Judgment

HB Low, J

I. APPLICATION

1. Vide summons in chambers, Encl.10, the plaintiffs pursuant to Order 81 r 1(1) of the Rules of the High Court 1980, are seeking summary judgment for a declaration that the oral agreement between the plaintiffs and the defendant in or about September 1996 (the oral agreement) in which the defendant has agreed to sell and the plaintiffs have agreed to buy a bungalow lot known as Plot B201, HS(D) 216 mukim of Air Panas, district of Jasin, Melaka (the bungalow lot) be rescinded and that the plaintiffs are entitled to the refund by the defendant of the deposit in the sum of RM14,060.20, interest thereon, general damages for defendant's breach of the oral agreement, and costs.

   II. FACTUAL BACKGROUND

2. The plaintiffs' affidavit affirmed by the first plaintiff Loy Sai Heng, alleged as follows:

   In or about September 1996, the defendant orally agreed to sell and the plaintiffs orally agreed to buy the bungalow lot, for which the plaintiffs paid a deposit and part payment of RM14,060.20 (the deposit).

3. It was an implied term of the oral agreement that the defendant would within a reasonable period deliver vacant possession of the bungalow lot with water, electricity and infrastructure, but as at July 1998 and even on November 20, 2003, the defendant has failed to take steps to deliver the bungalow lot to the plaintiffs. The plaintiffs have vide letter dated July 1, 1998 purportedly rescinded the oral agreement.

4. Subsequently, the plaintiffs' solicitors have through four letters dated February 2, 1999, September 9, 1999, February 22, 2002 and April 18, 2003 demanded from the defendant the refund of the deposit but the defendant has failed, refused and/or neglected to do so.

5. On the other hand, the defendant's affidavit affirmed by one A Azman Ghani raised the following issues:

   1. No period has been fixed for the delivery of the bungalow lot;

   2. The conditions of approval imposed by the authorities are not acceptable to the defendant and amendments thereto would take a long time; and

   3. Upon receiving the plaintiffs' letter dated July 1, 1998, the defendant had through its representatives persuaded the plaintiffs not to rescind the oral agreement and the plaintiffs have orally indicated their intention to proceed with the oral agreement by withdrawing the letter dated July 1, 1998.

   III. REASONABLE TIME

6. Mr. Andre Wee Heng Leong, plaintiffs' learned counsel, referred to ss 40 and 47 of the Contracts Act 1930 (ss 40 and 47) saying that the oral agreement must be performed within a reasonable time, which the defendant has refused or was unable to perform.

7. Miss Kuganeswari, defendant's learned counsel, contended that the issue of what constitutes a reasonable period is a triable issue and support was sought in Penang Development Corporation v Khaw Chin Boo [1993] 2 MLJ 161.

8. I shall first deal with Penang Development Corporation, supra, where the sale and purchase agreement was silent regarding the date of delivery of vacant possession of a flat, but vacant possession was actually delivered some three and a half years after the execution of the agreement. The plaintiffs' amended statement of claim sought damages for late delivery and relied on the 24 months' period under the Housing Developers (Control and Licensing) Regulations 1982. The defendant contended that the plaintiffs' amended statement of claim disclosed no reasonable cause of action. The issue before Mohamed Dzaiddin J (later CJ Malaysia) was whether the amended statement of claim disclosed a reasonable cause of action. In answering the issue in the negative, His Lordship explained at p 1631 that under s 47 of the Contracts Act 1950 when no time was fixed for the performance of the contract, the contract must be performed within a reasonable time and that the reasonable time in each particular case is a question of fact.

9. In the instant case, since the payment of the deposit by the plaintiffs to the defendant in September 1996 until the defendant's affidavit affirmed on December 13, 2003, there has been no indication that the defendant was in a position to deliver the bungalow lot to the plaintiffs. Indeed paragraph 7 of the defendant's affidavit averred that the defendant had expected June 2004 to be the date the bungalow lot would be ready for delivery. From June 2004 until today, almost one year had elapsed and there has been no indication by the defendant that the bungalow lot was ever to be delivered to the plaintiffs. Before judgment was delivered today, I asked defendant's learned counsel if the defendant was in any position to deliver the bungalow lot to the plaintiffs today. The reply was in the negative.

