Mohamad Bin S. Ahmad v Lembaga Pengelola Dewan Bahasa dan Pustaka (W-02(IPVC)(W)-1841-09/2018)

MOHAMAD BIN S. AHMAD

SHEIKH AHMAD BIN MOHAMAD

SHEIKH MOHAMMAD AYMAN BIN MOHAMAD

SHEIKH MOHAMMAD SYAAMIL BIN MOHAMAD (NO K/P: 970929-56-5295) (Trading as DARUL FIKIR Business Registration No. 000624088-H) … APPELLANTS AND LEMBAGA PENGELOLA DEWAN BAHASA DAN PUSTAKA … RESPONDENT (In the High Court of Malaya at Kuala Lumpur (Commercial Division) In the Federal Territory of Kuala Lumpur, Malaysia Civil Suit No. WA-22IP-37-09/2017 Between 2

Mohamad Bin S.Ahmad (No K/P: 550506-10-6133)

Sheikh Ahmad Bin Mohamad (No K/P: 850426-14-6543)

Sheikh Mohammad Ayman Bin Mohamad (No K/P: 880328-56-5063)

Sheikh Mohammad Syaamil Bin Mohamad (No K/P: 970929-56-5295) (Trading As Darul Fikir Business Registration No. 000624088-H) … Plaintiffs And Lembaga Pengelola Dewan Bahasa Dan Pustaka … Defendant CORAM: HAMID SULTAN BIN ABU BACKER, JCA HANIPAH BINTI FARIKULLAH, JCA LAU BEE LAN, JCA

This appeal arises from the decision of the learned High Court Judge dated 7.8.2018 dismissing the plaintiffs’ claim for an injunction to restrain the respondent from issuing an open tender to invite a third party to bid for a contract to publish and supply a “Mushaf Al-Quran Bertajwid dan Berwarna” 3 (the said Al-Quran). The learned High Court Judge dismissed the plaintiffs’ claim on the ground that the contract between the parties has lapsed and had been duly performed and that there is no provision in the contract which bars the defendant from getting a third party to publish the said Al-Quran.

For convenience, we will refer to the parties in this judgment as they were referred to in the High Court. At the conclusion of the hearing, we unanimously allowed it with costs. We now give our reasons for so deciding. The Background Facts 3. The background facts have been set out in the judgment of the learned High Court Judge. We will only repeat in the following paragraphs the relevant facts as narrated by the learned High Court Judge in so far as they are relevant to the issues which arise for decision in this appeal.

This suit has been initially filed by Darul Fikir, a partnership, against Dewan Bahasa dan Pustaka (DBP).

Darul Fikir applied for an interlocutory injunction against DBP pending the disposal of this suit. The learned High Court Judge dismissed Darul Fikir’s application on the grounds that, among others, under the Dewan 4 Bahasa dan Pustaka Act 1959, Darul Fikir should have sued the Board of Control of DBP (the Board) and not DBP itself. There is no appeal to the Court of Appeal against the dismissal of Darul Fikir’s application.

After the dismissal of Darul Fikir’s application, the statement of claim, in this case, was amended as follows:

all the partners of Darul Fikir replaced the latter as plaintiffs in this case (the plaintiffs); and

the Board substituted DBP as the defendant in this suit. The Plaintiffs’ Claim in the High Court 7. The plaintiffs had commenced the present proceedings in the High Court against the defendant for breach of clause 15.3 of the Contract when the defendant issued an open tender on 18.9.2017 to invite Bumiputera book suppliers to bid for a contract to print and supply the said Al-Quran for 2018 without obtaining the plaintiffs’ written consent.

The defendant’s defence was that they were not in breach of the Contract for the following reasons:

based on the Contract, the plaintiffs were only a contractor to perform work regarding the said Al-Quran as stipulated in the 5 Contract. Pursuant to the Contract, the plaintiffs were not a co-publisher of the said Al-Quran with the defendant; and

the Contract provided for a sum of RM8,175,998.42 to be paid by the defendant to Darul Fikir for the latter’s services regarding the said Al-Quran. The defendant had paid the price in full to the plaintiffs.

