JUDGMENTBY: THOMSON CJ, SYED SHEH BARAKBAH J, NEAL J

THOMSON CJ This is an appeal from a decision of Smith J., which raises a question as to the effect of the Rubber Supervision Enactment, No: 10 of 1987.

There has never been any real controversy as to the facts which may most conveniently be stated historically.

Before the war one Yap was carrying on business as a rubber dealer at 27, Jalan Tuan Sheikh, Seremban, under the name of Tong Seng Rubber Company. After the war he resumed business and at all material times he has held a licence to purchase rubber under section 5 of the Rubber Supervision Enactment issued to himself personally and stating that he trades under the style of Tong Seng Rubber Company.

When he resumed business Yap was apparently short of working capital and on 14th January, 1946, he entered into an agreement of partnership with eight other persons including the present appellant which was duly registered under the Registration of Businesses Ordinance. That agreement recited that Yap was the holder of a rubber dealers licence and provided that the partners should carry on the business of rubber dealers under the style or firm name of Tong Seng Rubber Company at the premises already occupied for that purpose by Yap. It provided for the distribution of profits in proportion to the capital contributed by the partners and it provided that the partnership business should be managed by Yap who was to be paid a monthly salary of $ 120 and 6% of the net profits in addition to his share in those profits based on his share in the capital and who as manager was to call a meeting of the partners once every six months.

From time to time one Liew sold rubber to the firm and from time to time he received payments in respect of this rubber, but on 13th June, 1951, there was owing to him for rubber supplied a balance of $ 5,097. He was unable to obtain payment of this balance and accordingly on 30th July, 1951, he commenced proceedings to recover it.

By this time a number of the original partners had withdrawn from the firm and in fact, although Liew was not aware of this and had had no intimation of it, the present appellant had withdrawn on 12th June, the day before the last delivery of rubber involved in the account had been made. The proceedings, therefore, were brought against Yap, the present appellant and two of the other partners, Eng and Ang. Ang was out of the jurisdiction and was never served. Yap and Eng submitted to judgment. The appellant, however, denied liability. He did not attempt to rely on the fact that he had ceased to be a partner, and indeed he could not do so because it was admitted that the plaintiff knew he was a partner and had had no intimation of his withdrawal. His defence was that in effect both the partnership and any contracts made with it were illegal as being forbidden by the provisions of the Rubber Supervision Enactment and that therefore the plaintiff could not recover.

The trial Judge came to the conclusion that, because all the partners were not named in the licence issued under the Rubber Supervision Enactment, the partnership was not properly licensed under that Enactment. He was of the opinion, however, that breach of that Enactment should be regarded in the same way as breach of a revenue statute and that having regard to the case of Brown v Duncan 109 ER 385 the plaintiff should not be regarded as particeps criminis and was therefore entitled to recover against all members of the partnership. If he was wrong in this view he thought that it was expecting too much to ask that every person who sells rubber should inspect the dealers licence and then, if he finds that the dealer trades under a name other than his own, be obliged to make an inquiry at the Business Names Registry to discover whether or not there are any partners. The plaintiff had satisfied himself that the person with whom he was actually dealing was licensed and therefore could not be said to be in pari delicto wi

Click Here to Read the rest of this document