An informal agreement without a formal contract does not create enforceable obligations unless clear intentions are established.

The relevant notice of appeal was filed in the then Supreme Court on 3 June 1994, three weeks before the establishment of the Court of Appeal and the renaming of the Supreme Court to the Federal Court. According to learned counsel for the appellant, the respondents have not been served when the matter was called up for hearing before us on 15 May 2000. On our earlier instructions, learned counsel for the appellant had placed the relevant advertisements in the West Australian papers, as the respondents reside in Perth, and in the Star, a local daily, as to the hearing date of the appeal. The appellant had duly sworn an affidavit as regards the advertisements on 25 April 2000.

A check of the registry records, however, indicate that the respondents' solicitors, both the past solicitors in Ipoh and the present solicitors in Perth, have been duly served with the notices of hearing all along. The previous solicitors were duly discharged by order of court dated 24 March 1998. In view of the long delay since the appeal was filed, we decided to proceed with the hearing despite the respondents and their counsel not being present.

The decision appealed against was made in the High Court on 23 May 1994 but there are no grounds of judgment to assist us as the learned trial judge had retired on medical grounds that same year. With the respondents and their counsel absent, we were left only with the arguments of learned counsel for the appellant.

The facts, according to learned counsel, were that the respondents had three properties in Taiping, namely lots 2917, 2918 and 2919, which they put up for sale through PW2 who was working in CH Williams Talhar and Wong Sdn Bhd, a well known estate agent in this country. This is evident from the letter written by the estate agent to the appellant marked "without prejudice and subject to contract" dated 13 June 1991.

It is relevant to reproduce the said letter in full to get the proper impact of its contents:

WITHOUT PREJUDICE & SUBJECT TO CONTRACT

13th June, 1991

Mr. Lee Chin Kok, 400, Jalan Kampung Maharaja Lela, 34000 Taiping, Perak Darul Ridzuan

Dear Sir,

Re: For Sale Lots 2917, 2918 & 2919, Town of Taiping, District of Larut, Perak.

Further to the meeting between your goodself and our Mr. Robert Tan of even date, it was confirmed that you are still interested to purchase the above property at $215,000/- (Ringgit: Two hundred and fifteen thousand only) with vacant possession and free from all encumbrances.

As discussed, we are to write to the land owner on this and the following terms and conditions:

1. That the landowner allows you to put up layout and building plans for the erection of a showroom on the above-mentioned property.

2. That you're prepare (sic) to pay the owner a token sum of $3,000/- (Ringgit: Three thousand only) as a sign of good faith.

This sum is nonrefundable if the Local Authority rejects the said plans for whatever reasons.

3. That, if the said land and building plans are approved by the Local Authority, you will proceed with the above sale immediately and that your method of payment will be as follows:

a. 10% of the agreed sale price less the $3,000/- (Ringgit: Three thousand only) (that is the token sum)

b. The balance sum amounting to 90% of the sale price to be settled within 3 months thereafter subject to obtaining vacant possession and free from all encumbrances.

As instructed by your goodself, we have already written to the owner on the above and also informed her that your lawyer will be preparing the Sale & Purchase Agreement if she is agreeable to the terms and conditions as set out.

We will inform you immediately once we have received a reply from her.

Thank you.

Yours faithfully, C.H. Williams, Talha