RASIAH MUNUSAMY v LIM TAN & SONS SDN BHD
CaseAnalysis | [1985] 2 MLJ 291
RASIAH MUNUSAMY v LIM TAN & SONS SDN BHD [1985] 2 MLJ 291
Malayan Law Journal Reports · 6 pages
SC KUALA LUMPUR
WAN SULEIMAN, MOHAMED AZMI & HASHIM YEOP A SANI SCJJ
FEDERAL COURT CIVIL APPEAL NO 132 OF 1983
21 February 1984, 10 December 1984, 11 December 1984, 6 March 1985
Case Summary
Contract — Buildingcontract — Oral agreement — Dispute as to area of land and balance of purchase price
— Housing Developers (Control and Licensing) Rules, r 12 — Specific Relief Act, 1950, s 18
HousingDevelopers — Oral agreement not complying with rule, — Protection — Housing Developers
(Control and Licensing) Rules, 1970, r 12
In this case the appellant allegedthat the respondent had orally agreed to sell and transfer to the appellant a double
storey terrace house which the respondent undertook to build. There was a dispute as to the area of the land and
the balance of the purchase price and it was alleged that theappellant refused to pay the final balance of $5,298/-.
The respondent claimed that the agreement had been repudiated on the ground of the refusal to settle the balance
of the agreement, damages and other ancillary relief.
The learned trialjudge rejected the appellant's claim on the extra land and he accepted the respondent's evidence
that the purchase price was $30,000/- comprising $28,500/- the original cost of the property and $1500/- as the cost
of extra works requested by the purchaser.The learned judge also found that the amount actually due and payable
to the respondent was only $2808/- and not $5928/- as claimed. He therefore held that the purported repudiation by
the respondent was improper and not valid. On the alternative defence thatthe oral agreement was not valid under
rule 12(1) of the Housing Developers Rules, 1970, the learned trial judge held that since only the method or mode
of entering into the agreement was in contravention of the law, the verbal agreement was valid and
enforceable.However the learned Judge dismissed the appellant's claim as he held that he would not be entitled to
vacant possession or transfer until the balance with interest was settled. The appellant appealed.
Held:
(1) although the oral agreement did not comply with the provision of rule 12(1) of the Housing Developers
(Control and Licensing) Rules, 1970, the appellant-purchaser clearly belongs to a class for whose
protection thestatutory prohibition is imposed and as such the appellant can enforce his right for specific
performance of the oral contract of sale provided he is a bona fide purchaser;
(2) in the circumstancesof this case the appellant could not be said to be a mala fide purchaser. He cannot be
deprived of the protection given by the Housing Developers legislation nor is there justification in holding
that the appellant had used thehousing developers legislation as an engine of fraud. The appellant has not
perpetrated any fraud, legal or equitable, and his claim for specific performance should have been granted;
(3) in this case the delay in the deliveryof vacant possession of the housing accommodation must be attributed
entirely to the appellant's own conduct in agreeing to perform his obligation under the contract only in
accordance with his own erroneous interpretation of it pertaining to the extra land.There was no delay by
the respondent in the completion of the building although the vendor committed a breach of contract by
refusing to accept payment and to transfer the property. The appellant should therefore not be entitled to
any indemnity under rule 12(1)(r)of the Housing Developers (Control and Licensing) Rules. The proper
JERAMY KOH GUANG TING JERAMY KOH GUANG TING
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discretion to be exercised in this case is to grant the appellant specific performance of the contract of sale
without any compensation under section 18 of the Specific Relief Act, 1950.
Cases referred to
Suisse Atlantique Societe v NV Rotterdamsche Kolen Centrale [1967] 1 AC 367 435
Freeth v Burr 1874 LR 9 CP 208 214
[1985] 2 MLJ 291 at 292
Oversea-Chinese Banking Corporation Ltd v Philip Wee Kee Puan [1984]] 2 MLJ 1
Wilsons and Clyde Coal Co Ltd v English [1937] 3 All ER 628
Nash v Halifax Building Society [1979] 1 Ch 584
Daiman Development Sdn Bhd v Mathew Lui Chin Teck [1981] 1 MLJ 56 60
SEA Housing Corporation Sdn Bhd v Lee Poh Choo [1982]2 MLJ 31 34
James McCormick v William Grogan (1869) 4 LRHL 82
SUPREME COURT
VK Palasuntharam for the appellant.
