JUDGMENT

Lord Cross of Chelsea J:

(delivering the judgment of the Board):This is an appeal by Loh Boon Siew the plaintiff in the action from a judgment and order of the Federal Court of Malaysia dated 13 November 1969 allowing an appeal from a judgment and order of the High Court in Malaya by which the appellant was granted specific performance of a contract to purchase certain land at Jalan Treacher, Kuala Lumpur.

In 1961 one Wong Choong (now deceased) and his wife Chin Kim who is the first respondent to this appeal were the registered co-owners of the land in question. On the land there was a big house in which they lived and two or three small houses which were let to tenants who had the protection afforded them by the Control of Rent Ordinance 1956. They wished to sell the land and instructed one Chin, a broker, to find a purchaser for it. Chin got into touch with the appellant who wished to buy a piece of land at Kuala Lumpur on which to build a motor car showroom for his company. After looking at the land and finding it suitable for his purposes the appellant went with Chin to see Wong Choong and his wife and after some bargaining an agreement was executed on 16 May 1961 between Wong Choong and Chin Kim (described as vendors) of the first part, the appellant (described as purchaser) of the second part and Chin (described as "the broker") of the third part. After reciting the title of the vendors to the land and the fact that the vendors wished to sell it and the purchaser to buy it the agreement continued as follows:

"1. In consideration of the sum of Dollars One Thousand Two Hundred ($1,200) only now paid by the Purchaser to the Vendors, which sum the Vendors hereby acknowledge, the Vendors hereby grant to the Purchaser or any person or body corporate nominated by the Purchaser in writing (hereinafter referred to as "the Nominee") this OPTION to purchase the said land for the sum of Dollars One Hundred and Sixty Thousand ($160,000) only (sic) free from all encumbrances.

2. This option shall remain open for the period of six (6) months from date hereof.

3. The Purchaser shall immediately upon the signing of this option Agreement instruct a duly qualified architect to prepare plans and specifications of a building or buildings to be erected on the said land for submission to the proper authorities for approval and the Vendors shall sign all such plans, specifications and any other documents which my be necessary when requested to do so.

4. All expenses and liabilities whatsoever which may be incurred in respect of such plans and specifications shall be borne by the Purchaser or the Nominee.

5. As soon as the said plans and specifications have been duly approved, the Purchaser or the Nominee shall immediately notify the Vendors in writing of such approval and shall at the same time pay to the Vendors a sum of Dollars Forty Thousand ($40,000) only as deposit and such deposit shall be deemed to be part payment towards the agree purchase price of Dollars One Hundred and Sixty Thousand ($16,000) only and the Purchaser and Nominee shall pay the balance sum of Dollars One Hundred and Twenty Thousand ($120,000) within six months from date of payment of such deposit and the sum of Dollars One Thousand Two Hundred ($1,200) now paid by the Purchaser to the Vendors shall be set-off against the agreed purchase price.

6. If however, the plans and specifications submitted to the proper authorities have not been approved within six month from date hereof, this option shall then be automatically extended for a further period of six months and the said sum of Dollars One Thousand Two Hundred ($1,200) now paid by the Purchaser to the Vendors shall be deemed to be the consideration of the said agreed extension of six months but in this event the said sum of One thousand Two Hundred ($1,200.00) shall belong to the vendors absolutely and shall not be set-off against the agreed purchase price.

7. Immediately on receipt of the sum of Dollars Forty Thousan