10. In my view, there can be no doubt that, as a matter of fact, a lapse of nine years in the instant case has gone far beyond the bounds of reasonableness, thereby indicating that the defendant has refused or disabled itself from performing the contract i.e. to deliver the bungalow lot to the plaintiffs, the effect of which is provided for in s 40 in the following words:

    40.	Effect of refusal of party to perform promise wholly When a party to a contract has refused to perform, or disabled himself from performing, his promise in its entirety, the promise may put an end to the contract, unless he has signified, by words or conduct, his acquiescence in its continuance.

11. In my view, the plaintiffs are entitled to invoke ss 40 and 47, and treat the defendant's non-delivery of the bungalow lot to the plaintiffs as a fundamental breach of the oral agreement.

    IV. AUTHORITIES' UNACCEPTABLE CONDITIONS

12. For the plaintiffs, it was submitted that the allegedly unacceptable conditions imposed by the authorities and amendments thereto are not relevant to the oral agreement between the plaintiffs and the defendant.

13. There was no response by the defendant to this submission.

14. In my judgment, once the defendant has accepted the deposit from the plaintiffs in consideration of the delivery of the bungalow lot by the defendant to the plaintiffs, it is the contractual obligation of the defendant to do so and the conditions imposed by the authorities and the amendments thereto are matters between the defendant and the authorities, to which the plaintiffs are not privy. The conditions imposed by the authorities cannot provide an excuse to the defendant's contractual obligations to the plaintiffs, especially after a lapse of nine years from the date of the oral agreement.

    V. PLAINTIFFS' ALLEGED WITHDRAWAL OF LETTER DATED JULY 1, 1998

15. The stand taken for the plaintiffs is that this issue raised for the defendant is untrue having regard to four subsequent letters issued by the plaintiffs' solicitors.

16. The defendant seeks to raise conflicting facts in the affidavits filed herein to show that there are triable issues, relying on Bank Negara Malaysia v Mohd Ismail [1992] 1 MLJ 400; Kapital Raya Sdn Bhd v Bloomville Corp Sdn Bhd [1997] 1 AMR 22; [1996] 3 MLJ 522; and Huo Heng Oil Co (EM) Sdn Bhd v Tang Tiew Yong [1987] 1 MLJ 139.

17. Huo Heng Oil Co, supra, concerns a claim for, inter alia, the sum of RM18,510.87 being the price of goods sold and delivered by the plaintiff to the defendant who generally denied owing the said sum. SF Chong J (later CJ (Sabah & Sarawak)) held that the general denial is bad in law and so summary judgment was entered in favour of the plaintiff.

18. In Chen Heng Ping v Intradagan Merchant Bankers (M) Bhd [1995] 2 AMR 1655, the bank had obtained summary judgment against the guarantors and the Court of Appeal affirmed the summary judgment on appeal.

19. I am of the view that these two authorities cited for the defendant would militate against the defendant's contention herein.

20. In my view, the defendant's allegation in this respect must be tested against all the contemporary letters from the plaintiffs to the defendant.

21. The plaintiffs' letter dated July 1, 1998 had categorically informed the defendant that after two years of paying the deposit, the receipt of which was acknowledged by the defendant, they would like to treat the oral agreement as null and void and so the plaintiffs had requested for the refund of the deposit. There was no response from the defendant.

22. Four letters issued by the plaintiffs' solicitors to the defendant were to the same effect. The defendant had never denied receiving these letters in its affidavit in reply but had turned a deaf ear to them. In my view, the defence is deemed to have been admitted by the defendant: Alloy Automotive Sdn Bhd v Perusahaan Ironfield Sdn Bhd [1986] 1 MLJ 382 at p 3851 right per HH Lee CJ (Borneo) delivering the judgment for the Federal Court.

23. The importance of examining undisputed contemporary documents has been manifested by the then Supreme Court in Bank Negara Malaysia, supra, where at p 408, Mohamed Azmi SCJ (as he then was) in a majority judgment said, where relevant:

    Under an Order 14 application, the duty of a judge does not end as soon as a fact is asserted by one party, .... Where such assertion, .... is equivocal, or lacking in precision or is inconsistent with undisputed contemporary documents .... then the judge has a duty to reject such assertion .... thereby rendering the issue not triable.

24. The above dictum was followed by the Court of Appeal in Kapital Raya, supra, through the judgment of Ahmad Fairuz JCA (now CJ Malaysia).

25. In the instant case, I am of the view that the defendant's allegation herein is inconsistent with the aforesaid five letters which are undisputed contemporary documents. I therefore reject the defendant's assertion which I hold as raising no triable issue.

    VI. ORAL AGREEMENT

26. It was stressed for the defendant that the agreement in question is an oral agreement and so a trial must be held to ascertain the true position, relying on Perwira Habib Bank Malaysia Bhd v Beca (Malaysia) Sdn Bhd (Mallal's Digest, 4th edn, paragraph 6156).

27. The plaintiffs' contention is that this is not a triable issue.

28. The undisputed facts before me are that the plaintiffs have paid the defendant the deposit for the purchase of the bungalow lot by way of an oral agreement but the defendant was unable to deliver the bungalow lot to the plaintiffs even until today. Order 81 r 1(1) (b) expressly provides for the plaintiffs to apply for rescission of an agreement, (whether in writing or not) on the ground that the defendant has no defence to the action.

29. The facts in Perwira Habib Bank, supra, revolve around three banking facilities in which liability was disputed on the ground that the time to repay had not accrued yet as the plaintiff bank had failed to fulfil their obligations to provide a complete drawdown of the facilities for the purpose for which such facilities were granted. The defendant alleged that the plaintiff had orally agreed, inter alia, that they would continue to assist the defendant. On these facts, Siti Norma Yaakob J (now CJ (M)) held that it was not a proper case to grant summary judgment.

30. I am of the view the facts in Perwira Habib Bank, supra, are clearly distinguishable from the facts before me.

    VII. DELAY AND CONSEQUENCES

31. It was said for the defendant that the plaintiffs have after the letter dated July 1, 1998 waited until July 16, 2003 to commence this action and has indeed acquiesced in the continuance of the oral agreement and so was estopped from commencing this action.

32. The plaintiffs' response is that this issue was never raised in the defence.

33. In my judgment, the truth of the matter is that after the plaintiffs' letter dated July 1, 1998, the plaintiffs had instructed their solicitors to issue four notices of demand to the defendant to which the defendant had never replied. In the face of contemporary letters, the submission for the defendant is clearly unsustainable.

34. Further the defendant's failure to include the issues of delay, acquiescence and estoppel in the defence made it demonstrably clear to me that this submission is a red herring which deserves to be rejected.

    VIII. CONCLUSION

35. The defendant has no defence to the plaintiff's claim. In line with National Company Foreign Trade v Kayu Raya Sdn Bhd [1984] 2 MLJ 300, FC, I hold that the plaintiff is entitled to summary judgment and make an order in terms of Encl.10, with general damages for breach of the oral agreement to be assessed by the registrar of this court.

Alloy Automotive Sdn Bhd v Perusahaan Ironfield Sdn Bhd [1986] 1 MLJ 382, SC; Bank Negara Malaysia v Mohd Ismail [1992] 1 MLJ 400, SC; Chen Heng Ping v Intradagang Merchant Bankers (M) Bhd [1993] 2 AMR 1655, CA; Huo Heng Oil Co (EM) Sdn Bhd v Tang Tiew Yong [1987] 1 MLJ 139, HC; Kapital Raya Sdn Bhd v Bloomville Corp Sdn Bhd [1997] 1 AMR 22; [1996] 3 MLJ 322, CA; National Company For Foreign Trade v Kayu Raya Sdn Bhd [1984] 2 MLJ 300, FC; Penang Development Corporation v Khaw Chin Boo [1993] 2 MLJ 161, HC; Perwira Habib Bank Malaysia Bhd v Beca (Malaysia) Sdn Bhd (Mallal's Digest, 4th edn, paragraph 6136)

Contracts Act 1930: s.40, s.47

Housing Developers (Control and Licensing) Regulations 1982

Rules of the High Court 1980, Order 81 r1(1), 1(1)(b)

Andre HL Wee (Yap Koon Roy & Associates) for plaintiffs

Kuganeswari (Kesavan & Associates) for defendant

This decision is also reported at [2005] 5 AMR 64.