G Sri Ram for the respondent.
MOHAMED AZMI SCJ
(delivering the Judgment of the Court): This is an appeal against the decision of the High Court at Kuala Lumpur
wherein the appellant'sclaim for specific performance, damages and other ancillary reliefs in respect of a contract of
sale of a double-storey terrace building at Rawang was dismissed with costs. By paragraph 4 of the Statement of
Claim and admitted by paragraph 1 of the Amended Defence,the purchaser (appellant/plaintiff) alleged that, “on
December 16, 1971 the defendant (respondent/vendor) acting by one Lim Tan orally agreed with the plaintiff at the
defendant's office at No.54, Jalan Maxwell, Rawang, that the defendant would selland transfer to the plaintiff lot
No.3227/67, Main Road, Green Park, Rawang, together with a double-storey terrace building which the defendant
undertook to build on it. The said lot is a corner lot and the said building would be the building at one end of arow of
more than four buildings. The said building is housing accommodation under Housing Developers (Control and
Licensing) Act 1966 and the said lot No.3227/67 is land under Housing Developers (Control and Licensing) Rules
1970.” It was also pleaded bythe purchaser that the price of the property was $28,000/- but being a corner lot there
was extra land measuring 22['] × 70['] for which he had to pay an additional $2,000/-, thus making a total sum of
$30,000/- as consideration for the contractof sale. The vendor denied the claim on extra land. Whilst admitting the
purchase price to be $30,000/-, the vendor averred that the price included a sum of $1,500/- being the cost of extra
work on a balcony and not the cost of extra land. On the evidence, itwould appear that the extra land dispute was
the main reason for the purchaser refusing to pay the vendor the final balance of $5,928/- (which included $120/- for
water deposit) despite repeated written demands by the vendor. From Exhibit AB8 at page 210 ofAppeal Record, it
was not disputed that the total sum demanded by the vendor was $30,120/- and out of this the purchaser had paid
to the vendor $24,192/- — the last payment of $19,192/- being paid on January 25, 1973 through the Government
Housing LoanDivision of the Treasury. Being an officer in the Immigration Department at the material time, the
purchaser was eligible for a housing loan, and when the sale agreement was entered into it was understood that a
loan of $20,000/- would be sought from the Governmenttowards the purchase of the property. As is normal in such
a loan application, the vendor furnished the purchaser with the necessary supporting documents required by the
Housing Loan Department to establish the purchase. In the present case there was conflictingevidence as to what
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documents were in fact furnished by the vendor to the purchaser, but the dispute on documents was more for the
purpose of determining by documentary evidence the extra land issue. To cut the story short, by letter dated March
21, 1974 (AB13)the vendor took the stand that the agreement had been repudiated on the ground of the
purchaser's refusal to settle the balance sum of $5,928/- towards the purchase price after a reasonable time had
been given. The repudiation is challenged by the purchaseron the basis that it was invalid by virtue of the Housing
Developers legislation. By paragraph 15 of the Amended Defence, the vendor also averred that the purchase was
based on oral agreement and therefore void by reason of Rule 12(1) of the Housing Developers Rules 1970 which
provides that every contract of sale “shall be in writing” and shall contain within its terms and conditions provisions
as provided in paragraphs (a) to (u) of the sub-rule.
On issues of fact the learned trial Judgemainly found for the vendor. On the extra land dispute, he rejected the
purchaser's claim and came to the conclusion that the area of the land sold was 1,834 sq. ft. and not 3,080 sq. ft.
