Peh Swee Chin FCJ:

Section 75

When a contract has broken, if the sum is named in the contract as the amount to be paid in case of such breach, or if the contract contains any other stipulation by way of penalty, the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or, as the case may be, the penalty stipulated for.

2

The agreement made on this 15 October 1988 ...

Whereas:

Now this agreement witnesseth as follows:

In consideration of the covenants, undertakings and payments set out hereinafter, the parties mutually agree between themselves as follows:

(1) (a) The vendor shall sell the said premises free of all encumbrances to the purchaser for the total of RM120,000 the payment terms being as follows:

i) The purchaser shall pay to the vendor receipt of which the vendor hereby acknowledges by signing this agreement the sum of RM12,000.

ii) The purchaser shall pay the vendor the sum of RM48,000 on or by 27 October 1988.

iii) The purchaser shall pay the vendor fifteen (15) equal monthly instalments of RM4,000 a month on or before the end of each month the first of which fifteen (15) payments is to commence on 30 November 1988.

(2) (a) The vendor as tenant shall continue to hold the tenancy as trustee for and on behalf of the purchaser till the expiry date on 30 November 1989 and if requested by the purchaser shall in accordance with the tenancy agreement renew the said tenancy. On the expiry of the extended period if there shall not be any clause for further extension the vendor's obligation in this clause shall cease and the purchaser will have full liberty to negotiate a new tenancy but so long as there shall be extensions to the current tenancy the vendor shall continue to hold the same for and to the benefit of the purchaser and to act on the purchaser's instructions.

(b) Both parties represent to each other that they will not do anything to breach the terms of the tenancy and in the event of such breach occurring the party at fault shall and hereby....fully indemnify the other party.

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(15) (a) In the event the vendor shall default in his obligations herein the purchaser shall be entitled to specific performance in which event all the costs incurred shall be to the vendor's account.

(b) In the event the purchaser shall default in his obligations herein all monies paid to date of such breach shall be forfeited absolutely to the vendor as agreed liquidated damages and thereupon this agreement shall be deemed null and void and the purchaser shall give up vacant possession of the said premises and shall give us the said practice to the vendor and shall have not further rights whatsoever.

[3] The premises where the clinic is situated have, at all material times, belonged to a third party who had earlier granted a tenancy of the same to the vendor, who, after and under the agreement dated 15 October 1988, was "to hold the tendency as trustee for and on behalf of the purchaser...", vide its cl 2 but the rent payable would be paid by the purchaser after the date of the said agreement to the vendor who would then in turn pay to the vendor's landlord.

[4] RM12,000 was paid