1
This is an appeal against the trial judgment of the High Court in respect of an iron ore mining contract whereby the Appellant’s claim was dismissed with costs and the Respondent’s counterclaim of RM20,000.00 was allowed with costs.
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C-02(NCvC)(W)-438-03/2021
Court of Appeal of Malaysia19 Jan 2023
The written judgment as the court issued it, with the coram, case number, and source links. Every paragraph has its own anchor.
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“nd March 2018 but to rescind the Agreement when the Appellant instituted the suit in the High Court. [44] As the result, the Appellant is entitled to compensatory damages as provided in s. 76 of the Contracts Act 1950 as follows:”
“e has been made on the case of Than Siew Beng & Anor v. Ketua Pengarah Jabatan Pendaftaran Negara & Ors [2017] 5 MLJ 662 (CA). [20] In addition, the learned High Court judge invoked s. 114(g) of the Evidence Act 1950 following Marappan a/l Muthusamy v. R Sivam a/l Ramasamy [2014] 4 MLJ 428 by reason of the Appellant’s”
“verify the originality of this document via eFILING portal 39 In commenting on the circumstances in which a person may disable himself from performing his promise within the meaning of s. 39 of the Indian Contracts Act (equivalent to our s. 40 ) Indian Contract and Specific Relief Acts by Pollock & Mulla, 11th edn, vol”
“Bhd [2007] 6 CLJ 93, Augustine Paul FCJ held as follows: “… The reason for which a contract is not performed must exist at the time it is terminated (see British & Beningtons Ltd v. NW Cachar Tea Co [1923] AC 48). However, the termination of a contract, based upon a reason that is in fact inadequate, may nevertheless b”
“lainly wrong decision happens when the trial court is guilty of no or insufficient judicial appreciation of evidence. (See Chow Yee Wah & Anor v. Choo Ah Pat [1978] 1 LNS 32; Watt or Thomas v. Thomas [1947] AC 484; and Gan Yook Chin & Anor v. Lee Ing Chin & Ors [2004] 4 CLJ 309).” as well as the dicta of Zulkelfli Maki”
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1
This is an appeal against the trial judgment of the High Court in respect of an iron ore mining contract whereby the Appellant’s claim was dismissed with costs and the Respondent’s counterclaim of RM20,000.00 was allowed with costs.
2
We heard the appeal on 19th January 2023 and thereafter unanimously allowed the appeal. In this regard, we found that the contract was terminated on 29th September 2016. We set aside the High Court’s judgment and we, in substitution, only allowed the Appellant’s claim made in prayers (v), (vi) and (vii) of the statement of claim to be assessed by the High Court (but not exemplary and punitive damages) with costs of RM40,000.00 subject to allocatur. Additionally, the Respondent’s counterclaim is disallowed.
3
The Appellant and Respondent were the Plaintiff and Defendant in the High Court respectively.
4
By a quadripartite written agreement dated 26th February 2016 (“Agreement”) made between the Respondent, Appellant, Siva Kumar a/l Govindan (a director of the Respondent) and Hoe Hock Lai ( a director of the Appellant), the Respondent appointed the Appellant as its exclusive mining sub-contractor to mine an area known as ML 16/2014 Lot P.A. S/N ekSrdyP0R0a4MdUw4KIbw **Note : Serial number will be used to verify the originality of this document via eFILING portal 3 26644 (PA 265864) Sungai Rawit, Mukim Semantan, Temerloh, Pahang consisting of 40.33 hectares (99.66 acres) (“Land”) upon which the Director of Land & Mines of Pahang leased the Land to Bayu Mining Sdn Bhd (“Lessee”). The Lessee and the Respondent were also granted permission and rights as an operator to carry out development work and mining operation on the Land by the Director of Land & Mines of Pahang.
