Sabah Land Development Board v Teraju Hijau Sdn Bhd (S-02(NCVC)(W)-1140-06/2017)

(a) that the Defendant shall pay the sum of RM5,357.88 to the Plaintiff being the outstanding balance for work executed;

(b) that the Defendant shall pay the sum of RM2,000,000.00 to the Plaintiff as agreed liquidated damages under the agreement dated 22.6.2010;

(c) that the Defendant shall pay statutory interest at the rate of 5% per annum from the date of judgment to the date of full payment to the Plaintiff; and

(d) that the Defendant shall pay costs of RM7,000.00 subject to 4% allocatur to the Plaintiff. [2] We heard the Defendant’s appeal on the 17.7.2018. After considering the written submissions and the oral arguments from both parties on the issues raised, we unanimously allowed the appeal. We now give our reasons for allowing the appeal. Civil Appeal No: S-02(NCVC)(W)-1140-06/2017 3 [3] For ease of reference, parties will be referred to as they were in the proceedings before the High Court. Background facts [4] The factual matrix of this case was not much in dispute. The subject matter of the present appeal relates to an agreement dated 22.6.2010 between the Plaintiff, Teraju Hijau Sdn Bhd and the Defendant, Sabah Land Development Board (‘the said Agreement’). [5] The Plaintiff is a company dealing with the operation of nursery for oil palm seedlings. The Defendant is a statutory body constituted under the Sabah Land Development Board Enactment, 1981. [6] The parties entered into the said Agreement with the sole objective to develop, supply and operate an oil palm nursery in an effort to eradicate poverty in Tongod, Sandakan by promoting agropolitan, that is, by setting up agricultural and agro-based developments projects in Tongod. [7] By the said Agreement, the Defendant had agreed to engage the Plaintiff to develop, supply and operate an oil palm nursery for a period of five (5) years with a minimum of 1,300,000 oil palm seedlings back to the Defendant at an agreed contractual rates of RM8.50 per seedlings. [8] After the execution of the said Agreement, the Plaintiff began managing and operating the nursery. After the said Agreement had been in effect for approximately 4 years, the Defendant had managed to source and supply some 284,860 seedlings, leaving a shortfall of 1,015,140 Civil Appeal No: S-02(NCVC)(W)-1140-06/2017 4 seedlings to be supplied. The Plaintiff claimed that the Defendant had owed them an outstanding sum of RM5,357.88 for the works done. [9] Subsequently, by a letter dated 12.3.2014 (P12), the Plaintiff wrote to the Defendant to enquire about the supply and delivery of the remaining balance of the seedlings that the Defendant was supposed to supply under the said Agreement. There was no response from the Defendant to the letter P12 and as well to a series of reminder letters which were exhibited as P9, P10, P11 and P13. [10] The Plaintiff then wrote another letter dated 9.1.2014 through their solicitors, Messrs Chin Mirdin & Co (P3). There was no response from the Defendant to the solicitor’s letter as well as to the subsequent two reminder letters. It was after the third reminder letter dated 13.1.2015 (P4), the Defendant responded to the Plaintiff’s letters. [11] In the said P4 letter, the Plaintiff had reminded the Defendant to reply to the letter P3 and stated further that failure to reply to the same would inter alia be deemed as the Defendant’s repudiation of the said Agreement. [12] The Defendant responded vide a letter dated 14.1.2015 (page 324, Record of Appeal, Volume 2B, Part C). By this letter, the Defendant proposed to negotiate with the Plaintiff to extend the period of the said Agreement. Parties proceeded to negotiate the terms of the said Agreement to be extended for another year and that the seedlings to be raised up to 200,000 only; and the balance of the seedlings will be advised from time to time. Civil Appeal No: S-02(NCVC)(W)-1140-06/2017 5 [13] During the negotiations, the Plaintiff had, vide letter dated 31.3.2015 (P6), given notice to the Defendant that since the Defendant could not fulfil their obligations under the said Agreement, the Plaintiff treated that the Defendant to have repudiated the said Agreement and the Plaintiff accepted the Defendant’s repudiation. [14] Notwithstanding P6, the parties continued with their negotiations to extend the period of the said Agreement. However, on or about 15.6.2015, such negotiations halted upon the issuance of the Plaintiff’s writ of Summons and Statement of Claim. [15] The thrust of the Plaintiff’s claim is that the Defendant had repudiated the said Agreement by failing to observe Clause 9.23 (a) and (b) and Clause 9.24 of the said Agreement. At the High Court [16] At the High Court, the learned JC ruled in favour of the Plaintiff after hearing the evidence and submissions of both parties. The learned JC held that:

