Chew Soo Ho JC

BRIEF FACTS

The plaintiff is a limited company incorporated under the Companies Act 1965 with a paid up capital of RM3 while the defendant is similarly a limited company incorporated under the same Act.

The defendant is the registered owner of a parcel of land known as Lot 905 Mukim 9, Daerah Barat Daya, Pulau Pinang held under Geran Mukim GM 577 (‘the said land’) and intended to sell the said land.

Through the introduction of an agent (unlicensed) both the plaintiff and the defendant had a meeting on 20 February 2006 at the defendant’s office at Wisma Chuan Bee, Chulia Street, Penang attended by a director of plaintiff Ng Kock Leong with their solicitor, two directors of defendant namely Teh Khee Yeoh and Teh Tai Wooi and the son of Teh Tai Wooi who was a lawyer to discuss the sale and purchase of the said land.

The plaintiff alleged that at this meeting, both parties had agreed to the fundamental terms of the sale and purchase ie the selling price at RM2,161,394.90, sale without vacant possession but with two squatter buildings remaining on the said land, the payment of compensation to the squatters for vacant possession to be deposited by the plaintiff with the defendant as stakeholder to assist to pay off the squatters and the completion date of nine months from the date of the sale and purchase agreement. Vide a letter dated 23 February 2006 from the defendant’s solicitors to the plaintiff’s solicitor at the material time, defendant had also requested for earnest money in the sum of RM10,000 which was duly paid by the plaintiff. The plaintiff therefore contended that a contract had been concluded at this meeting itself. Thus when the defendant refused to sell the said land to the plaintiff subsequently, the plaintiff took out this suit claiming, inter alia, for specific performance, general damages, injunction to restrain disposal of the said land and costs. Before filing this action, the plaintiff had also lodged a caveat on the said land.

The defendant’s version is that there was no concluded contract at the meeting on 20 February 2006 but that it was subject to further consideration and particularly that the sale would need the approval of the EGM of the defendant’s company. It was emphasised that there would not be any concluded and binding agreement unless and until the sale and purchase agreement had been duly executed by both parties and that was expressed in their solicitors’ letters as well. defendant also denied having discussed the squatters’ compensation in the said meeting but that it was after the meeting that defendant had met the squatters to find out the compensation sum they proposed. The alleged nine months completion date was denied by the defendant on ground that it was too long and could not have been agreed. On the request for the earnest money, defendant averred that the purpose was to show its EGM the sincerity of the plaintiff to buy the said land for the consideration of its shareholders but the cheque was never cashed. Since the minority shareholders could come up with a better offer to buy the said land, defendant decided not to sell it to the plaintiff.

ORIGINATING SUMMONS NO 24–912 OF 2006 AND INTERLOCUTORY PROCEEDING

The defendant had filed an Originating Summons No 24–912 of 2006 dated 8 June 2006 which case has been consolidated with the instant suit vide the order of the court dated 22 November 2007, to remove the caveat lodged by the plaintiff on the said land vide Kaveat Persendirian Perserahan No 173/2006 which was registered on 10 March 2006. The ground for the removal of the caveat was purely that there was no binding and concluded contract in respect of the sale and purchase of the said land. Although this OS was consolidated with this suit, it was proceeded on a separate hearing and after its full hearing, the said application by the defendant was allowed and the caveat was ordered to be removed immediately. This order of the learned judge was made on 25 February 2010 (bund