Mokhtar Sidin JCA:

[1] The respondent entered into a written tenancy agreement with the appellants but failed to hand over vacant possession of the property to the respondent after executing the tenancy agreement. The tenancy agreement executed was for a period of three years, ie, from 1 October 1991 to 31 October 1994 in respect of premise No 209 Jalan Pasar, Bukit Mertajam, Province Wellesley (hereinafter referred to as "the said premise"). On 25 June 1993, the respondent filed an application by way of summons-in-chambers seeking to repudiate the tenancy agreement. The prayers prayed for as stated in the summons-in-chambers were:

(a) bahawa perjanjian sewa bertarikh 1hb Oktober, 1991 di antara Plaintiff dan Defendan-defendan dibatalkan (rescinded);

(b) wang cengkeram sebanyak RM17,500.00 dikembalikan oleh Defendan-defendan kepada Plaintif;

(c) Defendan-defendan membayar kepada Plaintif gantirugi dan kerugian dengan faedah yang ditaksirkan oleh Penolong Kanan Pendaftar;

(d) kos.

[2] On 15 September 1993, the learned judge allowed the application and ordered the assessments be made before the senior assistant registrar (SAR). The present appeal is only in respect of the assessments by the SAR.

[3] On 15 October 1994, the SAR made the following awards:

(a) RM97,200 as general damages for loss of profit; and

(b) RM17,200.00 as special damages for the purchase of furniture and mannequins.

[4] The appellants being dissatisfied with the awards made by the SAR appealed to the judge. The judge dismissed the appeal against the award for general damages but allowed the award on special damages. Being dissatisfied with that decision, the appellants appealed to this court. We have given our decision earlier whereby we allowed the appeal by the appellants in respect of general damages and reinstated the award on special damages in the sum of RM17,200. In other words, the award of RM97,200 as general damages by the SAR was set aside while the award of RM17,200 as special damages by the SAR was reinstated and affirmed.

[5] Now we give our reasons for doing so.

[6] Before us, the learned counsel for the appellants submitted that the tenancy agreement (hereinafter referred to as "the agreement") was a non-performance agreement. From the very beginning, immediately after the execution of the agreement, it was made known to the parties that the appellants were unable to deliver vacant possession of the premise stated in the agreement. The reason being the previous tenant refused to deliver vacant possession to the appellants and continued to occupy the said premise. Despite the fact that it was being made known to the respondent, the respondent insisted and demanded vacant possession of the premise by a letter from his solicitors dated 8 November 1991. It was not disputed that when the appellants failed to deliver vacant possession the respondent did not take any action to repudiate the agreement. Despite being informed by the appellants that they had difficulties in delivering vacant possession, the respondent attempted to pay the monthly rents which the appellants refused to accept. The situation remained the same until October 1992 (about a year later) when the respondent sprang into action and issued a notice to terminate the agreement. The notice to terminate was followed by the filing of the writ and the statement of claim. The appellants admitted liability when the respondent filed a summons-in-chambers stated earlier resulting with an order dated 15 September 1993 ordering that the assessment of damages to be done before the SAR.

[7] At the hearing of the assessment of damages, the respondent claimed:

(a) loss of profits from 1.11.1991 to 31.10.1994 (the life span of the agreement) as general damages; and

(b) money expended for the purchase of furniture and mannequins in preparation of carrying on business at the said premise as special damages.

[8] The claim by the respondent was in accordance with s 74 of the Contracts Act 1950. The operation