Oral contracts may be enforceable if supported by sufficient evidence, but the burden rests on the claimant to prove existence on the balance of probabilities.

Appeal

[1] This appeal by the appellant ("the defendant") is lodged against the decision of the Kuala Lumpur High Court in allowing the claim of the respondents ("the plaintiffs") after a full trial.

[2] We heard the appeal on 31 May and 1 June 2010. By a majority judgment (Low Hop Bing and Zaharah bt Ibrahim JJCA concurring, and Mohd Hishamudin bin Mohd Yunus JCA dissenting), we allowed the appeal. We now give the grounds of the majority judgment.

Plaintiffs' Claim

[3] The plaintiffs are partners who have been carrying on the business of supplying tanker lorry services to carry latex from Kota in Negeri Sembilan to Port Klang in Selangor since 1987.

[4] The plaintiffs' claim against the defendant is based on an oral contract in March 1999 with the defendant to replant, maintain and fertilise oil palm seedlings on 240 acres (Kawasan A) which was half the area of Estate No 6 belonging to the defendant; and the plaintiffs were promised the right to harvest oil palm fruits on the 480 acres in the entire Estate No 6 for ten years. Since there was no written contract, the plaintiffs stopped all works in October 2000 and sought to recover sums of money that they had purportedly spent in relation to Kawasan A, due to the defendant's breach of contract.

The Defence

[5] The defendant, the owner of Estate No 6 measuring 480 acres in area, denied the existence of any contract with the plaintiffs, and averred that it had actually engaged other contractors viz Mr Ng Boon Geok and Mr Tan Leng Seong (Ah Seng) to do all oil palm seedlings replanting and field works such as spraying, road works, drainage, harvesting, pruning and manuring on the entire 480 acres of estate No 6.

Any Contract Between Plaintiffs And Defendant?

[6] It was submitted by defendant's learned counsel Mr Chan By Sing (Ms Lim Cheng Wun and Mr Sakthy Vell with him) that there was no contract between the plaintiffs and the defendant in relation to the replanting works carried out in Kawasan A of estate No 6.

[7] Plaintiffs' learned counsel Mr MJ Ganesan supported the learned trial judge's finding that there was an oral contract for the replanting works in Kawasan A to bind the parties.

[8] The learned trial judge traced the plaintiffs' case to 1995 when one Tan Tuan Kim of the defendant company was said to have approached Mr Suburamaniam (PW1) of the plaintiffs' firm and offered him (PW1) to do rubber tapping and latex collection in Estate No 6 owned by the defendant. In return, PW1 agreed and paid a sum of RM10,000 per month to Tan Tuan Kim. There was no written agreement for rubber tapping and latex collection. The relationship was said to have continued until March 1999 when the said Tan Tuan Kim offered PW1 oil palm replanting works for 240 acres in Estate No 6. In return, the plaintiffs were given the right to harvest the oil palm fruits from Estate No 6 for a period of 10 years; and the assurance and promise that a proper written agreement would follow suit. In the meantime, besides replanting works, earthworks, ground levelling and construction of roads and culverts in Kawasan A were undertaken by the plaintiffs. The plaintiffs kept on pestering Tan Tuan Kim for the written agreement and made various trips to the defendant's office in Kuala Lumpur, but were unable to meet anybody. All along, Tan Tuan Kim and his brother Ah Seng were in the estate, supervising the plaintiffs' works. Soon, when the plaintiffs realised that Tan Tuan Kim has ceased coming to the estate, the plaintiffs stopped work in October 2000. One Cheong Pang Kwan (DW1), another director of the defendant company, used to