(Oral)

Gopal Sri Ram JCA:

This is the judgment of the court.

The defendant is and was at all material times the registered proprietor of a piece of property off Jalan Ipoh. It is a 4 1/2 - storey shop house. The ground, first and second floors were used for commercial purposes. They were designated as such at the time the building was constructed. For convenience we will call it "the subject property ".

The defendant wanted to sell the subject property. It engaged the services of Rahim & Co., a well-known and reputable firm of estate agents. Eventually, the estate agents introduced the plaintiff as the intending purchaser. At about the same time, Rahim & Co. prepared a letter setting out the terms on which the sale and purchase was to be carried out. The conveyancing Bar calls such a document "the proforma of sale ". The proforma in this case was dated 7 July 1992. In accordance with the usual conveyancing practice, a copy of the proforma was sent to the plaintiff and defendant respectively. The defendant signed its copy of the proforma on 10 July 1992. What that meant was that the defendant accepted the offer made to it to buy the property. It is in evidence that the plaintiff also signed his copy of the proforma on the same date. It is not in dispute that the proforma does use the phrase "subject to contract ". In fact, those words appear at the very top of the proforma. Since almost the whole of the argument before the High Court centered on the proforma, it is best, we think, that each be reproduced.

Shorn of its formalities, this is how the proforma addressed to the plaintiff reads:

Dear Mr. Ng,

We are pleased to inform you that our client, M/s. Sinar Wang Sdn Bhd has agreed to sell the above property to you subject to the terms and conditions as set out below:

1. Sale Price: M$750,000-00 (Ringgit: Seven Hundred And Fifty Thousand Only)

2. Terms of Payment: (a) The sum of M$75,000.00 (Ringgit: Seventy Five thousand Only) representing ten percent (10%) of the Sale Price shall be paid upon execution of the Sale and Purchase Agreement. Any earnest monies paid shall be included in this sum. This amount is forfeitable in the event the Purchaser shall fail to complete the transaction within the time provided.

(b) The sum of M$675,000.00 (Ringgit: Six Hundred and Seventy Five Thousand only) representing the balance of the Sale Price shall be paid within three (3) months from the date of execution of the Sale and Purchase Agreement.

(c) An extension period of one (1) month shall be provided subject to the balance incurring an interest at the rate of 12% per annum calculated on a daily basis.

3. Earnest Money: M$7,500.00 (Ringgit: Seven Thousand Five Hundred only) shall be paid upon acceptance of the terms and conditions as stated in this letter. This amount is forfeitable in the event the transaction is aborted by the Prospective Purchaser prior to the execution of the Sale and Purchase Agreement.

4. Possession of Upon receipt of the full payment of the sale

Property: price.

5. Quit Rent & This shall be apportioned at the time of delivery

Assessment: of possession.

6. Transfer & The purchaser shall bear the cost of of transfer

Stamp fees: and stamp fees including preparation of the Sale and Purchase Agreement. However, each party shall bear their own legal fees.

7. Specific Terms a) This sale is made subject to the existing

& Conditions: tenancy and all rights of the tenant thereunder being undertaken by the purchaser.

b) In the event there is no Novation Agreement signed between the Vendor, the Purchaser and the tenant then, the Purchaser shall only be entitled to terminate the tenancy agreement through the Vendor and to pay compensation to the tenant accordingly with the tenancy agreement executed between the Vendor and the Tenant.

c) The Purchaser shall indemnify the Vendor of any losses, claims made by the tenant in the event of any premature termination of the tenancy agreement made by the Purchaser.

8. Other Terms