Ian HC Chin J:

Introduction

This is an appeal against the decision of the learned Sessions Court judge handed down on 30 July 1997 by which he dismissed the claim of the plaintiff Chan Sia Hock ("the appellant") and hence this appeal by him.

Facts Of Case

The appellant on 12 May 1993 entered into an agreement with C & C Group Sdn Bhd ("the 1st respondent") for the sale and purchase of the goodwill of a music lounge business and of the equipment, fixtures, fittings and chattels for the sum of RM60,000 which was to be paid (a) RM5,000 as deposit on the signing of the agreement and (b) eleven monthly instalments of RM5,000 beginning one month from the date of the agreement. The purchase price is also stated to include the various deposits held by the authorities concerned for the supply of water, electricity and telephone services, the right to the refund of which was given to the appellant. It is only upon full payment of the purchase price that the appellant would "execute a registrable memorandum of transfer of the business name in favour of" the 1st respondent. The 1st respondent was allowed to commence business, by taking over the premises and the said equipment, fittings, fixtures and chattels before full payment of the purchase price. Provision was made in cl. 8 of the agreement for the eventuality of a failure to pay the instalment which term will be considered later when the issue of damages is considered.

Also on 12 May 1994, the 2nd respondent executed a guarantee under which he guaranted:

(1) That the [1st respondent] will completely and faithfully carry out and comply with the performance and discharge the sale agreement and all agreements convenants stipulations and obligations therein contained and on the part of the [1st respondent] to be performed or observed thereunder.

(2) If the [1st respondent] shall in any manner fail to perform the sale agreement I will pay to you on demand all monies which now are or during the currency of the said agreement or after the termination thereof be owing to you by the [1st respondent] under or by virtue of the said agreement or payable by the [1st respondent] to you whatsoever and all costs, charges, fees and expenses which you may incur in enforcing or seeking to enforce any security for or obtaining or seeking to enforce any security for or obtaining or seeking to obtain payment whether by court action or not of all or any part of the monies hereby guaranteed (including legal costs on solicitors' own client basis).

(3) That you shall be at liberty to treat me as a principal debtor and I waive all suretyship and other right inconsistent thereto.

The 1st respondent paid a total sum of RM30,000 representing the deposit and five instalments. On 17 February 1994 the appellant's advocates demanded payment of the balance of RM30,000. After the 1st respondent and the 2nd respondent had refused to pay, the appellant issued a summons on 25 April 1994 claiming for the said sum of RM30,000 as being due under the said agreement.

The 1st respondent defended the action claiming (1) that the appellant at the time of the agreement "did not beneficially own the said goodwill business and chattels and had in fact already sold it to one JEREMY C.K. HOO" under a previous agreement, (2) that the 1st respondent had already purchased the same from the said Jeremy C.K. Hoo and had paid him RM90,000 under an agreement dated 15 December 1992, (3) that the agreement with the appellant was entered into as a result of a threat by the appellant not to renew the entertainment licence of the business which the 1st respondent was then already operating after purchasing the same from C.K. Hoo and (4) that the agreement was void for mistake under s. 21 of the Contracts Act because the appellant was not permitted to transfer the entertainment licence. The 1st respondent counter-claimed the refund of the RM30,000 already paid. The learned Sessions Court judge dealt with the evidence adduced at the