5
The Agreement without its appendices is reproduced below: S/N ekSrdyP0R0a4MdUw4KIbw **Note : Serial number will be used to verify the originality of this document via eFILING portal 4 S/N ekSrdyP0R0a4MdUw4KIbw **Note : Serial number will be used to verify the originality of this document via eFILING portal 5 S/N ekSrdyP0R0a4MdUw4KIbw **Note : Serial number will be used to verify the originality of this document via eFILING portal 6 S/N ekSrdyP0R0a4MdUw4KIbw **Note : Serial number will be used to verify the originality of this document via eFILING portal 7 S/N ekSrdyP0R0a4MdUw4KIbw **Note : Serial number will be used to verify the originality of this document via eFILING portal 8 S/N ekSrdyP0R0a4MdUw4KIbw **Note : Serial number will be used to verify the originality of this document via eFILING portal 9 S/N ekSrdyP0R0a4MdUw4KIbw **Note : Serial number will be used to verify the originality of this document via eFILING portal 10 S/N ekSrdyP0R0a4MdUw4KIbw **Note : Serial number will be used to verify the originality of this document via eFILING portal 11 S/N ekSrdyP0R0a4MdUw4KIbw **Note : Serial number will be used to verify the originality of this document via eFILING portal 12 S/N ekSrdyP0R0a4MdUw4KIbw **Note : Serial number will be used to verify the originality of this document via eFILING portal 13 S/N ekSrdyP0R0a4MdUw4KIbw **Note : Serial number will be used to verify the originality of this document via eFILING portal 14 S/N ekSrdyP0R0a4MdUw4KIbw **Note : Serial number will be used to verify the originality of this document via eFILING portal 15 S/N ekSrdyP0R0a4MdUw4KIbw **Note : Serial number will be used to verify the originality of this document via eFILING portal 16 S/N ekSrdyP0R0a4MdUw4KIbw **Note : Serial number will be used to verify the originality of this document via eFILING portal 17 S/N ekSrdyP0R0a4MdUw4KIbw **Note : Serial number will be used to verify the originality of this document via eFILING portal 18 S/N ekSrdyP0R0a4MdUw4KIbw **Note : Serial number will be used to verify the originality of this document via eFILING portal 19 S/N ekSrdyP0R0a4MdUw4KIbw **Note : Serial number will be used to verify the originality of this document via eFILING portal 20 S/N ekSrdyP0R0a4MdUw4KIbw **Note : Serial number will be used to verify the originality of this document via eFILING portal 21 S/N ekSrdyP0R0a4MdUw4KIbw **Note : Serial number will be used to verify the originality of this document via eFILING portal 22
6
After the execution of the Agreement, the Appellant’s and Respondent’s representatives met on 19th May 2016 and 31st May 2016 and discussed on the Agreement (“Meetings”). The minutes of the Meetings are also reproduced below: S/N ekSrdyP0R0a4MdUw4KIbw **Note : Serial number will be used to verify the originality of this document via eFILING portal 23 S/N ekSrdyP0R0a4MdUw4KIbw **Note : Serial number will be used to verify the originality of this document via eFILING portal 24 S/N ekSrdyP0R0a4MdUw4KIbw **Note : Serial number will be used to verify the originality of this document via eFILING portal 25 S/N ekSrdyP0R0a4MdUw4KIbw **Note : Serial number will be used to verify the originality of this document via eFILING portal 26
7
Since the conclusion of the aforementioned Meetings, there was no new agreement entered between the parties.
8
As a result, the Respondent via its solicitor Messrs. Bastion Vendargon wrote on 2nd September 2016 and again on 7th September 2016 to the Appellant enquiring about the drafting of the new agreement.
9
The Respondent thereafter on 29th September 2016 wrote to the Appellant to forthwith cease all operations until the new agreement is finalised and executed by the parties.
10
The Respondent again via its solicitor Messrs. Bastion Vendargon wrote on 17th October 2016 to the Appellant giving the Appellant 2 weeks from the date of the notice to vacate the Land.
11
The Appellant via its solicitor Messrs. R. Shan & Associates replied on 27th October 2016 to the Respondent’s solicitor Messrs. Bastion Vendargon that the Agreement was still valid and on the Appellant’s desire to continue to perform the Agreement. The Appellant also denied trespassing on the Land.
12
Subsequently after the mining lease had been successfully renewed, the Respondent via its solicitor Messrs. Bastion Vendargon wrote on 29th November 2017 to the Appellant giving the Appellant 4 weeks from the date of the notice to vacate the Land. S/N ekSrdyP0R0a4MdUw4KIbw **Note : Serial number will be used to verify the originality of this document via eFILING portal 27
13
The Appellant via its new solicitor Messrs. Andrew-David Wong & Ong replied on 20th December 2017 to the Respondent’ solicitor Messrs. Bastion Vendargon that the Agreement was still valid but the Appellant could not carry out mining activity since October 2016 because of the dispute between the Respondent and the Lessee on mining on the Land. The Appellant maintained that it was ready and willing to perform the Agreement and did not wish to vacate the Land.
