Page 1

2 MLJ 672, *; [1988] 2 MLJ 672

1 of 250 DOCUMENTS
2003 LexisNexis Asia (a division of Reed Elsevier (S) Pte Ltd)
The Malayan Law Journal
TAN GEOK KHOON & GERARD FRANCIS ROBLESS V PAYA TERUBONG
ESTATE SDN BHD
[1988] 2 MLJ 672
CIVIL SUIT NO 831 OF 1984
OCJ PENANG
DECIDED-DATE-1: 11 MAY 1987
EDGAR JOSEPH JR J
CATCHWORDS:
Contract - Offer and acceptance - Correspondence between the respective parties - Whether there was a contract Remedies available
HEADNOTES:
In this case, the main issue for decision was whether there was a contract for the sale of a certain piece of land. The
plaintiffs are the executors and trustees of the estate of Tan Tye Chek (the deceased) who died on May 22, 1981. This
action was brought against the defendants, Paya Terubong Estate Sdn. Bhd. The plaintiffs claimed that through a series
of correspondence made between the plaintiffs and defendants a contract was concluded.
Held:
(1) in the present case through the crucial letters a contract was
concluded;
(2) in the circumstances of the present case, nominal damages should be
awarded for the plaintiff.
Cases referred to
Gibson v Manchester City Council [1979] 1 WLR 294
Hyde v Wrench (1840) 3 Beav 334, 49 ER 132
Trollope & Colls Ltd v Atomic Power Constructions [1962] 2 All ER 1035
Van Hatzfeldt-Wildenburg v Alexander [1912] 1 Ch 284, 288, 289
Rossiter v Miller (1877-78) 3 App Cas 1124, 1143
Hussey v Horne-Payne (1879) 4 App Cas 311
Cavallari v Premier Refrigeration Co Ltd (1952) 85 CLR 20, 25
Erdie v Addison (1883) 52 LJ 80, 82
Harichand v Govind (1923) LR 50 IA 25
Central Malaysia Development Co Ltd v Chin Pak Chin [1967] 2 MLJ 174
Johnson v Agnew [1980] AC 367
Malhotra v Choudhury [1980] Ch 52
Datuk Jagindar Singh & Ors v Tara Rajaratnam [1986] 1 MLJ 105
Bonham-Carter v Hyde Park Hotel (1948) 64 TLR 177
Ashcroft v Curtin [1971] 1 WLR 1731 (CA)
Beaumont v Greathead (1846) 2 CB 494, 499, 135 ER 1039
The Mediana [1900] AC 113
Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873

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2 MLJ 672, *; [1988] 2 MLJ 672

CIVIL SUIT
RJ Manecksha for the plaintiffs.
Lim Cheng Poh for the defendants.
ACTION: CIVIL SUIT
LAWYERS: RJ Manecksha for the plaintiffs.
Lim Cheng Poh for the defendants.
JUDGMENTBY: EDGAR JOSEPH JR J
Whether or not a contract has been made by a valid offer and acceptance [*673] during the course of
correspondence can sometimes be a question not free from difficulty. The conventional approach to this question in the
words of Lord Diplock in Gibson v Manchester City Council [1979] 1 WLR 294 is that of "looking at the handful of
documents relied upon as constituting the contract sued upon and seeing whether upon their true construction there is to
be found in them a contractual offer to sell ... and an acceptance of that offer ...". It is this approach which I propose to
adopt in determining the primary issue which arises for decision in this case.
This brings me to a consideration of the particular circumstances of this case.
The plaintiffs are the executors and trustees of the estate of Tan Tye Chek ("the deceased") who died on May 5,
1981 and have brought this action against the defendants, Paya Terubong Estate Sendirian Berhad, an incorporated
family company, for specific performance of what is claimed to be a contract for sale of 20 acres of land comprised in
part of what was originally Lot 59(1), later re-numbered Lot 2552 Mukim 13, North East District, Penang, but which is
now part of Lot 3440 ("the land concerned") at the price of $ 3,000 per acre.
By way of background, certain facts must be mentioned.
According to the unchallenged evidence of Haji A. Kassim bin Mohd. Hussein, a licensed appraiser and valuer,
who was familiar with all the lands of the defendants, Lot 2552 was originally 442.138 acres in area but the state
government had acquired 192.028 acres of it. The unacquired portion was later sub-divided into three lots, namely, Lot
3439 in area 144.1 acres, Lot 3440 in area 44.18 acres and Lot 3441 in area 61.83 acres. The land concerned, as I have
already mentioned, was an undivided portion of Lot 3440 in area 20 acres.
This witness expressed the view that as Lot 3440 was subject to the provisions of the Land Conservation Act 1960,
it would not be possible to subdivide it into two lots of 20 acres and 24.18 acres. He explained that this was because it
was "hill land" and that it was the practice of the Land Authority to refuse applications for subdivision of such land. He
gave a further reason why it would not be possible to subdivide Lot 3440 into two lots; this was because there would be
no access. Amplifying this part of his evidence, he pointed out that the land adjoining Lot 3440 to the north and west
was state land which had been acquired by the state government before World War II.
Under cross-examination, the witness was asked whether it would be possible for the land concerned to be excised
and he replied that this would depend on the State Executive Committee which would act on the advice of the State
Planning Authority.
So much for the history of the land concerned. It is now necessary to mention the deceased's interest in Lot 2552
prior to the acquisition of part of it by the state government and prior to the correspondence which gave rise to the
dispute the subject of this action.
This brings me to the testimony of Mrs. Jessie Lebroy, the managing director of the defendants, at the time of the
hearing and a director at all material times to this suit.

