Abdul Malik Ishak J:

Background Facts

The plaintiff signed a sale and purchase agreement with Syarikat Permodalan Johor (P.P.) Sdn Bhd ["Permodalan"] on 18 February 1981 for the purchase of a single storey low cost intermediate terrace house in a housing estate known as Taman Dewan Jaya. That terrace house was priced at RM29,900 and the plaintiff in accordance with cl. 3 of the sale and purchase agreement ["agreement"] paid RM2,990 being 10% of the total purchase price upon the execution of the agreement. The balance of the purchase price shall be paid in the manner and at the times as set out in cl. 3 of the agreement. The plaintiff did not take a bridging loan but she dutifully paid the progressive payments according to the manner and at the times as alluded to in the agreement in hard cold cash. The terrace house was scheduled to be completed and ready for delivery within 18 months from the date of the agreement. In short, the completion date should be on 18 August 1982.

On 19 July 1982 the plaintiff paid the 2nd progressive payment and this was followed by the 3rd progressive payment on 16 November 1982. The last progressive payment which the plaintiff paid was on 27 October 1986 and then there was total silence. Permodalan stopped building the terrace house and the housing project at Taman Dewan Jaya came to an abrupt stop. Permodalan abandoned the whole project much to the chagrin of the plaintiff. When the plaintiff paid the last progressive payment on 27 October 1986, the terrace house was 75% completed and this meant that the plaintiff had paid to Permodalan a sum of RM22,425 as reflected in the official receipts exhibited in "ZM 2" of encl. 4. There was still a balance of 25% amounting to RM7,475 that was still unpaid to Permodalan. All the legal fees and disbursements were paid by the plaintiff and almost six years after signing that agreement (to be exact 5 years 8 months 9 days), Permodalan only managed to complete 75% of the terrace house. So the plaintiff decided to complete the terrace house by herself and this was done towards the end of 1989 and by 1991 the terrace house was completed at the cost of RM9,060. Of course, the plaintiff employed contractors to complete the terrace house and there were bills and receipts of payments incurred by the plaintiff and all these were exhibited as exhibit "ZM 4" of encl. 4. By letter dated 20 June 1991, Permodalan through their solicitors Messrs Muthu & Co. demanded the balance of the purchase price amounting to RM7,475. The plaintiff refused to pay because permodalan had failed to perform their part under the agreement. The plaintiff's stand was simple: no architect certificate was ever issued and after the plaintiff made the last progressive payment on 27 October 1986 there was no notice of demand issued by Permodalan. By letter dated 15 December 1997 Messrs Ng, Lee & Partners wrote to the plaintiff and relayed the message that they were appointed as the liquidator for the compulsory winding-up of Permodalan by the High Court, Johor Bahru on 4 November 1991 and by the same letter the liquidator requested for the balance of the purchase price of the terrace house with an undertaking couched in the following manner:

I have researched the Company's records and noted that you still owe the company RM7,475.00 for the house, PTD 10441 HS(D) 27894 which you bought from the company previously. I have the said document of title in my possession and am prepared to transfer the said document to you upon receipt of the mentioned sum due from you. Please indicate to me within 30 days of the date of this letter whether you would like to have the house transferred to you.

The message was clear. Permodalan had been wound up and the liquidator was prepared to transfer the title of the terrace house to the plaintiff provided the balance of the purchase price was paid by the plaintiff. No time was wasted. Through her solicitors Messrs TK Lim & Co, the plaintiff replied and this was