14
As a result, the Respondent via its solicitor Messrs. Bastion Vendargon replied on 28th December 2017 to the Appellant’s solicitor Messrs. Andrew-David Wong & Ong that there was no valid Agreement and the Appellant was unable to perform and had abandoned its mining activity on the Land.
15
The Appellant via its solicitor Messrs. Andrew-David Wong & Ong thereafter wrote on 13th March 2018 to the Respondent’s solicitor Messrs. Bastion Vendargon that the Respondent had wrongly dismantled and removed the Appellants plant and machineries on the Land and wish to re-enter the Site to dismantle and remove the balance of its plant and machineries in mitigation of loss on a without prejudice basis.
16
However, the Respondent via its solicitor Messrs. Bastion Vendargon replied on 15th March 2018 to the Appellant’s solicitor Messrs. Andrew-David Wong & Ong that the Respondent rejected the Appellant’s request and the Respondent would continue to remove and dispose whatever obstructive materials left on the Land. S/N ekSrdyP0R0a4MdUw4KIbw **Note : Serial number will be used to verify the originality of this document via eFILING portal 28
17
Finally, the Appellant on 27th March 2018 instituted its action in the High Court and claimed the following in paragraph (10) of its statement of claim: i. Defendan sendiri, ejen-ejen, atau pengkhidmat-pengkhidmat beliau selainnya ditahan dan suatu Injunksi dikeluarkan untuk menahan dan melarang mereka ini melakukan kerja-kerja meleraikan dan mengeluarkan kilang – “processing plant” dan semua harta benda kepunyaan Plaintif di kawasan konsesi tapak perlombongan yang di kenali sebagai ML. 16/2014 LOT PA 26644 (PA265864) Sungai Rawit, Mukim Semantan, Daerah Temerloh, Pahang Darul Makmur; ii. Plaintif dibenarkan untuk menanggalkan dan mengeluarkan dalam masa yang munasabah kilang – “processing plant” dan semua harta benda kepunyaan Plaintif tanpa sebarang sekatan, gangguan mahupun larangan daripada Defendan sendiri, ejen-ejen atau pengkhidmat-pengkhidmat beliau sendiri di kawasan konsesi tapak perlombongan yang di kenali sebagai ML. 16/2014 LOT PA 26644 (PA265864) Sungai Rawit, Mukim Semantan, Daerah Temerloh, Pahang Darul Makmur; iii. Suatu Deklarasi bahawa Perjanjian bertarikh 26/02/2016 adalah sah dan berkuatkuasa; iv. Pembatalan Perjanjian bertarikh 26/02/2016 oleh pihak Defendan adalah tidak sah; v. Dalam alternatif, Defendan membayar Plaintif gantirugi dan kerugian atas kilang – “processing plant” yang telah dileraikan dan S/N ekSrdyP0R0a4MdUw4KIbw **Note : Serial number will be used to verify the originality of this document via eFILING portal 29 dikeluarkan oleh Defendan sendiri, ejen-ejen atau pengkhidmat-pengkhidmatnya tanpa kebenaran dan keizinan Plaintif-Plaintif; vi.