At the conclusion of the trial, the learned High Court Judge found that the defendant has not breached the Contract based on the following reasons:

the Contract had lapsed after the expiry of the one-year duration and no supplemental contract had been signed by the plaintiffs and the defendant. Furthermore, the price had been paid in full by the defendant to the plaintiffs; and

as the Contract has been fully performed, there is no provision in the Contract, including Clause 15.3, which bars the defendant from issuing the Tender.

The plaintiffs have appealed to this court against the decision of the learned judge. The Plaintiffs’ Submissions 11. In this appeal, it was contended for the plaintiffs that there is nothing in the Contract that allows the defendant to appoint a third party to publish the 6 said Al-Quran without the written consent of the plaintiffs. Learned counsel for the plaintiffs submitted that the defendant should get the plaintiffs’ consent in writing before issuing the said tender pursuant to Clause 15.3 of the Contract. Learned counsel for the plaintiffs argued that the learned High Court Judge has erred in law and in fact when he decided that the plaintiffs did not plead regarding infringement of copyright and patent of the said Al-Quran and therefore could not claim against the defendant. Learned counsel emphasized to us in his written and oral submissions that the plaintiffs’ claim against the defendant is not an infringement of any copyright or patent but for breach of contract.

Counsel for plaintiffs also relied strongly on the fact that the parties have agreed in recital (1) and in Clause 13.1 of the Contract that the plaintiffs are the copyright or patent owner of the said Al-Quran. We will now consider these arguments and the counter-argument of the defendant. The Defendant’s Submission 13. Before us, the defendants put forward the same arguments they had raised in the court below. Its rebuttal argument can be summarized as follows: 7 1) the Contract is for one (1) year and therefore Clause 15.3 of the Contract has no effect after the lapse of the one (1) year period. 2) As the Contract has been duly performed, including the price has been paid in full by the defendant to the plaintiffs, there is no provision in the Contract, including Clause 15.3 which prevents the defendant from issuing the Tender.

For the above reasons, learned counsel for the defendant submitted that the learned High Court Judge has not erred in his finding that the defendant had not breached the Contract.

The learned High Court Judge correctly stated that the plaintiffs in its amended statement of claim had only pleaded one cause of action i.e the defendant’s breach of contract. The plaintiffs did not plead that the defendant had breached copyright and patent in the colour codes of the said Al-Quran. Therefore, the learned High Court Judge concluded that the plaintiffs are barred from relying on patent infringement under s 58 Patent Act 1983 and copyright infringement under s 36(1) Copyright Act 1987.

Despite the above decision, the learned High Court Judge proceeded to discuss the patent infringement issue and copyright infringement issue. 8

For the purpose of the appeal, it is unnecessary to repeat or even refer to most of those matters that relate to patent infringement and copyright infringement. We will concentrate on the main point raised on the appeal.

We now turn to the principle on which the learned Judge rested his decision. In his Judgment at para 24 to 29, the learned High Court Judge addressed the question of whether the defendant has breached the Contract. He began by reminding himself of the following principles in relation to the interpretation of an agreement:

The interpretation of an agreement is a question of law to be decided by the Court and not by witnesses through their oral evidence. The learned Judge commented that accordingly, the testimonies of the 1st plaintiff and SP2 regarding the meaning of Clause 15.3 is irrelevant. Similarly, the failure of the defendant learned counsel to cross-examine the 1st plaintiff and SP2 on Clause 15.3, is also of no consequence.

(ii) Sections 91 and 92 of the Evidence Act 1950 which provide that no evidence can be adduced by the plaintiffs and the defendant to contradict, vary, add to or subtract from the terms and conditions of the Contract.

(iii) The Contract is a commercial contract which should be construed in a commercially sensible manner (Berjaya Times 9 Square Sdn Bhd (formerly known as Berjaya Ditan Sdn Bhd v M Concept Sdn Bhd [2010] 1 MLJ 597)

The learned High Court Judge went on to consider the decision of this court in Master Strike Sdn Bhd v Sterling Heights Sdn Bhd [2005] 2 CLJ 596, on the effect of an entire agreement clause in a contract, that is the contract “constitutes a binding agreement between [the parties] with regards to all matters mentioned in the contract and… the contract does not permit any term to be implied or import any other consideration not in the contract”. Thus, the learned High Court Judge made a finding that based on clause 39 of the Contract, the following evidence is not material in the interpretation of the Contract: 1) the fact that the Contract stated that the plaintiffs were the co-publisher of the Al-Quran together with the defendant; 2) the publication of the Al-Quran was done solely by the plaintiffs; and 3) the defendant’s failure to reply to the plaintiffs’ demand.

At paragraph 29 of his judgment, the learned High Court Judge reached the conclusion that the defendant has not breached the Contract. Having referred to the clauses 1.2(f), 4.1, 4.2 and 43 of the Contract, the 10 learned judge reasons is expressed succinctly at paragraph 29(1), (2) and

of his judgment: “(1) clauses 1.2(f), 4.1, 4.2 and 43 of the Contract [Clause 1.2(f), 4.1 4.2 and 43] provided in Malay as follows- “Tafsiran

1.2 (f) perkataan “secara bertulis” ertinya suatu suratan dalam bentuk bertulis yang diberikan, dikemukakan atau diserahkan secara rasmi antara pihak-pihak.

4.1 Perjanjian ini adalah bagi tempoh satu (1) tahun (kemudian daripada ini dirujuk sebagai “Tempoh Perjanjian” dan walau apa-apa pun dalam Perjanjian ini, hendaklah dianggap mula berkuat kuasa mulai 19 April 2016 (kemudian daripada ini disebut sebagat “Tarikh Berkuat Kuasa”) hingga 18 April 2017 (kemudian daripada ini dirujuk sebagai “Tarikh Penamatan”).

4.2 Perjanjian ini boleh dilanjutkan atau dipinda, pada bila-bila masa dengan persetujuan Pihak-Pihak secara bertulis melalui suatu Perjanjian Tambahan yang secara khusus merujuk kepada Perjanjian ini dan ditandatangani oleh Pihak-pihak.

Masa hendaklah menjadi inti pati Perjanjian ini.” (emphasis added)”

That lead him to further conclude that giving the Contract a commercially sensible construction as explained in Berjaya Times Squares, 11 the plaintiffs and the defendant have manifestly intended in the Contract as follows-

(a)

Clause 4.1 prevails over Clause 15.3 because the former provision employs the term “notwithstanding the Contract” (Walau apa-apa pun dalam Perjanjian ini). Clause 4.1 did not state that Clause 4.1 is “subject to” (tertakluk kepada) Clause 15.3;

by reason of Clause 4.2-

the Contract can only be extended in writing [Clause 1.2(f)] by way of a supplemental contract which refers specifically to the Contract (Supplemental Contract); and

(ii) the Supplemental Contract has to be signed by the plaintiffs and the defendant; and

Clause 15.3 can only have effect during the One-Year Duration (Clause 4.1). If Clause 15.3 has effect after the lapse of the One-Year Duration, this will be contrary to Clauses 1.2(f) and 4.2

Having reached that conclusion on the interpretation of the Contract, the learned High Court Judge’s decision on the issue was this: 12

the Contract had lapsed after the expiry of the One-Year Duration and no Supplemental Contract had been signed by the plaintiffs and the Board. Furthermore, the Price had been paid in full by the Board to the plaintiffs; and

as the Contract has been fully performed, there is no provision in the Contract, including Clause 15.3, which bars the Board from issuing the Tender.”

We take a different view from the learned Judge. It is apparent from our summary of the defendant’s arguments, their defence rests entirely on the position that the Contract has expired, hence the obligations under the Contract are no longer enforceable between the parties.

The only issue before this Court is whether the defendant can invite a third party to print and publish the said Al-Quran after the expiry of the Contract without the written consent of the plaintiffs.

The alleged breach of the Contract arose from a Contract dated 2.9.2016 between the plaintiffs and the defendant. The contract is titled “Perjanjian Untuk Membuat Kerja-Kerja Mencetak, Membekal, dan Mengedarkan Mushaf Al-Quran Bertajwid dan Berwarna”. So now we turn to the relevant provisions of the Contract itself. The following we think, particularly relevant provisions: 13

Recital (1) of the Contract provides that Dr. Taha is the owner of the copyright and patent in the colour code of the said Al-Quran.

