JUDGEMENT

This is an application by the Plaintif for a declaratory order that an offer by the Defendant to sell a piece of land to the Plaintiff has been accepted and the Defendant be ordered to execute the agreement and complete the sale.

[2]

The piece of land in question is 18.6 acres and is situated in Kuala Lukut about 5 km away from Port Dickson. The registered proprietor of 9,461.107/10,000 shares of the land hereinafter referred to as "the property" is Annamalay s/o Narayanan, the remaining shares being held by 4 others. Annamalay was adjudged a bankrupt on 22.8.83 and by virtue of section 24(4) of the Bankruptcy Act, 1967 the property became divisible among his creditors and vested in the Official Assignee.

The Plaintiff wanted to buy the land and engaged the service of E.K. Tan and Co. a licensed valuation surveyor and valuer to prepare and submit a valuation report. On 27.8.97 the valuer submitted a valuation report with an opinion that the market value of the property (9,461.107/10,000 shares) is RM1.9 million. Immediately the Plaintiff wrote a letter to the Defendant expressing his desire to buy the said property by private treaty for RM1.9 million. It is reasonably assumed as no direct evidence is available that the Plaintiff's letter was accompanied and supported by the valuer's letter [3] (Exhibit RA-2) to the Plaintiff stating that the market value of the property is RM1.9 million. The Defendant responded on 13.9.97 by offering to sell the property to the Plaintiff on the following terms:

"1.1 Harga jualan ditetapkan pada RM1.9 juta.

1.2 Penjualan adalah merangkumi segala bebanan yang ada.

1.3 Pegawai Pemegang Harta tidak dipertanggungjawabkan jika pembeli gagal melaksanakan pindahmilik tanah.

1.4 Pegawai Pemegang Harta dikecualikan dari dikenakan sebarang kos yang mungkin timbul dari transaksi jualbeli ini.

1.5 Bayaran 10% dari harga jualan hendaklah dibuat dalam tempoh tujuh (7) hari dari tarikh penerimaan surat ini dan bakinya dalam tempoh 3 bulan selepas itu.".

On 13.9.97 the Plaintiff accepted the Defendant's offer and paid the 10% deposit of RM190,000 to the Defendant and the balance sum to be paid within 3 months. One month later the Defendant requested the Valuation and Property Services Department to prepare and submit a valuation report [4] of the land. On 27.10.97 the Government valuer submitted a valuation report with an opinion that the fair market value of the land is RM3.765 million. The Defendant refused to execute the agreement and complete the sale. The Plaintiff filed this action.

The Defendant's opposition to the Plaintiff's application is founded on 2 grounds. Firstly the Defendant doubted and suspected the ability and credibility of the Plaintiff company and the director who purportedly acted for the Plaintiff in a RM1.9 million land transaction. The Plaintiff was incorporated on 17.1.97 with a paid up capital of RM2/= and an authorised capital of RM100,000/=. Mr. Koh Bee Kuan who purportedly acted for the Plaintiff in the sale transaction is not a director of the Plaintiff. The directors are Ahmad Sayuty bin Fuaad and Ng Heng Hock and the shareholders are Vasanthi a/p Subramaniam and Cheong Yoke Ling. The second ground is inadequacy of consideration as the purchase price is grossly under-valued.

The first ground fails for the simple reason that if the Plaintiff is unable to pay the balance [5] sum within 3 months the Defendant is entitled to forfeit the deposit of RM190,000/=. There is therefore no prejudice or disadvantage to the Defendant. It is not uncommon for businessmen and brokers to use a RM2/= company as a vehicle to clench a deal and having entered into a formal agreement assign or sell it to a 3rd party for a profit. This devise does not and should not concern the Defendant.

The second ground is well founded. The law relating to contracts is governed by the Contracts Act, 1950 and any issue, question or determination whether an agreement or contract is void/voidable or unlawful