P.S. Gill J:

This application for assessment of damage is being made pursuant to an order made by me in my judgment delivered at the conclusion of the trial. The brief facts of the case are that by a sale and purchase agreement dated 20 August 1984 the second defendant, Rumah Nanas Estate Sdn. Bhd. agreed to sell to the plaintiffs, Plenitude Holdings Sdn. Bhd., a piece of Estate land at price of RM47,939,958. The plaintiff paid a deposit of RM4,793,995.80 but failed to pay the balance sum within the stipulated period of contract, or within the extended completion period. The second defendant then terminated the said agreement and forfeited the said deposit.

Having heard all the evidence I came to the conclusion that the termination of the contract by the second defendant was not valid and ordered specific performance of the contract for the sale and purchase of the land in question. The defendants appealed against my judgment and the Supreme Court dismissed the defendants' appeal and affirmed my judgment.

In my judgment I held that the first defendant on his own volition and acting for and on behalf of the second defendant had promised to secure a loan for the plaintiffs and that in the event that such a loan was not secured, the first defendant had given an undertaking that the defendants would join the plaintiffs in a joint venture scheme to develop the land. The Court granted the plaintiffs the remedy of specific performance of the sale and purchase agreement with the damages to be assessed and paid for by the defendants to the plaintiffs, for wrongful termination of the agreement, and for breaches of their undetakings with costs. For easy reference, the relevant order of the Court dated 8 April 1993 reads as follows:

[5] The second defendants shall pay to the plaintiffs damages to be assessed for wrongful termination of the said agreement dated 20 August 1984 with costs.

[6 ] The first and second defendants shall pay to the plaintiffs damages to be assessed for breaches of their undertakings with costs.

The consequences of a breach of contract are governed by s. 74 of the Contract Act 1950 which states as follows:

74. [1] When a contract has been broken, the party who suffers by the breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which natually arose in the usual course of things from the breach, or which the parties knew, when they made the contract, to be

likely to result from the breach of it.

[2] Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach.

Any loss of profit normally to be expected which the developer would otherwise have earned, but for the breach and delay caused, is an allowable claim under the rule in Hadley v. Baxendale [1854] 9 Ex. 341.

The plaintiffs claim that their loss of profit and damages arose out of and was directly caused by the breaches of undertakings by both the defendants. As such, the defendants knew of the consequences of the breach of contract as they were fully aware that the plaintiffs had purchased the land for the purpose of development.

At this trial, the plaintiffs called Mr. Song Chap Fah as their witness. He had also filed two affidavits dated 28 April 1993 and 22 June 1993. The defendants also filed an affidavit denying that they were liable for the claims made against them. Their affidavit was sworn by a director of the company Madam Rahmah binti Haji Jaafar and it was dated 17 June 1993. Apart from the affidavits filed by the defendants, the defendants called two witnesses namely Lim Wooi Hwee and Mr R. Parampathy.

The plaintiffs claim for damages is for wrongful termination of the agreement, breaches of undertakings, loss of profit on the housing project, and interest on the deposit of RM4,793,995.80. This amount was the 10% deposit paid by the plaintiffs to the second defendants towards the purchase price of t