Clause 13.1 of the Contract provides that the copyright and patent in the colour code of the said Al-Quran are owned by the plaintiffs due to the fact that Darul Fikir is the exclusive distributor of the said Quran granted by the original copyright owner and patent holder subject to the payment of royalty of honorarium.

Clause 15.3 of the Contract, allows the defendant at all times to appoint a third party to manage the publication, printing and supply of the said Al-Quran provided that it has obtained prior written consent of the plaintiffs or the owner of the copyright or patent in the colour code of the said Al-Quran.

The learned High Court Judge in para 17 of his judgment states that he has not overlooked clause 13.1 of the Contract which states that the copyright and patent in the colour code of the said Al-Quran are owned by the plaintiffs due to the fact that the plaintiffs are the exclusive distributor of the said Al-Quran. In his view however, if a patent is not granted by the Registrar and has not been registered in the Register, Clause 13.1 cannot confer any patent right in the colour code of the said Al-Quran on the plaintiffs, Dr. Taha and any other person. 14

The learned High Court Judge also makes the finding that clause 13.1 and 14.1 of the Contract do not confer on the plaintiffs any copyright of the said Al-Quran as he puts it at paragraph 19: “(1) s 6 CA provides that subject to CA, no copyright “shall subsist otherwise than by virtue of” CA. The effect of s 6 CA is as follows-

a party who claims copyright in any “work” enumerated in s 7(1)(a) to (f) CA, has to prove that the party has fulfilled all the requirements laid down in CA regarding copyright [Statutory

a contract in itself (including Clauses 13.1 and 14.1) cannot confer any copyright;

the Colour Code is a “graphic work” (please see the wide inclusionary definition of “graphic work” in s 3 CA) and falls within the definition of “artistic work” in s 3(a) CA. The Statutory Requirements (Copyright) for the Colour Code are as follows –

as laid down in s 7(3)(a) CA, sufficient efforts have been expended to make the Colour Code original in character – please see Chuah Aik King v Keydonesoft Sdn Bhd [2018] 10 CLJ 354, at paragraph 29;

in accordance with s 7(3(b) CA, the Colour Code has been recorded in a “material form” [interpreted in s 3 CA to include “any form (whether visible or not) of storage from which the work …, or a substantial part of the work … can be reproduced”] – Chuah Aik King, at paragraph 31; and 15

one of the following three alternative requirements has to be fulfilled -

the “author” of the Colour Code is a “qualified person” – please see s 10(1) CA. According to s 3 CA, the “author” of the Colour Code is its “artist”. Section 3 CA provides for the definition of a “qualified person” as follows - “(a) in relation to an individual, means a person who is a citizen of, or a permanent resident in,

in relation to a body corporate, means a body corporate established in Malaysia and constituted or vested with legal personality under the laws of Malaysia;” (emphasis added);

(ii) the Colour Code is first published in Malaysia – please see s 10(3) CA; or

(iii) the Colour Code is made in Malaysia – please see s 10(3) CA; and

except for the fact that the Colour Code has been recorded in “material form” as required by s 7(3)(b) CA, the plaintiffs have not adduced any evidence to prove the fulfillment of the other Statutory Requirements (Copyright) for the Colour Code as explained in the above sub-paragraphs (2)(a) and (c).” 16

What is therefore required to be considered which is of central importance to this appeal is whether pursuant to clause 13.1 of the Contract, the defendant had expressly acknowledged and agreed that the copyright and patent in the colour code of the said Al-Quran are vested with the plaintiffs. Clause 13.1 of the Contract which is stated in Malay as follows: “ 13.1 Pihak-Pihak bersetuju bahawa hak cipta setiap edisi Buku Tersebut yang diterbitkan terletak hak kepada Kerajaan dan Pihak-Pihak bersetuju bahawa hak cipta Buku Tersebut dipegang oleh Kerajaan. Kontraktor dengan ini bersetuju bahawa kawalan hak cipta dan tindakan berhubung dengan kawalan dan hak pengurusan hak cipta pada edisi yang diterbitkan adalah terletak kepada Kerajaan kecuali hak cipta dan paten kod pewarnaan adalah tetap dipegang (milik) Kontraktor selaku pengedar eksklusif dari pemegang hak cipta dan paten asal.” (emphasise added)

