Geonex (M) Sdn Bhd v 1. ) Bayu Mining Sdn Bhd (22NCVC-60-10/2016)

BAYU MINING SDN BHD

OTHAMAN BIN ABDUL RAHMAN

MOHD SABRI BIN AZIZ (NRIC NO : 650420-06-5455) …DEFENDANTS GROUNDS OF JUDGEMENT

The Plaintiffs in this suit has filed Enclosure

This Court allowed the Plaintiff’s claim against the Defendants for the specific 2 performance of the said implied contract between the Plaintiff and 1st Defendant with cost amounting to RM150,000.00.

The Plaintiff in this suit is a private limited company. The 1st Defendant (D1) is also a private limited company, the 2nd Defendant (D2) and the 3rd Defendant (D3) are the directors of D1.

Sometime in 2007, the State Government of Pahang issued a Prospecting License over a mining land (“The Mining Land”) vide a license dated 12.4.2007 to 3 individuals namely D2 and D3 and Mat Nawi Bin Hamat.

Via a contract dated 30.11.2010, D2 and D3 entered into a Mining Agreement (“agreement dated 30.11.2010”) with a company known as Cheroh Mining Sdn Bhd (“Cheroh Mining”). It was mentioned in the agreement that D1 would be the Licensee of the mining lease and a Power of Attorney dated 30.11.2010 was issued by D1 in favour of Cheroh Mining. 3

Vide letter dated 17.1.2011, Messrs. Sharif Ridzuan & Co was appointed by D2 and D3 to receive on behalf and pay the tributes in equal sum of 25% to D2, D3, Zainab Binti Jusoh and Mahmud Bin Abd Rahman.

On 18.10.2012, Plaintiff was appointed by Cheroh Mining to be the miners of the said Mining Land provided that Plaintiff pays RM275,000.00 as booking fee. On 8.10.2012, Plaintiff paid the sum of RM275,000.00 to Cheroh Mining. On 7.12.2012, the Plaintiff’s then solicitors Messrs Fatin & Zaharman paid the sum of RM825,000.00 to Cheroh Mining as a deposit upon completion of the feasibility study.

Cheroh Mining then entered into a mining agreement with the Plaintiff in which D1 endorsed its consent on the same. There is a Power of Attorney dated 13.12.2012 (“the Mining Agreement”) from Cheroh Mining in favour of the Plaintiff.

In order to assist the Defendants towards the issuance of the Mining License, it was impliedly agreed by the Plaintiff and D1 on a certain term (“the said contract”). Some of the terms agreed 4 upon is that in consideration of the Plaintiff paying agreed tribute sums to the D1, through the D1 solicitors, Messrs. Sharif Ridzuan & Co, the D1 would appoint the Plaintiff to carry out its mining activity as a miner, lawfully on the mining land including but not limited to setting up a plant, work on the mine, extract and sell the iron ore.

On 9.6.2014 and 29.8.2014 both the Mining License (“ML”) and Operating Mining Scheme (“OMS”) were issued respectively on the favor of the D1.

The Plaintiff in reliance to the said contract, has made payments of tributes to the D1 through Messrs. Sharif Ridzuan & Co, even though no sale of any mineral from the mining land has been made.

The Plaintiff in this suit claims that they have made a payment for the total sum of RM6,125,000.00 between 8.10.2012 and July 2016 to Cheroh Mining and the D1 via the solicitors Messrs. Sharif Ridzuan & Co. 5

The Plaintiff has proceeded to organize the mining area, set up the plant and equipment needed to carry out the mining work of extracting and processing the iron ore for sale. All ores mined and processed were kept as a stockpile because the Plaintiff was unable to market it until the ML was renewed and the Form 13D was issued by the appropriate authority.

On 21.9.2016 and 28.9.2016, D1 and D2 trough their firm of solicitors known as Messrs. Andrew David Wong & Ong sent letters terminating the agreement with Cheroh Mining thus the agreement between Plaintiff and Cheroh Mining dated 31.12.2012 is also terminated. D1 has also demanded that the Plaintiff handover vacant possession of the mining area.