(a) based on the evidence adduced in the trial, the main issue for determination was whether the Plaintiff had succeeded in showing that there was non-compliance with Clause 9.23 and in the circumstances, whether the said Agreement was repudiated by the Defendant;

(b) based on the evidence, although the Defendant attempted to dispute the Plaintiff’s claims that they did not owe the Civil Appeal No: S-02(NCVC)(W)-1140-06/2017 6 outstanding amount of RM5,357.88, the learned JC of the view that the said challenges was untenable in view of the evidence adduced by the Plaintiff during the trial;

(c) the learned JC accepted the oral evidence and witness statement of PW3 that the Defendant had failed to pay the Plaintiff the amount claimed for the works done by the Plaintiff;

(d) the learned JC accepted the evidence of PW3 that three (3) separate invoices were submitted to the Defendant and they did not received any payments for the invoices;

(e) the non-production of the three invoices was not fatal to the Plaintiff’s case as the issue of the outstanding amount was never disputed by the Defendant except just a general denial;

(f) the Defendant had failed to rebut or claimed that there was no outstanding amount due to the Plaintiff;

(g) as the amount was overdue for more than 14 days, there was a breach of Clause 9.23 (a) and the Plaintiff entitled to determine the said Agreement by giving notice in writing to the Defendant;

(h) the Defendant had evinced an intention through their conduct not to the bound by the said Agreement and the Plaintiff was entitled to rely on the Defendant’s conduct to show that the Defendant had repudiated or terminated the said Agreement; Civil Appeal No: S-02(NCVC)(W)-1140-06/2017 7

(i) from the letter dated 14.1.2015, the Defendant could no longer fulfilled their obligation under the said Agreement;

(j) the Defendant’s defence that they lack of new development areas for them to plant the seedlings was a non-starter and was never pleaded in their defence. The lack of new development area is not relevant in determining the issue on termination of the said Agreement;

(k) the Defendant was only able to raise and supplied 284,860 seedlings within 4 years and the Defendant did not offer any explanation as to how they are going to comply with the said Agreement;

(l) the Defendant could not rely on Clause 9.27 of the said Agreement as it was never pleaded in their defence;

(m) the Defendant could not relied on the negotiations and correspondences as they were on without prejudice basis and parties were not able to reach any settlement; and

(n) there was breached of Clause 9.23 (a) and (b); and Plaintiff entitled to the liquidated damages as provided under Clause 9.24 of the said Agreement. [17] Being dissatisfied with the learned JC’s decision, the Defendant appealed to this Court by way of a notice of appeal dated 15.5.2017. Civil Appeal No: S-02(NCVC)(W)-1140-06/2017 8 Grounds of Appeal [18] Before us, learned Counsel for the Defendant posited the following grounds of appeal which may be summarized as follows:

(a) whether the Defendant had terminated the said Agreement without reasonable cause;

(b) whether the correspondences between the parties made on “without prejudice” basis are capable of varying the terms of the said Agreement to the effect that:

(i) the period of the said Agreement had been extended; and

(c) whether the Plaintiff is entitled to the liquidated damages in accordance with Clause 9.23 and 9.24 of the said Agreement. Civil Appeal No: S-02(NCVC)(W)-1140-06/2017 11 Plaintiff’s submission [20] The Plaintiff had canvassed the following submissions before us in support of the learned JC’s findings and decision which in favour of the Plaintiff’s pleaded case. The Plaintiff critisized the Defence filed by the Defendant for being very brief which essentially geared towards the negotiations that took place between the parties through their correspondences that were subjected to “without prejudice” basis. It was argued that the only material allegations of fact pleaded in the Defence related to the ultimately unsuccessful negotiations between the parties. Plaintiff argued further that the negotiations between the parties were irrelevant and the same show that the Defendant had no real defence to the Plaintiff’s claim. [21] The Plaintiff relied on Order 18 rule 13 (3) of the Rules of Court 2012 (‘RC 2012’): “Subject to paragraph (4), every allegation of fact made in a statement of claim or counterclaim which the party on whom it is served ‘does not intend to admit must be specifically traversed by him in his defence or defence to a counterclaim, as the case may be; and a general denial of such allegations or a general statement of non-admission of them is not a sufficient traverse of them.” [22] The Plaintiff further referred to Malaysian Civil Procedure 2018 Vol. 1 by Sweet & Maxwell at pages 252-253 which states: “Traverse must be specific ̶ The traverse must be specific, and not general, and must not be evasive: Kayat & Anor v Lim Yew Seng [1972] 1 MLJ 26 (“Where a defendant denies an allegation of fact in the pleading, he must not do so evasively, but answer the point of substance. Civil Appeal No: S-02(NCVC)(W)-1140-06/2017 12 A denial must be specific (see Mallal’s Supreme Court Practice Volume 1 at page 284). In this case the denials of the defence are more of a general nature”). The pleader must deal specifically with every allegation of fact made – he must either admit it frankly or deny it boldly. Unpleaded traverses in relation to material allegations will be disregarded by the court: Tang Kwor Ham & Ors v Lembaga Kumpulan Wang Simpanan Pekerja [2005] 8 CLJ 676. A traverse which follows too closely the precise language of the allegation may be held to be evasive: Tildesley v Harper

(a) Failing to pay the Operator the amount due under this Agreement within fourteen (14) working days after the same shall be presented to SLDB for payment; or Civil Appeal No: S-02(NCVC)(W)-1140-06/2017 14

(b) Terminating the Agreement without any reasonable cause the Operator shall be entitled, to determine the employment of the Operator under the Agreement by giving notice in writing to SLDB.” “9.24 In the event of such determination under Clause 9.23 hereof SLDB shall be under the same obligations to the Operator in regard to payment as specified in Clause 9.23 hereof as if this Agreement had been determined under the provisions of Clause 9.21 hereof and in addition SLDB shall pay to the Operator liquidated damages in the sum of RM2.00 for each of existing seedlings at the said Nursery and the remaining seedlings from the agreed 1,000,000 seedlings yet to be delivered to the nursery site at the time termination.” [26] It is the Plaintiff’s case that pursuant to the said Agreement, the Defendant had sourced and supplied oil palm seedlings to the Plaintiff for raising at the nursery and the Plaintiff had received payment for the work done except the balance of RM5,357.88. It is not disputed as evidenced by the correspondences that the Plaintiff had demanded for the payment of RM5,357.88 from the Defendant to which the Defendant had neglected or refused to make any payment. [27] We were mindful that the learned JC had accepted the Plaintiff’s version that they had sent the three invoices to the Defendant, which were denied and without producing the same at the trial. In consequence thereof, the learned JC held that the Plaintiff is entitled to terminate the said Agreement under Clause 9.23 and claim liquidated damages under Clause 9.24. [28] We were also mindful of the fact that the Plaintiff had never supported and/or corroborated their allegation that the sum of RM5,357.88 was due Civil Appeal No: S-02(NCVC)(W)-1140-06/2017 15 and outstanding. We are saying that the Plaintiff had failed to prove its case for the simple reason that they had failed to produce the invoices allegedly sent to the Defendant and the Plaintiff had also failed to prove the amount outstanding. It is the duty of the Plaintiff to prove its case on a balance of probabilities as required under section 101 of the Evidence Act 1950. [29] Section 101 of the Evidence Act 1950 states: “101. (1) Whoever desires any court to give judgment as to any legal right or liability, dependent on the existence of facts which he asserts, must prove that those facts exist.

