The plaintiff's action against the defendant is for damages for breach of contract arising from the sale of two new units of excavators sold by the plaintiff to the defendant. The plaintiff's claim is for the loss of the depreciated value of the two excavators which were recovered by the plaintiff from the defendant as a result of the repudiation of the contract by the defendant for the sale of the excavators.

The plaintiff's claim against the defendant is also for the recovery of rentals for two other units of excavators, namely, one new unit of the 115CL Poclain excavator and one used unit of the 90CL Poclain excavator which the plaintiff alleges were rented to the defendant.

The plaintiff in its statement of claim avers that by two agreements dated 23 August 1982, the plaintiff agreed to sell two new units of the Poclain hydraulic excavator, model 160CK at the price of RM290,000 each. A discount of RM20,000 was given by the plaintiff to the defendant towards the cost of the price of the two units of excavators. On 21 September 1982, the plaintiff delivered to the defendant one unit of the excavator, and on 28 September 1982, the second unit was delivered to the defendant. Both the excavators were delivered to the worksite of the defendant.

Pursuant to a letter written by the defendant to the plaintiff, whereby the defendant informed the plaintiff to take the machines back from the defendant's site, the plaintiff removed the two excavators from the defendant's site on 14 November 1982. The defendant in his letter to the plaintiff, informed the plaintiff that the new excavators were found to be unsuitable for its purpose.

The plaintiff alleged that as a result of the failure of the defendant to pay the cost of the two new units of excavators and the rentals for the other two units of excavators, the plaintiff had suffered loss and damage. In its statement of claim, the plaintiff particularizes the damage suffered as a consequence of the defendant's breach.

The defence

The defendant, in its defence, had not disputed the fact that it had agreed to purchase the two new excavators and that the excavators were in fact delivered to the defendant as stated by the plaintiff. The defendant, however, contends that the two excavators delivered by the plaintiff were not suitable for the purpose for which they were purchased as, amongst other reasons, the two excavators were not capable of bearing the weight of the 1.8cu yd buckets which had been fitted to the excavators. The defendant alleged that acting under an oral collateral warranty given by the plaintiff to the defendant to the effect that if the defendant found the excavators delivered to it to be unsuitable, the defendant could return them to the plaintiff without incurring any financial obligations, the defendant requested the plaintiff to take the excavators back, without having to pay the plaintiff any sum of money.

The issues

The issues before the court are rather straightforward and they are as follows:

(i) whether the defendant has established that the plaintiff did make the oral collateral warranty as asserted to by the defendant;

(ii) whether, if it has been established that there was such an oral warranty, the defendant was justified in returning the excavators to the plaintiff and in refusing to pay the purchase price;

(iii) whether, if there was no evidence of the existence of such a warranty, the defendant's refusal to pay for the excavators amounted to a repudiation of the contract;

(iv) whether, the plaintiff is entitled to receive rentals for the two other machines; and

(v) the quantum of damages the plaintiff is entitled to, if there has been a breach of the contracts.

The trial

The plaintiff commenced the present action against the defendant sometime in late 1982. However, the request to set down the action for trial was made only on 12 June 1987. In September 1988, the senior assistant registrar of the High Court informed the parties that the action had been ent