Judgment

Abdul Malik Ishak J:

Introduction

This was the defendant's appeal by way of a notice of motion in encl. 10 against the whole of the decision of the learned senior assistant registrar ("SAR"). The appeal by the defendant was against the order for final judgment. I heard the submissions of the parties and I allowed the defendant's appeal in encl. 10 with costs. The defendant then withdrew encl. 14 which was the defendant's application for stay pending the disposal of the appeal in encl. 10. The plaintiff had no objection to the withdrawal of encl. 14 and I, accordingly, struck off encl. 14 without costs.

My reasons for allowing the defendant's appeal in encl. 10 with costs are as follows:

The Plaintiff's Claim

By way of encl. 4, the plaintiff's claim against the defendant was for the sum of RM12,936,730.74 as at 31 March 2001 together with interests and costs. The plaintiff's claim was for monies, allegedly due, by the defendant under four separate overdraft facilities. The details of the overdraft facilities may be stated as follows:

(a) an overdraft dated 6 July 1995 for RM500,000 (hereinafter referred to as"OD1");

(b) an overdraft dated 13 March 1996 for RM5.25 million (hereinafter referred to as"OD2");

(c) an overdraft dated 10 April 1996 for RM1.0 million (hereinafter referred to as"OD3"); and

(d) an overdraft dated 4 September 1996 for RM12.3072 million (hereinafter referred to as"OD4").

The overdraft facilities were, at all times, secured by the deposit of the following shares:

(1) 1,500 lots of Kretam Holdings Berhad shares;

(2) 3,846 lots of Ramatex Berhad shares; and

(3) 1,200 lots of Tekala Corporation Berhad shares.

All these shares will hereinafter collectively referred to as"the shares".

The Defence

Under this category, the defendant advanced triable issues and they may be stated in this way.

The First Meeting

On 2 December 1998, the defendant met two of the plaintiff's representatives in the persons of Mr. Khalil and Mr. Mohd Azlam to discuss the manner in which the defendant would settle his account with the plaintiff. At that meeting, it was agreed that (hereinafter referred to as"the first collateral agreement"):

(i) the defendant would dispose off the shares held by the plaintiff as security and apply all monies derived therefrom towards the principal outstanding;

(ii) there was no specific time frame fixed for the disposal of the shares;

(iii) the plaintiff would consider a reduction on interest; and

(iv) the disposal of the shares were to be done by way of private arrangement through Arab-Malaysian Securities Sdn Bhd ("AMS").

Five days later, and this was on 7 December 1998, the defendant wrote three separate letters to the plaintiff stating categorically the sale of the shares by private arrangement through AMS.

Nine days later, and this was on 16 December 1998, AMS wrote a letter to PAB Nominees (Tempatan) Sdn Bhd stating that the shares were to be sold by private arrangement through AMS.

Ten days later, and this was on 26 December 1998, the plaintiff wrote to the defendant and stated that the defendant's request for a 50% rebate will only be considered upon disposal of all the shares.

Thus far, the existence of the first collateral agreement can never be doubted.

But, on 3 March 2000, the plaintiff wrote to the defendant informing him that effective from 15 March 2000 the plaintiff will proceed to melt down the shares through one of its subsidiary companies called Affin-UOB Securities Sdn Bhd and that all the instructions pertaining to the sale of the shares would be done at the plaintiff's sole discretion. It must be observed that there was no reason for the plaintiff to put the defendant on notice unless the plaintiff was aware of the first collateral agreement dated 2 December 1998 and that such an inference must be drawn to that effect. It would be reasonable to infer that the only reason the plaintiff wrote the letter containing the notice was because the first collateral agreement was in