(a) A desires a court to give judgment that B shall be punished for a crime which A says B has committed. A must prove that B has committed the crime.

(b) A desires a court to give judgment that he is entitled to certain land in the possession of B by reason of facts which he asserts and which B denies to be true. A must prove the existence of those facts.” [30] In the case of Letchumanan Chettiar Alagappan (As Executor to SL Alameloo Achi (Deceased)) & Anor v. Secure Plantation Sdn Bhd [2017] 5 CLJ 418, the Federal Court clearly held on the same point as follows: Civil Appeal No: S-02(NCVC)(W)-1140-06/2017 16 “[54] Section 101(1) provides that “Whoever desires any court to give judgment as to any legal right or liability, dependent on the existence of facts which he asserts, must prove that those facts exist”. “Section 101 states that the initial burden of proving a prima facie case in his favour is cast on the plaintiff …” (Woodroffe and Amir Ali Law of Evidence 19th edn, vol. 3 at p. 3194). Illustration (b) to s. 101 puts it beyond doubt that the “burden of proof” rests throughout on the plaintiff. Section 102 provides that “the burden of proof in a suit or proceeding lies on that person who would fail if no evidence at all were given on either side”. “The initial onus of proving the case is always on the plaintiff” (Sarkar Law of Evidence 16th edn at 1593). Illustration (a) to s. 102 puts it beyond doubt that a plaintiff has the initial onus of proof. [55] But “when (the plaintiff) gives such evidence as will support a prima facie case, the onus shifts on to the defendant, to adduce rebutting evidence to meet the case made out by the plaintiff. As the case continues to develop, the onus may shift back again to the plaintiff. It is not easy to decide at what particular stage, in the course of the evidence, the onus shifts from one side to the other. When after the entire evidence has been adduced, the tribunal feels it cannot make up its mind as to which of the versions is true, it will hold that the party on whom the burden lies has not discharged the burden, but if it has, on the evidence, no difficulty arriving at a definite conclusion, then the burden of proof on the pleading recedes into the background” (Woodroffe and Amir Ali, supra, at p. 3194; see also Abrath v. North Eastern Rly at 452}. “ … the onus of proof may shift … but the question must ultimately arise whether the person who is bound to prove the affirmative of the issue … has discharged … that burden” (Jane Wakelin v. The London And South Western Railway Company (1986) 12 App Cas 41; (1887) 12 App Cas per Lord Halsbury LC) or proved “his case sufficiently to justify a judgment in his favour” (Stoney v. Eastbourne R D Council [1927] 1 Ch 367, 397 per Lord Hanworth MR). Civil Appeal No: S-02(NCVC)(W)-1140-06/2017 17 [56] Thus, a plaintiff has both the burden of proof as well as the initial onus of proof. In Britestone Pte Ltd v. Smith & Associates Far East Ltd [2007] 4 SLR 855, the Singapore Court of Appeal per VK Rajah JCA, delivering the judgment of the court, explained that at the start of the plaintiff’s case the burden of proof and the onus of proof coincide: … at the start of the plaintiff’s case, the legal burden of proving the existence of any relevant fact that the plaintiff must prove and the evidential burden of some (not inherently incredible) evidence of the existence of such fact coincide. Upon adduction of that evidence, the evidential burden shifts to the defendant, as the case may be, to adduce some evidence in rebuttal. If no evidence in rebuttal is adduced, the court may conclude from the evidence of the defendant. If, on the other hand, evidence in rebuttal is adduced, the evidential burden shifts back to the plaintiff. If, ultimately, the evidential burden comes to rest on the defendant, the illegal burden of proof of the relevant fact would have been discharged by the plaintiff. The legal burden of proof – a permanent and enduring burden – does not shift. A party who has the legal burden of proof on any issue must discharge it throughout. Sometimes, the legal burden is spoken of, inaccurately, as “shifting”; but what is truly meant is that another issue has been engaged, on which the opposite party bears the illegal burden of proof. [57] The rule is that “the onus of proof of any particular fact lies on the party who alleges it, not on him who denies it; et incumbit probation qui decit, non qui negat, Actori incibit probation … The plaintiff is bound in the first instance, to show a prima facie case, and if he leaves it imperfect, the court will not assist him. Hence the maxim potior est condition defendantis. A plaintiff cannot obviously advantage himself by the weakness of the defence. A plaintiff’s case must stand or fall upon the evidence adduced by him. When, however, the defendant, or either Civil Appeal No: S-02(NCVC)(W)-1140-06/2017 18 litigant party, instead of denying what is alleged against him, relies on some new matter which, if true, is an answer to it, the burden of proof changes sides; and he, in his turn, is bound to show a prima facie case at least and, if he leaves it imperfect, the court will not assist him. Reus excipendo fit actor” (Woodroffe and Amir Ali, supra, vol. 3 at pp. 3190- 3191).” [31] In the instant case, we observed that the learned JC merely relied on the oral testimonies of Plaintiff’s witnesses who alleged that there was an outstanding balance owed by the Defendant for the sum of RM5,357.88. The witnesses also alleged that they had sent three (3) separate invoices to the Defendant by way of courier and fax services. The Defendant on the other hand strongly denied the Plaintiff’s witnesses allegations. The Defendant strongly asserts that the alleged invoices were not pleaded in the Plaintiff’s Statement of Claim, the invoices were not included in the Plaintiff’s Bundle of Documents and proof of delivery of the said invoices were not pleaded and not included in the pleading and in the Bundles. Apart from that, the said amount of RM5,357.88 allegedly owed by the Defendant were not proven either. [32] We agreed with the Defendant that the learned JC erred in law and in fact when His Lordship held that the Defendant had breached Clause 9.23 of the said Agreement. We are as well agreed that the learned JC also erred in his finding that the outstanding amount of RM5,357.88 was beyond the fourteen (14) days period as stipulated in Clause 9.23. We agreed with our earlier decision in Aneka Melor Sdn Bhd v. Seri Sabco

