Peh Swee Chin FCJ:

[2] In the instant appeal, the High Court below has dismissed earlier an application under O 18 r 19 from the defendant (hereinafter called the finance company) to strike out the plaintiff's statement of claim on grounds, inter alia, of a plea of res judicata, ie in turn, of its being an abuse of process of the Court, (the plaintiff is hereinafter called the borrower). The learned Judge dismissed the application, holding, inter alia and in effect that the plea of res judicata was not successful stating that there was "no question of the plaintiffs statement of claim being frivolous or vexatious or an abuse of process of the Court"; hence this appeal. His Lordship felt bound also by the decision of Kandiah Peter v. Public Bank, [1994] 1 MLJ 119, a decision of the Supreme Court.

[3] The borrower's statement of claim claims special damages for loss of profit in the sum of RM1,015,700 and general damages in connection with a housing development or proposed housing development which could not get off the ground on account of the finance company allegedly refusing to disburse completely an agreed loan of RM750,000. The said statement of claim, in so far as it relates to the defendant's plea of res judicata, appears to be based primarily on a letter of offer dated 14 November 1985 to grant the said loan to the borrower from the finance company, the material provisions of which are set out below:

2

Asia Commercial Finance (M) Berhad

14 November 1985

Kawal Teliti Sdn Berhad

33-A, Jalan Goh Hock Huat

Kelang

41400 Selangor

Attn: Mr Tan Seng

Dear Sirs,

Fixed Loan Of RM750,000 And End-Finance Facility Of RM1.5 Million

We are pleased to inform you that our Company has approved for your use a fixed loan of RM750,000 and end-finance facility of RM1.5 million, based substantially on the following terms and conditions:

Fixed Loan

1. Amount of Loan

RM750,000 (Ringgit: Seven Hundred and Fifty Thousand Only)

2. Interest Rate

4 per cent per annum above the Base Lending Rate (BLR) of Asia Commercial Finance (M) Berhad and calculated on basis of monthly rest. Our current BLR is 12 per cent per annum.

3. Period of Loan

Not exceeding eighteen (18) months from date of first draw-down.

Security

(a) First legal charge over thirty-two (32) individual lots held under Title No H S(M) 2690 - 2696, 2699 - 279 and 2724 - 2737 for Lot Nos 832 - 838, 841 - 851 and 866 - 879 respectively, Section One, Mukim of Tanjong Duabelas, Tempat of Banting, Selangor.

(b) ...

5. ...

6. Repayment

(a) Servicing of monthly interest in arrears-

(b) ...

7. Availability Period

The first drawdown must be effected within three (3) months from date of offer, failing which the loan shall be treated as lapsed and cancelled. The loan shall be available for fifteen (15) months from date of offer.Thereafter, any undrawn portion of the loan shall be treated as lapsed and cancelled. [Clauses 8 to 15, Parts II, III, IV and V are omitted]

If the above stated terms and conditions are acceptable to you, kindly confirm acceptance on the duplicate copy of this letter and return to us within fourteen (14) days from date hereof, failing which the offer shall be treated as lapsed and cancelled.

[4] In pursuance of other provisions of the said letter of offer, the charge of certain lands of the borrower was executed by the borrower in favour of the finance company.

[5] Subsequently, for failure to pay interest pursuant to cl 6(a) of the said letter of offer, commitment and legal fees, t