Edgar Joseph Jr SCJ:

[1] By an agreement in writing dated 20 May 1977, ("the joint-venture agreement") entered into by a certain Tan Ah Chim, of the one part, and a certain Ooi Bee Tat, the first defendant ("D1") of the other part, D1 had agreed to purchase and Tan Ah Chim had agreed to sell the land comprised in Holding No 70, Town Subdivision 5, North East District Penang, ("the land"), for the construction of dwelling houses described therein and subject to the terms and conditions set out therein.

[2] More particularly, the principal terms and conditions of the joint-venture agreement so far as material to this suit were these:

(1) part of the purchase price of the land was to consist of dwelling houses to be erected thereon by D1 for the benefit of Tan Ah Chim. (Clauses 2 and 11);

(2) the building scheme on the land was to be carried out in two phases. (Clause 9);

(3) D1 had undertaken to complete the construction of the dwelling houses and obtain occupation certificates in respect thereof within 18 months of being given possession of the site. (Clause 11); and

(4) if D1 were to be in default of his obligations under Clause 11 then he was to incur liability to compensate Tan Ah Chim at the rate of RM10 per day in respect of each dwelling house and, if after a period of 18 months from the date of such default, D1 were to fail to obtain the required occupation certificates, Tan Ah Chim was to have the right to rescind the agreement. (Clause 13).

[3] In addition, it was contended for the plaintiff that the following terms were to be implied under the joint-venture agreement:

(1) that D1 would carry out his work in a proper and workmanlike manner using materials of good quality and reasonably fit for their purpose; and

(2) that Tan Ah Chim relied on the skill and judgment of D1 as a building contractor and upon his financial ability to carry out the works.

[4] Some 15 months after the execution of the joint-venture agreement; more particularly, on 27 August 1978, Tan Ah Chim had, by an agreement in writing dated the same date, sold the land to the plaintiff Tan Ah Chim & Sons - a family company of which Tan Ah Chim was the founder - subject to the rights and obligations under the joint-venture agreement, and D1 had by a letter dated 26 May 1979, consented to the sale, on condition that all the rights and obligations of the parties under the joint-venture agreement were to be assumed by the plaintiff and D1.

[5] Pursuant to the joint-venture agreement, D1 had commenced construction work on the land but, as events turned out, he was unable to complete the same.

[6] In consequence, the plaintiff alleges that D1 is, by virtue of the joint-venture agreement, liable to pay to the plaintiff compensation at the rate of RM10 per day in respect of each dwelling house and as 15 dwelling houses were involved, this would amount to RM150 per day from January 1979.

[7] The plaintiff further alleges that the construction work carried out by D1 was seriously defective in that:

(a) the structures were not built according to the specifications of the contract; and

(b) the materials used and the workmanship were of inferior quality,

and although D1 had been notified of the same by a letter in writing dated 22 January 1979 from the Consultant Engineer concerned, he had not carried out any remedial works, and that in consequence, he was in breach of contract.

[8] Additionally, the plaintiff alleges that D1 did not possess the wherewithal or the financial means to carry out his obligations under the joint-venture agreement and, in consequence, the same was frustrated.

[9] It would be pertinent, at this stage, to refer to another event; namely, the entry on the scene of the second defendant Ooi Bee Tat & Sons ("D2"), it being the family company of which D1 was the founder. This requires me to refer to an assignment agreement in writing dated 14 June 1979, ("the assignment agreement") whereby D1 purported to assign all his right, title and interest under the j