Judgment

Nik Hashim Nik Ab Rahman, JCA

(delivering the judgment of the court)

1. This appeal is against the decision of the High Court entering judgment for the respondent's claim and damages to be assessed by the senior assistant registrar for breach of contract.

2. The facts are that the parties had entered into an agreement dated October 30, 1986 at pp 139-146 of the appeal record. By this agreement, the appellant had granted a license to the respondent to enter the appellant's land to extract and remove granite and carry out quarry works for 3 years commencing from the date the respondent commences quarry works. It was a term that the respondent was to pay the appellant 80 cent for each ton of granite extracted and removed. The respondent with the consent of the appellant agreed with another party, Energoprojekt Engineering & Contracting Co, for this company to extract and carry out quarry works. This company ceased all quarry works on September 24, 1988. Meanwhile, the appellant entered into an agreement with Hyundai Engineering Co Ltd dated May 24, 1990 at pp 238-254 of the appeal record granting the said company license to extract and remove granite boulders from the same land for a period of 3 years from the date of the agreement.

3. Clause 1 of the agreement between the appellant and the respondent states:

   In consideration of the premises and the due and mutual observance and performance by the parties hereto of the provisions herein contained the Grantor shall grant a license to the licensee to enter into the said portion for the purpose of extracting and removing granite only in the said portion and carrying out quarry works thereon for a term of three (3) years commencing from the date the Licensee commences quarry works.

4. The main issue before this court was when the respondent commenced quarry works.

5. The appellant's counsel contended that quarry works mean works towards extraction of stones from a quarry which includes felling of tress, building access road to the site and removal of overburden i.e. all materials on top of granite. Learned counsel submitted that quarry works commenced on May 25, 1987 when the clearing of the land took place. This being so, the license agreement ended by effluxion of time on May 24, 1990 and therefore, the appellant was entitled to enter into the license agreement with Hyundai on May 24, 1990. Learned counsel then cited the Privy Council case of Saw Choo Theng v Sungei Biak Tin Mines Ltd [1971] 2 MLJ 83 and the High Court case of Lim Kim Choy v Wong Chow [1932] MLJ 20 in support of his arguments.

6. Learned counsel for the respondent, on the other hand, argued that quarry works actually started on August 8, 1987 when the blasting took place after the police permit was issued on August 2, 1987.

7. Unfortunately, in this case, the learned trial judge did not make a finding of fact when the quarry works commenced. However, we agreed with the respondent. From the evidence, we held that the preparatory works such as clearing of the trees, construction of the access road to the site and removal of overburden on the said land before the police permit for blasting was obtained are not quarry works. Quarry works commenced when the police permit for blasting was obtained on August 2, 1987. Support for our finding can be found in clause 8(d) of the agreement itself which reads:

   (d)	The Licensee shall commence quarry, works on the said portion within six (6) months from the date the last of the said Permits and Licences are obtained and failing which this agreement shall automatically forthwith terminate.

   As the last of the permits was the police permit for blasting issued on August 2, 1987, the quarry works as understood by the parties could not have commenced before that date.

8. The two cited cases: Saw Choo Theng and Lim Kim Choy relied on by the appellant are indeed distinguishable on facts and therefore not applicable to the present case.

9. In Saw Choo Theng, the appellants had sought to have the sub-lease cancelled on the ground that the respondent therein had cut down budded rubber trees on approximately 60 acres of the land, without the consent and knowledge of the appellants and planted a commercial crop of tapioca, also without the appellants' consent and knowledge.

10. The trial judge made a finding that the respondent therein had cleared the land primarily to plant tapioca; he was not authorised to do so; it was done without government approval and was a breach of the Mining Enactment; and it ignored the rights of the appellants to the rubber trees which were preserved by the sub-lease.

11. On those facts, the cancellation of the sub-lease was justified, and at p 86 paragraph A the court held that the whole purpose of the relevant clause 4(b) of the sub-lease was to require an orderly working of the land, and that such operations as the sub-lease should be regulated and controlled. The court went on to give three cogent reasons in that case, applicable to its facts, and for those three reasons held that a proper construction of "work the land" in that case included preparatory work and indeed, any operations on the land.

12. In Lim Kim Choy, the court relied on the statutory interpretation of "mining operations" as contained in s 3 of the Mining Enactment. The court gave its reasons for deciding in the manner it did at pp 22 and 23 i.e. to avoid a conflict between the sub-lease and the later agreement. It was in that context that the court had to consider whether "mining operations" had ceased in that case - a consideration irrelevant to the present appeal. There the court held that the sinking of bore holes amounts to a "mining operations".

13. Unlike in the aforesaid cases, the present case does not involve the application of the Mining Enactment, and thus the decisions therein are not quite relevant here.

14. On the cannons of interpretation of what the parties have meant in a contract, Lord Mustill in Charter Reinsurance Co Ltd v Fagan [1996] 3 All ER 46 at p 54 reminded:

    There comes a point at which the court should remind itself that the task is to discover what the parties meant from what they have said, and that to force upon the words a meaning which they cannot fairly bear is to substitute for the bargain actually made one which the court believes could better have been made. This is an illegitimate role for a court. Particularly in the field of commerce, where the parties need to know what they must do and what they can insist on not doing, it is essential for them to be confident that they can rely on the court to enforce their contract according to its terms.

15. In the case before us, clauses 1 and 8(d) of the agreement, read together, are sufficiently clear. The only interpretation of clause 1 is that "quarry works" contemplated by the parties were such as could only commence after relevant permits and licences had been obtained. And in view of the clear statement by the learned trial judge that he chose to believe the respondent, we found that the appeal had no merit and dismissed the appeal with costs and ordered the deposit be paid out to the respondent to account of his taxed costs.

Cases

Charter Reinsurance Co Ltd v Fagan [1996] 3 All ER 46, HL; Lim Kim Choy v Wong Chow [1952] MLJ 20, HC; Saw Choo Theng v Sungei Biak Tin Mines Ltd [1971] 2 MLJ 83, PC

Legislations

Mining Enactment 1936: s.3

Representations

S Kandasivam (PG Lim & Co) for appellant

Balwant Singh Sidhu (Balwant Singh Sidhu & Co) for respondent

Notes:-

This decision is also reported at [2004] 3 AMR 283