Dealings of land – case notes (week 2)

Tan Siew Gaik v Loke Poh Seong

Facts: the plaintiffs (administrators of the estate of the deceased) claimed for a specific
performance of a written agreement for the breach of contract against the D. The deceased
purchased 21,000 square ft of land for $5500 from the D. However, instead of 21000 sq ft, only
19439 sq ft were transferred. The remaining of the land (19439 sq ft) were sold to two other
purchasers. The D argued that in their oral agreement the deceased had accepted the smaller
portion of the land but the P claimed that the deceased only agreed to accept the transfer if the
remaining portion was to be utilized as a public road for the housing project.

Issue: Whether the oral agreement was admissible under section 92 of Evidence Act.

Held: the oral agreement tends to explain the real intention of the parties during the transfer.
Basing on the case of Lebai Taib v Abdul Ghani, oral agreement does not contradict, vary or
subtract from the terms of the document of transfer within the meaning of s.92 of Evidence Act.
The surrounding facts and circumstances have to be taken into account. The deceased was under
the impression that the portion in dispute was meant for a road reserve since there was no answer
given by the defendant to the letter requiring the particulars of the land. The D’s argument was
that because the gov has not taken up the portion in dispute as a road reserve but roads were
constructed along the strips of land on both sides of the P’s lot and that he has the right to sell the
disputed portion. If that was true, he ought to have informed the P earlier that he intended to
dispose it rather than to maintain that it was to be taken up for a road reserve. The P is entitled to
damages for breach of contract.

Tan Chong & Sons Motor Co. v Alan McKnight

Facts: the R (squadron leader in Royal Australian Air Force) wanted to buy a car and get the
benefit of exemption from duty in Malaysia and Australia. The exemption would have been
obtained if the motor car was taken out of Malaysia and if it complied with Australian Design
Regulations. He bought the car from the A and signed a Buyer’s Order which contained a
condition that no guarantee/warranty was given by the company. R bought the car on the
representation of the A’s salesman that the car conformed to the the Regulations. It was later
found out that the car supplied did not comply with the regulations and the R had to sell the car
for $6500 (incurred loss). R also lost the fiscal advantage of importing the car to Australia duty
free. R claimed damages for breach of warranty. Trial judge – ada warranty and awarded
damages of $10,500. A appealed to the Fed Crt contending that they were not liable and the
damages were too high BUT the R cross-appealed on the ground that the damages were too low
and that he was entitled to interest.

Relevant issue: A argued that the representation having been orally made, whilst the agreement,
being in writing. Therefore, the representations were not admissible. (S.92 of Evidence Act – no
oral evidence will be admissible to contradict, vary, add or subtract the terms of a written
agreement unless the oral evidence comes within one of the exceptions or illustrations.)

Held: The primary purpose of probing the pre-contract statements in the case under the present
appeal was not to contradict, vary, add or subtract the terms of the Order, but to prove the
existence of a warrant, a separate contractual promise. Such proof is allowed under (b) and (c)
and also illustrations (d), (g) and (h) of s.92. The prohibition against admissibility of evidence
under s.92 only applies where all of the terms of the contract are written into the agreement. But
where some terms are given orally and some in writing, oral evidence can be given to prove
terms agreed to orally. Thus, in this case, the oral representations were admissible.

Kam Mah Theatre Sdn Bhd v Tan Lay Soon [1994] 1 MLJ 108

Facts: Resp claimed to have entered into a binding agreement with the App for the sale of
certain lands, relying on a letter addressed from the App (vendor) to the Resp (purchaser). The
terms of the letter contained a proviso, ‘that the sale and purchase agreement shall incorporate all
the terms and conditions herein and other usual terms and conditions and shall be signed on or
before 18 March 1989’, otherwise the deposit was to be refunded to the Resp. A sale and
purchase agreement was subsequently prepared and signed by the Resp only and sent to the
App’s solicitors. The agreement included 2 new conditions to which App did not agree and
therefore refunded the deposit. App contended that there was no binding contract and that it was
still then negotiating with the Resp. The trial judge found that there was a binding and concluded
agreement and ordered specific performance. His Lordship held that the additional new term was
a usual term and condition (see pg 115 para D).

App appealed.

Held:

- There was no concluded and binding agreement. The letter was dependent on the signing of a
formal contract to be further negotiated and approved by both parties. Proviso in the letter
was very similar to the phrase or formula of ‘subject to contract’.
- The formula gives rise to a strong presumption of the necessity of a further formal contract.
(see pg 116 para I) There was evidence (pg 117 para C onwards) to show that negotiations
were still ongoing btw the parties, including (i) provision of return of deposit on the failure of
parties signing the contract, (ii) agreement which was signed by the Resp only containing 2
new conditions, (iii) there could have been a further amended draft of the ultimate agreement
to take account of withdrawal of the compulsory acquisition over part of the land, and (iv)
the correspondence after the date of the letter.
- The words ‘usual terms and conditions’ failed to reveal certainty and were too ambiguous.
What would be the usual terms and conditions remained largely a matter of conjecture, thus
the words would create uncertainty unless a contract containing these agreed ‘usual terms
and conditions’ had been signed by the parties. (see pg 116 para H)
- S91 and 92 of Evidence Act 1950 merely strike at evidence to contradict, for in that event,
such evidence would be unacceptable …. (see pg 115 para I)

