JUDGMENT

Zaleha Zahari JC:

By an agreement made on 9 January 1992, the plaintiff, formerly known as Malthus Industries Sdn. Bhd., agreed to buy, and the defendant, Sri Mayang Sdn. Bhd., agreed to sell, land known as H.S. (D) 11531, Lot P.T. 392 Mukim Ampang, Daerah Hulu Langat, Selangor Darul Ehsan for a sum of RM13.9 million.

The agreement, so far as is material to this appeal, was subject to the approval of the Foreign Investment Committee and State Authority within 1 year (article3.01). Article14.01 expressly provides that time, whenever mentioned, shall of the essence. The agreement also had definite and distinct terms involving legal results should the approvals not be obtained within the approval period or extended period. Article3.04 provides:

3.04. In the event that the approvals of the relevant authorities are not obtained within the approval period or such extended period as may be mutually agreed by the parties hereto, the rights and obligations of the parties hereunder shall lapse and be of no further effect and the following shall take place within seven (7) days of the approval period or the extended period, as the case may be:

(a) The vendor shall refund the Purchase Price (as defined herein) together with interest thereon at the rate of two percentum (2%) above the Base Lending Rate of Malayan Banking Berhad prevailing at the time to the Purchaser;

(b) the Purchaser shall deliver the issue document of title to the said Land free from all liens and encumbrances together with the duly executed Memorandum of Transfer and stamping proforma to the Vendor; and

(c) the Purchaser shall deliver back vacant possession of the said Land to the Vendor;

and thereafter neither party shall have any rights whatsoever against the other.

It is not in issue that the approval of the FIC was obtained on 4 December 1992 i.e. within the approval period. On the facts of this case the approval of the State Authority was obtained only on 12 May 1993 a delay of about 4 months.

Note is taken of the fact that subsequent to receipt of the letter dated 12 May 1993 of the State Authority, Counsel for the plaintiff, vide letter dated 15 November 1993 proceeded to complete the transfer form and called for other relevant documents for completion of the transaction. The attempt by the plaintiff to invoke article3.04 was made only on 21 April 1994 six months after all documents had been executed.

According to the plaintiff's Counsel the agreement became void when the approval was not obtained by all relevant authorities before the deadline fixed. Plaintiff took issue that the period of obtaining the approvals had been extended. He submitted that article3.04 took effect consequent upon the defendant's failure to obtain the approval on or before 9 January 1993.

It was the defendant's case that the plaintiff had an election on 9 January 1993, upon expiry of period, to invoke, article3.04 of the contract or to treat the contract as still subsisting. The plaintiff did not take any step to invoke article3.04 at that stage. On the facts of this case, vide letter dated 14 October 1993 (Exh."SM2"), the defendant's solicitors had written to the plaintiff's solicitors informing them of the steps they had taken since 18 September 1992 and the problems met by them at the land office. The delay was, according to the defendant's solicitors, wholly attributable to the irresponsible attitude of the officers at the land office. There was no response to this letter. There was no intimation at this stage from the plaintiff that they intended to invoke article3.04, that they were desirous of rescinding the agreement.

According to the defendant's Counsel the conduct of the plaintiff upon the issuance and receipt of the letter of approval of the State Authority was also significant. The plaintiff, having full knowledge that the approval of the State Authority was issued well after the expiry of the time agreed upon, proceeded to complete the transfer form and called upon