Gopal Sri Ram JCA:

As long ago as February 1983, the appellant and one Tan Hee Thai entered into a sale and purchase agreement in respect of a piece of land in Tapah of which the respondent is the registered proprietor. Soon after the execution of this agreement on 8 June 1984, the appellant entered a caveat against the title to the land to protect his interest pending completion. It is what the profession calls a conveyancing caveat. Such a caveat is entered, not in anticipation of any litigation, but merely pending conveyance and transfer of the property which forms the subject matter of the sale.

On 31 July 1986, the vendor, Tan Hee Thai, through his solicitors, wrote to the appellant's solicitors informing them that the area of the land available for transfer was not 5.5 acres as stated in the sale and purchase agreement but only 4.28 acres. The appellant took exception to this information. On 8 August 1986, his solicitors responded by a letter the contents of which are so important that I consider their reproduction here vital. This is what the letter says:

Messrs. A.S. Yeo & Co., Advocates and Solicitors, No. 9, Jalan Bandar Raya, (Jalan Hale), 30000 Ipoh.

Dear Sirs,

Re: Tapah Estate H.S.(D) B.P. 56/81 Lot 6399 in the Mukim & District of Batang Padang

We refer to your letter dated 31st July, 1986.

Our client has instructed us to inform you that he expressly by the agreement purchased a piece of land measuring 5.5 acres. Our client needs for his purposes a minimum of 5.5 acres and not 4.28 acres as now offered by your clients in clear breach of the agreement. As the other piece of 1.22 acres is in a different lot our client is definitely not agreeable to take two pieces in different lots.

As you state our client agreed to purchase 5.5. acres and not 4.28 acres in one lot and 1.22 acres in another.

As regards your para. 4 we are of the view that a reduction of 1.22 acres is a very substantial reduction and a piece of 4.28 acres will not serve our clients purpose for which the land was purchased.

As such our client is not interested to take the 4.28 acres offered by your client in breach of the agreement and there is no question at all of your client forfeiting the RM10,000.

Instead our client reserves the right to sue your client for breach of contract and claim damages.

As instructed we hereby demand the refund of the sum of RM10,000 together with interest at the rate of 12% per annum from the date of receipt of the said sum by your client till realisation.

Your client is to take this as notice that if the said sum together with interest is not refunded within 14 days from date hereof we have instructions to commence legal proceedings against your client without any further reference.

On 29 August 1986, the vendor's solicitors replied as follows:

Messrs.

Bachan & Kartar Advocates and Solicitors 2nd Floor, 31, Station Road 30000 Ipoh

Dear Sirs,

Re: Tapah Estate H.S (D) B.P. 56/81 Lot 6399 in the Mukim District of Batang Padang

We acknowledge receipt of your letter of 8th instant, contents of which have been conveyed to our client.

We are pleased to inform you that our client has completed arrangements with A.M.S. Periasamy son of Suppiah Pillay to transfer direct to you the 5.5 acres of land which they have agreed to sell to you under the relevant agreement of sale and purchase.

In view of this, our client is now in a position to deliver to your client a valid and registrable transfer in respect of the sale to your client of the 5.5 acres of land.

Our client now instructs us to and we do hereby give you notice to pay up to us as solicitors for our client the balance of the purchase price which has been deposited by your client to you since 3rd August 1983.

If your client fails to pay up the balance of the purchase price within fourteen (14) days of the receipt of this letter, our client will have no alternative but to forfeit the deposit of RM10,000 paid under the relevant Agreement of Sale an