Amalgamated Steel Mills Bhd v Ingeback (Malaysia) Sdn Bhd [1990] 2 MLJ 374

Facts: P brought action for SP of 3 agreements in respect of sale and purchase of 3 pieces of
land. P’s cause of action was pegged to 3 letters all dated 7 September 1989 which were alleged
to have offered 3 pieces of land for sale. P alleged that the offers were accepted and initial
moneys tendered according to the said letters of offer. D, however, informed the P by letter that
it could not accept the P’s agreement and directed its agent to return the cheques. P contended
that the letters constituted binding contracts and D had no right in law to repudiate them. D
alleged that the purported contracts were tainted with illegality but the court observed that the
complaints were directed to the letter of offer for one of the pieces of land only. D alleged that it
was agreed not to reflect the true purchase price in the SPA yet to be formulated. This is so as to
defeat the Stamp Ordinance 1949 and to defraud 2 third parties to whom the land was
encumbered. P however denied any evasion of the Ordinance and alleged that such an alleged
breach would not render the agreement void. Further, any fraud in the 2 third partied were
perpetrated by the D.

Held:

1. S92 Evidence Act 1950 prohibits the admission of oral evidence for the purpose of
contradicting, varying, adding to or subtracting from the expressed terms of a contract.
However, the language of proviso (a) allows parol evidence to show that a contract in writing
was really made for objects forbidden either by statute or common law. (pg 376 para C right)
P had not denied D’s allegations regarding the matters discussed. P’s only contention was
that even if the matters were discussed and even if they had reached an agreement at all, they
were irrelevant and inadmissible in view of the finality of the letters of offer. As the P has
failed to deny or contradict the D’s allegations, it must be held that the allegations have been
admitted. As such, both parties had agreed that the sale price was $14.157m; that the
agreement should not reflect the actual price; and there would be a supplementary agreement
showing a work contract by which the D was entitled to $2.157m. (pg 376 para I right
-onwards) The arrangements of the 2 parties amounted to nothing less than a dubious means
of evading the Ordinance 1949 and an attempted fraud on public revenue as well as the third
parties. The mention of such a fictitious price in the letter of offer relating to the 50 acres of
land and purportedly accepted by the P amounted to overt steps in carrying out the fraud.
2. Under s24(a) of CA1950, only contracts that are unlawful are those forbidden by law. The
object of the Ordinance 1949 however is not to vitiate the contract but to impose a penalty
upon the party offending. (pg 377 para H left) However, s24(e) of CA1950 directs a court to
hold the consideration or object of an agreement as unlawful and void if the court regards
such consideration or object as immoral or opposed to public policy. (pg 378 para A left)
3. In respect of the remaining 2 pieces of land, the letter had set out the essential terms and
thereafter it said ‘subject to signing of formal contract’. There was nothing in that letter to
show that it was the intention of the parties not to make a concluded bargain at all. In using
 the formula ‘subject to signing of formal contract’, it merely proposed to have the terms
restated in a form which would be fuller and more precise but not different in form. 2
subsequent letters of offer also clearly manifested the intention of parties. (pg 381 para B
left)
4. No indication in the letter that there was to be a block sale of the 3 pieces of land. The S&P
of the 50 acres land was not made condition of the S&P of the other 2 smaller lands. The 3
pieces of land were offered for sale under 3 separate letter of offer. (pg 381 para A right)

Eng Mee Yong

Facts

The applicants ("the caveatees") were the registered proprietors of the land which is situated in
the Ampangan District of Seremban. The respondent ("the caveator") was the person at whose
instance a caveat was entered on the register document of title to the land, on November 9, 1974.
The caveat was expressed to bind the land itself to the extent of a whole share. The caveatees had
applied to the Registrar on January 6, 1975 for removal of the caveat under section 326(1) of the
Code; but the Registrar was unable to serve notice of intended removal on the caveator as he
could not be found. The caveatees were thus driven to proceed ex parte under section 327(1) for
an order for the removal of the caveat.

Held

The respondent had no caveatable interest in the land concerned within the meaning of section
323(1) of the National Land Code. The parties had entered into a written agreement on June 28,
1974 wherein time was made the essence of the contract and acting pursuant to the provisions in
the agreement the applicants were well within their rights when they forfeited the deposit of
$97,765.62 and the further sum of $30,000 upon the failure of the respondent to complete the
purchase of the land on or before September 28, 1974.

Principle

 “the effect of entry of a caveat expressed to bind the land itself is to prevent any registered
disposition of the land except with the caveator’s consent until the caveat is removed. This is
 a very grave curtailment of the rights of the proprietor. It can be imposed at the instance of
anyone who makes a claim to title to the land, however baseless that claim may turn out to
be. A private caveat does not have the effect of altering the ownership of the land or interest.
It merely functions as a notice of a claim and priority of a claim.” (per Lord Diplock)
 Distinguished s.326 and s.327; whereas the procedure under s.326 is available only to the
caveatee, the procedure for applying directly to the court for an order of removal is available
not only to the caveatee but also any other person aggrieved by the existence of the caveat.”
 If the applicant has no registered interest on the land, he must first satisfy the court that he is
a person aggrieved by the existence of the caveat. If he is not, his application to remove the
caveat will be dismissed. If the applicant manages to prove he is a person aggrieved, then the
onus moves to the caveator. The caveator must then satisfy the court that on the evidence
presented to it, his claim to an interest in the land does raise a serious question to be tried and
show that on a balance of convenience, it would be better to maintain the status quo until the
trial of the action.