Lee Hun Hoe CJ (Borneo):

We allowed the appeal with costs and stated that we would give our reasons later. We do so now.

Thirteen appeals were heard together. Although the appellant purchasers were different the respondents, the owners of the land, were the same. Encik M.S. Sandhu appeared for the appellants in respect of two appeals while Encik K.Y. Lin for the remaining appellants. Encik Lawrence Lai and Encik John Ko appeared for the respondents in all thirteen appeals.

The first three respondents are the registered proprietors of Lot 3006 Miri Concession Land District containing 1.182 hectares while the fourth respondent is the registered proprietor of Lot 3149 Miri Concession Land District containing 5,630 sq. ft. hectares. These two parcels of land are adjoining one another and situate at Lopeng, Miri. The proprietors of the two parcels of land jointly applied to the Lands & Surveys Department, Miri for subdivision and conversion into 32 sublots.

For their purposes the respondents and the Modern Development Co. (the developers) entered into two development agreements on identical terms. The first development agreement was executed on 27 August 1982 under which the developers undertook to develop Lots 3006 and 3149 together into a housing estate on a sharing basis with the respondents. The three partners of the development company who signed the first development agreement were Thong Saie Tok @ Thong Shie Tok, Lee Tze Hen and Allih bin Jameh @ Sebli Jemaah. The second development agreement was executed on 28 August 1982. However, only Thong and Lee signed this agreement. The developers sought to utilize this agreement to apply for loan from the Malayan Banking Bhd., Miri whose then credit/loan officer happened to be Allih's brother. This agreement was to avoid giving impression to the authorities concerned that the loan application, if approved, was not the result of the said officer's brotherly relationship with Allih.

Under either development agreement the developers were to build houses at their own costs and expenses on the 32 sublots. The respondents were to receive 5 two-storey semi-detached houses and 4 two-storey detached houses on 9 sublots to be chosen by them. The houses were to be completed within 18 months from the date of approval of the building plans. The other 32 sublots were to be allotted to the developers or their nominees, the transfer purportedly to be effected by the respondents upon the handing over to their possession the said nine houses by the developers. Under Clause 6 the developers would have to pay liquidated damages to the respondents in the event of failure on the part of the developers to hand over the nine houses to the respondents within the time stipulated. Time was made the essence of the agreement under Clause 15.

On the same day, i.e. 28 August 1982 the first three respondents granted a power of attorney to Thong and Lee in respect of the second development agreement to do all acts and things in connection with or incidental to the development of Lot 3006, and with power to raise money on the security of their land for the purpose of the said development.

On 21 December 1982 the respondent and the developers executed a document called "Rescission of Agreement" by which they undertook not to claim from each other any sum whatsoever as liquidated damages or as compensation for non-performance of the first development agreement. In other words, they rescinded the first development agreement. Despite this the fourth respondent on 31 January 1983 granted Thong and Lee a similar power of attorney in respect of the first development agreement. In this case the power of attorney contains a clause whereby the developers were expressly given the power to sell those sublots purported to be allotted to the developers under the first development agreement.

Encik K.Y. Lin referred to various clauses of the two development agreements and in particular to Clause 2(a) which provides that: