Abu Mansor Ali JCA:

[1] The appellant in this appeal advanced ten grounds of appeal but they could conveniently be divided into three and the appellant took them together and that greatly assisted us.

[2] Firstly, in grounds 2 and 3, the appellant contended that on the evidence as a whole, by the Letter of Intent entered between the appellant and respondent dated 3 April 1985 (Letter of Intent), there was a concluded contract. The respondent was thereby estopped from denying there was such a contract.

[3] The appellant therefore says the learned trial Judge was plainly wrong when he held, at p 55 of the appeal record:

To my mind there could only be a new contract after the parties have agreed on all the matters which required to be agreed upon and a finalised contract sum was reached.

Having carefully considered the submissions of learned Counsel on both sides and the evidence, both oral and documentary, I have come to the conclusions that (1) the sum of Ringgit Malaysia 37,971,579 was not a finalised contract sum; (ii) the letter of intent dated 3 April 1985 was not a concluded contract (iii) at all material time the parties have considered themselves to be still governed by the 1984 contract."

[4] Counsel for the appellant contended before us that the learned trial Judge's finding was against the weight of the evidence before him.

[5] Appellant's Counsel referred us firstly to the contract between the appellant and the respondent on 16 November 1983 when the respondent employed the appellant to build a hatchery in Labuan. This contract was substituted by another contract dated 2 May 1984 (called the 1984 contract) for a contract price of RM18,827,618.

[6] Whilst this 1984 contract was in progress, it was not disputed the parties had three meetings, on 16 March 1985, 18 March 1985 and 30 March 1985. The meetings resulted in the parties signing the Letter of Intent on 3 April 1985. As we have mentioned, the appellant contended that this Letter of Intent produced a concluded contract, which is denied by the respondent. The appellant further contended that the supplementary agreement to be signed was a mere formality in the concluded contract.

[7] Appellant's Counsel referred us to the minutes of the meeting on 30 March 1985 (Vol 4 p 1195) and at p 1192 the parties had agreed as follows:

(a) Supplementary Agreement

A supplementary agreement incorporating all revised bills, rates, extension of completion dates and etc. would be prepared and signed by both parties. The draft would be prepared by KPD's Legal Affairs Officer.

(b) Advance

The agreed advance was 15% of the contract sum subject to a maximum of RM3.7 million and its release and repayment would be administered in accordance with the Treasury Instructions except that a personal guarantee for the whole sum of the advance would replace a bank guarantee.

(c) Performance bond

A performance bond of an amount equal to five percent (5%) of the contract sum would be produced by Koko Mewah. Desa Hatchery would reimburse Koko Mewah the cost of the performance bond upon presentation of receipts by the latter.

(d) Liquidity Damages

The agreed liquidity damages are as follows:

(a) RM6,500 per day for the processing plant building.

(b) RM6,500 per day for the hatchery building

(c) RM1,000 per day for a parentstock farm.

(d) RM1,000 per day for a boiler farm.

(e) Confirmation of Prices

For items without any agreed rates, Desa Hatchery was required to confirm the rates within two full working days after receipt of the quotations of the items

[8] The appellant contended that after the meeting of 30 March 1985 what had been taken to Sabah Cabinet vide cabinet paper no 18/85 was that the Cabinet had approved a loan of RM19.14 million and it also agreed to re-schedule the loan of RM18,827,618 making a total of RM37,971,579.27. The appellant's Counsel submitted that when the Letter of Intent was executed on 3 April 1985, the contract price was agreed and what had to be worked out were only minor details.

[9]