GOPAL SRI RAM JCA::

Preliminary

(1) Despite the heat generated during argument, I apprehend that the short question at issue in this appeal to be whether it was the appellants or the respondents who were in breach of their contractual obligations. The resolution of that question does not, in my opinion, involve any novel or difficult point of principle. Rather is this a case that calls for an application of settled principles of law to particular facts. The background against which the question central to this appeal falls to be resolved may be shortly stated.

The background

(2) This appeal arises out of the trial of two consolidated actions. I must mention that there are ten other appeals in respect of connected matters and interlocutory applications. These were adjourned with the consent of all counsel who were agreeable that our views upon the present appeal will have a direct effect upon the outcome of some, if not all, of the other appeals.

(3) The first appellant was at all material times the owner of about 400 acres of land known as Kayangan Heights. The land in question was sub-divided into about 612 vacant bungalow lots. Of these, the first appellant sold 235 lots to individual purchasers. It sold a further 372 lots to the respondents. The transaction between the appellants and the respondents was carried into effect through the mechanics of a number of written agreements. Of these, four are 5 February 1996. Since so much turns upon the construction to be placed upon these agreements, it is necessary to briefly describe each of them.

(4) To begin with, there is the sale and purchase agreement (‘the sale agreement’). The parties to this are the first appellant and the first respondent. Pursuant to the terms of the sale agreement the first appellant sold the bungalow lots to the first respondent at RM10.04psf. The total purchase price for the sale works out to RM90m.

(5) The second set of documents is seven agreements for the sale and purchase of the several bungalow lots to seven different private limited companies. The seven companies are all nominees of the first respondent. They are its alter ego. About this there is no dispute.

(6) The third document is called a Turnkey contract. Under the terms of this agreement, the first respondent appointed the second appellant as the contractor to carry out the remaining infrastructure works for the land in question for the sum of RM71,372,682.

(7) The next document is the master supplementary agreement (‘the supplementary agreement’) entered into between the first and second appellants of the one part and the first respondent of the other part. It is common ground that the first respondent represented the seven companies in the supplementary agreement. The supplementary agreement so recites.

(8) So much for the first four documents of even date.

(9) There are three other agreements. First, there is an indemnity dated 5 February 1996. The parties to this are the third appellant and one Lee Kam Sun of the one part and the first respondent of the other part. Since part of the relief granted by the learned judge relates to the enforcement of this document it is necessary to say something about it. According to that document, the third appellant and her co-director agreed to keep the first respondent:

… indemnified against all actions, proceedings, claims, demands,

damages, costs and expenses, including but not limited to any claims,

actions or proceedings brought by the purchasers of bungalow lots at

Kayangan Heights sold by Sri Kelangkota-Rakan JV Sdn Bhd or their

contractors or their sub-contractors whatever which you or your

representatives may be liable to or incur by reason of you entering

into the sale agreement with the said Sri Kelangkota-Rakan JV Sdn Bhd

and the Turnkey contract with Kayangan Development & Construction

Sdn Bhd.

(10) I will return to the effect given to these words by the l