JUDGMENT

Gunn Chit Tuan SCJ:

This was another appeal involving the interpretation of a deed of assignment executed on 3 September 1983, between Hipparion (M) Sdn. Bhd. (the defendant) as assignor of the one part and Chung Khiaw Bank Ltd. (the plaintiff) as assignee of the other part.

Briefly the material facts, which are not in dispute, are that on 3 September 1983, the plaintiff, a licensed bank, entered into an agreement with the defendant, an incorporated company, whereby the plaintiff granted a loan of one million ringgit to the defendant repayable with interest thereon at the rate of 13.5 per cent per annum or at such rate as the plaintiff may specify, from time to time, in accordance with the terms and conditions specified in the said agreement. It was also provided in the said agreement that the defendant would remain in possession of a property known as the Third Floor of a building standing on Holding 355, Town Subdivision 14, North East District, Penang, as a contractual licensee only of the plaintiff. It was further provided in the said agreement that in the event of default being made by the defendant in the payment of any one or more of the instalment payments covenanted to be made in the manner provided, the plaintiff was to be at liberty to demand immediate payment on the balance and in the event of any part of the same remaining unpaid after fourteen days from the date of such demand, the plaintiff would have the right to terminate the licence of the defendant by notice in writing and to enter upon the property and to deal with all its rights, title and interest as owner thereof in all respects as the person absolutely and beneficially entitled thereto, including the right and power to sell or to transfer such rights, title and interest at such price and in such manner and subject to such conditions as the plaintiff shall in its absolute discretion deem fit free from any interest of the defendant.

By way of security for the loan the defendant also executed the said deed of assignment dated 3 September 1983 whereby it assigned absolutely to the plaintiff all its rights, title and interest in the said property and in respect of a sale and purchase agreement dated 13 April 1981 whereby the defendant had bought the same property from a company called Penang Garden Sdn. Bhd.

The defendant defaulted in making payments due under the said agreement and the plaintiff through its solicitors caused to be issued a notice in writing on 14 August 1985, demanding repayment of the loan together with accrued interest thereon within 14 days from the date of the demand. The plaintiff also caused to be issued another notice in writing on 30 August 1985 stating that if its demand for payment aforesaid was not complied with, it would proceed with the sale of the said property by advertising in the local press without further reference to the defendant.

On 30 January 1986, the plaintiff commenced proceedings by way of originating summons in the High Court at Pulau Pinang seeking a declaration that the sum due and owing by the defendant under the said agreement as at 31 July 1985, is RM1,072,013.17, for principal and interest and further interest continues to accrue thereon at the rate of 14 per cent per annum from 1 August 1985, is also due till the date of payment. It also sought orders that the defendant do quit and deliver vacant possession of the property within 7 days from the date of service of the Court order and that the plaintiff may be at liberty to sell by public auction and/or private treaty the said property.

It was submitted by Counsel for the defendant in the Court below that the plaintiff was seeking to enforce a security for repayment of a loan and that the security documents concerned could be construed either as a security relating to land or a security relating to a chose in action. It was firstly contended that if the security documents were construed as a security relating to the land, then the plaintiff's remed