Abdul Malek Ahmad FCJ:

The twenty-four appellants are all participants of a youth settlement scheme known as the Pujut/Lopeng Youth Settlement Scheme in the Fourth Division, Miri in Sarawak. The scheme had been established by the respondent with the primary objective of settling rural school leavers and to educate and train them to undertake economic and scientific farming. The supervising authority was the State Department of Agriculture.

Except for four of the appellants namely Andy Hisham bin Basnol, who continued the action upon the death of Basnol bin Abol pursuant to order of court dated 12 January 2001, Chong Kui Hiong (hereinafter "Chong"), who replaced Kong Hee Choi pursuant to order of court also dated 12 January 2001, Intai ak Utong (hereinafter "Intai") and Junan ak Salau (hereinafter "Junan"), all the other appellants are the original settlers who had joined the scheme in three batches from 1972 until 1976. Kong Hee Choi took over from his brother Roland Kong Oh Koi who passed away on 16 June 1987. He had written to the Miri Department of Agriculture to take over his brother's place. The Miri Department of Agriculture in fact accepted payments from him but he passed away and the action was continued by his wife Chong. Intai and Junan only joined the scheme on 18 September 1985.

Training had been initially provided to the original settlers who had been selected after a course. Upon selection, they were required to actively participate in the scheme communally and individually to the satisfaction of the respondent, to abide by the respondent's advice and instructions and to diligently and conscientiously cultivate and manage the padi and coconut plantations including livestock and any other crops short term or otherwise according to the principles of good husbandry for four years. They were expected to clear the swampy land of trees and vegetation, build drains and channels and construct bunds for the planting of padi, all these with their own sweat and toil.

On 24 June 1975, all the original settlers who joined the scheme had signed separate deeds of agreement with the respondent with similar terms and conditions. Each of them received a loan of RM6,800 of which RM5,000 was meant for the construction of a house to be erected and completed after the third year of the eight year settling period and RM1,800 for the monthly subsistence at RM50 per month for the first three years of participation. Repayment was at a rate of not less than RM50 a month. Each settler had to remain active in the scheme, pay the monthly repayment commencing from the last year of the settling period or earlier, and sell his farm produce to the cooperative society set up especially for the scheme. They were not allowed to make any structural alteration, addition or renovation to their houses or carry on other business or occupation without the permission of the respondent.

The appellants had filed an action against the respondent, the Superintendent of Land and Survey, Miri and the Director of Agriculture for a declaration that they were entitled to be issued with documents of title for the lots allocated to them under the deeds of agreement made between them and the respondent or alternatively for loss and damages in lieuof the issuance of documents of title pursuant to the offer letter dated 18 September 1985.

They relied on cl. 7 of the deed of agreement which reads:

7(a) Subject to the provisions of Clause 3(b), the Government will cause to be issued to the Borrower in the third year of the settling period a Temporary Occupation Licence each in respect of:

(i) the coconut lot containing ten (10) acres more or less in the Scheme; and,

(ii) the padi lot containing three (3) acres more or less in the Scheme.

(b) At the expiration of the seventh (7) year after the settling period shall have been completed (but not earlier) and if the Borrower shall have fully repaid the loan to the Government, the Government will cause to be issued to