Mokhtar Sidin JCA:

Sometime in April 1987 the respondent submitted a booking form dated 3 April 1987 (hereinafter referred to as "the application") to the appellant's agent to rent Kiosk No. 3 at the premises owned by the appellant which premises is known as Subang Parade. The appellant's agent handling the bookings for the various outlets at the Subang Parade at that time was Collings Hui Sdn Bhd. (hereinafter referred to as "Collings Hui"). It is interesting to note and not disputed that the respondent at that time was employed by Collings Hui as its administrative manager. Together with the booking form the respondent also remitted a sum of RM500 said to be the deposit of the said booking. There is no evidence to show that Collings Hui as the booking agent for the appellant replied to the application made by the respondent or for that matter accepted the application made by the respondent. Things were not well between the appellant as the owner of Subang Parade and Collings Hui. Apparently, Collings Hui was not happy with the appointment of Natvest Sdn Bhd (hereinafter referred to as "Natvest") as the appellant's new agent. The appellant then terminated Collings Hui as its agent sometime on 31 March 1988. On the other hand, Collings Hui claimed that it terminated its agency with the appellant on 10 March 1988. For the purposes of this appeal, it does not matter who terminated the services of Collings Hui, but it is to be noted that as on 31 March 1988 Collings Hui officially ceased to be the agent for the appellant. On 5 April 1988, the respondent through her solicitors forwarded three copies of a tenancy agreement in respect of Kiosk No. 3 to Natvest as the agent for the appellant requesting Natvest to execute the said agreement. Together with that agreement the solicitors also enclosed a cheque for RM500 being the rental payment. Natvest or the appellant did not execute the agreement. Apparently, at that point of time, Natvest or the appellant did not accept the respondent's application. Natvest returned the unexecuted agreement and the RM1,000 (deposit and rental) to the respondent's then solicitors, Messrs Chooi & Company.

The respondent then filed the present claim. In her statement of claim the respondent stated, inter alia, the following:

3. By an agreement dated 3.4.87 (hereinafter referred to as "the said Agreement") the Plaintiff inter aliaagreed:

a) to lease an area of 120 sq. ft. and known as Kiosk 3 at an agreed rental of RM500.00 from the Defendant;

b) that the commencement of the lease shall begin three (3) months from the date of issuance of Certificate of Fitness for occupation of Subang Jaya Shopping Centre;

c) that the lease shall be for a period of three (3) years with an option to renew for another three (3) years.

The full terms and effect of the Agreement dated 3.4.87 shall be referred to at the trial.

4. Pursuant to the said Agreement, the Plaintiff paid a sum of RM500.00 as booking deposit and one (1) month's rental inclusive of service charges.

5. The defendant had pursuant to the said Agreement represented and demarcated the exact location of Kiosk 3 at Subang Jaya Shopping Centre.

6. On or about 5.4.88 the Plaintiff through their solicitors MESSRS CHOOI & CO forwarded a further cheque for RM500.00 being the balance security deposit and 3 copies of the tenancy agreement duly executed to the Defendant.

7. On 7.6.88 the Defendant contrary to the Agreement purported to relocate the position of Kiosk 3 and notified of their intention to rescind the Agreement dated 3.4.87.

8. On or about July, 1988 the defendant returned the Plaintiff's cheques totalling RM1,000.00 and the unexecuted tenancy Agreement wherein the same were thereafter returned to the Defendant.

9. As a result of the Defendant's act and/or omission and breach of the Agreement dated 3.4.87 on 7.6.88, the Plaintiff incurred loss and expenses.

10. The Plaintiff at all material times were desirous of commencing the business of retai