JUDGMENT

1. Under a Sale & Purchase Agreement dated 15th December, 1980 (Exhibit A) between the plaintiffs and the defendant, the plaintiffs agreed to purchase and the defendant to sell a parcel of land (the said property) described as Private Lot 32 of Lot 281 Section 64 KTLD at Taman Sarawak, Jalan Borneo, Kuching, at an agreed price of RM660,000.00 free from encumbrances. The price of RM660,000 was paid fully by the plaintiffs to the defendant.

2. By a Deed of Assignment dated 4th March, 1997 the plaintiffs, with the consent of the defendant, had assigned the said property to Market Management Services Sdn Bhd (MMSB) for RM430,000. Unknown to the plaintiffs, the said property was charged to the Utama Bank (M) Bhd. by the defendant, and the Bank had repeatedly reminded the defendant to redeem the property at a redemption fee of RM250,000 (Exhibit F). The assignment could not be [3] completed as the said property was encumbered, and MMSB demanded from the plaintiffs a refund of RM100,000.00 as deposit in respect of the sale under Exhibit A.

3. The plaintiffs had taken out this application under O. 81 r. 1 Rules of the High Court 1980 for summary judgment against the defendant with the following prayers:

(a) ;a declaration that the plaintiffs are legal or beneficial co-proprietors of the said property; and

(b) ;an order to compel the defendant to pay RM250,000.00 redemption fee to secure its discharge;

Alternatively,

(c) ;a declaration that the Sale & Purchase Agreement (Exhibit A) be rescinded for breach of it by the defendant;

(d) ;an order to the defendant for the refund of the purchase price RM660,000.00;

(e) ;general damages, interests and costs to the plaintiffs.

4. The application is supported by the affidavits of Vijaya Raghavan affirmed on 24th July, 1998 and 23rd September, 1998. The defendant opposed the application by four affidavits; three of Stanley Lingoh Gara affirmed on 11th September, 1998; 8th and 28th October, 1998, and an affidavit of Chan Cheng San affirmed on 15th October, 1998.

5. According to the Malaysian Court Practice, High Court regarding Order 81, at page 5301:-

"This order provides a procedure similar to O 14 and enables a plaintiff, where there is no triable defence to the action, to obtain summary judgment in an action for specific performance of a contract (irrespective of whether it is in writing) for the sale and purchase of land without having to proceed to a full trial."

Under rule (3) of Order 81 it provides that:-

"Unless on the hearing of an application under rule 1 either the Court dismisses the application or the defendant satisfies the Court that there is an issue or question in dispute which ought to be tried or that there ought for some other reason to be a trial of the action, the Court may give judgment for the plaintiff in the action:" [4]

6. In Alloy Automative Sdn Bhd v Perusahaan Ironfield Sdn Bhd (1986) 1 MLJ 382 , the Federal Court held that summary judgment conferred by O 81 provides a procedure similar to O 14, and must be used with great care. See also Ng Ah Ba & Ors v Ramanda Sdn Bhd (1996) 1 MLJ 62 [CA]; (1996) 1 CLJ 738.

7. The defendant had raised issues or questions which are triable. In a written submission, learned counsel for the plaintiffs stated that the defendant had committed a breach of clause 1 of the Sale & Purchase Agreement (Exhibit A) i.e. the said property was not free from encumbrances. It was found that the said property was under a charge at the time of sale thereof.

8. The defendant in its affidavit averred that under clause 12(3) of the Sale & Purchase Agreement it is provided that the vendor (i.e. defendant) would serve on the buyer (i.e. the plaintiffs) a Vendor's Notice to Complete, and within 14 days of the receipt of such a notice by the buyer, then the Sale & Purchase Agreement would be executed and the defendant would then hand over to the plaintiffs the said property free from encumbrances. The defendant had not yet issued the Vendor's N