(M) Sdn Bhd & Another Appeal [2016] 2 CLJ 563 where this Court had this to say: Civil Appeal No: S-02(NCVC)(W)-1140-06/2017 19 “[28] The plaintiff posited that the very fact payment was made by JKR to the first defendant showed that the works executed by the plaintiff was evaluated and approved by JKR. Therefore, it was argued that the plaintiff shall be entitled to the amount claimed. [29] With respect, we disagree. The burden of proving each and every item of the progress claim lies squarely on the plaintiff. In Re B [2008] UKHL 35, Lord Hoffmann using a mathematical analogy explaining the burden of proof stated: If a legal rule requires a fact to be proved (a fact in issue), a judge or jury must decide whether or not it happened. There is no room for a finding that it might have happened. The law operates a binary system in which the only values are 0 and 1. The fact either happened or it did not. If the tribunal is left in doubt, the doubt is resolved by a rule that one party or the other carries the burden of proof. If the party who bears the burden of proof fails to discharge it, a value of 0 is returned and the fact is treated as not having happened. If he does discharge it, a value of 1 is returned and the fact is treated as having happened. [30] We were of the view that the maxim, “he who avers must prove” and prove he must on a balance of probabilities should be adhered to by the court. (See ss. 101 and 102 of the Evidence Act 1950; Selvaduray v. Chinniah [1939] 1 LNS 107; [1939] MLJ 253 CA; UN Pandey v. Hotel Marco Polo Pte Ltd [1978] 1 LNS 223; [1980] 1 MLJ 4; Sundram Ramasamy v. Arujunan Arumugam & Anor [1994] 4 CLJ 300 and Syed Mohamed Syed Alwi & Ors v. Shariffah Badariah Alwi Al-Attas & Ors And Other Cases [2009] 1 LNS 1234).” [33] We are of the view that the invoices, if any, were and are material and best evidence to determine the existence of the alleged outstanding balance and to establish the number of days outstanding as required under Civil Appeal No: S-02(NCVC)(W)-1140-06/2017 20 Clause 9.23. It is improbable for the learned JC to rely on oral testimony of witnesses, which at best is corroborative in nature. The existence and the contents of the invoices must be proved by the production of the invoices in the court. The burden of proof lies on the Plaintiff. If a party has failed to discharge its burden of proof on the standard required by the law, his adversary does not bear the burden to adduce any evidence. It is not the Defendant’s duty to fill up the gaps in the Plaintiff’s case (see The Carbon Company Sdn Bhd v. Ng Lee Hoon [2017] 6 CLJ 189). [34] In the instant appeal, the learned JC not only relied on oral testimony without proof the existence of the invoices, the important documents to establish the Plaintiff’s claim, His Lordship had reversed the burden of proof from the Plaintiff to the Defendant in relation to the three invoices. His Lordship criticised and put the blame on the Defendant for the failure of the Defendant to disprove the purported invoices and the outstanding amount thereunder. We agreed that the learned JC had committed an error in law and in fact when he reversed the burden of proof to the Defendant (see Keruntum Sdn Bhd v. The Director of Forests & Ors [2017] 4 CLJ 676). [35] By relying on the oral evidence of Plaintiff’s witnesses which are secondary in nature, the learned JC had breached the provisions of sections 65 and 66 of the Evidence Act 1950 due to failure by the Plaintiff to produce the alleged three invoices. Sections 65 and 66 were in the following terms: “65. (1) Secondary evidence may be given of the existence, condition or contents of a document admissible in evidence in the following cases:

(a) when the original is shown or appears to be in the possession or power ̶ ̶ Civil Appeal No: S-02(NCVC)(W)-1140-06/2017 21

(i) of the person against whom the document is sought to be proved;

(b) when the existence, condition or contents of the original have been proved to be admitted in writing by the person against whom it is proved or by his representative in interest;

(c) when the original has been destroyed or lost, or when the party offering evidence of its contents cannot for any other reason not arising from his own default or neglect produce it in reasonable time;

(d) when the original is of such a nature as not to be easily movable;

(e) when the original is a public document within the meaning of section 74;

(f) when the original is a document of which a certified copy is permitted by this Act or by any other law in force for the time being in Malaysia to be given in evidence;

(g) when the originals consist of numerous accounts or other documents which cannot conveniently be examined in court, and the fact to be proved is the general result of the whole collection.

(b) In the case referred to in paragraph (1)(b) the written admission is admissible.

(c) In the case referred to in paragraph (1)(e) or (f) a certified copy of the document but no other kind of secondary evidence is admissible.

(d) In the case referred to in paragraph (1)(g) evidence may be given as to the general result of the documents by any person who has examined them and who is skilled in the examination of such documents.

(a) When the document to be proved is itself a notice;

(b) When from the nature of the case the adverse party must know that he will be required to produce it;

(c) When it appears or is proved that the adverse party has obtained possession of the original by fraud or force;

(d) When the adverse party or his agent has the original in court; Civil Appeal No: S-02(NCVC)(W)-1140-06/2017 23

(e) When the adverse party or his agent has admitted the loss of the document; or

(f) When the person in possession of the document is out of reach of or not subject to the process of the court.” [36] We observed that the Plaintiff had failed to give reasonable notice to the Defendant as required by sections 65 and 66 of the Evidence Act 1950 whereby the scales should be tilted in favour of the Defendant. [37] Next question to ask is was there termination or repudiation of contract by the Defendant without any reasonable cause as provided under Clause 9.23 (b) of the said Agreement. From our reading of Clause 9.23

