Mahadev Shankar JCA:

The appellants (the vendors) were the registered proprietors of 65.325 acres of land (the said land) comprised in eleven separate titles, all in the Mukim of Kota Tinggi, Johor. On 16 May 1988 the respondents (the purchasers) entered into a sale and purchase agreement (the said agreement) with the vendors to buy the said land. The price agreed was RM7,000 per acre. The total purchase price was RM457,275. As agreed the purchasers paid a 10% deposit amounting to RM45,727.50. The completion date was fixed for the 16 August 1988. Clause 16 of the said agreement provided that time was to be of the essence of the agreement. Therefore the balance purchase price of RM411,547.50 had to be paid on or before 16 August 1988.

Before the purchasers executed the said agreement they were taken to see the said land by two persons said to be the vendors' agents. A pipeline reserve to facilitate the passage of three very large water pipes belonging to the Public Utilities Board Singapore (the PUB) traversed seven out of the eleven titles. These pipes carried water from Kota Tinggi reservoirs to Singapore. Alongside this reserve but affecting all eleven titles was a transmission cable reserve of Tenaga Nasional Berhad ('TNB') (formerly Lembaga Letrik Negara). This reserve was utilised for high tension cables and the pylons (the fixtures) used to carry them. Both the water pipes and the fixtures were so visible that it was impossible for anybody in the vicinity not to notice them.

However at the time of the visit the vendors' agents are said to have actively represented to the purchasers that the fixtures were in fact outside the said land. At or about the time the said agreement was executed this representation was repeated by the vendors' agents in the presence of the parties and the vendors did not do anything to correct the representation.

The titles to the eleven lots comprising the said land did not show any memorial registered thereon relating to these reserves.

The purchasers only took steps to check out the location of the fixtures after they executed the said agreement. Their surveyor advised them that contrary to the representation the said reserves and the fixtures thereon did in fact traverse the said land. The pipeline reserves took up 4.08 acres. The TNB's reserve took up a further 13.60 acres, making 17.60 acres in all.

The purchasers therefore took the view that they should only pay a price representing the value of 47.645 acres, since in their view the 17.60 acres was being used by the PUB and the TNB. On 4 August 1988 the purchasers' solicitors wrote to the vendors' solicitors that the actual area of the said land was less than 65.325 acres and requested that the completion date be postponed until a meeting had been held to resolve the discrepancy. The vendors replied on 9 August 1988 insisting that the land area to be transferred was 65.325 acres and that if the purchasers did not complete as provided by the said agreement on 16 August the vendors would exercise their rights under cl. 10 of the said agreement and forfeit the deposit.

On 13 August 1988 the purchasers' solicitors replied insisting that the purchasers were only prepared to pay for 47.645 acres which works out to RM332,515. After deducting the deposit of 10% they contended that completion should take place on payment of the nett balance of RM287,787.50. The vendors' solicitors did not respond.

On 16 August 1988 the purchasers' solicitors tendered a cheque for RM287,787.50 and demanded that the vendors transfer the eleven titles. The vendors refused. The cheque was returned the following day but the 10% deposit was forfeited.

Nothing happened after this until 22 October 1988 when the purchasers' solicitors unconditionally tendered the full balance of the contractual purchase price of RM411,547.50 and demanded that the said land be transferred to them. The vendors refused.

After another delay of more than two months the purchase