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2 MLJ 672, *; [1988] 2 MLJ 672

She testified that the defendants were a family company established by her grandfather, Foo Choo Choon, and that
after his death his children and grand-children became its directors and shareholders. Until today, no outsider has been
admitted either as director or shareholder and that it was not the policy of the company to do so in the future.
It would appear from the evidence of this witness that the deceased had been well acquainted with the land
concerned, for long before the events which gave rise to the dispute, the subject of this action, he had been granted a
lease under an indenture dated April 6, 1959 over part of Lot 59(1) and Lot 59(4) which then were under blukar. By the
terms of this indenture, the deceased was to plant the whole of the demised land with rubber and to keep and maintain it
at his own expense. He was also required to pay the defendants 7frac12;% of the gross proceeds of sale of the rubber
sold but he was entitled to keep for himself the re-planting cess grants made by the relevant authority. It would appear
that when in 1975 the state government acquired part of Lot 2552 it paid the deceased, direct, a sum of $ 405,784 by
way of compensation in respect of his interest therein. The defendants were not happy about this as they felt that being
the owners the payment ought to have been made not to the deceased but to them direct and Mrs. Lebroy has testified
that the validity of this payment is being challenged.
[*674] In order to elucidate the issues which arise for decision, I must now reproduce the crucial contemporary
documents, including the correspondence in the case, showing what they say.
There was first of all a letter dated January 17, 1978 from the deceased addressed to the defendants (being ex. G2 to
en. 6) which was in the following terms:
"Tan Tye Chek
31-C, Jalan Ayer Itam,
Mk. 13, Penang
17th January, 1978
Paya Trubong Estate Sdn. Berhad,
68, Beach Street,
Penang
Deposit for Purchase of 20 acres
59(1) & 59(4) pts.
Enclosed is cheque for $ 6,000 being 10% for the purchase of 20 acres
or thereabouts at $ 3,000 per acre and without' prejudice to my rights
for compensation for sale of leased lands.
Yours faithfully,
sgd. Tan Tye Cheak"
It is noteworthy that the subject heading of this letter mentions "Deposit for purchase of 20 acres 59(1) & 59(4)".
According to the affidavit of Mrs. Jessie Lebroy affirmed to on April 18, 1985 (en. 10) filed in opposition to the
plaintiff's application for summary judgment for specific performance under Order 81 of the Rules of the High Court,
Lot 2552 was part of old Lot 59(1). It should also be noted that the deceased had stated that he was paying the deposit
of $ 6,000 "without prejudice to his right for compensation for sale of leased lands".
This letter from the deceased evoked the following response from the defendants' secretary who wrote a letter on
the defendant company's note paper (see AB page 1) dated January 17, 1979, referring in unambiguous terms to the land
concerned as follows:
"Paya Trubong Estate Sendirian Berhad
(Incorporated in the Fed. of Malaya)
Secretary:
Ong Huck Tuan
Penang
Registered Office:
Tel. No. 61680 (Office)
6-B, Beach Street
Tel. No. 61630 (Hse)
Penang
Managing Director:
Foo Meow Fong
Penang
Tel. No. 65235 (Hse)

17th January, 1979

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2 MLJ 672, *; [1988] 2 MLJ 672

