Lee Hun Hoe CJ (Borneo):

[1] For convenience the application to amend the Defence and Counterclaim and the appeal are dealt with together. A Solicitor's Certificate of Urgency was filed on 28 January 1985 for the said application to be heard before the appeal. This is very unusual.

[2] We would summarise the facts. Plaintiff/respondent is a private limited company. Choo Chak Low, See Hon and Lee Thong @ Lee Tong are the registered proprietors in equal shares of a piece of land held under HS (M) 896, PT No 168, Mukim Batu, Tempat 2388, Jinjang Utara Kepong together with the factory erected thereon. The land is subject to a restriction that it shall not be transferred, charged or leased without the consent of the State Authority. The respondent became a beneficial owner of the land by virtue of an agreement dated 10 October 1979 (called the co-proprietors' agreement) entered between three registered co-proprietors, namely See Hon and Lee Thong @ Lee Tong on the one part and Choo Chak Low on the other part. Under the co-proprietors' agreement See Hon and Lee Thong @ Lee Tong agreed to sell their respective 1/3 share of the land to Choo Chak Low. The latter would incorporate a private limited company, ie the respondent. The land would then be transferred to the respondent as the sole proprietor thereof. The co-proprietors undertook to apply to the State Authority for consent to transfer the land to the respondent.

[3] By an agreement dated 29 December 1980 the respondent as beneficial owner agreed to sell and the defendant/appellant to buy the land together with the factory building erected thereon at the purchase price of RM435,000 payable at the times and in the manner and upon the terms and conditions provided in the said agreement. The agreement provided, inter alia, that:

1) the appellant shall pay RM43,500 by way of deposit and part payment;

2) the appellant shall pay a further sum of RM43,500 on or before 1 April 1981 as part payment;

3) the balance of RM348,000 shall be paid after deducting there from the amount owing to Lee Wah Bank Berhad for purpose of discharging the existing charge on the land within one month of the date of a written notice from the respondent that the requisite consent from the State Authority has been obtained and the land is registered in the respondent's name;

4) the respondent shall hand over the keys to the property upon the signing of the agreement and deliver vacant possession of the land on or before 15 February 1981;

5) if the appellant shall fail or neglect for whatever reason to pay the balance of the purchase price in accordance with the agreement the respondent shall be at liberty forthwith by notice in writing to the appellant to terminate the agreement.

[4] Provisions are also made to protect the parties in the event that the consent of the State Authority to transfer the land cannot be obtained. In pursuance of the agreement the appellant paid a total of RM87,000. On 15 February 1981 the appellant went into occupation of the said land.

[5] By a letter dated 21 January 1982 the Land Office informed the respondent's then solicitors of the approval of the transfer of the land to the respondent. By a letter dated 15 February 1982 the respondent informed the appellant of the aforesaid approval and requested the appellant to pay the balance of the purchase price in accordance with the agreement. The appellant failed to pay the balance of the purchase price or to redeem the land or to complete the purchase within one month from the date of notification of approval. As a result, the co-31;proprietors were unable to effect a registration of the transfer of the land to the respondent. It was also discovered that a caveat was lodged by the Public Bank as security for loans and advances granted to the appellant. On 1 July 1982 the respondent's solicitors gave the appellant's solicitors notice by letter to pay the balance of the purchase price within 7 days from receipt of the letter, failing which