JUDGMENT

Harun Hashim SCJ:

Tanjung Petri Enterprise Sdn. Bhd. (Tg. Petri) became the registered owner of Lot No. PTB 8647 Town of Johor Bahru on 29 October 1978. In December 1978, the land was charged to the Overseas Chinese Banking Corporation Ltd. which charge was discharged on 29 October 1979. On the same day the land was charged to Asiavest Merchant Bankers, which charge was discharged on 12 April 1981. Finally on 2 November 1981, the land was again charged by Tg. Petri to Singapore Finance Ltd. which charge was registered on 15 November 1981 as security for the repayment of moneys due to Singapore Finance from Raymond Yong Kim Yoong of Singapore amounting to S$1,100,000 with interest. The charge to Singapore Finance includes three other lands viz. Lot Nos. PTB 8659, 8661 and 8666, all in the Town of Johor Bahru and registered in the name of Tg. Petri.

Tg. Petri was incorporated as a company in 1976 with the following subscribers:

1. Shaikh Mohamad bin S. Tahir of Kota Tinggi, Johor.

2. Raymond Yong Kim Yoong of Beach Road, Singapore.

3. Koh Kim Kuay of Kota Tinggi, Johor.

Shaikh Mohamad was a director of Tg. Petri from the date of its incorporation until he resigned on 30 April 1985.

On 10 April 1980, Tg. Petri granted an option to purchase Lot No. PTB 8647 on which stood a 4-storey shop-house to Shaikh Mohamad at the purchase price of RM199,750. The option was in writing and signed by its director, Raymond Yong. It stated that Shaikh Mohamad had paid a sum of RM39,950 and that this sum will not be refunded should he fail to exercise the option within the option period. The option, however, was only exercisable after 1 April 1985 but before 30 May 1985 at 4.00 p.m. by the payment of a further sum of RM39,950 towards the purchase price. The balance of the purchase price was payable within three months of exercising the option. When Shaikh Mohamad resigned as director of Tg. Petri on 30 April 1985 he had yet to exercise the option and the option remained unexercised on 30 May 1985.

On 29 June 1985, Tg. Petri entered into a sale and purchase agreement with Almurisi Holdings Sdn. Bhd. (Almurisi) of which Shaikh Mohamad was a director for the sale and purchase of Lot PTB 8647 at the purchase price of RM199,750. Clause 1 of the agreement declared that a deposit of RM79,900 had been paid and received by Tg. Petri who was to execute a valid and registrable transfer of the said property in escrow which is to be kept by the purchaser's solicitor pending completion of the sale. The purchase was to be completed on or before 31 August 1985 by the purchaser paying the balance of the purchase price of RM119,850. Failure to pay the balance would entitle Tg. Petri to forfeit the sum of RM19,975 and a sum of RM59,925 shall be refunded by Tg. Petri to the purchaser. Time shall be the essence of the agreement. Shaikh Mohamad signed the agreement on behalf of Almurisi.

On 5 July 1985 Tg. Petri issued a receipt for the sum of RM41,075 in favour of Shaikh Mohamad as part payment of the purchase price and the payment was stated to be by way of contra. Taking this sum into account, a sum of RM78,775 remained outstanding on 31 August 1985. Four months later, on 5 January 1986, the solicitor of Almurisi addressed a letter to the solicitor of Tg. Petri referring to negotiations between their clients in November 1985 to the effect that Tg. Petri had agreed to release the title deed to Almurisi within one month. That month had passed. It further said that the transfer document had been adjudicated for stamp duty and was ready for registration. Almurisi was ready and able to pay the balance of the purchase price amounting to RM78,775. It concluded by giving Tg. Petri one month from 5 January 1986 to deliver the title deed failing which they were at liberty to commence legal proceedings against Tg. Petri for specific performance and or alternatively for damages for breach of contract. On 25 March 1986, Almurisi entered a private caveat on the land. On