Gopal Sri Ram JCA: We heard this appeal yesterday and at the conclusion of arguments reserved judgment to today. This case concerns the construction to be placed on a clause in an option (exh. P2) granted by the intended vendor of certain immovable property to the intended purchaser. The questions of immediate moment are whether the option was properly exercised and whether there is a concluded agreement between the parties to this appeal. The clause in question (cl. 2) reads as follows: 2. The Intended Purchasers hereby agree to enter with a Sale and Purchase Agreement within 45 days of date hereof and to pay the balance sum amounting to a total of 10% of the total purchase price if they decide to exercise the option to purchase the abovementioned properties. It is the appellants' case that the aforesaid clause on its true construction means that the sale and purchase agreement contemplated by the clause must be executed and the balance of the 10% deposit referred to therein be paid at the time of such execution. There is no dispute that the balance of the 10% was not paid within the 45 days specified in cl. 2. However, according to the chronology of events we were taken through, it is equally beyond challenge that the appellants did, within the 45 days specified in the option, forward to the respondents' solicitors a draft agreement containing terms that may be found in any normal sale and purchase agreement in Malaysian conveyancing practice. It is also a point of considerable significance that at no time throughout the material period when the parties were in communication with each other did the respondents reject the transaction out of hand on the ground that the appellants had not paid the balance of the 10% deposit within the 45 days limited by cl. 2. Instead, we find in the record of appeal provided to us a letter from the respondents' solicitors dated 12 July 1993 in which they say that they have no objections to the terms of the draft agreement prepared by the appellants' solicitors and sent by them under cover of their letter dated 17 April 1993. Now, this was well outside the 45 day period specified in

cl. 2. That period expired on 23 February 1993. We therefore have here a situation whereby the parties have by their contemporaneous conduct subsequent to the making of the option agreement placed an interpretation on cl. 2 of exh. P 2 to the effect that payment of the balance of the 10% was not to be made within the 45 days prescribed by that clause. Is it then open to a court to place a different interpretation on cl. 2? With respect, we think not. We accept that it is settled law that an agreement may not be interpreted by reference to the subsequent conduct of the parties thereto (see Wickman Tools v. Schuler A.G. [1974] AC 235). But it is equally well settled that parties may by their subsequent conduct give a term in an agreement a particular meaning. See, American Surety Co of New York v. Calgary Mining Co Ltd [1919] 48 DLR 295, a decision of the Privy Council. In such an event it is that meaning which binds the court and the court is not then entitled to discover some other meaning in the exercise of its interpretive jurisdiction. See Amalgamated Investment & Property Co Ltd (In liquidation) v. Texas Commerce Bank [1982] QB 84; Boustead Trading (1985) Sdn Bhd v. Arab Malaysian Merchant Bank Bhd [1995] 4 CLJ 283.

In our respectful view, this is the error into which the learned judge in the court below fell. Instead of hearkening to the way in which the parties themselves acted towards each other in relation to the meaning of cl. 2, he erred in accepting the invitation of the defendants' (respondents before us) counsel to place a different interpretation on the said clause. It follows from what we have said thus far that there was a concluded and binding agreement between the parties in terms of the draft agreement sent under cover of the appellants' solicitors' letter dated 17 April 1993. This is