Lord Templeman:

This appeal arises out of a purchaser's specific performance action. The purchaser is the respondent Jip Hong Trading Co. Pte. Limited. The defendant vendor is the appellant Meng Leong Development Pte. Limited. The action was tried by A.P. Rajah J in the High Court of Singapore. On behalf of the vendor it was submitted at the trial that specific performance could not be granted because the vendor had, since the date of the purchaser's contract, sold the contractual property to a third party who was not before the Court. The learned Judge accepted that submission and awarded damages in lieu of specific performance. The purchaser's contract price was $152,500, the vendor had spent $38,000 on improvements and there was evidence that at the date of the trial the property was worth $488,000. Accordingly, by an order dated 8 September 1981 A.P. Rajah J awarded the purchaser $297,500 damages; he refused a stay of execution. By notice dated 23 September 1981 the vendor gave notice of appeal for the purpose of obtaining a reduction in the damages of $297,500 ordered by the Judge. The purchaser did not give notice of appeal or cross-appeal against the decision of the Judge to deny the purchaser specific performance and to award damages instead. The purchaser shared the mistaken view of the law of specific performance accepted by the Judge. The time allowed by the operative rules of Court for the service of notice of appeal expired in October 1981, subject to the power of the Court to grant an extension of time.

By a letter dated 23 October 1981 the vendor's solicitors wrote to the purchaser's solicitors saying that the purchaser's solicitors had proposed that the vendor pay the $297,500 damages to the Overseas Chinese Banking Corporation on fixed deposit on a three month basis in the name of the purchaser's solicitors to be held by them as stakeholders and to pay over the deposit to the party who succeeded in the pending appeal together with all accrued interest. By a letter dated 28 October 1981 the purchaser's solicitors confirmed these arrangements but added that:

... the agreement was reached on the strict understanding that the said sum of $297,500 was to be paid to us immediately without any further delay.

Therefore kindly let us have your clients' cheque of $297,500 on receipt of this letter.

The plain implication was that if the vendor did not deposit the damages of $297,500 the purchaser would proceed to levy execution for this sum. With a letter dated 12 November 1981 the vendor's solicitors sent to the purchaser's solicitors the vendor's cheque for $297,500 pursuant to the agreement:

... that in the event that our clients succeed in the pending appeal and damages payable to your clients are reduced, your clients will only be entitled to a proportionate sum of the interest accrued under the fixed deposit. The balance of the interest is to be paid out to our clients.

The vendor's appeal against the quantum of damages came before the Court of Appeal (Kulasekaram, Lai Kew Chai and Chua JJ) on 20 August 1982. The Court pointed out that the purchaser's right to specific performance at the date of the trial could not have been affected by any sale to a third party with notice and suggested that the purchaser should cross-appeal asking for specific performance. The Court of Appeal gave leave to the purchaser to do so and adjourned the vendor's appeal. The Court of Appeal were not on that occasion, or any subsequent occasion, informed by either party that the damages of $297,500 ordered by the learned Judge had already been raised by the vendor and placed on deposit awaiting the outcome of the vendor's appeal as to quantum. By notice of cross-appeal dated 8 September 1982 the purchaser asked that the order of Rajah J should be varied and that specific performance be substituted therefor. On 16 September 1982 the Court of Appeal dismissed the vendor's appeal on quantum, allowed the purchaser's cross-appeal and