and he accepted the vendor's version that the purchase price was$30,000/- comprising $28,500/-, the original cost
of the property, and $1,500/- as the cost of extra works on the balcony requested by the purchaser. On the
evidence we see no reason to disturb the findings of fact made by the learned Judge. On issues of lawhowever, the
learned Judge mainly found for the purchaser. On the principal defence that the vendor was entitled to repudiate
the contract of sale as a result of the purchaser's
[1985] 2 MLJ 291 at 293
failure to settle the balance of the purchase price,the learned Judge held that the sum of $5,928/- demanded was
in breach of the provisions of Schedule C of the Housing Developers Rules. It cannot be disputed that the sum
demanded included $3,000/- i.e. 10% of the purchase priceof $30,000/- which was only payable under paragraph
(h) item 1 of Schedule C “on delivery to the purchaser of vacant possession of the housing accommodation and the
land as provided in Rule 12(1) (o) or on completion of the transfer of the property as providedin Rule 12(1) (p)
whichever shall first happen.” Since neither of the event stipulated by the Rule had occurred, the sum of $3,000/-
was not yet payable and should not be included in the letter of demand. Further, the sum of $5,928/- also included
as statedearlier, water deposit amounting to $120/-. This sum should also be excluded in the letter of demand as
such item was by law payable by the vendor as a licensed housing developer under Rule 12(1) (1). Deducting these
two items, the amount actually due and payablewhen the repudiation was made should only be $2,808/- and not
$5,928/- as contained in the notices of demand in AB6 dated September 18, 1973; AB11 dated February 11, 1974;
and AB13 the letter of repudiation dated March 21, 1974 and confirmed by AB30 dated September30, 1974 (see
pages 207, 213, 215 and 236 of Appeal Record). The vendor's letter of repudiation (AB13) was in the following
terms:-
“Dear Sirs,
Lot 3227/67 Green Park
We would refer to our letter dated February 11, 1974.
Take Notice that in view of your client's failure to pay the balance of the purchase price the agreement is deemed to have
been repudiated by your client. In the circumstanceswe have been instructed to inform you that the sale has been cancelled
by our clients who shall be refunding the sums of money paid by your client. Kindly inform us whether a cheque could be
forwarded to you.”
On April 11, 1974,the vendor's solicitors also wrote to the Housing Loan Division the following letter:-
“Dear Sirs,
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RASIAH MUNUSAMY v LIM TAN & SONS SDN BHD, [1985] 2 MLJ 291
H.S. (D) 353 Lot 3227/67 in the Mukim of Rawang Encik Rasiah Munusamy
We act for Lim Tan & Sons Sdn. Bhd. and would refer to the above lot which was originally purchased by Encik Rasiah
Munusamy to whom you have granted a loan of $19,192/-.
Our clients have repudiated the sale for the reason thatthe purchaser has defaulted in payment of the balance outstanding
and due amounting to $5,928/- and desire to pay to you the sum of $19,192/- being the amount advanced by you. Kindly
inform us whether it is in order.”
In thecircumstances, the learned Judge did not err in fact or in law when he held that the purported repudiation by
the vendor was improper and not valid, in his submission Mr. Sri Ram argued that the learned Judge had failed to
consider Exhibit D7 and D8 at pages279 and 280 of Appeal Record. It is his contention that these two documents
are complete answer to the alleged breach of the provisions of Schedule C to the Housing Developers (Control and
Licensing) Rules. The truth of these two documents was challenged bythe purchaser but as to their reliability. We
fail to see why these two documents should not be relied upon. Be that as it may, we do not think that they would
validate the purported repudiation of the contract. Exhibit D8 is a letter dated June 27, 1972 informingthe purchaser
that the vendor had completed the construction of the building and requesting him to complete the purchase; whilst
Exhibit D7, another letter dated May 4, 1973, informed the purchaser that the title deed to the property was
available and that thevendor was prepared to execute the transfer of the title deed to him on payment of the
outstanding amount of $5,928/-. Thus the sum of $5928/- was central to the offer to perform by the vendor, and
what is more important when all these letters of demand andrepudiation were written between June 1972 and
February 1974, there was a dispute between the parties regarding the extra land which was then still not resolved.
