Gopal Sri Ram JCA:

[1]The defendant owns a 3/4 undivided share in a piece of land. The land is in Labuan. His co-proprietor is one Monica Goh. She owns the other 1/4 share. She is not a party to these proceedings. The plaintiff and Monica Goh by their mutual agreement notionally demarcated their respective shares in the subject land. I say "notional" because there was no actual subdivision until January 1991. As for his 3/4 portion of the subject land, the defendant prepared a plan dividing it into 3 sections. The defendant wanted to develop only one of these three sections. He entered into a joint venture agreement with the plaintiff, a housing developer, to carry out the development. That agreement is dated 31 December 1980. Under the terms of the joint venture agreement, the plaintiff was to construct several units of houses at its own cost on the defendant's land and the defendant was to receive a portion of those units.

[2]The defendant also executed a power of attorney in the plaintiff's favour. It is also dated 31 December 1980. By its terms the defendant conferred on the plaintiff wide powers to deal with the land. Let me give an example that is of immediate relevance. Clauses 9 & 10 of the power say that the plaintiff is:

9. To have absolute power to apply for sub-division of the said land dividing the same into lots subsequently & for that purpose to sign and execute all documents and agreements.

10. To have absolute power to surrender the said land for sub-division and to accept such terms and offer and for that purpose to sign and execute all the necessary instruments to that effect.

[3]Initially the parties went forward on the joint venture agreement. Plans and amended plans were submitted. Construction commenced in 1982 but halted in November 1984. The project was never completed. That is because part of the construction encroached onto Monica Goh's portion. There were some negotiations between the plaintiff and the defendant. They came to naught. For some six years neither side did anything. Then, on 24 February 1990 the defendant's solicitors wrote to the plaintiff enquiring whether the plaintiff will resume work to complete the project. It further gave notice that failure to respond within seven days the project will be deemed abandoned. The plaintiff responded by a letter dated 16 March 1990. The essential part of that letter reads:

We are pleased to advise you that we will get in touch with your client to discuss and negotiate with regard to the joint venture agreement. We will resume the construction of the project in the near future.

We will appreciate very much if you could defer any court proceeding until we have an opportunity to discuss with your client.

[4]Then, on 1 August 1990 the defendant's solicitors wrote stating that as the plaintiff had failed to see the defendant nor resumed construction, the joint venture agreement was to be treated as having been terminated by repudiation. Later, the plaintiff issued writ. The defendant delivered his defence and counterclaim. At the trial, a substantial volume of oral and documentary evidence was produced before the judge. The learned judge who tried the case held that the defendant's termination of the joint venture agreement was justified and therefore lawful. He awarded the defendant damages. In short he found for the defendant. But he also went on to direct an assessment of the work that the plaintiff had done and ordered the defendant to pay the assessed value. The defendant has appealed against this part of the judge's order. The plaintiff has appealed against the dismissal of its claim. I find it convenient to deal with the plaintiff's cross appeal first.

[5]At the trial, the plaintiff's complaint was that the defendant was to blame for all of the difficulties that arose in relation to the encroachment onto the co-proprietor's portion of the subject land. The defendant's case is that it is all the plaintiff's fault. Counsel on both sides to