ABERFOYLE

PLANTATIONS LTD V
KHAW BIAN CHENG
[1960] 1 MLJ 47
CASE LAW PRESENTATION BY GROUP 3 - LWB01K
 Aberfoyle Plantations LTD v Khaw Bian Cheng

FACT OF THE CASE

The vendor, Aberfoyle Plantations LTD agreed to sell 1336 acres of rubber plantations to
the purchaser, Khaw Bian Cheng.
The vendor had good title to 1154 acres of the rubber plantations, but for the other 182
acres depends on its successful negotiations to renew 7 previously expired leases.
Upon agreement, by the 30th April 1956, the vendor was expected to have settled the
leases and the purchaser should have made payment for the deposits.
The purchaser had paid the deposits required, however, the vendor had not yet obtained a
renewal of the leases.
The purchaser filed a claim for the return of the deposits paid.
 LEGAL ISSUES
Whether the condition of agreement between the appellant (Aberfoyle
1 Plantations Ltd/ the vendor) and the respondent (Khaw Bian Cheng/ the
purchaser) is being fulfilled or not

2
Whether the purchaser is entitled to the return of deposits amounting to
$100,000 paid by the vendor

Aberfoyle Plantations LTD v Khaw Bian Cheng (1960)

 Aberfoyle Plantations LTD v Khaw Bian Cheng

APELLANT's ARGUMENTS
the vendor contends that it cannot have been the parties' intention for
the condition to be fulfilled in such a short period of time (just under
six months from the date of the agreement), and reasonable amount of
time should be allowed to satisfy the requirement

in addition, the vendor claimed Clause 9 proved that, while the parties
described the 30th of April, 1956, as the date on which the contract
was to be completed, what happened on that day did not amount to
completion, because upon payment of the payment, the vendor was only
obligated to execute a proper transfer "as soon as possible afterward."
 Aberfoyle Plantations LTD v Khaw Bian Cheng

RESPONDENT's ARGUMENTS

the purchaser, on the other hand, claims that the provision in clause 9 requiring
the vendor to "as soon as possible afterward execute a proper transfer of the
property to the purchaser" included doing what was required to complete the
condition stated in clause 4, and thus gave the vendor a reasonable time after
April 30, 1956, to conform with the condition.
 Aberfoyle Plantations LTD v Khaw Bian Cheng

COURT DECISION
After examining the fact of the case, the reason for the lordship dismissing the vendor’s or
hereinafter the appellant appeal is because the vendor’s side of argument is not relevant.

According to their argument in clause 9, the vendor was required to "as soon as possible
thereafter execute a proper transfer or transfers of the property to the purchaser," and what
was required to fulfill the condition stated in clause 4 giving the vendor a reasonable time after
April 30, 1956, to comply with the condition.

However, according to clause 4 the vendor failed to fulfill a condition precedent specified in the
contract, namely to obtain the renewal of several leases relating to the land. Therefore, the
conditions of the agreement between both parties are left unfulfilled.

On the other hand, the court also held that the purchaser was entitled to the return of his
deposits mounting to $100,000 paid by the vendor on the ground that the condition had not
been performed by the vendor within the stipulated time.
 Aberfoyle Plantations LTD v Khaw Bian Cheng

APPLICATION / RELEVANCIES
The case of Aberfoyle Plantations Ltd v Khaw Bian Cheng, was related to the 3rd modes of
revoking offer which is failure of the acceptor to fulfil conditions precedent to
acceptance. In a contract, a condition precedent is a condition or requirements that must
be fulfilled before a specific contract is considered to be in effect.

The failure of the acceptor to fulfil condition precedent to acceptance is stated under
Section 6 (c) of Contracts Act, where the condition precedent must be met before
acceptance, and if failing to do so will result in the offer being canceled. In the case of
Aberfoyle Plantations Ltd v Khaw Bian Cheng, the vendor failed to fulfil a condition
precedent specified in the contract, that is to obtain the renewal of several leases
relating to the land. As the condition precedent was not satisfied there would be no
contract between the parties.

Therefore the purchaser was entitled to the return of his deposits paid.