The Plaintiff in this suit contended that there was an independent contract between the Plaintiff and D1 i.e. the said contract, which arises after the contract dated 31.12.2012. The Plaintiff also contends that they had complied with covenants and obligations thus they would not vacate the mining area. 6

Plaintiff has pleaded that D1 has done anticipatory breach to the said contract when on several occasions D1 has tried to prohibit Plaintiff from entering the mining land by lodging a police report against Plaintiff and has changing the padlocks to the mining area to prevent Plaintiff from entering. D1 still insisted to not continue with the Plaintiff and the Plaintiff was asked to vacate the mining land. Thus, this suit was filed by the Plaintiff against the Defendants to seek reliefs from the Defendants. MAIN ISSUES TO BE TRIED Is there a contract between the Plaintiff and D1?

The main issue that must be determined forehand is whether is there is a contract between Plaintiff and D1. Though there is no written contract between Plaintiff and D1, this court agrees that there is an implied contract between them.

This is because, Plaintiff has acted upon reliance to the terms in the implied contract. Plaintiff have set up a plant, and has also worked on the mine to extract tons of iron ore to be marketed. 7

The presence of the implied contract was also further confirmed by the admission of the Defendants themselves in their Defence and Counterclaim. Whereby on several paragraphs the Defendants has pleaded the presence of an implied agreement which is the said contract.

Since is a common rule that parties are bound by their pleadings, therefore it is not a doubt anymore that the said contract is present and binds both the Plaintiff and D1.

When there is a legally binding implied agreement between the parties, this court has a duty to uphold the terms that has been agreed upon. Whether there is tribute sum paid by the Plaintiff to D1 in accordance to the said contract? Has Plaintiff breached any terms of the contract that causes it to be terminated?

This court is of the view that at all material times the Plaintiff have worked on their end to perform the obligation under the said contract. Whereby the Plaintiff have started to work on the mining land after tributes relevant tributes were paid to D1. 8

It is submitted via letter dated 17.2.2011 that D2 and D3 has irrevocably appointed Messrs. Sharif Ridzuan & Co to receive the tributes and pay the same equal 25% to all the directors of D1, SP2 has confirmed this by saying that his firm received the payment of the tributes from the Plaintiff and SP2 also confirmed that all the directors of D1 has received the monies paid by Plaintiff.

This court is of the view that, all the parties in this suit are aware that Plaintiff have forwarded a certain amount of tribute as per agreed although no iron ore that was mine has been sold till date.

If the Defendants did not receive any sum of tribute, it is absurd that the Plaintiff was given the vacant possession for several years to do the mining work without anything in return.

This this court is of the view that the Plaintiff in this suit has complied to the said agreement by forwarding the agreed tributes and at the same time has done all the mining work in the mining land. 9

The Defendants on their end has sent two letters to terminate their Mining Agreement with Cheroh Mining consequently the Mining Agreement dated 13.12.2012 shall cease to have effect and Plaintiff to give vacant possession of the mining land.

The basis of the termination letter that was the Defendants did not receive RM440,000.00 advance payment and the monthly tribute of RM75,000.00 as per the Mining Agreement.

This court is agreeable with the Plaintiff’s view that as per the agreement dated 30.11.2010, the payments of the tribute as per clause 6.1 are supposedly to be only paid on 12.1.2015.

But the D1’s directors have already received the sum of RM2,417,200.00 in advance which is inconsistent to the payment terms of the Mining Agreement. The Defendants also admitted that the Directors of D1 received the tribute beginning in Year 2011.

If the Defendants are insisting that the payment terms should follow the terms agreed upon in the Mining Agreement, the Defendants should not have received the monies paid by the 10 Plaintiff since 2011. By way of conduct of the parties, it is clear that the parties have elected to not follow the payment terms stated under the Mining Agreement.

It is unfair to the Plaintiff, if the Defendant later on issue termination notices to Plaintiff and Cheroh Mining because the payments terms in the Mining Agreement are not followed when they themselves have acted outside of the agreed payment terms. Thus, it could be concluded that the termination notice itself was invalid.