In our view, this is not a simple case where the purchaser has simply refused to pay the balanceof the purchase
price. The size of the land sold was in dispute and the balance of the purchase price must necessarily depend on
the outcome of the dispute. Although the issue of extra land has now been resolved in favour of the vendor, we do
not think thatit can be used retrospectively to validate an invalid repudiation of the contract however flimsy the
purchaser's claim to the extra land might turn out to be, so long as the claim was genuinely made. What is pertinent
is that the building lot in disputeoccupied a corner lot and it is not uncommon for a purchaser to assume that there
would be extra land. As such on balance it cannot be said that the purchaser simply did not want to complete the
contract, and it is fair to assume that he genuinely thought thatthere was a valid claim on the extra land. In fact after
the purported repudiation of the contract by the vendor, the purchaser attempted to make payments of $4,000/- by
bank draft (page
[1985] 2 MLJ 291 at 294
236 of record) and $808/- by cheque and finallyon July 25, 1975 he paid under protest a final sum of $1,120/- by
cashier's order (see AB31 at page 237 of record). These payments totalling $5,928/- the sum demanded by the
vendor, are clear testimony of the purchaser's willingness to perform his partof the contract subject only to the
dispute on extra land being resolved. It should be observed that not every refusal to perform some part of a contract
will amount to a renunciation. Even a deliberate breach will not necessarily entitle the innocent partyto treat himself
as discharged, since it may sometime be that such a breach can appropriately be sanctioned by damages (see
Suisse Atlantique Societe v NV Rotterdamsche Kolen Centrale [1967] 1 AC 367 , 435). It is not a mere refusal or
omission of one of the contracting parties to do something which he ought to do that will justify the other in
repudiating the contract, but there must be an absolute refusal toperform his part of the contract (see Freeth v Burr
1874 LR 9 CP 208, 214). If there is an absolute refusal to perform, the other party may treat himselfas discharged.
Short of an express refusal, however, the test is to ascertain whether the action or actions of the party in default are
such as to lead a reasonable person to conclude that he no longer intends to be bound by its provisions. Where
such an inferencecannot be drawn, the innocent party will be entitled to claim damages for breach, but not to treat
himself as discharged. In particular where there is a genuine dispute as to the construction of a contract, the courts
may be unwilling to hold that an expressionof an intention by one party to carry out the contract only in accordance
with his own erroneous interpretation of it amounts to a repudiation (see Chitty on Contracts, 25th Edition Vol. 1,
para. 1602, page 884). In this appeal,no evidence was adduced to suggest that the purchaser had by conduct or
otherwise expressly or impliedly shown an absolute refusal to settle the balance of the purchase price. There was a
genuine dispute regarding the extra land and as adverted to earlier thepurchaser had in fact shown a willingness to
pay the balance of the purchase price albeit in accordance with his own erroneous interpretation that extra land
should be included in the sale. In our judgment, in such circumstances the vendor is not entitled torepudiate the
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contract. Not only was the demand made by the vendor far in excess of what was permitted by law and thereby
rendering the failure to comply with such demand blameless, but also the vendor had failed to establish that the
purchaser's refusalor unwillingness to perform was absolute. The question whether there was reasonable notice
given is not really relevant having regard to the dispute on extra land. There is also no necessity for us to make a
ruling on Mr. Palasuntharam's legal propositionthat a licensed Housing Developer cannot repudiate an agreement
made with a purchaser on account of the latter's default in making payments on due date, and that his remedy is to
seek an order of rescission under section 34(1) (c) of the Specific Relief Act, 1950. All we need say by way of
observation is that such a proposition seems to be going a bit too far, as it would mean that every Housing
Developer would have to resort to litigation whenever there is default in payment occassioned by the purchaser
howeverabsolute might be the purchaser's refusal to pay or to perform any material part of his obligation that goes
to the root of the contract.
On the alternative Defence that the oral agreement is not valid under Rule 12(1), the learned trialJudge was of the
opinion that since only the method or mode of entering into the agreement was in contravention of the law, the
verbal agreement was valid and enforceable. As we understand him, the form of the contract is not material. It was
his judgment thatall those provisions as contained in paragraphs (a) to (u) in Rule 12(1) should be implied in the
oral agreement and both parties were obliged to comply with them. Having interpreted the law in favour of the
purchaser, the learned Judge was however not inclinedto allow his claim as prayed. Instead the learned Judge
came to the following inconclusive finding:-
“The next question which I have to determine is whether order can now be made against the Defendant to deliver vacant
possessionand to execute transfer to the Plaintiff of the property sold. I do not think that such order can be made in view of
the fact that the Plaintiff had not made full payment under paragraph 1(g) of Schedule C. The position now is that the sale
and purchase agreementis still subsisting and remains to be fully performed by both parties, Under paragraph 2 of
Schedule C the Defendant is entitled to claim interest on the paragraph l(g) balance of $2,808 for period from 23.1.1973
until date of payment of that balance. The Plaintiffwould not be entitled to vacant possession or transfer until that balance
with interest thereon is settled.
