Lord Guest:

The judgment of their Lordships was delivered by,

This appeal from the Federal Court of Malaysia concerns the construction of a single clause in a contract between the appellant and the management committee of Sandakan Chinese Secondary School, Sandakan. The appellant's letter of appointment at a salary of $310 per month, dated 15 October 1960 was for four years commencing on 1 January 1961 and expiring on 31 December 1964. The appellant received a letter, dated 8 October 1962 from the acting supervisor and chairman of the education sub-committee stating that his post as teacher at Sandakan Secondary School would not be continued from 8 January 1963 and that in pursuance of the terms of his contract with the education sub-committee he was given three months' notice to leave the service.

The official translation of cl. 4 of the contract is in the following terms:

The teachers and staff of the school must not during the validity of the agreement of appointment rescind the agreement of appointment except for very important matters. If, in case of special circumstances, release of or withdrawal from the appointment is necessary either party shall give three months' notice in advance.

In an action in the High Court in Borneo the appellant claimed that he had been wrongfully dismissed and claimed compensation. Harley J held that the appellant had been wrongfully dismissed and awarded damages at a sum equal to $330 a month from the date of his ceasing employment up to the date of judgment and a further $330 a month from that date until his re-employment or 31 December 1964 whichever should be the earlier. Upon an appeal to the Federal Court of Malaysia judgment was given allowing the appeal with costs.

Before referring to the evidence their Lordships desire to say that in their opinion the respondents' were correct in submitting that the trial Judge was in error in his construction of cl. 4 when he said:

In my view the intention was not to widen, but more likely to restrict, the common law reasons for dismissal.

Indeed, Counsel for the appellant did not support the Judge's construction of the clause. He conceded that if there was satisfactory evidence of special circumstances necessitating the appellant's withdrawal from the appointment in terms of cl 4, the dismissal would be justified.

There was no dispute as to the terms of the contract or that the appellant had been dismissed. The only question was whether his dismissal was justified. In order to succeed the respondents must justify his dismissal in terms of the contract and if there is doubt as to the meaning of the clause, then, as it is the respondents' document, it must be construed against them.

No reasons for the appellant's dismissal were given in the letter of 8 October 1962, but Tan Tze Shu, one of the respondents and a member of the managing committee, gave evidence. In his evidence he adduced three grounds for the appellant's dismissal. First, he alleged that under the unified scheme it would be necessary to reduce the appellant's salary from what he had previously been paid and that although the new salary would be within his contract, the appellant was not prepared to carry on. The witness departed from this allegation in his cross-examination and there is a finding of fact by Harley J adverse to this contention. Secondly, the witness alleged that the plaintiff was qualified only to teach in junior classes and that he refused to teach in senior classes. This ground could have no substance, as there was nothing in the appellant's contract stipulating that he should teach senior classes and in fact when he started the employment there were no senior classes in the school. No reliance was placed on this ground in the Federal Court or before the board.

Their Lordships now come to the only point of substance in the case. The witness Tan Tze Shun said in evidence "we could not keep plaintiff at $330 anyway because we had too large a ratio of