Lord Diplock :

(delivering the judgment of the Board): In 1931 an agreement relating to tin mining rights in Perak was made between three parties. It is convenient to refer to these parties and their respective successors in title as "the company", the "sub-lessees" and the "sub-sub-lessee". The company held mining leases from the State of Perak over four parcels of land. These the company had sub-let to the sub-lessees. The company was dissatisfied with the manner in which the sub-lessees were complying with their obligations to work the mines under the sub-leases and the contract provided that the sub-lessees should grant sub-sub-leases of these parcels to the sub-sub-lessee who was already mining adjacent parcels of land. The contract further provided that the sub-sub- lessee should mine the parcels of which the company was lessee together with the parcels already being mined by the sub-sub-lessee as a single mine under a comprehensive mining scheme. Clause 4 of this contract contemplated the acquisition by the company of mining leases over other parcels of land in the vicinity of those which formed part of the comprehensive mining scheme.

Many years later the company applied for mining leases over certain parcels of land in the vicinity of those referred to in the agreement of 1931. These applications were approved in 1959 and mining leases over the parcels, hereinafter called "the disputed parcels" were subsequently granted to the company. The sub-sub-lessee claimed that upon the true construction of cl 4 of the agreement of 1931 the company was obliged to grant sub-leases of the disputed parcels to the sub-lessees and the sub-lessees were obliged in turn to grant sub-sub-leases of the disputed parcels to the sub-sub-lessee. The company refused to comply with a request by the sub-sub-lessee that it should grant to the sub-lessees sub-leases of the disputed parcels. The sub-lessees on the other hand were willing to grant sub-sub-leases of these parcels to the sub-sub-lessee if they were given the necessary sub-leases by the company.

The sub-sub-lessee accordingly in July 1964 brought an action in the High Court against the company and the sub-lessees as defendants for specific performance of the contract and praying inter alia for (i) an order that the company execute sub-leases of the disputed parcels to the sub-lessees and (ii) an order that the sub-lessees execute sub-sub-leases of the disputed parcels to the sub-sub-lessee.

The company resisted these claims upon a number of grounds of which one was that upon its true construction the agreement of 1931 did not impose upon the company or upon the sub-lessees the alleged obligations to grant sub-leases and sub-sub-leases respectively of the new parcels. The sub-lessees by their defence admitted the claims of the sub-sub-lessee and at the trial of the action by their Counsel supported the argument of the plaintiff the sub-sub-lessee.

Upon the trial of the action Ali J held that the contract did not bear the construction alleged by the sub-sub-lessee and supported by the sub-lessees, and that it imposed no obligation upon the company to grant sub-leases of the disputed parcels to the sub-lessees or upon the latter to grant sub-sub-leases of the new parcels to the sub-sub-lessee. He dismissed the action and ordered the sub-sub-lessee to pay the costs of the company and of the sub-lessees.

At the time of the action the sub-sub-lessee already held sub-sub-leases of two parcels of land referred to in the agreement of 1931 and adjoining the disputed parcels. In respect of these two parcels she had entered into a contract with the first respondent to this appeal (hereinafter called "the contractor") whereby she granted to the contractor liberty to enter on the land and win the minerals on her behalf. The contractor undertook to work the mines in accordance with the Mining Regulations and to deliver the minerals when won to the sub- sub-lessee for sale. He was to be