Received from Mr Tan Tai Chek the sum of$ 6,000 being deposit for
purchasing part of Lot 2552 for approximately 20 acres at price as
mutually agreed as per plan attached.
Paya Trubong Estate (Sdn.) Bhd.
Sgd.
...
Secretary"
I would interpolate to remark that the plan referred to in the defendants' secretary's letter was not drawn to scale and
although some criticism has been levelled against it by counsel for the defendants it seems clear that essentially
speaking the hatched area shown therein does refer to the land concerned.
The letter from the defendants' secretary was followed up some five months later by a letter from their solicitors
dated June 20, 1979 which was in the following terms:
"A.R. REGISTERED
20th June, 79
Mr. Tan Tai Chek,
31-C, Ayer Itam Road,
Penang.
Dear Sir,
Re: Part of Lot 2552 Mukim 13
N.E.D. Penang (20 acres)
We act for Paya Terubong Estate Sdn. Bhd.
We have been informed by our clients that you have on the 17th day of
January 1979 paid a sum of $ 6,000 to them purporting to be payment of
deposit for the purchase of the above property.
Our clients now instruct us to inform you which we hereby do, that they
do not accept the deposit. You are to make payment of the full purchase
price forthwith if you wish to buy the above property.
We are further instructed to state that unless you comply with the
above demand to pay the whole purchase price within fourteen (14) days
from date hereof our instructions are to take the necessary action to
annul any agreement made between our clients and your goodself.
Yours faithfully,
sgd.
c.c.
1.

2.

Paya Terubong Estate Sdn. Bhd.,

No. 6-B, Beach Street,
Penang.
Mr.Foo Meow Fong,
4-Cantonment Avenue,
Penang."

[*675] A little more than one month later, more precisely on July 23, 1979 which was after expiry of the 14-day
period limited in the above letter, the deceased paid the balance of the purchase price of $ 54,000 to the defendants'
solicitors who, on the same day, wrote as follows:
"Our Ref: PTO/KY/PTEst.
Your Ref: ...
23rd July, 79
Paya Terubong Estate Sdn. Bhd.,
No. 6-B, Beach Street,
Penang,
Dear Sirs,
Re: Part of Lot 2552 Mukim 13 N.E.D.
Penang (20 acres)

Page 5
2 MLJ 672, *; [1988] 2 MLJ 672

We forward you herewith a cheque for$ 54,000 drawn on the Malayan

Banking Bhd. (Cheque No. 828239) which we received today from Mr. Tan
Tai Chek being payment of the balance of the purchase price in respect
of the above property.
For your information we would like to inform you that that a deposit of
$ 6,000 was paid to you by Mr. Tan Tai Chek on 17th January 1979.
Kindly forward us your formal receipt in favour of Mr. Tan Tai Chek in
due course.
We have been instructed by Mr. Foo Meow Fong to draft the agreement for
sale and the same will be forwarded to you for your approval as soon as
the same is ready.
Kindly acknowledge receipt.
Yours faithfully,
sgd.
c.c.
Mr. Foo Meow Fong,
No. 4 Cantonment Avenue,
Penang.
Mr. Tan Tai Chek,
No. 31-C, Ayer Itam Road,
Penang."
The defendants' response was to issue a receipt dated July 23, 1979 on the note paper signed by a director which
read:
"Penang, 23rd July 1979
Received from Mr. Tan Tye Chek of 31-C, Ayer Itam Road, Penang the sum
of Dollars Fifty Four Thousand ($ 54,000.00) only being payment of the
balance for purchasing part of Lot 2552 for approximately 20 acres.
Paya Trubong Estate (Sdn.) Bhd.
sgd.
...
Directors
Malayan Bkg. Bhd., Penang
cheque No. 828239"
But, then, it would seem rather unexpectedly, the defendants' solicitors wrote to the deceased a letter dated August
20, 1979 refunding the sum of $ 60,000 "as no agreement of sale was entered into". Most particularly, that letter was in
the following terms:
"Our Ref: PTO/Ky/PTEst.
Our Ref: ...
ENCL.
20th August, 1979
Mr. Tan Tye Chek,
No. 31-C, Ayer Itam Road,
Penang.
Dear Sir,
Re: Part of Lot 2552 Mk. 13 N.E.D.
Penang (20 acres)
We write to inform you that Paya Terubong Estate Sdn. Bhd. have
forwarded us a cheque for $ 60,000 being refund of the purchase price
in respect of the above property as no agreement for sale was entered
into between your goodself and our clients.
We now forward you herewith our cheque for$ 60,000 being the refund
of the purchase price, receipt of which kindly acknowledge.
Yours faithfully,