a
Gantirugi Khas;
b
Gantirugi Am; dan
c
Gantirugi Ekonomi, kesemuanya ditaksirkan oleh Mahkamah yang Mulia ini; vii. Faedah 5% setahun dari tarikh penamatan perjanjian Penamatan pada 29/09/2016; viii. Plaintif diberikan keizinan dan kebebasan untuk mebuat permohonan dan relif-relif lain sampingan selanjutnya; ix. Perintah yang selanjutnya dan lain-lain relif yang Mahkamah sifatkan sesuai dan berpatutan. [18] The Respondent counterclaimed the following:
1
Damages for the storage of the machinery or equipment and/or plant and their obstruction and interference with the Defendant’s mining activity to be assessed and paid to the Defendant;
2
Interest thereon from the date of judgment till full realization; S/N ekSrdyP0R0a4MdUw4KIbw
3
Damages for inducement of breach of contract to be assessed and paid by the Defendant;
4
Interest thereon from the date of judgment till full realization at the rate prescribed on (3) above;
5
Costs to be paid by the Plaintiff to the Defendant; and
6
Such further or other relief. IN THE HIGH COURT [19] After trial, the learned High Court judge basically found the Appellant failed to discharge its burden of proof that the Agreement was still valid and enforceable because it is the Appellant’s duty to either adduce evidence or produce witnesses to testify on the same. Reliance has been made on the case of Than Siew Beng & Anor v. Ketua Pengarah Jabatan Pendaftaran Negara & Ors [2017] 5 MLJ 662 (CA). [20] In addition, the learned High Court judge invoked s. 114(g) of the Evidence Act 1950 following Marappan a/l Muthusamy v. R Sivam a/l Ramasamy [2014] 4 MLJ 428 by reason of the Appellant’s failure to call witnesses identified as Lee Hua-Hsiung, Ong Swee Loon and Hoe Hock Lai to convince the court that the Agreement had not been annulled contrary to that testified by the Respondent’s witnesses Siva Kumar a/l Govindan and Sreedharan a/l Nair. S/N ekSrdyP0R0a4MdUw4KIbw [21] Finally, the learned High Court judge also found that the there was no subsequent or new agreement entered by the parties to replace the annulled Agreement. According to the learned High Court judge, the Appellant did not satisfactorily respond to the Respondent on the drafting of the new agreement as well as procrastinated in contesting the alleged annulment of the Agreement. [22] In the premises, the learned High Court judge therefore found that the Respondent had the right to remove the Appellant’s plant and machinery that was on the Land after due notification including to claim storage charges pending their removal following Tengah Oil and Gas International Pte Ltd v. Seawealth Nautical Sdn Bhd & Anor [2011] 11 MLRH 66. [23] In view that the Appellant has abandoned the Land since 2016 as found by the learned High Court judge; hence the Respondent’s counterclaim of RM20,000.00 storage charges incurred was allowed. FINDINGS OF THIS COURT [24] Before us, both parties primarily repeated their respective submissions made in the High Court. [25] We have accordingly, in the exercise of our appellate duty and function, reviewed the judgment of the learned High Court judge. In this S/N ekSrdyP0R0a4MdUw4KIbw respect, we are mindful of the following dicta of Raus Sharif FCJ (later CJ) in UEM Group Bhd v. Genisys Integrated Engineers Pte Ltd & Anor [2010] 9 CLJ 785 (FC): “[26] Thus, the prime issue in respect of Questions 1 to 3 is whether the Court of Appeal had erred in interfering with the findings of facts of the trial judge. It is well settled law that an appellate court will not generally speaking, intervene with the decision of a trial court unless the trial court is shown to be plainly wrong in arriving at its decision. A plainly wrong decision happens when the trial court is guilty of no or insufficient judicial appreciation of evidence. (See Chow Yee Wah & Anor v. Choo Ah Pat [1978] 1 LNS 32; Watt or Thomas v. Thomas [1947] AC 484; and Gan Yook Chin & Anor v. Lee Ing Chin & Ors [2004] 4 CLJ 309).” as well as the dicta of Zulkelfli Makinudin FCJ (later PCA) in Ahmad Najib Aris v. PP [2009] 2 CLJ 800 (FC) as follows: “[20] As regards the first main ground of appeal raised by the appellant, I am of the view that the Court of Appeal has the power to review or to re-evaluate all the evidence available as adduced by the prosecution. The Court of Appeal is in a position to do so in the present case even though the grounds of decision of the trial judge as appearing in the appeal records is found lacking in specific findings and with no reasons for the findings. In a case involving purely a question of fact, the Court of Appeal is free to determine whether or not the various findings of the trial