The court affirmed the enforceability of a breach of contract claim and upheld the awarded damages based on the trial judge's discretion and proper evidential assessment.

Appeal

[1] On 21 October 2009, after a full trial, the Miri High Court found the defendant company liable for breach of contract and gave judgment for the respondent ("the plaintiff company") in the sum of RM120,000,000 as damages with interest at 8% per annum.

[2] We heard the appellant's ("the defendant company's") appeal on 30 June and 1 July 2010. We dismissed it with costs of RM50,000. We now give our grounds.

The Facts

[3] This appeal is essentially fact-based.

[4] The defendant company is and was at all material times the registered proprietor of a parcel of land held under Lot 63, Sawai Land District ("Lot 63") Batang Suai, Miri containing an approximate area of 4,856 hectares (= 12,000 acres)

[5] On 20 April 1994, the parties herein entered into exh. P15 which is a timber Sale and Purchase Agreement ("the Timber SPA") for the sale by the defendant company to the plaintiff company of all the merchantable timber or logs to be extracted from the whole parcel of Lot 63. (A reference hereinafter to the word "timber" includes a reference to logs and vice versa ).

[6] The Timber SPA is one of the three agreements which the parties entered into on 20 April 1994. The other two agreements are:

(1) An Agreement (exh. P13) for the sale of all the shares (in the defendant company) from the then shareholders viz Mr Ha Tiung Noon and his wife to the present shareholders for the sum of RM1.2 million. It was also agreed therein that the then shareholders shall cause the defendant company to enter into the Timber SPA with the plaintiff company for the sale of all the merchantable logs to be extracted from Lot 63; and

(2) A Deed whereby the then shareholders and the present shareholders agreed to acquire shares in the plaintiff company and the plaintiff company shall enter into the Timber SPA with the defendant company to purchase all the merchantable timber to be extracted from Lot 63 to be resold to third parties.

[7] Specifically, the Timber SPA contains recitals, inter alia , to the following effect:

(1) The defendant company has made an application to the relevant authorities for a timber licence to enable it to fell, extract and harvest all the merchantable timber from Lot 63; and

(2)The defendant company has agreed with the plaintiff company that upon the issue of a timber licence by the relevant authorities, the defendant company will sell to the plaintiff company all the merchantable timber extracted or to be extracted from Lot 63, upon the terms and conditions contained therein.

[8] Clause 1(a) of the Timber SPA expressly and specifically states that subject to the issue of the timber licence, the defendant company will sell and the plaintiff company will purchase all the extracted merchantable timber from Lot 63 that are marked by the relevant authorities during the licence period and any extension or renewal thereof from time to time. (A reference hereinafter to a clause is a reference to that clause in the Timber SPA).

[9] The defendant company, by letter dated 29 March 1994 to the Director of Forestry Sarawak, applied for a timber licence to fell and extract all merchantable timber from Lot 63.

[10] On 25 January 1995, the Director of Forestry Sarawak informed the defendant company that the latter's application to extract merchantable timber from 1,000 ha of Lot 63 has been approved.

[11] By letter dated 15 April 1995, the defendant company's controlling shareholders viz Mr Ha Tiung Noon and Madam Chan Yitt Fong wrote to the plaintiff company's chairperson, Madam Tan So Yin, purporting to unilaterally terminate the Timber SPA on the ground, inter alia , that Kementerian