Legal precedents require courts to consider commercial reality and public interest when interpreting contracts, particularly involving state agencies.

Hamid Sultan Abu Backer JCA:

[1] There are two appeals before us relating to the same decision of the learned trial judge. The first appeal is Appeal No: B-01-343-09-2014 and the appellant is the 1st defendant in the court below. The second appeal is Appeal No: B-02- 1520-09-2014 and the appellant is the plaintiff in the court below.

[2] The parties had agreed that Appeal No: B-01-343-09-2014 should be heard first and will be bound by the decision to decide the fate of the second appeal.

[3] We heard the appeals on 1 July 2015 and allowed Appeal No: B-01-343-09-2014 and dismissed Appeal No: B-02-1520-09-2014. My learned brother Balia Yusof Wahi JCA and learned sister Badariah Sahamid JCA have read the judgment and approved the same.

[4] This judgment must be read with the judgment of the High court reported as Perbadanan Riadah Sdn Bhd v. Setiausaha Kerajaan Negeri Selangor & Anor, 2014 MarsdenLR 439 for comprehensiveness, as well as to appreciate the facts and arguments originating from the High court.

Brief Facts

[5] The facts of the case had been set out in detail by the learned judge. We do not wish to labour on that save to say: (i) the plaintiff who is a developer entered into a joint venture with the state's agencies, namely the 1st and 2nd defendants, to develop the property for a specific purpose, namely a housing and industrial project in Sepang, Selangor; (ii) the 1st defendant was to give vacant possession within six months; (iii) that did not take place; neither did the plaintiff demand vacant possession; (iv) it was also within the knowledge of the plaintiff that the said land was leased by the state and/or its agencies for the purpose of sand dredging activities by third parties The said lease can be terminated and vacant possession can be given. This issue is not in dispute.

[6] Memorandum of Appeal No: B-02-1520-09-2014 reads as follows:

"1. The learned judge erred in law and in fact in dismissing the appellant's/plaintiff's claim against the respondent/2nd defendant.

2. The learned judge erred in law and in fact in finding that the respondent/2nd defendant was "more the project manager and agent of the 1st defendant".

3. The learned judge erred in law and fact in finding that the respondent/2nd defendant "should also be found as an agent that is personally and separately liable pursuant to s 183 Contract Act 1950".

4. The learned judge erred in law in his appreciation of s 183 Contract Act 1950.

5. The learned judge failed to appreciate the fact that the respondent/2nd defendant was a party to the Joint-Venture agreement.

6. The learned judge failed to take into account that the respondent/2nd defendant's duties and obligations to the appellant/plaintiff are stated in the Joint Venture Agreement.

7. The learned judge erred in law and fact in finding respondent/2nd defendant is the agent of the 1st defendant."

[7] Memorandum of Appeal No: B-01-343-09-2014 reads as follows:

"1. Yang Arif Hakim Pesuruhjaya Kehakiman Yang Bijaksana telah khilaf di sisi undang-undang dan fakta kerana memutuskan liabiliti adalah terhadap perayu. Sebelum perbicaraan penuh kes tersebut, pihak-pihak telah bersetuju untuk buktikan ("establish") liabiliti sahaja dan ganti rugi akan ditaksirkan kemudian.

2. Yang Arif Hakim Pesuruhjaya Kehakiman Yang Bijaksana telah khilaf di sisi undang-undang dan fakta kerana gagal mengambil kedudukan undang-undang bahawa sebagai pihak-pihak kepada suatu Perjanjian Usahasama, perayu dan responden mempunyai hubungan fidusiari di antara satu sama lain.

3. Yang Arif Hakim Pesuruhjaya Kehakiman Yang Bijaksana telah khilaf di