Further, in clause 15.3 of the Contract, the defendant accepted that it cannot get a third party to publish the said Al-Quran at any time without the written permission of the plaintiffs or the owner of the copyright and patent during the contract period. However, it was argued by the defendant that since the contract has expired on 18.4.2017, therefore, clause 15.3 no longer binds the parties. 17

The reasoning assumes that this is a straight forward case of expiry of the Contract and hence parties are released from their obligations after its expiry. In our view, it would be strange if the defendant who had agreed in clause 13.1 of the Contract that the copyright and patent in the colour code of the said Al-Quran are owned by the plaintiffs due to the fact that the plaintiffs are the exclusive distributor of the said Al-Quran can now deny the existence of the facts as represented by them in the Contract.

It cannot be denied that as a matter of fact, the defendant had acknowledged in Clause 13.1 of the Contract that the plaintiffs are the owner of the copyright and patent of the said Al-Quran when the Contract was signed on 2.9.2016. One further point must be noted. The defendant had not refuted by credible evidence the plaintiffs’ contention that they are the owner of the copyright and colour code of the said Al-Quran pursuant to the Contract.

It is our considered view that even though the Contract has expired, the statements in clause 13.1 and clause 15.1 of the Contract are statements of facts which parties are bound by estoppel from denying it. 18

The application of the principles of estoppel was explained by His Royal Highness Raja Azlan (FJ) (as he then was) in the case of Public Textiles Berhad v Lembaga Letrik Negara [1976] 2 MLJ 58 as follows: “The doctrine of estoppel is enacted in section 115 of the Evidence Act, 1950, which is pari materia with section 115 of the Indian Evidence Act. Of the latter is conceded that the law it enacts is the same as English law: see Sarat Chunder Dey v Gopal Chunder Laha. It seems to me that what was there said in relation to the Indian Evidence Act must apply a fortiori to our Evidence Act. Our Evidence Act which gets its inspiration from the Indian Evidence Act does not therefore enact as law anything different from the law in England on the subject of estoppel, and English decisions on the subject are relevant to the determination of questions arising for decision under the

The principle of estoppel was described by Lord Denning in Moorgate Mercantile Co Ltd v Twitchings [1976] QB 225 at page 241 as a principle of justice and equity where any person who makes the statement, promise or assurance and who had led another to believe in a particular state of affairs from going back on the words or conduct which led to that belief when it would be unjust or inequitable or unconscionable for him to do so.

Once again in a leading judgment Lord Denning in Amalgamated Investment & Property Co. Ltd. (In Liquidation) v Texas Commerce 19 International Bank Ltd [1982] QB 84 at page 122 set forth the doctrine in these words: “The doctrine of estoppel is one of the most flexible and useful in the armoury of the law. But it has become overloaded with cases. That is why I have not gone through them all in this judgment. It has evolved during the last 150 years in a sequence of separate developments: proprietary estoppel, estoppel by representation of fact, estoppel by acquiescence, and promissory estoppel. At the same time it has been sought to be limited by a series of maxims: estoppel is only a rule of evidence, estoppel cannot give rise to a cause of action, estoppel cannot do away with the need for consideration, and so forth. All these can now be seen to merge into one general principle shorn of limitations. When the parties to a transaction proceed on the basis of an underlying assumption-either of fact or law-whether due to misrepresentation or mistake makes no difference-on which they have conducted the dealings between them – neither of them will be allowed to go back on that assumption when it would be unfair or unjust to allow him to do so. If one of them does seek to go back on it, the courts will give the other such remedy as the equity of the case demands.” (emphasise added)

Amalgamated Investment was approved by the House of Lords in Kenneth Allison Ltd & Ors v AE Limehouse & Co (a firm) [1991] 3 WLR 671 and A-G of Hong Kong & Anor v Humphreys Estate (Queen’s Garden) Ltd [1982] AC 114. It was also cited with approval by the Federal 20 Court in Boustead Trading (1985) Sdn Bhd v Arab Malaysian Merchant Bank Bhd [1995] 3 MLJ 331.