Court are correct. (See Mohamed Mokhtar v. PP [1972] 1 MLJ 122). In the present case even though the Court of Appeal took the view that the High Court judgment was of no assistance, it nevertheless had considered and subjected all the evidence adduced by the prosecution to a critical re-examination. The Court of Appeal had given sound reasons as to why the evidence was admitted and how it had implicated the appellant. There was no miscarriage of justice against the appellant as the Court of Appeal's decision was based on evidence adduced from the witnesses called by the prosecution as appearing in the appeal records. I am therefore of the view that the Court of Appeal did not err on this issue.” (emphasis added) S/N ekSrdyP0R0a4MdUw4KIbw [26] On the facts here, it is plainly not in dispute that the Agreement had been validly entered amongst the parties. The pivotal fact in issue is whether the Agreement was thereafter bilaterally declared null and void by the parties. [27] According to the Respondent, the parties mutually agreed at the Meetings that the Agreement was treated as null and void and a new agreement would be entered. However as far as the Appellant is concerned, the Agreement would continue to be in force unless and until a new agreement is executed. [28] We have consequently reviewed the minutes of the Meetings in entirety and noted that there were discussions recorded in both Meetings (as per the 1st item in the agenda) on the parties’ express desire to treat the Agreement “no longer valid and will be void” but there was nothing concluded expressly that the Agreement is henceforth null and void. [29] Furthermore, we noted that there were also express discussion and conclusion recorded in the meeting held on 19th May 2016 that “the new agreement will be drafted by Mr Siva” of the Respondent and “New agreement to be draft out as soonest ...” respectively. At the subsequent meeting held on 31st May 2016, the express discussion and conclusion recorded were that “New agreement will be done after SSM received from VSKL” and “New SSM document are required with attached Mr Lee Hua Hsiung as director and major shareholder” respectively. S/N ekSrdyP0R0a4MdUw4KIbw [30] Apposite thereto, we also noted that there were discussions and conclusions on plant/project and cash flow in the meeting held on 19th May 2016 (as per items 2nd to 3rd in the agenda) as well as on discussions and conclusions on plant/project, deposit payment and quantity changes in contract in the subsequent meeting held on 31st May 2016 (as per items 2nd to 4th in the agenda). [31] Consequently, we objectively find from the Meetings that the presumed intent of the parties is that the Agreement still subsisted unless and until replaced by the new agreement. Simply put, it was plain that the parties did not mutually treat the Agreement as already null and void. We are persuaded by the wordings as adopted in the minutes of the Meetings highlighted above as well as the conduct of the parties in having discussed and settled in the Meetings too on various items which are consistent with the ongoing performance of the Agreement. [32] It is also apt for us to refer to s. 94 of the Evidence Act 1950 which provides as follows:
94
Exclusion of evidence against application of document to existing facts When language used in a document is plain in itself and when it applies accurately to existing facts, evidence may not be given to show that it was not meant to apply to such facts. ILLUSTRATION A conveys to B by memorandum of transfer "my estate at Kranji containing 100 acres." A has an estate at Kranji containing 100 acres. Evidence may not be S/N ekSrdyP0R0a4MdUw4KIbw given of the fact that the estate meant was one situated at a different place and of a different size. [33] Thus based on s. 94 of the Evidence Act 1950, we find that the learned High Court judge fell into error when he found that the Appellant suppressed or withheld vital evidence on the Meetings and invoked s. 114(g) of the Evidence Act 1950 because of the Appellant’s failure to produce Lee Hua-Hsiung, Ong Swee Loon and Hoe Hock Lai as witnesses at the trial. [34] That notwithstanding and if oral evidence is admissible to explain the outcome of the Meetings, we noted that the Respondent’s principal witness Siva Kumar a/l Govindan unequivocally testified as follows in cross examination at trial: Sehingga perjanjian baru diderafkan, adakah perjanjian lama diteruskan atau dikekalkan? Sebab Mr Lee yang sepatutnya melakukan kerja semua itu. Jadi sekarang peguam tanya, sehinggalah satu perjanjian baru disediakan, apa jadi dengan perjanjian lama itu, adakah ianya diteruskan, dikekalkan? A: Ya. …
