Ong CJ:

This is an appeal against the decision of the High Court at Kuala Lumpur given on 19 June 1969 ordering specific performance by the vendors of an agreement dated 16 May 1961 for the sale of land.

Wong Choong and Chin Kim, his wife, were the registered co-owners in equal shares of a piece of land at Treacher Road in the residential zone of Kuala Lumpur. Loh Boon Siew was in search of a suitable place for his motor-car showrooms. On 16 May 1961 they entered into an agreement for the sale and purchase of this land at the price of $160,000 or approximately $4 per square foot. Situate on the land were the vendors' family residence and some outhouses let to tenants protected under the Control of Rent Ordinance 1956 then in force. As the land was required by the purchasers for commercial purposes, the agreement contained certain stipulations relating to planning permission to be applied for and proceedings taken by the vendors thereafter for ejectment of their tenants so as to be able to give the purchaser vacant possession.

Briefly, the agreement was as follows. In consideration of $1,200 paid to them by the purchaser the vendors granted him an option of purchase at the price of $160,000 to be exercised within six months. During such period the purchaser was to supply plans for submission by the vendors to the authorities for planning permission. Upon receipt of such permission the purchaser was to pay the vendors forthwith the sum of $40,000 by way of deposit to account of the purchase price and the balance of $120,000 within six months thereafter; but, in the event of permission being refused, the option was to be automatically extended for a further six months, so that the expiry date became 12 months from 16 May 1961. In the event planning permission was not forthcoming and the option became extended accordingly. The agreement went on to provide for the contingency where, in default of planning permission, the purchaser was still desirous to complete and paid the agreed deposit. The relevant provisions were as follows:

7. Immediately on receipt of the sum of dollars forty thousand ($40,000) only, the vendors hereby undertake to take such steps as may be deemed necessary including legal proceedings to evict their tenants on the said land and shall immediately apply to the President or Chairman of the Rent Assessment Board for a certificate that the Rent Assessment Board is satisfied that the owners of the said land intend to demolish all buildings on the said land for the purpose of rebuilding and in its opinion it is in the public interest that they should be permitted to do so. All costs and expenses in this connection shall be borne by the vendors.

8. If, within six (6) months from the date of the said deposit the vendors are unable to give vacant possession of the said land, the purchaser or the nominee has the exclusive right to terminate the agreement and the vendors shall immediately refund to the purchaser or nominee the sum of dollars forty thousand ($40,000) free of interest and this agreement shall be null and void.

13.Time wherever mentioned in this agreement shall be the essence of this contract.

On 5 May 1962 - ten days before the extended expiry date - the purchaser purported to exercise his option by remitting from Penang $40,000 by cheque to the solicitor in Kuala Lumpur who was acting for both parties. In the meantime Wong Choong had met an untimely death on 5 May 1962, having appointed the Public Trustee executor of his will. The latter accepted the appointment and on or about 8 June 1962 both he and the widow returned their respective shares of the $40,000 sent to them by cheque, on the ground that the option had not been "duly exercised". Thereafter there was no further correspondence between the parties, or any intimation given by the purchaser as to his intentions regarding the property until writ in this action was issued in the High Court on 29 August 1966.

By their defence the ven