(b) and Clause 9.24, it provides that should the Defendant terminate the said Agreement, the Plaintiff is entitled to determine its employment with the Defendant. We did not find any hard evidence that the Defendant had terminated or repudiated the said Agreement. Even the Plaintiff’s own witnesses, PW 1 admitted that the Defendant had never terminated the said Agreement. At pages 54-55, Appeal Record Vol. 2A Part B, PW1 said this: “Q19 : I refer to you CB1, Part A, page 14 at Clause 9.23 (b). Did you give any notice in writing to determine the engagement to SLDB? : No. Q20. PUT : I put to you that you had never determined Teraju Hijau Sdn Bhd’s engagement to SLDB for the oil palm nursery. Yes or no” : Yes. Q21. PUT : I put to you that SLDB had never terminated this Agreement. Yes or no? Civil Appeal No: S-02(NCVC)(W)-1140-06/2017 24 : Yes. Q22. PUT : I put to you that pursuant to Clause 9.23 of the Agreement, Teraju Hijau Sdn Bhd had no right to terminate this Agreement. Yes or no? : Yes. …… Q25. PUT : I put to you that SLDB intended to proceed with the Agreement. Yes or no? : Yes.” [38] We agreed with the Defendant’s contention that the Plaintiff had wrongfully assumed that the Defendant had repudiated the Agreement and as such the Plaintiff’s election to accept the purported repudiation is invalid and/or bad in law. Therefore, the learned JC erred in law and in fact when His Lordship held that the Plaintiff was entitled to determine the employment of operator (Plaintiff) under the said Agreement by giving notice in writing to the Defendant. [39] The Plaintiff gave notice dated 13.1.2015 (P4) in an attempt to determine the said Agreement. We observed that the Plaintiff gave the Defendant seven (7) days to respond. We also observed that the Defendant replied on the next day, that is, on the 14.1.2015 expressing their intention to proceed with the said Agreement. We reproduce the contents of the Defendant’s solicitors letter dated 14.1.2015 which can be found at page 324, Appeal Record Volume 2B, Part B & C as below: Civil Appeal No: S-02(NCVC)(W)-1140-06/2017 25 Date : 14th January, 2015. MESSRS. CHIN, MIRDIN & CO. Advocates & Solicitors M.P.T. 4208, Lot 29-32, 1st Floor “Without Prejudice” Block C, Bandaran Baru, Jalan Baru By Fax & By Hand 91025 Tawau, Sabah 089 – 763 369 Dear Sirs, RE: AGREEMENT DATED 22ND JUNE 2010 FOR THE DEVELOPMENT, SUPPLY AND OPERATION OF OIL PALM NURSERY AT TONGOD, SANDAKAN. We act for Sabah Land Development Board (SLDB) and your letters dated 9th December, 2014 and 13th January, 2015 addressed to our client pertaining to the above matter refers. We are instructed by our client to inform you that presently our client does not have any new development projects at Tongod area. In the premises, our client is offering to your client the following:

(i) The burden of proof is on the party seeking the claim to prove the facts and the amount of damages (Hock Huat Iron Foundry v. Naga Tembaga Sdn Bhd [1999] 1 CLJ 89; [1999] 1 MLJ 65; Bonham-Carter v. Hyde Park Hotel Limited (1948) 64 TLR 177; Civil Appeal No: S-02(NCVC)(W)-1140-06/2017 31 Popular Industries Ltd v. The Eastern Garment Manufacturing Co Sdn Bhd [1990] 1 CLJ 133; [1990] 2 CLJ (Rep) 635; [1989] 3 MLJ 360 and Sony Electronics (M) Sdn Bhd v. Direct Interest Sdn Bhd [2007] 1 CLJ 611; [2007] 2 MLJ 229).