Gopal Sri Ram JCA:

[1] This is the judgment of the court.

[2] The defendant is and was at all material times the registered proprietor of a piece of property off Jalan Ipoh. It is a 4 1/2 - storey shop house. The ground, first and second floors were used for commercial purposes. They were designated as such at the time the building was constructed. For convenience we will call it "the subject property".

[3] The defendant wanted to sell the subject property. It engaged the services of Rahim & Co, a well-known and reputable firm of estate agents. Eventually, the estate agents introduced the plaintiff as the intending purchaser At about the same time, Rahim & Co prepared a letter setting out the terms on which the sale and purchase was to be carried out. The conveyancing Bar calls such a document "the proforma of sale". The proforma in this case was dated 7 July 1992. In accordance with the usual conveyancing practice, a copy of the proforma was sent to the plaintiff and defendant respectively. The defendant signed its copy of the proforma on 10 July 1992. What that meant was that the defendant accepted the offer made to it to buy the property. It is in evidence that the plaintiff also signed his copy of the proforma on the same date. It is not in dispute that the proforma does use the phrase "subject to contract ". In fact, those words appear at the very top of the proforma. Since almost the whole of the argument before the High court centered on the proforma, it is best, we think, that each be reproduced.

[4] Shorn of its formalities, this is how the proforma addressed to the plaintiff reads:

Dear Mr. Ng,

We are pleased to inform you that our client, M/s. Sinar Wang Sdn Bhd has agreed to sell the above property to you subject to the terms and conditions as set out below:

Please note that this offer is made subject to final acceptance by the Vendor.

Should the above terms and conditions be satisfactory, kindly sign and return the duplicate copy of this letter to us soonest.

[5] The defendant's copy of the proforma again, shorn of its formalities, reads as follows:

We are pleased to inform you that our prospective purchaser, Mr. Ng Kee Seng has agreed to purchase the above property from you subject to the terms and conditions as set out below:

Should the above terms and conditions be satisfactory, kindly sign and return the duplicate copy of this letter together with the following documents to us soonest.

i) A photocopy of the latest Assessment & Quit Rent receipt.

ii) A photocopy of the existing Tenancy Agreement.

iii) A photocopy of the conversion premium receipt for converting residential

to commercial status for the upper floors.

iv) A certified copy of the Company Resolution.

[6] After the exchange of the proforma, the parties got down to the business of settling a formal sale and purchase agreement. In the course of discussing the? terms that were to be put into the agreement, a problem arose. It had to do with the conversion of the lower third and upper third floors of the subject property from residential use to commercial use. The plaintiff insisted on the term. But the defendant would have none of it. So a dispute arose. The defendant took the position that there was no Contract; that the parties were still in negotiations and that it was not under an obligation to sell and transfer the subject property to the plaintiff.

[7] In September, 1993 the plaintiff sent his letter before action. The plaintiff requested for an opportunity to re-negotiate the terms of the proposed formal agreement. However, it must be borne in mind that the defendant had already declared its unwillingness to complete in its letter dated 31 October 1992. Despite this, writ was issued only on 13 December 1993.

[8] After the usual exchange of pleadings, the trial of the action commenced on 22 April 1998. Decision was handed down on 18 September 1998. The learned judge who tried the action gave judgment for the plaintiff. He decreed specific performance and mad