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2 MLJ 672, *; [1988] 2 MLJ 672

sgd.
c.c.
Paya Terubong Estate Sdn. Bhd.,
No. 6-B, Beach Street,
Penang."
The solicitors for the deceased returned the cheque for $ 60,000 to the defendants' solicitors and retorted by a letter
dated August 28, 1979 in the following terms:
"AJ/IL/79/721A
PTO/Ky/PTEst.
28th August, 79
To:
M/s Lim, Lim & Oon,
Advocates & Solicitors,
Penang
Dear Sirs,
Re: Sale of Land part of Lot 2552,
Paya Terubong Estate
We act for Mr. Tan Tye Chek of No. 31-C, Ayer Itam Road, Penang. Our
client has handed to us your letter dated 20th instant with
instructions to reply thereto.
Our client states that your clients by their director, Mr. Foo Meow
Fong offered to sell our client part of Lot 2552 in Paya Terubong
Estate for approximately 20 acres at the price of $ 3,000 per acre as
per plan of the land shown to our client. On 17th January, 1979 our
client paid a deposit of $ 6,000 to your clients and a receipt was
issued to our [*676] client with the plan of the land annexed
showing the portion sold to our client. This agreement was confirmed by
your clients by letter dated 12th April, 1979.
Later by your letter dated 20th June, 1979 you requested for
payment of the balance of the purchase price. Our client paid to you
the sum of $ 54,000 being the balance of the purchase price and he was
issued with a receipt dated 23rd July, 1979 for the said sum of $ 54,
000 by your clients.
The sale is therefore complete and no further agreement is necessary
for execution by the parties. Our client is waiting for your clients to
effect the transfer of the portion of the land sold to our client.
We are therefore instructed by our client to return to you your cheque
for $ 60,000 and inform you that he wants specific performance of the
contract of sale.
Yours faithfully,
sgd.
Encl:-c.c. to client"
The defendants' solicitors once again returned the cheque for$ 60,000 to the solicitors for the deceased
accompanied by the following letter dated May 21, 1980:
"Our Ref: PTO/KY/PTEst.
Our Ref: AJ/IL/79/721A
ENCI
21st May, 1980
Jayadeva & Kamal,
Advocates & Solicitors,
No. 21 Church Street,
Penang.
Dear Sirs,

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2 MLJ 672, *; [1988] 2 MLJ 672

Re: Sale of Lot 2552 (Pt) Mk. 13

N.E.D. Penang (approx. 20 acres)
With reference to your letter of the 25th August 1979, we have now been
instructed by our clients to refund the sum of$ 60,000 (Cheque No.
209723 drawn on Overseas Union Bank Ltd. Penang and made payable to Mr.
Tan Tye Chek) as the directors of Paya Terubong Estate Sdn. Bhd. do not
agree to the sale of the above property to your client Mr. Tan Tye Chek.
Kindly acknowledge receipt.
Yours faithfully,
sgd.
c.c.
1.

2.

The Secretary,
Paya Terubong Estate Sdn. Bhd.,
No. 6-B, Beach Street,
Penang.
Mr. Foo Meow Fong,
No. 4, Cantonment Avenue,
Penang"

The solicitors for the deceased were not daunted; they once again sent the cheque for $ 60,000 to the defendants'
solicitors which they enclosed with their letter dated May 29, 1980 which read as follows:
"AJ/IL/80/721A
PTO/KY/PTEst.
29th May, 80.
To:
M/s Lim, Lim & Oon,
Advocates & Solicitors,
Penang.
Dear Sirs,
Re: Sale of Lot 2552 (Pt) Mukim
13 N.E.D. Penang (approx. 20 Acres)
We have taken our client's instructions to reply to your letter dated
21st instant. Our client states that he has completed the purchase of
the part of Lot 2552 Mukim 13, N.E.D., Penang for an approximate area
of 20 acres. The deposit of $ 6,000 was paid to and received by your
clients on 17th January, 1979. Later, the balance of the purchase price
amounting to $ 54,000 was paid to and received by your clients on 23rd
July, 1979. In this respect, we refer you to our letter dated 28th
August, 1979 which we sent to you in reply to your letter dated 20th
August, 1979.
Since our client has paid the whole of the purchase price, your clients
are estopped from stating that the directors of Paya Terubong Estate
Sdn. Bhd. do not agree to the sale of the above property to our client,
Our client does not accept the refund of the purchase price. We
therefore return to you your cheque for $ 60,000. Our client intends
to institute legal proceedings against your clients for the transfer of
the portion of the said property.
Yours faithfully,
sgd."
The defendants' solicitors replied somewhat belatedly by letter dated June 10, 1980 stating that the agreement had
been cancelled "by reason of the failure on the part of the deceased to pay the balance purchase price before July 4,
1979". It added that no agreement had been entered into by the parties. Most particularly, the reply was in the following
terms:
"Our Ref: PTO/KY/PTEst.

