Lee Hun Hoe CJ (Borneo):

[1] For convenience and by consent, these two appeals arising from an order dated December 14, 1976 made in respect of an action in Civil Suit No K.25 of 1972 for specific performance and damages for breach of contract are consolidated and dealt with together as the grounds of appeal are the same.

[2] As the background is somewhat complex, it is necessary to set out certain facts. Plaintiff is the sole proprietor of Hock Thye Timber Co Miri. Tsen Tuan is a Taiwanese businessman. Shin Chong Sawmill Co Ltd (referred to as SCS) was registered under the Sarawak Companies Ordinance (Cap 65) with the first nine defendants as shareholders. SCS owns a forest concession and holds two annual renewal forest licences No T/0051 and T/0055 issued by the Sarawak Forest Department. The 10th defendant, Taiwan Malaysia Timber Co, is a partnership formed by Taiwanese and Malaysians including plaintiff and Tsen Tuan to acquire SCS. It came in as a defendant by leave of court. Through his firm, plaintiff obtained an option to purchase SCS for M$180,000. He made several visits to Taiwan and succeeded in getting certain Taiwanese, particularly Tsen Tuan, interested in the forest concession.Apparently, there were discussions to form a partnership to acquire SCS for US$180,000. On September 25, 1969 plaintiff entered into a sale and purchase agreement with the shareholders for the transfer of shares together with all contractual rights to extract timber in the forest concession of SCS for M$180,000. Payments were to be made by instalments as follows:

i) $10,000 on or before 30.9.69.

ii) $50,000 on or before 31.10.69.

iii) $60,000 on or before 31.1.70.

iv) $60,000 on or before 30.4.70.

[3] In October 1969 Tsen Tuan and another Taiwanese ]Chai Hsiun Ying came to Miri and the Taiwan Malaysia Timber Co was formed and registered. A partnership agreement was signed by the parties on October 18, 1969 and registered on October 31, 1969. As a major shareholder, Tsen Tuan was elected chairman. Clause 1 of the agreement provides that the partnership "shall purchase all the assets and forest licences of Shin Chong Sawmill Co Ltd of Miri at the price of one hundred eighty thousand American dollars." Clause 2 says that "the purchase price for Shin Chong Sawmill Co Ltd will be paid by 3 instalments by the company." By cl 3 plaintiff was temporarily appointed as the representative of the partnership to purchase all shares in SCS and on payment of all instalments of purchase price the shares in SCS are to be transferred to the partnership. Clause 8 states as follows:—

"From the date of this agreement all partners shall try their very best to help promote the business of the company. If it is discovered that anyone has been working for his own ends, or indulging in corruption or malpractices detrimental to the interest of the company, his shares shall be forfeited as punishment."

[4] Subsequently, Tsen Tuan discovered that plaintiff had in fact acquired SCS for M$180,000 with money he paid to plaintiff towards his share of the partnership.As a result, he and Chai Hsiun Ying sued plaintiff in Civil Suit No K.200 of 1970 seeking a declaration that plaintiff bought SCS as their representative and trustee. Plaintiff counterclaimed for balance of the purchase price. The learned judge dismissed both the claim and the counterclaim. There was no appeal against his decision. The learned judge made certain findings. He found that plaintiff obtained an option to purchase SCS for M$180,000 and succeeded in getting 10th defendant to buy SCS for US$180,000; that Tsen Tuan paid to 10th defendant US$72,011.63 and that out of this sum plaintiff used M$120,000 to pay the shareholders of SCS; that apart from Tsen Tuan none of the partners had paid up his share of capital to the partnership; that plaintiff paid M$60,000 to the shareholders of SCS from money he had borrowed from his uncle in Kuching; that Chai Hsiun Ying conspired with plaintiff and his father to pr