The court determined that a contract remains valid unless mutually annulled or replaced, upheld by statutory obligations under the Evidence Act.

Introduction

[1] This is an appeal against the trial judgment of the High Court in respect of an iron ore mining contract whereby the Appellant's claim was dismissed with costs and the Respondent's counterclaim of RM20,000.00 was allowed with costs.

[2] We heard the appeal on 19 January 2023 and thereafter unanimously allowed the appeal. In this regard, we found that the contract was terminated on 29 September 2016. We set aside the High Court's judgment and we, in substitution, only allowed the Appellant's claim made in prayers (v), (vi) and (vii) of the statement of claim to be assessed by the High Court (but not exemplary and punitive damages) with costs of RM40,000.00 subject to allocatur. Additionally, the Respondent's counterclaim is disallowed.

[3] The Appellant and Respondent were the Plaintiff and Defendant in the High Court respectively.

Background

[4] By a quadripartite written agreement dated 26 February 2016 ("Agreement") made between the Respondent, Appellant, Siva Kumar Govindan (a director of the Respondent) and Hoe Hock Lai (a director of the Appellant), the Respondent appointed the Appellant as its exclusive mining sub-contractor to mine an area known as ML 16/2014 Lot P.a 26644 (PA 265864) Sungai Rawit, Mukim Semantan, Temerloh, Pahang consisting of 40.33 hectares (99.66 acres) ("Land") upon which the Director of Land & Mines of Pahang leased the Land to Bayu Mining Sdn Bhd ("Lessee"). The Lessee and the Respondent were also granted permission and rights as an operator to carry out development work and mining operation on the Land by the Director of Land & Mines of Pahang.

[5] The Agreement without its appendices is reproduced below:

[6] After the execution of the Agreement, the Appellant's and Respondent's representatives met on 19 May 2016 and 31 May 2016 and discussed on the Agreement ("Meetings"). The minutes of the Meetings are also reproduced Below:

[7] Since the conclusion of the aforementioned Meetings, there was no new agreement entered between the partis.

[8] AS a result, the Respondent via its solicitor Messrs. Bastion Vendargon wrote on 2 September 2016 and again on 7 September 2016 to the Appellant enquiring about the drafting of the new agreement.

[9] The Respondent thereafter on 29 September 2016 wrote to the Appellant to forthwith cease all operations until the new agreement is finalised and executed by the parties.

[10] The Respondent again via its solicitor Messrs. Bastion Vendargon wrote on 17 October 2016 to the Appellant giving the Appellant 2 weeks from the date of the notice to vacate the Land.

[11] The Appellant via its solicitor Messrs. R. Shan & Associates replied on 27 October 2016 to the Respondent's solicitor Messrs. Bastion Vendargon that the Agreement was still valid and on the Appellant's desire to continue to perform the Agreement. The Appellant also denied trespassing on the Land.

[12] Subsequently after the mining lease had been successfully renewed, the Respondent via its solicitor Messrs. Bastion Vendargon wrote on 29 November 2017 to the Appellant giving the Appellant 4 weeks from the date of the notice to vacate the Land.

[13] The Appellant via its new solicitor Messrs. Andrew-David Wong & Ong replied on 20 December 2017 to the Respondent' solicitor Messrs. Bastion Vendargon that the Agreement was still valid but the Appellant could not carry out mining activity since October 2016 because of the dispute between the Respondent and the Lessee on mining on the Land. The Appellant maintained that it was ready and willing to perform the Agreement and did