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2 MLJ 672, *; [1988] 2 MLJ 672

Your Ref: AJ/IL/80/721A

10 June,1980.
Jayadeva & Kamal,
Advocates & Solicitors,
No. 21 Leboh Gereja,
Penang
Dear Sirs,
Sale of Lot 2552 Pt. Mk. 13 N.E.D.
Penang (approx 20 acres)
We are in receipt of your letter of the 2nd May 1980 and apologise for
the delay as the writer was away.
[*677]
Our clients will refer you to our letter of 20th June 1979 addressed to
your client and our letter of 23rd July 1979 addressed to Paya Terubong
Estate Sdn. Bhd. copied to your client.
Kindly note that any agreement made between our respective clients has
been cancelled by your client's failure to comply with the request to
pay the balance of the purchase price before 4th July 1979.
Kindly also note that no agreement was entered our respective clients.
Yours faithfully,
sgd.
c.c.
1.
Paya Terubong Estate Sdn. Bhd.,
No. 6-B, Beach Street,
Penang.
2.

Mr. Foo Meow Fong,

No. 4 Cantonment Avenue,
Penang

The rules governing the resolution of a dispute of this sort are the traditional ones set out as far back as 1840 by
Lord Langdale M.R. in Hyde v Wrench (1840) 3 Beav 334, 49 ER 132 and applied by Megaw J. in Trollope & Colls Ltd
v Atomic Power Constructions [1962] 2 All ER 1035 and, of course, by Lord Diplock in Gibson v Manchester City
Council [1979] 1 WLR 294 to which I referred in the opening paragraph of this judgment.
It is with these rules in mind that I turn to analyse and construe the contemporary documents.
The deceased started by making an offer when he wrote and sent the letter dated January 17, 1979 offering to buy
certain land, namely, 20 acres, being an undivided portion of Lots 59(1) and 59(4), the property of the defendants at a
price of $ 3,000 per acre. It will be recalled that part of Lot 59(1) was Lot 2552 which in turn had been subdivided into
three lots, being Lots 3439, 3340 and 3341. This offer was made expressly "without prejudice to [his] right to
compensation for sale of leased lands".
That this offer was not accepted is clear from the defendants' secretary's letter dated January 17, 1979 written on the
company's note paper acknowledging receipt of the $ 6,000 as a deposit for purchase not of 20 acres of Lots 59(1) and
59(4) but for 20 acres of Lot 2552, that is, the land concerned illustrated by an accompanying sketch. The letter also
suggests that by then there might have been an antecedent oral agreement for it states categorically "at price as mutually
agreed".
The solicitors for the defendants then wrote to the deceased their letter dated June 20, 1979, the gist of which was
that the defendants did not accept the purported deposit of $ 6,000 for the purchase of the land concerned but,
nevertheless, offering to sell the same if the whole purchase price was paid within 14 days, failing which "they had
instructions to annul any agreement made ..." Assuming, in the defendants' favour, that there was no longer, at that
stage, a binding agreement, I would construe this letter, at the very least, as a counter offer.
The deceased then accepted the counter offer, at the same time making payment of the balance of $ 54,000, though
somewhat belatedly, on July 23, 1979 since this was after the expiry of the 14 days' time limit imposed by the
defendants' solicitors' letter dated June 26, 1979. But, the fact remains that the defendants did accept the payment of this

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2 MLJ 672, *; [1988] 2 MLJ 672

