The wrongful termination of a contract requires notice to make time of the essence again if it was previously set at large; damages must be proven and not speculative.

Introduction

[1] The Plaintiff's claim against the Defendant is for damages arising from what is alleged to be the repudiation of a Jungle Clearing Agreement dated 28 July 2017 at Hutan Simpanan Kemasul, Mukim Semantan, Daerah Temerloh, Pahang Darul Makmur ("Contract"). The Defendant counterclaimed for damages allegedly caused by the Plaintiff's delay in completing the jungle clearing operation, which delayed the planting of rubber trees in the affected areas.

Background Facts

[2] On 1 April 2005, the State Government of Pahang had leased 1,780.60 hectares of jungle land to the Defendant to start rubber plantations. In the process, timber would be extracted. The area of jungle to be cleared was divided into 2 blocks

(a) Block A - 406.69 hectares

(b) Block B - 201.75 hectares

These are in Compartment C91 covering some 539.45 hectares still covered with standing timber.

[3] Under the Contract, the Plaintiff was contracted to clear Blocks A and B at its own cost to get the area ready for the Defendant to plant rubber. This activity is referred to in the Contract as "cuci mangkok operation" or "CMO." As part of the CMO, the Plaintiff would benefit from the timber to be extracted as the Contract provided for the purchase of the logged timber from the Defendant for RM400,000.00.

[4] It is not in dispute that the Plaintiff required a logging license to carry out the CMO ("License"). The Defendant's then General Manager, Wong Teck Chai, gave a letter to the Pahang State Director of Forestry on 26 July 2017 to authorize the Plaintiff's Eng Cheng Hoe ("PW1") to represent the Defendant in all matters relating to the License ("Letter of Authorisation").

[5] On 28 July 2017, the Plaintiff paid RM400,000.00 to the Defendant, and an additional RM200,000.00 as a Security Deposit. A letter of approval with conditions was obtained from the Pahang State Forestry Department on 11 June 2019 and this is understood to be the conditional approval for the License, setting out a number of conditions to be satisfied by the Plaintiff.

Analysis And Findings

[6] The issues in this action revolve around the question of who breached the Contract and what damages, if any, are recoverable:

(a) The Defendant claims that the Plaintiff breached the Contract by failing to obtain the License in 180 days from the date of the Contract, allegedly causing the Defendant to suffer RM2,723,418.88 in "lost" crop production.

(b) The Plaintiff claims that the Defendant wrongfully terminated the Contract after time was set at large, and upon the Plaintiff's acceptance of the Defendant's repudiation of the Contract, it is entitled to a refund of the sums paid for the breach. The Plaintiff also pleads for the refund on grounds of unjust enrichment.

Delay In Obtaining License

[7] By a letter dated 5 January 2018, the Plaintiff wrote to "GM Wong" at the Defendant's address to notify about the status of its work at Compartment C91. It reported that there were procedures in the application to obtain the License and added this:

"Selain itu, pada 20hb November 2017, pihak syarikat kami telah menyerahkan segala dokumen berkaitan permohonan kepada pihak Lembaga Perhutanan. Namun pada bulan September, pegawai Biro Rasuah telah membuat penyiasatan ke atas Lembaga Perhutanan dan pejabat Lembaga Perhutanan telah ditutup dari beroperasi selama sebulan lebih. Ini juga menyebabkan permohonan masih belum diluluskan dengan secara rasminya."

[8] PW1 also testified at the trial that the License application was deferred because of what might be understood as "election fever' leading up to the 2018 General Elections. Apparently, the formation of t