JUDGMENT

Gopal Sri Ram JCA:

[1] This case has to do with the perennial question as to who was in breach of a contract. Of course, there is no universal answer to that question. It all depends on the nature of the particular obligation. Often it depends on the order of performance of the respective obligations and whether one obligation can be performed without cooperation from the other party to the contract. Above all, it depends on the facts and circumstances of a given case. Here are the facts of this case.

[2] The plaintiff is a developer. It was interested in purchasing seven plots of land in Alor Setar. I will refer to them simply as "the lands". The defendant was the registered proprietor of the lands. The plaintiff wrote to the defendant expressing its interest in the lands and the plan it had in mind to develop them if the defendant was prepared to sell them. The defendant agreed. On 1 July 1991 it wrote to the plaintiff. In its letter it set out the terms on which it was prepared to offer the lands for sale. Here are some of the salient terms (as translated):

(a) The schedule of payment of the purchase price in the sum of RM 720,000 is as follows;

(i) 10% of the purchase price within one (1) month from the date of the letter of offer;

(ii) The balance of the purchase price within three (3) months from the date of the first payment;

(b) That you [the plaintiff] are to develop shop lots thereon according to the current demand for shop lots in the area;

(c) That all cost for removing the squatters on the land shall be borne by you [the plaintiff] and PKNK [the defendant] will help in solving the squatter problem;

(d) That all costs for surveying works and other works, if any, shall be borne by you;

(e) That when payment of 10% is made, all quit rent payable shall be borne by you until all lots are transferred to the purchasers;

(f) That this project shall be developed within a year from the date of signing of the letter of agreement for the project;

(h) This offer for sale is subject to your approval in signing the agreement that PKNK is preparing at the moment.

If you agree to accept the offer herein together with the terms above, kindly make payment in the sum of RM 72,000.00 to PKNK within one month from the date of the letter of offer.

[3] The plaintiff agreed to these terms and paid the deposit of 10% of the purchase price on 28 July 1991. Later, on 11 December 1991 the plaintiff handed a sum of RM5,000 to the defendant to be paid to the squatters as compensation.

[4] The three month period within which the plaintiff was to pay the balance of the purchase price was extended by a further three months by the defendant at the former's request. In the meantime, copies of a more formal agreement were prepared and forwarded by the defendant to the plaintiff for execution on 15 January 1992. But the plaintiff refused to sign. Because the squatters were still on the land. Six months went by. Nothing happened. The defendant sent reminders to the plaintiff on 9 February 1992 and 7 March 1992. Still nothing happened. The defendant then terminated the contract on 25 March 1992.

[5] The land was subsequently sold to another company, Valley Enterprise Sdn Bhd on 5 May 1992 for RM820,000: a hundred thousand ringgit more than the price at which it had been sold to the plaintiff. The transfer was effected on 24 June 1992. About two years later, on 19 May 1994, the plaintiff instituted proceedings against the defendant. It claimed that the defendant had acted in breach of contract. It sought to recover, inter alia, the deposit of RM72,000, a sum of RM5,000 which it had paid the defendant in respect of the squatters on the land and general damages for breach of contract. At the conclusion of a trial at which viva voce evidence was led, the learned judge held that there was no binding contract between the parties. He further held that the defendant has rightfully withdrawn the offer to the plaintiff when the latter failed to pay the b