balance when their solicitors forwarded it to them by their letter dated July 23, 1979 ending with the significant
statement "we have been instructed by Mr. Foo Meow Fong to draft the agreement for sale and the same will be
forwarded to you for approval as soon as the same is ready". Mr. Foo, it will be recalled, was then the managing director
of the defendants.
The defendants' response to this letter was to issue a receipt on its note paper signed by one of its directors, dated
the same day, acknowledging that the $ 54,000 was payment of the balance of the purchase price for the land concerned.
That was when, in my opinion, the contract was made; the parties were ad idem as to the terms of the contract so that at
this moment of time the agreement was unconditional. I would treat the reference in the defendants' solicitors' letter
dated July 23, 1979 addressed to the defendants about the drafting of an agreement of sale as merely the expression of a
desire to have the agreement put into due form by a solicitor; as such this could be ignored. In support, I would refer to
the following passage in the judgment of the court in Von Hatz Feldt-Wildenburg v Alexander [1912] 1 Ch 284, 288,
289:
"It appears to be well settled by the authorities that if the documents
or letters relied as constituting a contract contemplates the execution
of a further contract between the parties it is a question of
construction whether the execution of the further contract is a
condition or term of the bargain or whether it is a mere expression of
the desire of the parties as to the manner in which the transaction
already agreed to will in fact go through. In the former case, there is
no enforceable contract because the condition is unfulfilled or because
the law does not recognize a contract [*678] to enter into a
contract. In the latter case, there is a binding contract and reference
to the more formal document may be ignored."
The solicitors were therefore not at liberty to vary the agreement either on one side or the other, but only to put in
more formal and professional. shape the agreement which had been completely formed: Rossiter v Miller (1877-78) 3
App Cas 1124, 1143.
Lest I be accused of an oversight, I must now advert to the arguments of Mr. Lim Cheng Poh for the defendants. He
argued that not all the terms had been agreed between the parties. In particular, he contended that there was uncertainty,
as to to the subject matter, as to what if any compensation was to be paid to the deceased, and no agreement as to who
was to pay for survey and subdivision fees or what was to happen in the event of rejection by the relevant authority of
the plans for subdivision and finally, that the defendants being a family company would not agree to an undivided share
being transferred to the plaintiffs. He also drew attention to the provisions of section 214(1)(a) of the National Land
Code 1965 which prohibits the transfer of part only of alienated land. There was also, he argued, the evidence of Haji
Karim, the appraiser, that the land concerned was subject to the Land Conservation Act 1960, which would necessitate
an application to the State Executive Council for excission. That application, he said, might not be approved.
In the case of Hussey v Horne-Payne (1879) 4 App Cas 311, there were certain letters which apparently constituted
a complete contract, but on looking into the whole correspondence it was found that those letters did not contain all the
terms of the contract. It was held that if two letters standing alone would be evidence of a sufficient contract, yet a
negotiation for an important term of the purchase and sale carried on afterwards is enough to show that the contract was
not complete.
In the present case, however, there was no evidence of subsequenct negotiations regarding any of the matters
referred to by Mr. Lim Cheng Poh. This is amply borne out by the defendants' solicitors' letters of repudiation and the
testimony of Mr. Peter Oon to which I shall now refer.
First, there was the defendants' solicitors' letter dated August 20, 1979 intimating that the deal was off and giving as
their reason for this the fact that no agreement of sale had been entered into, referring, no doubt, to a formal written
agreement. Secondly, in their very next letter dated May 21, 1980, addressed to the solicitors for the deceased, they said
that the directors of the defendants did not agree to the sale of the land concerned to the deceased. Thirdly, in their
subsequent letter dated June 10, 1980 they gave a different reason, namely, "that any agreement made between our
respective clients has been cancelled by your client's failure to comply with the request to pay the balance of the
purchase price before 4th July 1979", though they did repeat that no agreement had been entered into.
I now turn to consider the evidence of Mr. Peter Oon, the solicitor who had charge of the matter on behalf of the
defendants. He confirmed that according to his instructions, there had been an agreement. He further confirmed that

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2 MLJ 672, *; [1988] 2 MLJ 672