This Court is of the view that, the Plaintiff in this suit has been able to proof to this court on the balance of probabilities that the D1 and D2’s termination notice of the Mining Agreement is indeed invalid and wrongful. This is because, the Defendant’s based their termination notices on clauses which they themselves has failed to follow. The Plaintiff has also been able to proof to this court that tributes has been paid and the Defendants has also admitted to this fact (paragraph 16(d) of Defence and Counterclaim. 11

This court believes that there is no breach of the Mining Agreement by the Plaintiff that would cause the Defendants to terminate the Agreement.

Since the Plaintiff did not breach any apparent terms in the Mining Agreement, the act of the Defendants disallowing the Plaintiff to occupy the mining land and work on the mine definitely unjust.

After receiving the advanced tribute by the Plaintiff and later stopping the Plaintiff from continuing the works in the mining land is a clear and unjust enrichment to the Defendants. Does the Defendants have a valid defence and counterclaim?

Throughout the trial process of this case, the Defence counsel have tried to portray D2 and D3 as simple Kampung Folks thus all the payments and accounts are made through their former lawyer Messrs. Sharif Ridzuan & Co and not directly to them.

This Court is of the view that both D2 and D3 are not simple kampong folks because both of them are educated and holds high positions in career wise. It is impossible for a simple kampong folk 12 to be able to understand how mining business works and what deals shall be made to obtain profits.

Furthermore, D2 is a village head and the late Mat Nawi was a Deputy District Officer and D3 is an officer in the Home Ministry. During the trial D2 himself has stated that they applied for the Mining License with the aid of YB Dato’ Menawar Abdul Jalil. A simple kampong folk would not have the capabilities to get direct aid from well known people.

This court is of the view that the Defendants are trying to portray D2 and D3 as simple kampong folks to wiggle their way out from this suit that has been filed against them.

The D2 and D3 being a simple kampong folk or not, they still understood the agreement that they entered with the Plaintiff and Cheroh Mining. As a result, they have tried to enforce their rights under the Mining Agreement. It clearly shows that at all material times they were aware of the transactions and agreements that they have entered. 13

This Court is convinced by the witness Mr. Sivakumar that the payments of tributes are clearly made to Dato’ Ridzuan from Messrs. Sharif Ridzuan & Co. This was further confirmed when Dato’ Ridzuan gave evidence that the Plaintiff has indeed paid the requisite tributes as per the agreement to him. He also admitted that he paid the monies received from the Plaintiff to the respective Directors of D1.

The issue, whether the tributes was or was not received by the directors of D1 shall not be directed to the Plaintiff, as the Plaintiff has clearly obliged to the terms in the Mining Agreement by paying advance tributes.

Besides that, the Defendants in this suit has also failed to adduce strong evidence to proof to this court that their have a valid counterclaim against the Plaintiff.

Their defence is almost like an afterthought because it was not supported by strong evidence and the witnesses themselves have failed to convince this court on the basis of their counterclaim. This court agrees with the Plaintiff that, the Defendants had 14 contradictions in their Defence and counterclaim which is clearly very ambiguous to this court.

Thus, this Court has decided for the specific performance of the said contract between Plaintiff and D1. -signed-ZAINAL AZMAN BIN AB AZIZ JUDGE HIGH COURT MALAYA OF KUANTAN PAHANG DARUL MAKMUR DATED : 30 NOVEMBER 2023 Plaintiff Solicitors: Mr. S. Ravichandran together with Mrs Elina Teng Tetuan Seah Balan Ravi & Co Unit A, 3rd Floor, Wisma 1 Alliance No. 1 Lorong Kasawari 4B Taman Eng Ann, 41150 Klang, Selangor Ref. : SBR/28522/22-04/SR(KS) Emel : sbrlitigation@gmail.com 15 Defendant’s Solicitors: Dato’ RK Nathan together with Mr. Toh Hong Seng (Pupils in Chamber) Tetuan Vinod Kamalanathan & Associates Suite 501, 5th Floor, Loke Yew Building 4 Jalan Mahkamah Persekutuan 50500 Kuala Lumpur Ref. : VKA/L/2029/BAYUMINING/2016/es Emel : vinodk.nathan@gmail.com