The Plaintiff's claim is dismissed.”
Having regard to his findings on the law, we are of theview that it should necessarily follow that judgment ought to
be given for the purchaser, and that would have entitled the vendor to be the appellant before us. In the result we
are forced to take the extraordinary course of requiring Mr. Sri Ram for the vendorto address us first both on the
appeal and cross-appeal, so that the whole proceedings
[1985] 2 MLJ 291 at 295
can be conducted in a more orderly and logical fashion.
On the issue of whether the oral agreement entered into between theparties on December 16, 1971 is valid and
enforceable having regard to the requirement of written contract under Rule 12(1), we are tempted to agree with Mr.
Palasuntharam's submission that having regard to the vendor's letter dated December 16, 1971(Exhibit D16A); the
deposit receipt for $1000 also of the same date; and the price of $28,500 as shown in the vendor's brochure
(Exhibit AB43 at p.257 of Appeal Record) pertaining to the sale, the contract was in fact in writing and not oral as
pleaded.Mr. Palasuntharam relies on the decision of the Privy Council in Oversea-Chinese Banking Corporation Ltd
v Philip Wee Kee Puan [1984] 2 MLJ 1 in supportof his submission that the purchaser can at the appeal stage rely
on the written contract although the trial proceeded on the basis of there being an oral agreement. We however
agree with Mr. Sri Ram that the OCBC case (ante)does not assist the purchaser, and to accept Mr.
Palasuntharam's submission would contradict the Statement of Claim and render meaningless the purpose of
pleading. This is the first time that the purchaser has taken the point that the contract was in writingand no
application for amendment of the pleading had ever been made. Throughout the trial the purchaser had denied the
existence of the letter Exhibit D16A and insisted that what he had submitted to the Housing Loan Department in his
application for loan underitem (d), was a photostat copy of his “application to purchase to the vendor” and not
Exhibit D16A which is the original letter from the vendor (see Exhibit D16C and Exhibit D16E at pages 300 and 301
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of Appeal Record). Further it was argued that sinceExhibits D16C and D16E expressly referred to photostat copy,
the document could not refer to Exhibit D16A. The learned Judge unfortunately did not make any finding whether
the document submitted by the purchaser was D16A as alleged by the vendor or a differentdocument as alleged by
the purchaser. In view of the unsatisfactory state of evidence on this particular matter, we do not consider it proper
to allow the purchaser to rely on Exhibit D16A to support his eleventh-hour proposition of a written contract as a
basisof his claim particularly when its very existence had been denied by him throughout the trial, and not admitted
as was the position in the OCBC case (ante). To allow amendment at this late stage would certainly prejudice
thevendor and would be contrary to the principle enunciated by the House of Lords in Wilsons and Clyde Coal Co
Ltd v English [1937] 3 All ER 628.
Going back to the dispute on the validity and enforceability of the oral agreement under the Housing Developers
legislation, the law on this point as a general rule is that although no action can arise from a prohibited and illegal
act, if a plaintiffcan show that he is a member of the class for whose protection the statutory prohibition was
imposed, then as an exception such a person can enforce rights or recover property transferred under the illegal
transaction. In Nash v Halifax Building Society [1979] 1 Ch 584 a building society advanced money on the
security of a property subject to a prior mortgage which was prohibited by section 32(1) of the English Building
Societies Act 1962. It was argued that the court would not enforce a contract which was expressly or impliedly
prohibited by statute at the suit of either party. It was held that section 32 was intended to protect the property of a
building societyfor the benefit of all persons interested in the society whether as members or outside creditors; and
that therefore although the mortgage transaction was illegal, the society was entitled to recover the money
advanced. Similarly, in the present appeal, theoral agreement entered into between the purchaser and the vendor is
prohibited by Rule 12(1) of the Housing Developers (Control and Licensing) Rules 1970 which requires “every
contract of sale shall be in writing”, and Rule 17 provides penalty to anylicensed Housing Developer who
contravenes any of the provisions of the 1970 Rules. Now, what is the nature and objective of the Housing
Developers legislation? As stated by Sir Garfield Barwick in Daiman Development Sdn Bhd v Mathew Lui Chin Teck
[1981]1 MLJ 56, 60, “Nothing in the rules expressly purports to invalidate a contract which does not comply with the
provisions of the rules. The rules impose no penalties on a purchaser who enters into a contract which doesnot
conform to the requirements of the rules.” In considering the scope of the legislation, Suffian L.P. in SEA Housing
Corporation Sdn Bhd v Lee Poh Choo [1982]2 MLJ 31, 34 in delivering the judgmentof the Federal Court had this to
say:-
“It is common knowledge that in recent years, especially when government started giving housing loans making it possible
for public servants to borrow money at 4% interest per annum to buyhomes, there was an upsurge in demand for housing,
and that to protect home buyers, most of whom are people of modest means, from rich and powerful developers,
Parliament found it necessary to regulate the sale of houses and protect buyers by enacting the Act.”