despite late payment by the deceased of the balance of the purchase price, he had been instructed by the managing
director of the defendants to draft the sale and purchase agreement. He added that when he said in his letter of June 10,
1980 that no agreement had been entered into he meant "no formal written agreement". He also said that apart from the
reasons mentioned in his letter to the solicitors of the deceased for not going through with the sale, he could not recall
what other reasons there were.
It is manifestly clear that there was no evidence that the parties were unable to agree about any of the matters
mentioned by Mr. Lim and if, indeed, they were unable to agree on any of these matters I would have expected him to
have asked Mr. Peter Oon questions regarding this. Moreover, the contemporary correspondence which I have
reproduced above says nothing of the sort nor, for that matter, was Mr. Foo Meow Fong, the then managing director of
the defendants, called to testify. I, therefore, find upon the evidence before me, that there is nothing to show that
subsequent to the crucial letters constituting the contract, there were any negotiations for an important term of the sale
and purchase.
I think I should round off this part of the judgment by referring to the following passage in the judgment of the
High Court of Australia in Cavallari v Premier Refrigeration Co Ltd (1952) 85 CLR 20, 25:
"... while the due course of completion of a contract for the sale of
land is a matter of some complexity, involving the doing of a number of
things by both parties, it is very well settled that an informal or
'open' contract not dealing expressly with any of these matters of
detail, may be made and be binding. In such a case law and equity fill
in the details, so to speak, providing by way of implication for
whatever is necessary to effectuate due performance."
[*679] Accordingly, as to the various points raised by Mr. Lim as not having been dealt with in the
correspondence to which I have referred, I would say that here a contract had already been formed and the solicitors
were only to carry out details and what were the proper clauses in respect of any discrepancy in the area of the land
concerned, costs of survey and subdivision, what was to happen in the event of subdivision not being approved, or an
application for the land concerned to be excised from land subject to the provisions of the Land Conservation Act 1960
being rejected; such details being "subject to the jurisdiction of the court as to whether or not the clause objected to was
proper or improper". (See Erdie v Addison (1883) 52 LJ 80, 82.) Perhaps, I should also refer to Harichand v Govind
(1923) LR 50 IA 25, a decision of the Privy Council, where their Lordships said at p. 31:
"Here exhibits A and A1 show clearly that the parties had come to a
definite and complete agreement on the subject of the sale. They
embodied in the documents that were exchanged the principal terms of
the bargain on which they were in absolute agreement, and regarding
which they did not contemplate any variation or change. The observation
only means that it should be put into proper shape and in legal
phraseology, with any subsidiary terms that the vakil might consider
necessary for insertion in a formal document."
I now come to the appropriate remedies.
Just before final address, counsel for the plaintiffs said he was abandoning the prayer for specific performance but
did not say why. He accordingly confined the remedy claimed to damages for breach of contract.
In outline, the victim of a breach of contract who has treated the breach committed by the offending party as a
repudiation of the contract and has accepted the repudiation can claim damages for the breach. Such a claim would be
for the so-called common law damages which in Malaysia fall within the scope of section 74 of the Contracts Act 1950
(Revised -- 1974). The case of Central Malaysia Development Co Ltd v Chin Pak Chin [1967] 2 MLJ 174 supports this
proposition, for there Gill J. said:
"It is to be observed that the section is general in its terms, and
does not exclude the case of damages for breach of a contract to sell
immovable property. In other words, the legislature has not prescribed
a different measure of damages in the case of contracts dealing with
land from that laid in the case of contracts relating to commodities."
Speaking about the measure of such damages, he added:
"The normal measure of damages is the market value of the property at

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2 MLJ 672, *; [1988] 2 MLJ 672

the contractual time for completion less the contract price."

In recent times, to offset the effects of raging inflation on the price of immovable property, the court may not apply
the general rule as to the measure of damages referred to by Gill J. in the Central Malaysia Development Case [1967] 2
MLJ 174. So, in Johnson v Agnew [1980] AC 367, Lord Wilberforce said at p. 401:
"But this (the rule of assessing damages at the date of completion) is
not an absolute rule: if to follow it would give rise to injustice, the
court has power to fix such other date as may be appropriate in the
circumstances. In cases where a breach of a contract for sale has
occurred and the innocent party reasonably continues to try to have the
contract completed, it would to me appear more logical and just rather
than tie him to the date of the original breach, to assess damages as
at the date when (otherwise than by his default) the contract is lost."
Similarly, in Malhotra v Choudhury [1980] Ch 52 the court in substituting an award of damages for that of an order
of specific performance held the relevant date for the assessment of damages was the date of judgment and not the date
of the breach.
Adopting the modern approach, I hold that the relevant date for the assessment of damages, in this case, should be
the date of judgment especially since there is no evidence that they would be greater if assessed at the date of breach.
I must next consider the evidence, if any, as to the market value of the land concerned at the date of judgment.
Upon this question, I find the record is barren as to any such evidence.
There being so, I must next consider whether I can form an opinion as to the market value of the land based on
public and common knowledge.
In Datuk Jagindar Singh & Ors v Tara Rajaratnam [1986] 1 MLJ 105 an action for damages founded on the tort of
fraud, the only relevant evidence on market value of the land in question was a statement by the plaintiff's expert that
there had been a boom in property values during a period up to about 1979. The trial judge expressed the view that it
was a matter of public and common knowledge that even if there had been no boom the normal annual rate of increase
of land prices had always been generally about 20% a year. He added that this was confirmed by about 700 land
reference cases which had come before him over the previous 11 months or so. The Federal Court did not criticize this
approach nor did it make any mention of it. In these circumstances, the Judicial Committee of the Privy Council was not
prepared to interfere either. Lord Keith of Kinkel observed:
[*680]
"There can be no doubt that a judge is not entitled to use his own
particular knowledge in arriving at an assessment of damages. In the
general exercise of his judicial functions he is, however, entitled to
rely on what is common and public knowledge. The scope of common and
public knowledge may vary quite widely from one country to another.
The fact of a fall over a period in the value of money or a rise in the
value of land is a matter which is capable of being one of common and
public knowledge. As to whether or not it is so in Malaysia is a
question upon which their Lordships would hesitate to venture an
opinion. Then judiciary of Malaysia are the persons best qualified to
answer the question."
In the present case, the contract was concluded on July 23, 1979. Ordinarily, I would therefore have assessed the
increment in value of the land concerned at 20% p.a. from that date. However, it is a matter of public and common
knowledge that since the last three or four years the country has been experiencing a severe economic recession as a
result of which land values have plumetted. But, I have no evidence before me as to the extent of the decline in such
values nor am I in a position to form an opinion as to this based on public and common knowledge. The inevitable
conclusion I have arrived at, so far as this part of the case is concerned, is that whilst the fact of the loss of bargain is
shown the necessary evidence as to its amount has not been adduced.
This brings to my mind the famous words of Lord Goddard in Bonham-Carter v Hyde Park Hotel (1948) 64 TLR
177:
"Plaintiffs must understand that if they bring actions for damages it
is for them to prove their damage; it is not enough to write down the

