Lord Russell of Killowen:

This appeal from the Federal Court of Malaysia, arises from an action by the respondents as purchasers against the appellant as vendor for specific performance of a contract dated 11 December 1973 for the sale and purchase of land in the Mukim of Serdang in the district of Bandar Bahru a price of RM1,100 per relong, the total purchase price being some RM75,000.

The action was in its face a normal one for specific performance requiring the vendor (present appellant) to transfer the land to the purchaser in fact Loh Koon Moy, Lam Wai Kee having acted on her behalf. The claim for relief was for specific performance of the agreement and further or alternatively damages for breach of contract - a perfectly usual claim which cannot be taken as indicating equally acceptable to the plaintiff. The vendor put in a defence which raised a number of points on all of which she failed. In the middle of cross-examination of Lam Wai Kee an amendment of the defence was permitted raising yet another plea on which the vendor also failed. Their Lordships do not find it necessary to comment on these failed points, except to remark that, insofar as they raised questions of fact upon which evidence conflicted, that given on behalf of the vendor was rejected by the Judge.

The agreement for sale was in no way remarkable: it provided for repayment by the purchaser of a deposit and part payment of RM5,000, which was then paid by cheque the receipt of which was then acknowledged. As emerges the vendor appellant did not in fact cash the cheque.

After the amendment to the defence already mentioned the cross-examination of Lam Wai Kee continued. The Judge's notes contain the following passage:

I agree that there is no mention in the agreement if either the purchaser does not pay the balance of the purchase price or the vendor should refuse to sell, what should the consequence be. As a businessman I agree if the purchaser fails to pay the balance of the purchase price the deposit will be forfeited. There was such understanding to the said agreement. There was no undertaking that the vendor has to pay double the amount of deposit if she fails to abide by the agreement. But she has to pay all the damages. The RM5,000 deposit would also be refunded. These undertakings are not incorporated in the agreement. It is not mentioned in the agreement that the vendor must sell and the purchaser must buy.

This passage suggests that in some form the content of an alleged contemporaneous oral agreement, which would or might stand in the way of an order for specific performance, was being suggested to the witness. But the witness appears (i) only to have said as a generalisation that a defaulting purchaser loses his deposit, which is quite correct but does not touch on the fact that such a purchaser can also be ordered specifically to perform by paying the balance of the purchase price, (ii) to have expressly denied that if the vendor defaulted she was to pay double the amount of the deposit: she would have to pay all the damages and refund the deposit - which is only one possibility of a vendor's default and contains no reference to specific performance either as excluded by a contemporaneous oral agreement or otherwise.

The vendor herself gave evidence, it was not suggested to her that there was any contemporaneous oral agreement touching the question of specific performance, though she had said that Lam Wai Kee had explained the agreement to her she was not however present when the agreement was signed, Lam Wai Kee signing on her behalf.

The first defence witness, Gohar Iman Bin Abdul Rahim Moghal, was the husband of the vendor. He stated in evidence in chief that he was present at the signing of the agreement, with the vendor, a brother of the vendor, and Lam Wai Kee after stating correctly that the written agreement did not contain any terms covering default by either party, he continued "There was an understanding should the second pl