JUDGMENT

Abdul Malik Ishak J:

Background Facts

At all material times, Silver Touch Sdn Bhd (In Receivership and under Liquidation) was a customer of the plaintiff, a bank. By a facility agreement made between the plaintiff and Silver Touch Sdn Bhd ("borrower"), the terms of which are set out in the letters of offer dated 16 May 1992 and 8 July 1994 and duly accepted by the borrower, the plaintiff granted to the borrower overdraft facilities of RM1.0 million and RM1.038 million respectively. It was a term of the facility agreement that all charges and legal expenses including the fees of the plaintiff's solicitors were on the basis of a solicitor and client and shall be borne by the borrower. On or about 31 October 1996, the borrower defaulted in paying monies due under the facility agreement comprising of the entire outstanding sum of RM1,625,010.03 being principal and RM17,932.66 being accrued interest which became immediately due and payable.

Calculation wise, as at 27 October 1997, the total sum of RM1,746,988.15 together with a further interest thereon at the rate of 4% above the plaintiff's base lending rate became due and outstanding from the borrower to the plaintiff under