Arifin Zakaria JCA:

Background facts.

This is an appeal by the plaintiff in the court below against the decision of the learned trial judge in dismissing the plaintiffs claim and in allowing the defendant's counterclaim. For convenient the parties will be referred to as "plaintiff and "defendant" respectively.

The facts leading to this claim may briefly be stated as follows. The defendant is the registered owner of land known as Lot. No. 8761, CT 25148, Mukim Kajang ("the said land"). By agreement dated 11 October 1989 ("the agreement") the defendant agreed to sell and the plaintiff agreed to purchase the said land at the agreed price of RM550,000 and on such other terms and conditions as contained in the agreement. It is not in dispute that a deposit of RM50,000 was paid by the plaintiff to the defendant on or before the execution of the agreement. Thereafter no further payment was made by the plaintiff.

Vide letter dated 10 January 1990 the defendant sought to terminate the agreement with immediate effect. The said letter shorn of the formalities reads as follows:

Sale and Purchase Agreement in respect of that piece of land held under CT 25148 Lot No. 8761 Mukim of Kajang

We refer to the Sale and Purchase Agreement entered into between ourselves as vendor and youselves as purchaser dated 11 October 1989. We give you notice that we are hereby terminating the said Sale and Purchase Agreement with immediate effect.

To this effect we propose to refund all deposit paid by yourselves to us and thereafter the Sale and Purchase Agreement is to be treated as null and void.

Through its solicitors Lee & Lee the plaintiff informed the defendant that it could not agree or accept the unilateral termination of the sale. This is found in the plaintiffs solicitors' letter dated 12 January 1990 the material part of which reads as follows:

Re: Sale and Purchase of land held under C.T. 25148, Lot No. 8761, Mukim of Kajang

We refer to your clients' letter dated 10 January, 1990 addressed directly to our clients, they purportedly terminated the Sale and Purchase Agreement.

We are instructed to inform you that our clients do not agree or accept the unilateral termination of the sale by your clients and that they require specific performance. If the sale is not concluded in accordance with the Sale & Purchase Agreement dated 11 October 1989 our clients may have no alternative but to seek redress in a court of law and shall claim for specific performance and all costs, expenses and consequential damages flowing thereon. It will be deeply appreciated if you will kindly use your good office to assist in the successful completion of this sale.

The issues.

The first issue raised before us is whether the purported termination of the agreement by the defendant was legally valid and effective in the circumstances of the case. This in our view would turn on the construction and effect to be given to the cl. 3.(a), which stipulates as follows:

3(a) Completion of the sale and purchase hereunder of the said property shall take place within a period of Ninety (90) days from the date of this Agreement (hereinafter referred to as "the Completion Date"). Provided Always and it is hereby agreed by and between the parties hereto that the Vendor shall grant to the Purchasers an extension of a further thirty (30) days in respect of the Completion Date but upon payment of interest on the outstanding balance of the purchase price at the rate of eight point five per centum (8.5%) per annum calculated on a daily basis during the period of extension.

The said cl. clearly provides that the Completion Date of the sale and purchase of the said property is within a period of 90 days from the date of the agreement. It is common ground that the Completion Date falls on 9 January 1990 ie, one day prior to the termination letter issued by the defendant. Therefore, it would appear that the defendant had acted within the terms of the cl. 3.(a) in issuing the termination let