Jeffrey Tan J:

[1] This is an action by the plaintiff for specific performance of the agreement dated 17 March 1991 (said agreement) and entered into between the defendant as lessor of the one part and the plaintiff as lessee of the other part, in which the defendant had allegedly agreed to grant to the plaintiff a renewable 30-year lease of the piece of land (later identified as Lot 8117) opposite the plaintiff's Hotel Anita and situated at Jalan Sultanah, Kluang, Johor (said land) for a multi-storey car park complex, or damages in lieu of specific performance.

[2] Trial proceeded without any consensus on the agreed issues and or agreed documents. Nevertheless, there were areas of accord. Both parties agreed to the dispensation of formal proof of the documents in their respective bundles, which were PBA(1-61) and PBB(1-31) filed by the plaintiff, and DB(1-16) filed by the defendant. And both parties agreed to the following facts stated in encls. 90 and 90A.

1. The Defendant ("Kluang Council") is a local authority within the meaning of the Local Government Act, 1976.

2. By letter dated 1st November 1989, the Plaintiff applied to the Kluang Council for a lease of land situate in Jalan Sultanah, Kluang, Johor ("the said Land") for the purpose of developing it as a multi-storey car park complex.

3. The said land is situated opposite a hotel owned and operated by Hotel Anika. A portion of the said land was vacant in November 1989 while squatters occupied some parts of it.

4. By letter dated 20th January 1990 from the Kluang Council to the District Land Administrator, Kluang, the Kluang Council informed the District Land Administrator that the Kluang Council had decided during its meeting on 30th December 1989 to apply for a parcel of land as set out in the outline plan for the purpose of a "Temporary Occupation Licence For Temporary Car Park Site at Jalan Sultanah, Kluang". The Kluang Council further requested the cooperation of the Land Administrator to consider the application due to the shortage of car-park areas in Kluang town.

5. By letter dated 3rd October 1990, the Kluang Council informed the Director of the Johor State Economic Planning Unit, Johor Bahru ("UPEN") "inter alia", that:

(i) the Kluang Council had received an application from Hotel Anika for a lease of the said land for the purpose of building a multi storey car park area. The said land was a parcel of land that had been zoned as a car park area under the Layout Plan Bil: J5/3949;

(ii) that the Kluang Council had agreed to Hotel Anika's application during its meeting on 24th July 1990 in view of the fact that Kluang town had an acute shortage of parking lots and that it would be very good if the private sector was interested in building a multi storied car park to accommodate the increasing number of vehicles;

(iii) that the Kluang Council had accordingly imposed upon Hotel Anika certain conditions as contained in its said letter of 3rd October 1990; and

(iv) asked for UPEN to agree to this course of action on the part of Kluang Council.

6. By letter dated 6th November 1990, the Kluang Council approved the application and agreed to grant to Hotel Anika the said land as a lease for 30 years, with an option to renew for another 30 years and on other terms and conditions contained therein.

7. Thereafter, further communications passed between the parties on the terms and conditions of the proposed lease:

(i) By letter dated 8th November 1990, Hotel Anika wrote to thank the Yang Dipertua of the Kluang Council for approving its application, but sought clarification and the Yang Dipertua's consideration on the rental payments for the duration of the lease and some of the other conditions stated in the Kluang Council's letter of 6th November 1990. Hotel Anika also enclosed their BBMB Cheque No. 040702 for the sum of RM5,000.00 and made out to the Kluang Council pursuant to the terms of the Kluang Council's letter dated 6th November 1990;

(ii) By letter dated 3