On December 10, 1986 Sova Sdn. Bhd., the plaintiffs, instituted the present civil suit against Kasih Sayang Realty Sdn. Bhd., the defendants, whereby they allege that the defendants have committed a breach of a sale and purchase agreement entered into by the two parties on March 13, 1984 ("sale and purchase agreement"). By their writ of summons with the accompanying statement of claim filed in this court on the same date, the plaintiffs request for an order for specific performance of the said agreement and alternatively a rescission of the said agreement and they also claim damages and costs. The defendants entered an appearance to the writ on December 23, 1986 and filed their statement of defence on January 5, 1987. Prior to the filing of the statement of defence, the plaintiffs had made an application by way of summons-in-chambers (enclosure 3) on December 29, 1986 under Order 81 rule 1(b) of the Rules of the High Court 1980 for the rescission of the said agreement and the consequential orders directing the defendants to refund a certain sum of money paid by the plaintiffs to the defendants and damages and costs. An affidavit in support was duly filed with the application on the same day.

At the hearing of the application on February 21, 1987 in chambers the learned counsel for the defendants raised the following preliminary objections:

(1) that this court has no jurisdiction to determine the dispute between the parties or alternatively that this court is not the proper and convenient forum to determine the dispute between the parties;

(2) that the application for necessary judgment pursuant to Order 81 of the Rules of High Court 1980 should be dismissed with costs for non-compliance with Order 81 rule 2(2) of the said rules.

As it would take quite some time to hear the arguments of both the learned counsel I suggested to them that it would be more convenient for them to put in their respective written submissions which they eventually did.

In his submission on the jurisdiction issue the learned defence counsel contends that as the cause of action arose in Penang and places of business of both the plaintiff company and the defendant company are located in Kuala Lumpur, it must follow that this court has no jurisdiction to determine the dispute between the two parties pursuant to section 23(1) of the Courts of Judicature Act 1964 which reads:

"23.(1) Subject to the limitations contained in Article 128 of the Constitution the High Court shall have jurisdiction to try all civil proceedings where —

(a) the cause of action arose, or

(b) the defendant or one of several defendants resides or has his place of business, or

(c) the facts on which the proceedings are based exist or are alleged to have occurred, or

(d) any land the ownership of which is disputed is situated within the local jurisdiction of the court and notwithstanding anything contained in this section in any case where all parties consent in writing within the local jurisdiction of any other High Court."

It is the contention of the learned defence counsel that the facts as disclosed in the pleadings and the affidavits do not indicate that any one of the four criteria specified in the said section 23(1) is applicable to the civil proceedings now before this court. The parties have not given a written consent to the institution of the civil proceedings in this court. He further contended that the term "local jurisdiction" must be construed as meaning within the local territorial jurisdiction of the High Court in which the same is located and he relies on the case of Tengku Abdul Muiz Shah & Ors v Public Prosecutor [1983] 1 MLJ 422 to support his contentions.

On the other hand the learned counsel for the plaintiffs submits that since the term "High Court" is defined in section 3 of the Courts of Judicature Act 1964 to mean the High Court in Malaya and the High Court in Borneo it must therefore follow that the term "local jurisdiction" as defined in the