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2 MLJ 672, *; [1988] 2 MLJ 672

particulars and, so to speak, throw them at the head of the court,

saying: 'This is what I have lost, I ask you to give me these damages'.
They have to prove it."
Thus, in Ashcroft v Curtin [1971] 1 WLR 1731 (CA), a plaintiff claiming for diminution in the profits of his one
man business could not succeed in this claim though the evidence pointed to a decrease in profitability which was due to
the injury, the records kept being too rudimentary and the accounts too unreliable to quantify the loss.
In these circumstances, I would award the plaintiffs only nominal damages. In the words of Maule J. in Beaumont v
Greathead (1846) 2 CB 494, 499, 135 ER 1039:
" 'Nominal damages' means a sum of money that may be spoken of, but has
no existence in point of quantity."
They do not, however, mean small damages (per Lord Halsbury in The Mediana [1900] AC 113 and their amount
could be miniscule. Nevertheless, their practical function is twofold; first, it is the means of establishing, determining or
protecting a legal right ( Anglo-Cyprian Agencies v Paphos Wine Industries [1951] 1 All ER 873) and, secondly, in the
picturesque phrase of Maule J. in Beaumont v Greathead (1846) 2 CB 494, 499, 135 ER 1039 "a mere peg on which to
hang costs".
Accordingly, I award the plaintiffs $ 500 nominal damages for breach of contract.
Be that as it may, the deceased had paid the sum of $ 60,000 for a consideration which had wholly failed. I would,
therefore, further order the defendants to refund this sum to the plaintiffs.
The next question is the matter of interest.
Now, although the defendants had evinced an intention by their solicitors' letter dated May 21, 1980 not to proceed
with the sale, it was not until October 24, 1984 that the plaintiffs caused their writ to be issued. What were the reasons
for the inaction and delay of more than four years in the institution of this suit? None were vouchsafed to this court.
Nevertheless, the fact remains that the plaintiffs have had the use of the money since the date of payment. Section 11 of
the Civil Law Act 1956 empowers the court to award interest on debts or damages at such rate as the court thinks fit on
the whole or any part of the period between the date when the cause of action arose and the date of the judgment. Order
42 rule 12 of the Rules of the High Court provides that every judgment debt shall carry interest at the rate of 8% p.a.
from date of judgment until satisfaction.
In all the circumstances, it would be right and fair to award interest at the rate of 8% p.a. upon the nominal damages
of $ 500 from August 20, 1979 that being the date of breach, upon the deposit of $ 6,000 from January 17, 1979 and on
the balance of $ 54,000 from July 23, 1979 until today and I so order. It goes without saying that the total decretal sums
will attract interest at the rate of 8% p.a. from today until realization.
Finally, the defendants must pay to the plaintiffs the costs of this action.
Order accordingly.
SOLICITORS:
Solicitors: Lim Kean Siew & Co; Lim Cheng Poh, Lim & Rahim.
LOAD-DATE: June 3, 2003