In our judgment although the oral agreement does not comply with the provision of Rule 12(1), the purchaser clearly
belongs to a class for whose
[1985] 2 MLJ 291 at 296
protection the statutory prohibition is imposed and as such the purchaser canenforce his right for specific
performance of the oral contract of sale provided he is a bona fide purchaser.
On the question of enforceability, Mr. Sri Ram submits that in the instant case the oral contractis unenforceable
because the purchaser is not a bona fide buyer, and that even if the purchaser is a member of the class of persons
for whose benefit the Housing Developers legislation was enacted and that he is entitled at commonlaw to relief,
equitable remedy ought to be refused to him by reason of his conduct. The complaint against him is that he has
made a false claim regarding the extra land and he has used the Housing Developers legislation as an engine of
fraud as enunciated inthe case of James McCormick v William Grogan (1869) 4 LRHL 82. It is not a fraud in the
common law sense, but an unmeritorious and unconscionable conductwhich is known as constructive or equitable
fraud (see Spry on Equitable Remedies, 2nd Edition, at page 236). We have thoroughly examined the alleged
unconscionable conduct levelled against the purchaser and also the allegedconduct which was supposed to make
him a mala fide purchaser and therefore disqualify him from the protection of the Housing Developers legislation. In
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his oral and as well as written submissions Mr. Sri Ram has tabulated fourgrounds to establish unconscionable
conduct:-
(a) it was the purchaser who suggested that there be no written agreement;
(b) the purchaser took advantage of there beingno written agreement to make a claim for extra land as having
been sold to him;
(c) the purchaser has misled the relevant authorities when obtaining a loan from Bahagian Pinjaman
Perumahan (the Housing Loan Divison); and
(d) the purchaser tricked the vendor's clerk into accepting three bank drafts and then claiming that the vendor
had accepted full payments and waived any delay.
In normal circumstances, these allegationsif unexplained would be sufficient to satisfy us that the purchaser is not a
bona fide buyer and therefore would render the oral agreement unenforceable. But having regard to the whole
evidence and in the light of our conclusionthat the learned Judge was correct in holding that the repudiation of the
contract is not valid, the impact of these four allegations has been whittled down to the extent that we are satisfied
that this is merely a case of the pot calling the kettle black. Weare of the view that the vendor is more guilty of the
alleged unconscionable conduct assuming for one moment that such conduct is indeed unmeritorious and
unconscionable. On allegation (a) that the oral agreement was at the behest of the purchaser, the simpleanswer to
that argument is that the responsibility of having the contract in writing lies on the vendor as licensed Housing
Developer. This is clear from Rules 12(1) and 17. It is for the vendor to insist on the written agreement. The fact that
the idea of havingno written agreement had originated from the purchaser for whatever reason, does not relieve the
vendor from prosecution under Rule 17. The legislature has placed on the developer rather than the buyer the
responsibility of ensuring compliance with the Ruleswhich inter alia includes the requirement of the contract to be in
writing failing which the developer is liable to prosecution. In the circumstances, we do not think that ground (a)
would make the purchaser a malafide buyer. As regards ground (b), we are of the view that the allegation is
unsupported by the evidence. The learned Judge whilst rejecting the claim on extra land quite rightly did not make
any finding that the purchaser took advantage of therehaving been no written agreement to make a claim. As stated
earlier, the land in dispute is a corner lot and it is not uncommon in this country that the size of a corner lot is bigger
than a middle one. We have dealt with this matter when addressing the issueof repudiation, and we do not wish to
add anything further except to state that in any litigation, merely because a plaintiff has failed to establish a
particular claim, it does not automatically follow that his claim is made mala fideand that all evidence of other claims
in the suit must also be rejected outright. Having regard to the corner lot, we do not subscribe to the inference that