In our view, the general principle of estoppel applies in this case. The plaintiff is estopped from denying the existence of Clauses 13.1 and 15.1 of the Contract to escape liability. Applying the principle of estoppel by representation to the facts of the present case, we are of the opinion that based on the assertion in the Contract that copyright and patent in the colour code of the said Al-Quran are owned by the plaintiffs, there is an error of law in the approach of the learned High Court Judge.

In addition, the Federal Court in Boustead Trading states that it is wrong to apply the maxim estoppel may be used as a shield but not as a sword as limiting the availability of the doctrine to the defendant alone. Plaintiffs too may have recourse to it. Referring to the House of Lords’ decision in Dawsons Bank v Nippon Menkwa Kabushiki Kaisha LR 62 IA 100 at page 108, the Federal Court in said at page 345: “Estoppel is not a cause of action. It may (if established) assist a plaintiff in enforcing a cause of action by preventing a defendant from denying the existence of some fact essential to establish the cause of action, or (to put it in another way) by preventing a defendant from asserting the existence of some fact the existence of which would destroy the cause of action.” 21

Furthermore, in order to found estoppel, the statement must be clear. The wording in Clause 13.1 to be read with Clause 15.3 of the Contract are clear and unambiguous. In our view, the proper conclusion to reach on the terms of the Contract is that the parties intended that:

the plaintiffs are the owner of the copyright and patent in the colour code of the said Al-Quran;

the defendant should get the consent in writing of the plaintiffs before it allows a third party to print publish and supply the said Al-Quran.

It must be emphasized that there is nowhere in the Contract of anyone other than the plaintiffs to be the owner of the copyright and patent in the colour code of the said Al-Quran. Therefore, in our view, it would be inequitable based on the principle of estoppel for the defendant to allow a third party to publish and supply the said Al-Quran without the written consent of the plaintiffs even though the Contract has expired. Clause 15.3 of the Contract which is stated in Malay is as follows: “Kontraktor [Darul Fikir] boleh membenarkan Dewan [Board] untuk melantik mana-mana Pihak Ketiga pada bila-bila masa untuk menguruskan penerbitan, pencetakan dan pembekalan Buku Tersebut setelah mendapat izin bertulis dari kontraktor atau pemegang hak cipta dan paten. Perundingan adalah tertakluk kepada perkiraan royalty atau honorarium.” [emphasise added] 22

Of course, normally the Court of Appeal is most reluctant to interfere with a finding by the trial Judge. After all, the trial Judge has seen and heard the witnesses and has been more fully immersed in the detail than is possible in the Court of Appeal. (see Gan Yook Chin (P) & Anor v Lee Ing Chin @ Lee Teck Seng & Ors [2005] 2 MLJ 1; Azman bin Mahmood & Anor v SJ Securities Sdn Bhd [2012] 6 MLJ 1) But in this case, we think there is an unsatisfactory application of the law which affects the learned trial Judge’s conclusion.

We regard the issue in this appeal as essentially whether the defendant is estopped from denying that the plaintiffs are the owner of the copyright and patent in the colour code of the said Al-Quran. We are not concerned with copyright and patent infringement under the Copyright Act or the Patent Act. 23 Conclusion 43. For these reasons, we are therefore of the unanimous decision that the appeal must be allowed with costs of RM20,000 for here and below subject to the payment of allocator. Accordingly, the High Court decision is set aside. Sgd (HANIPAH BINTI FARIKULLAH) Judge Court of Appeal Malaysia Putrajaya Date: 23 Oktober 2019 Counsel/Solicitors: For the Appellants : Abdullah bin Abdul Rahman (Mokhzani Harris bin Yusof dan Mohd Najib bin Abas with him) Messrs Amirul & Najib B-10-2 Bangi Gateway Persiaran Pekeliling Seksyen 15, Bandar Baru Bangi