Preamble
Mengikut keterangan kamu tadi, sehingga perjanjian yang baru dibuat, perjanjian lama itu masih berjalan betul? Ya. … S/N ekSrdyP0R0a4MdUw4KIbw Q: Mengikut keterangan kamu tadi, sehingga perjanjian yang baru itu diadakan maka perjanjian lama itu dianggap bloeh berjalan seperti biasa. Jad, jawapan kepada soalan ini sepatutnya tidaklah. Tadi, kamu kata perjanjian itu masih terpakai lagi sehinggalah perjanjian baru dibuat, betul? Ya. [35] He subsequently answered as follows in re-examination: Q: … Soalan saya adakah anda dan Geonex mengambil tindakan lain sebagai perbincangan dengan VSKL atau pun tindakan-tindakan lain berkaitan dengan P1 ini? Ada. Apakah tindakan yang diambil? Tindakan yang kita ambil, kita ada membuat perbincangan macam perbualan biasa, memberitahu kepada VSKL mengatakan agreement yang lama yang kita buat ini tidak sah, so terpakasa kena buat satu agreement yang baru sebab apa perjanjian yang kita buat lama itu tidak betul dengan perjanjian yang kita sign dekat sana. Sebenarnya agreement yang kita buat dengan VSKL ini pada 2015 bulan 10 hari Deepavali ketiga. Saya sign semua dokumen depan belakang muka surat agreement tetapi apabila diberi kepada kiat pada bulan 2, 2016, Cuma ada sign di belakang sahaja. Yang depan semua satu signatory pun tidak ada. So itu pasal saya minta dia balik satu agreement baru dengan Mr Lee. Saya bagi kontrak ini di atas based on Mr Lee sebab Mr Lee sahaja yang tahu hendak membuat kontrak macam Hor Lai ke Swee Leong ke, dia orang tidak pandai di dalam bijih besi. So dengan Mr Lee bila saya jumpa memang agreement apa yang kita buat dengan apa yang kita tulis itu tidak betul, so kita buat satu agreement yang baru. So, saya kejar masa dia bagi agreement tapi dia tidak beri agreement. So, saya cakap dengan dia, kita buat satu agreement baru. Kita akan pass ke dia orang agreement itu. Tetapi dia orang pun macam tidak tunjuk initiative untuk mendapatkan agreement baru S/N ekSrdyP0R0a4MdUw4KIbw dan sambung dengan agreement baru. So dia orang stick on that. So, dekat sana saya dapat 2 tempat sudah tahu kena tipu. Sebenarnya agreement itu buat pada 2015 tetapi sign dalam 2016. Sebab stamping pun, ketiga-tiga copy dia orang pun simpan. Dia tidak bagi kita satu proof. Sebab itu kita macam tidak ada bukti mengatakan kita hendak tunjuk dia agreement lama dengan agreement baru. [36] We hence find the Respondent admitted or conceded to the fact that the Agreement still subsisted consequential to the Meetings unless and until replaced by the new agreement. However, the Respondent neither retracted nor clarified on the admission or concession. There was an attempt instead by the Respondent to portray that the Agreement was not understood and ought therefore to be cancelled. We are not convinced and find that it is irrelevant particularly because the defence of non est factum has never been pleaded by the Respondent. [37] In the circumstances, we therefore find that the learned High Court judge has misdirected himself in holding that the parties mutually agreed to annul the Agreement. [38] Consequently, it follows that the Agreement had to be performed unless otherwise replaced by a new agreement. It is plain from the Meetings that the onus is upon the Respondent to draft the new agreement but that was not done. S/N ekSrdyP0R0a4MdUw4KIbw [39] Furthermore pursuant to the Agreement, the Respondent was under the obligation jointly with the Lessee to renew or extend the permission and rights as an operator to carry out development work and mining operation on the Land which have already lapsed. This was not done too. [40] Nonetheless, there is at all material times neither non-performance nor breach of the Agreement seen on the part of the Appellant. [41] In the Federal Court case of Akitek Tenggara Sdn Bhd v. Mid Valley City Sdn Bhd [2007] 6 CLJ 93, Augustine Paul FCJ held as follows: “… The reason for which a contract is not performed must exist at the time it is terminated (see British & Beningtons Ltd v. NW Cachar Tea Co [1923] AC 48). However, the termination of a contract, based upon a reason that is in fact inadequate, may nevertheless be supported if there are at the time facts in existence which would have provided a good reason (see Universal Cargo Carriers Corpn v. Citati [1957] 2 QB 401). As the project was aborted at a later stage it cannot constitute a reason for the termination of the agreement. In any event the project was subsequently aborted by the act of the defendant itself in wanting to have a new development concept. The result is that the services of the plaintiff was terminated for reasons