. ThoseRecitals state as follows:

(D)The lender has instituted legal proceedings against the borrower(s) for, inter alia, the recovery of the term loan and all other monies payable under the loan agreement and the suit no: D3–22–2499–1998 is pending at the High Court of Malaya at Kuala Lumpur (hereinafter referred to as 'the pending legal action').

(E)In consideration of the lender having agreed at the borrower's request to forbear from disposing the said shares under the memorandum of deposit of shares and to withdraw the pending lega