Gopal Sri Ram JCA:

The short question in this appeal is whether there was a valid and binding contract between the appellant and the Sheriff of the High Court at Seremban. The learned judge of the High Court held that there was. After hearing arguments we agreed with him and dismissed the appeal. The reasons for our decision are now produced.

The facts are fairly simple. The Sheriff of the Seremban High Court arrested a motor vessel at Port Dickson known as "Mount I". He later put it up for sale. It was by way of an advertisement. The sale was on the Sheriff's terms and conditions and on an "as is where is" basis. The sale included the bunkers and lubricating oil. The appellant wanted to buy the vessel. It made an offer. The offer was sent to the Sheriff, under cover of the appellant's letter dated 12 February 1998, together with a banker's draft for 10% of the purchase price. The letter made it clear that the offer was on the Sheriff's terms but subject to certain conditions. One condition was that the port authority did not require any repairs to be done to the vessel. The other condition was that the vessel could leave on its own power on the basis of a seaworthiness certificate for one ballast voyage to Chittagong issued by an appointed surveyor of the underwriters. The Sheriff accepted the appellant's offer. Because the appellant's offer was below the advertised price, the Sheriff took out a summons seeking leave of the judge to conclude the sale. The learned judge then correctly directed the Sheriff to take steps to ensure that the conditions attached to the appellant's offer were satisfied. The Sheriff made the relevant inquiry. The result was a reply from the Marine Department at Port Klang which in essence satisfied the two conditions imposed by the appellant. The judge then approved the sale. The appellant then became obliged to pay the balance of the purchase price within the time stipulated. But it failed to do so and its deposit was forfeited. It then applied to the judge for the release of the deposit alleging that no binding contract had been concluded between the parties. The learned judge held against the appellant and hence this appeal.

Before considering the correctness of the learned judge's findings that have been attacked before us by Mr. Ananthan of counsel for the appellant, we think it appropriate to utilise this opportunity to set out the propositions of law that govern this area.

First, the general approach that is to be adopted by a court in determining whether there is an agreement concluded between the parties is to see whether there is a definite offer made by one party which has been accepted by the other. In other words, whether the agreement in question may be resolved into an offer and a corresponding acceptance. That such an approach should be generally adopted was affirmed by the House of Lords in Gibson v. Manchester City Council[1979] 1 All ER 972. In the Court of Appeal Lord Denning MR had suggested quite a different test. The decision of the Court of Appeal is reported in [1978] 2 All ER 583. The relevant passage is at p. 586. This is how the learned Master of the Rolls put it:

We have had much discussion as to whether Mr Gibson's letter of 18 March 1971 was a new offer or whether it was an acceptance of the previous offer which had been made. I do not like detailed analysis on such a point. To my mind it is a mistake to think that all contracts can be analysed into the form of offer and acceptance. I know in some of the textbooks it has been the custom to do so; but, as I understand the law, there is no need to look for a strict offer and acceptance. You should look at the correspondence as a whole and at the conduct of the parties and see therefrom whether the parties have come to an agreement on everything that was material. If by their correspondence and their conduct you can see an agreement on all material terms, which was intended thenceforward to be binding, then there