QUESTION

Tom is the registered owner of a parcel of agricultural land ("the property") situated in the outskirts of Kuala Lumpur. He has decided to sell the property The property is currently being rented out to Babu.

Omar who lives in the vicinity of the property had communicated his desire in purchasing the property to Tom. Tom offered to sell the property to Omar for RM800,000. This was far below the prevailing market price for similar properties situated in the neighbourhood. Omar immediately accepted the offer and executed a sale and purchase agreement ("the SPA") on 01/04/2021. He paid an initial sum of RM80,000 being 10% of the purchase price of the property as deposit and part payment of the purchase price ("the deposit").

The SPA contained, amongst others, the following essential terms and conditions:

1. That the property is subject to a condition endorsed on its document of title that the property shall not be transferred, charged, or leased without the written consent of the State Authority.
2. That the vendor shall apply for and obtain the written consent of the State Authority within three (3) months from the date of the SPA.
3. In the event the vendor fails to obtain the written consent of the State Authority for the sale and transfer of the property to the purchaser, the SPA shall be null and void and of no further effect.
4. That the purchaser shall pay to the vendor the balance of the purchase price amounting to RM720,000 within 3 months from the date of the written consent from the State Authority. ("the Completion Date").
5. Time wherever mentioned shall be of the essence of the Agreement

Omar subsequently discovered that it was a landlocked property which had no access to the public road. The property was surrounded by other properties. Due to its inaccessibility the property had a much lower value. Omar had also found it difficult to obtain a loan from the Banks to assist him to partly finance the purchase of the property. In the circumstances, Omar terminated the SPA and demanded the return of the 10% deposit he had paid to Tom. He thought that Tom should have told him about the status of the property and asserted that Tom had committed fraud by remaining silent as to this fact which was a crucial piece of information. Tom disregarded Omar's demand.

On the 01/06/2021 Tom received written notification from the State Authority that his application for the required consent to transfer the property was successful. He communicated this to Omar who maintained that the SPA had been terminated and refused to proceed with the SPA.

Meanwhile, Tom issued an eviction notice to Babu to recover vacant possession of the property. Babu argued that the termination of the tenancy was invalid on the ground that it was agreed between them that the property was rented to him "as long as he likes". Babu added that he had been regularly paying the rent for the property.

Babu had also alleged that Tom owed him a sum of RM2,000 being his winnings in an illegal lottery scheme operated by Tom. He has made numerous demands, but they were ignored by Tom. Babu further claimed that he had paid Tom RM1,000 in return for Tom's promise to use his influence to obtain a licence issued by the Municipal Council to run a stall at the local market. Tom had failed to keep his promise.

As soon as Tom's sister, Molly, learnt of his intention to sell the property, she confronted Tom stating that he had no right to sell the property as she was the rightful owner of a half-share of the property. She referred to a conversation that both had a year ago in which Tom had promised to transfer half-share of the property to her. The property was left to him absolutely by the Will of their deceased father. Tom has rejected the validity of Molly's claim challenging that she had not provided any consideration in support of his alleged promise.

Omar, Babu and Molly are contemplating commencing legal actions against Tom to enforce their respective alleged rights. Discuss their legal position under the law of contract.

[70 marks]