brought about by the acts of the defendant itself. In other words the defendant had disabled itself from performing the contract. The critical issue for determination is the validity of the termination of a contract on such grounds. The position where a person disables himself from performing an agreement is governed by s. 40 which reads as follows: When a party to a contract has refused to perform, or disabled himself from performing, his promise in its entirety, the promisee may put an end to the contract, unless he has signified, by words or conduct, his acquiescence in its continuance. S/N ekSrdyP0R0a4MdUw4KIbw In commenting on the circumstances in which a person may disable himself from performing his promise within the meaning of s. 39 of the Indian Contracts Act (equivalent to our s. 40 ) Indian Contract and Specific Relief Acts by Pollock & Mulla, 11th edn, vol 1 says at p 532: The principle that in the absence of an express provision in a contract to the contrary it was not to be presumed that the parties intended that a party should be entitled to take advantage of his own breach as against the other party was not limited to cases where a party was relying on his own wrong to avoid his obligations under the contract but applied also where a party sought to obtain a benefit under a continuing contract on account of his breach (Alghussein Establishment v. Eton College [1991] 1 All ER 267.” (emphasis added) See also Rasiah Munusamy v. Lim Tan & Sons Sdn. Bhd. [1985] 1 CLJ 541 (SC). [42] It is hence trite law of contract that the Respondent committed repudiatory breach of the Agreement when the Respondent via its solicitor’s letter dated 29th September 2016 instructed the Appellant to cease all mining operations forthwith and thereafter to vacate the Land. In other words, the Agreement was purportedly terminated but the Respondent cannot take advantage of its breach as seen in paragraphs [38] and [39] above to put an end to the contract. [43] On the facts herein, we find that the Appellant had no other option after several attempts to resuscitate the contract between September S/N ekSrdyP0R0a4MdUw4KIbw 2016 and March 2018 but to rescind the Agreement when the Appellant instituted the suit in the High Court. [44] As the result, the Appellant is entitled to compensatory damages as provided in s. 76 of the Contracts Act 1950 as follows:
76
Party rightfully rescinding contract entitled to compensation A person who rightly rescinds a contract is entitled to compensation for any damage which he has sustained through the non-fulfilment of the contract. ILLUSTRATION A, a singer, contracts with B, the manager of a theatre, to sing at his theatre for two nights in every week during the next two months, and B engages to pay her RM100 for each night's performance. On the sixth night A wilfully absents herself from the theatre, and B, in consequence, rescinds the contract. B is entitled to claim compensation for the damage which he has sustained through the non-fulfilment of the contract. [45] By virtue of the learned High Court judge’s misdirection as found by us in paragraph [37] above, there is obviously non-direction in consequence by the learned High Court judge pertaining to breach of the Agreement and resultant claim of damages by the Appellant as now found by us in paragraphs [38] to [44] above. Additionally, the learned High Court judge misdirected himself in allowing the counterclaim of storage charges made by the Respondent too. In the premises, appellate intervention is justified. S/N ekSrdyP0R0a4MdUw4KIbw CONCLUSION [46] It is for the foregoing reasons that we allowed the appeal as so ordered. Dated this 17th May 2023 sgd LIM CHONG FONG COURT OF APPEAL JUDGE S/N ekSrdyP0R0a4MdUw4KIbw
1
Counsels for Appellant
2
Vinod A/L R. Kamalanathan Solicitors for Appellant Messrs. Vinod Kamalanathan & Associates Counsels for Respondent Lee Shu Min Solicitors Respondent Messrs. Seah Balan Ravi & Co. LEGISLATION REFERRED TO: s. 94 & s.114(g) of the Evidence Act 1950 s. 76 of the Contracts Act 1950 CASES REFERRED TO: Than Siew Beng & Anor v. Ketua Pengarah Jabatan Pendaftaran Negara & Ors [2017] 5 MLJ 662; Marappan A/L Muthusamy v. R Sivam A/L Ramasamy [2014] 4 MLJ 428; Tengah Oil and Gas International Pte Ltd v. Seawealth Nautical Sdn Bhd & Anor [ 2011] 11 MLRH 66; UEM Group Bhd v. Genys Integrated Engineers Pte Ltd & Anor [2010] 9 CLJ 785; Ahmad Najib Aris v. PP [2009] 2 CLJ 800; Arkitek Tenggara Sdn Bhd v. Mid Valley City Sdn Bhd [2007] 6 CLJ 93; and Rasiah Munusamy v. Lim Tan & Sons Sdn Bhd [1985] 1 CLJ 541. S/N ekSrdyP0R0a4MdUw4KIbw
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