Zakaria M Yatim JCA (dissenting):

[1] The respondent filed an action against the appellant in the Sessions Court, Johor Bahru claiming special damages in the sum of RM43,770 together with interest and costs for a breach of an oral agreement. The action was tried in the Sessions Court and at the end of the trial the learned Sessions Court Judge dismissed the respondent's claim with costs The respondent appealed to the High Court. Haidar J allowed the appeal with costs With the leave of this Court, the appellant now appeals to this Court against the decision of the learned Judge.

[2] The appellant is a limited company incorporated under the Companies Act 1965. It was the owner of a machine known as "Hydraulic Press 300 Tons" (the said machine). The appellant had leased the said machine to a company known as Pembinaan Siap Sdn Bhd (the lessee) in Batu Pahat. The lessee had defaulted in paying the instalments due and the appellant wanted to repossess it. The respondent is a limited company incorporated under the Companies Act. On 3 February 1986, the respondent entered into an oral agreement with the appellant in the appellant's office at Johor Bahru whereby the appellant agreed to sell the said machine to the defendant for RM65,000. On the same date the managing director of the respondent, Mr Peh Hai Lim, (PW2) who was present at the meeting when the oral agreement was reached between the parties, signed a document entitled "Sale and Purchase Agreement". The document was undated and it is not in dispute that the appellant did not sign the document until today. Pursuant to the oral agreement, the respondent on 18 February 1986, sent its representatives to Batu Pahat to make arrangement to remove the said machine from the premises of the lessee. The respondent had constructed a concrete foundation for the machine at its premises in Johor Bahru. The machine was then duly transported to the respondent's premises On 21 March 1986, Mr Peh Hai Lim left for Taiwan. While he was in Taiwan, the appellant, on 25 March 1986, sold the machine to a third party for RM85,000 and removed the machine from the respondent's premises.

[3] The respondent alleged that the appellant was in breach of the said oral agreement and claimed special damages The respondent contended that under the oral agreement, the appellant had sold the said machine to the respondent for RM65,000 subject to the right of the lessee to buy it back from the appellant after the appellant had served due notice on the lessee. The lessee did not redeem the machine.

[4] The appellant contended that it agreed to sell the machine to the respondent at the price of RM65,000 subject to the condition that no higher prices were being offered by other interested purchasers The appellant further contended that it had received a higher offer of RM85,000, but the respondent refused to increase its offer to RM85,000. According to the appellant it was under no obligation to sell the machine to the respondent for RM65,000.

[5] The learned Sessions Court Judge, in his grounds of judgment made the following finding at p 4:

He referred to the evidence of the appellant's witness (DW2) who said that the sale of the said machine to the respondent was subject to two conditions, namely,

(1) If the lessee redeemed the machine within two weeks, the oral agreement was deemed to be cancelled; and

(2) the appellant would only sell the machine to the highest bidder, after the machine was advertised.

[6] The learned Sessions Court Judge accepted DW2's evidence. In his grounds of judgment on the same page, he stated that, from the evidence of DW2, it was not possible for the appellant to sell the machine to the respondent on 3 February 1986 because the lessee was given the liberty to redeem the machine. The oral agreement was also subject to the condition that the machine would only be sold to the "highest bidder". The learned Sessions Court Judge concluded by saying that the oral agreement was subject to conditi