Legislation referred to: Contracts Act 1950, ss. 19(1], (2)74 Civil Appeal No: W-03-41-98 Appellant in person For the respondent - Zainur Zakaria; M/s Zainur Zakaria & CoCivil Appeal No: W-03-43-98 For the appellant - Zainur Zakaria; M/s Zainur Zakaria & CoRespondent in personReported by Anne Khoo [Plaintiff's appeal dismissed; defendant's appeal allowed in part.] JUDGMENT Gopal Sri Ram JCA: Introduction There are two appeals before us. The appellant in Civil Appeal No W-03-41- 98 ("the first appeal") was the plaintiff in the court below. The respondent to the first appeal was the defendant. In Civil Appeal No. W-03-43- 98 ( "the second appeal") the roles are reversed. It is the defendant in the court below who is the appellant while the plaintiff is the respondent. We heard both appeals on 26 October 1998. Since both appeals arise from the same action and concern a common issue, we heard them together. The parties agreed to this course. At the conclusion of argument, we reserved judgment. We also directed parties to put in written submissions. This was done. We find it convenient throughout this judgment to refer to the parties according to the title assigned to them in the court below. We said that both appeals raise a common issue. It has to do with the measure of damages that the defendant is liable to pay the plaintiff. In the first appeal, the plaintiff complains that he has received too little; in the second appeal, the defendant complains that it has been ordered to pay too much. The question at issue is simple enough. It is amply covered by settled authority. Yet, a brief reference to the factual matrix against which these appeals rest is necessary to properly appreciate the arguments raised before us.Background The litigation that has led to these appeals has a long and chequered history. On 26 May 1986, the plaintiff, who was then a serving judge of the High Court in Malaya, issued a writ against the defendant. His statement of claim reveals that he had, on 25 May 1982, entered into an agreement with the defendant, a developer, to purchase an apartment for RM236,900. The purchase price had been paid in full from loans disbursed to the plaintiff by two institutional lenders. Interest had been paid on these loans. The plaintiff complained that he had been induced to enter into the agreement in question on the basis of a false and fraudulent representation made by the defendant in its brochure. He claimed that in consequence thereof, he had lost the value of his investment. He particularised them in his statement of claim. The amount came to RM299.651 32. This sum was made up of the purchase price, the interest he had paid and some incidental expenses. At Facts: The plaintiff complained that he had been induced to enter into the agreement in question on the basis of a false and fraudulent representation made by the defendant in its brochure. He claimed that in consequence thereof, he had lost the value of his investment. The defendant delivered a defence in which it traversed all points of importance raised by plaintiff in his statement of claim. A reply was then delivered by the plaintiff. In due course the plaintiff's action came on for hearing before the High Court which dismissed it. The plaintiff appealed. The Federal Court allowed his appeal on 24 November 1995. Although it made several orders, we are only concerned with the following: (1) that the agreement dated 25 May 1982 be set aside; (2) that the sum of RM299,661.32 be refunded by the defendant to the plaintiff together with interest thereon at 8%% per annum from 26 May 1986 until the date of full realisation; (3) that the defendant do pay the plaintiff damages to be assessed by the High Court.We pause to observe that although before us the plaintiff who appeared in person challenged the Bahasa Malaysia version of the first order, it is plain from his written submission tendered before the learned judge in the court below (at p. 33 of the Record in the first appeal) that he accepts that what the Federal Court ordered was rescission of the agreement in question. On 24 February 1997, the defendant paid over to the plaintiff a sum of RM556 072 89, made up of the judgment sum of RM299,661.32 and interest on that sum which amounted to RM256,411.57. Pursuant to the last paragraph of the Federal Court's order, the High Court proceeded to assess the damages allegedly suffered by the plaintiff. The assessment was conducted by the senior assistant registrar before whom the plaintiff claimed a number of items which he said he was entitled to recover from the defendant, including loss of rent that he might have earned from the apartment. The senior assistant registrar then assessed the following damages in the plaintiff's favour: (1) RM46.000.00 for the loss of the value of the appreciation of the subject property, representing the difference between the purchase price and the market value at the date of the Federal Court's decision. (2) RM5 998.00 for the loss of value of the appreciation of the club membership representing the difference between the purchase price and the market value of the club membership at the date of the Federal Court's decision, together with interest at 8% from April 24, 1985. (3) RM143,240.22 being the interest paid by the plaintiff to The Hongkong and Shanghai Banking Corporation Limited since May 1986 to April, 1997. (4) RM72.790 10 being interest at 8%% per annum on each of the monthly interest payments made by the plaintiff to The Hongkong and Shanghai Banking Corporation Limited from the date of payment in May 1986 to April 30, 1997 and continuing up to the date of judgment. (5) RM5 500 being the cost of the valuation report prepared by C. H. Williams Talhar & Wong The senior assistant registrar did not, however, allow the claim for the loss of rent which the plaintiff said he would have received if the transaction had proceeded to completion. Both the defendant and the plaintiff appealed against the senior assistant registrar's decision to the judge in chambers who dismissed both appeals. It is against those orders of dismissal that the present appeals haveThe Issue addressed in the Court of Appeal is quantum of damages upon rescission of the agreement. In order to deal with and resolve this issue it is necessary to advert to some of the relevant principles that govern the subject at hand. And we apprehend that much of the confusion in these appeals has arisen because of a failure to properly appreciate the terminology that is often employed in that area of the law of contract with which we are concerned in the present appeals. We therefore consider it desirable to re-state some of the fundamental principles. The Law Having regard to the relevant provisions of the Contracts Act 1950 and the authorities upon the subject, we consider the following propositions to be settled and beyond argument. 1. Since the consequences for a statement made by a party to a contract depends upon the stage at which the statement is made, the law recognises a division between contractual and pre-contractual statements. 2. Pre contractual statements are called "representations". However, contractual statements are obligations actually undertaken by the party making them. They are referred to by lawyers as "the terms of a contract". 3. Whether a particular statement made in the course of negotiations leading to the making of a contract is a representation or a term depends upon the intention of the parties and is to be deduced from the totality of the evidence. While decided cases suggest differing approaches, it is clear that no single criterion is conclusive. See, for example, Oscar Chess Lid. v. Williams [1957] 1 WLR 370; Dick Bentley Productions Ltd. v. Harold Smith (Motors) Ltd. [1965] 1 WLR 623. 4. The traditional method of classifying the terms of a contract is according to the degree of their importance. Stipulations that are essential are called "conditions", while those of a secondary nature are referred to as "warranties"_ The breach of a condition entitles the innocent party to repudiate the contract, that is, to treat it as at an end as to future obligations, and to sue for damages. On the other hand, the breach of a warranty sounds only in damages. Whether a particular term is a condition or a warranty is a matter of judicial impression, ie. it is a question of law. See, Ching Yik Development Son. Bhd. V. Setapak Heights Development Son, Bhd. 1997] 1 CU 287