A banking facility restructuring constitutes a binding contract when both parties accept terms, conditional upon fulfilling prior obligations; non-compliance permits unilateral amendments by the bank.

Introduction

[1] After a full trial, the learned High Court Judge dismissed the plaintiff s claim with costs in the sum of RM100,000.00 payable by the plaintiff to the defendant bank. Aggrieved by the decision, the plaintiff (now the appellant before us) filed an appeal against the whole decision of the learned judge of the High Court.

[2] Before us, learned counsel on both sides argued the appeal at great length. It is quite natural that the defendant bank (now the respondent bank before us) supported the decision of the learned judge of the High Court.

The Facts And The Analysis Thereto

[3] The appellant, as the customer of the respondent bank, had applied for and had been granted credit facilities since 1993, inter alia, to facilitate the appellants core business and that would be: trading in imported livestock. The banker-customer relationship between the appellant and the respondent bank went a long way.

[4] On the appellants application, the respondent bank approved on 21 April 1993 the following facilities in favour of the appellant, namely:

overdraft, letter of credit/Trust Receipt ("LC/TR") and bankers guarantee ("BG"). The breakdown are as follows:

(a) Overdraft

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RM200,000.00

(b) LC (sight)/TR (120 days)

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RM500,000.00

(c) BG

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RM100,000.00

[5] On 16 November 1993, the respondent bank gave additional credit facilities to the appellant, namely:

(a) Overdraft

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RM300,000.00

(b) LC (sight)/TR (120 days)

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RM500,000.00

[6] The combined facilities granted to the appellant by the respondent bank came up to:

(a) Overdraft of RM500,000.00

(b) LC/TR of RM1,000,000.00

[7] And these two facilities were secured by the following properties:

(a) PT no: 7 mukim of Damansara, district of Petaling;

(b) Flat no: 306 block no: 7, s 8, Shah Alam;

(c) Lot no: 4372, geran 4545, mukim of Bidor, district of Balang Padang;and

(d) Lot no: 50679, title HS(M) UK 367/74, mukim and district of Kinta.

[8] On 14 July 1994, the facilities granted by the respondent bank were dramatically increased in favour of the appellant. And the list itemised below shows that dramatic increase:

(a) Overdraft

-----

RM1,500,000.00

(b) LC/TR (120/90) days (sight/issuance 120 days)

-----

RM4,000,000.00

(c) BG (tender)

-----

RM200,000.00

RM5,700,000.00

[9] And these facilities were secured by the following two properties:

(a) Four storey shophouse vide PT no: 113, mukim of Damansara, Petaling; and

(b) A condominium unit at parcel B9-06 Fajaria, PT no: 1797, Kuala Lumpur.

[10] On 16 March 1995, an additional facility of RM1,500,000.00 was approved by the respondent bank to the appellant. And the additional security advanced by the appellant to the respondent bank was a piece of land at Lot no: 11317, mukim of Damansara, Petaling.

[11] In short, by various letters of offers the respondent bank gave the appellant overdraft facilities, LC/TR and BG. It was a term and condition of the letters of offers that the respondent bank was entitled by written notice to amend the existing terms and conditions and impose additional conditions.

[12] In regard to the letter of offer by the respondent bank dated 21 April 1993 as seen at pp 445 to 451 of the appeal record at Bahagian "C" at Jilid 2/15, cl (e) is worded in this way and it is in favour of the respondent bank:

"(e) The bank reserves the right to amend the existing terms and conditions and to impose additional clauses on the above facilities by notice in writing,"

[13] The letter of offer by the respondent bank dated 16 November 1993 can be seen at pp 553 to 559 of the appeal record at Bahagian "C" at Jilid 3/15 and cl (e) therein reserves to the respondent bank "the right to amend the existing terms and conditions and to impose additional clauses on the above facilities by notice in writing." It is obvious that this clause (e) is similarly worded just like cl (e) as found in the letter of offer dated 21 April 1993.

[14] The letter of offer by the respondent bank to the appellant dated 14 July 1994 can be seen at pp 652 to 660 of t