the claim on extra land was made mala fide. With regard to ground (c),it is a fact that the property in dispute has
been described by both the vendor and the purchaser as a “double-storey terrace house” although strictly it is in
fact a “double-storey terrace shophouse”. In our view there can be no sinistermotive in the misdescription since the
shop-house has dwelling facilities on the top floor. Mr. Sri Ram suggests that the reason for the misdescription was
to mislead the Housing Loan Department for otherwise the purchaser's application for loan to purchasea shophouse
would not have been approved. But it is clear from the evidence of Cik Hasnah (DW5), the officer attached to the
Housing Division of the Treasury, that only purely commercial buildings are excluded from Government loan, but
there is nothing to
[1985] 2 MLJ 291 at 297
prevent loans being granted to civil servants for purchasing a shophouse provided it has residential facility. On the
evidence, ground (c) fails to establish that the purchaser is a mala fide buyer. Finally,under ground (d) trickery is
alleged against the purchaser with regard to the three bank drafts totalling $5,928/- to settle the balance of the
purchase price. The learned Judge found that the payments were accepted by the respondent's clerk by
mistake.There was no finding of trickery. We see no reason to disturb the finding of fact of the learned Judge. In
any event, in view of our finding that the repudiation of the contract was not valid the purchaser was entitled to
make the payments and as such both thetender and acceptance were valid.
For the reasons given, we must reject the argument that the purchaser is a mala fide buyer. He cannot be deprived
of the protection given by the Housing Developers legislationnor is there justification in holding that the purchaser
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has used the housing developers legislation as an engine of fraud. In our judgment, the purchaser has not
perpetrated any fraud — legal or equitable. His claim for specific performance should havebeen granted.
The contract of sale though oral must be deemed to contain all the provisions in Rule 12(1). But notwithstanding the
provisions of Rule 12(1) (r) and 12(1) (o), we are of the view that the delay in the delivery of vacant possessionof
the housing accommodation must be attributed entirely to the purchaser's own conduct in agreeing to perform his
obligation under the contract only in accordance with his own erroneous interpretation of it pertaining to the extra
land. There was no delayby the vendor in the completion of the building although the vendor committed a breach of
contract by refusing to accept payment and to transfer the property. This is clear from Exhibit D8 dated June 27,
1972 wherein the purchaser was informed by the vendorthat the construction of the building had been completed. In
the result the purchaser should not be entitled to any indemnity under Rule 12(1)(r). In our judgment the proper
discretion to be exercised is to grant the purchaser specific performance of the contractof sale without any
compensation under section 18 of the Specific Relief Act, 1950. This is not a case where damages should also be
granted for breach of contract in addition to specific performance in order to satisfy the justice of the case. Before
concludingwe must confess that from the Appeal Record we are not too happy with the way in which the appellant's
case had been conducted in the court below as regards documentary evidence. Documents like Exhibits D7, D8
and D16A had been unnecessarily challenged andthereby contributing to wastage of judicial time. In the case of
Exhibit D16A after strenuous challenge had been made as to its genuineness, attempt is made before us to rely on
it to support the purchaser's claim. Be that as it may, this appeal is allowedwith costs, and the order of the learned
Judge is set aside. The Orders as prayed in paragraphs (a), (e), (f) and (g) of the Statement of Claim are granted.
The balance of the purchase price of $5,928/- less $120/- must of course be paid by the purchaser tothe vendor if
this has not been done. In this case we have considered both the appeal and cross-appeal together. For reasons
already stated we find the cross-appeal has no merit and should be dismissed. We also order that the deposit be
refunded to the appellant.
Appeal allowed; Cross-appeal dismissed.
Solicitors: VK Palasuntharam; Yeo & Yeo.
End of Document
