Ian HC Chin J:

Introduction

This is an action by Sababumi (Sandakan) Sdn Bhd ("Sababumi") against the Sandakan Turf Club ("the Club") in respect of, what is virtually, the right to millions of dollars that keep and will keep rolling in for years to come from the bets of punters in Sabah whose dream of striking it rich also spun a web which the punters, blind to the odds they face, would be entrapped to bet again and again in the eternal hope of realising that dream. Thus, the till of the one who has the legal right to organise the gaming rings daily with a continuous stream of ringgit. The tussle in this case is the right to that till and the ownership of that right depends on the construction to be given to an agreement which the parties have signed. I will now proceed to set out the facts of this case.

Facts of Case

On 25 November 1983, the Club was registered under the Societies Act, 1966. Just less than three months later, on 14 February 1984, the Club was exempted from the provisions of the Gaming Ordinance (Cap. 50) ("Ordinance") pursuant to s 27(a) thereof and this has the effect of allowing the Club to carry out gaming activities in the like of totalisator or pari mutuel, an on-course betting, which was otherwise prohibited by the Ordinance. On the same day as well and in pursuant to s 27(b), the Club was given a licence "to promote and organise public lotteries (including sweepstakes, 3-digit numbers, 4-digit numbers) in any part of Sabah upon the following terms and conditions:-

(1) the said public lotteries shall only be promoted and organised in conjunction with race meetings held by the Club;

(2) tickets for the said public lotteries may be sold on days other than those on which race meetings are held;

(3) tickets for the said public lotteries may be sold by the Club through persons employed by the Club or through agents duly appointed by the Club;

(4) tickets for the said public lotteries may be sold in any part of Sabah; and

(5) any prize money not claimed within one month from the date of drawing of the public lottery to which the prize money relates shall be forfeited and disposed off by the Club at the Club's discretion.

Undoubtedly, discussion and negotiations must have taken place before the Club and Sababumi entered into the Agreement dated 26 November 1987, ("the Agreement"), but nothing was said about them. What was revealed was that the Club was financially unable to construct a modern racecourse. It was nearly four years after they were issued the said exemption and licence that the Club entered into the Agreement, the preamble of which states, inter alia, that the Club and Sababumi have agreed to co-operate in the construction of the race course, the management of the racing facilities and the setting up of the betting facilities Since argument was advanced touching on the preamble of this Agreement, the preamble is reproduced here:-

WHEREAS the Club intends to acquire a piece of land in the District of Sandakan for the setting up of a race course with racing and betting facilities

AND WHEREAS the Club has been granted exemption from the provisions of the Gaming Ordinance Cap 50 by the relevant authority in respect of any totalisator or pari mutuel to be promoted or operated by it on the proposed Race Course (hereinafter referred to as 'the said Exemption').

AND WHEREAS the Club has also been granted the necessary licence to promote and organize public lotteries (including sweepstakes 3-D and 4-D) in any part of Sabah under the Gaming Ordinance Cap 50 Sabah (hereinafter referred to as 'the said Licence').

AND WHEREAS the Parties hereto have agreed to co-operate in the construction of the race course and the management of racing facilities in Sandakan and the setting up of the betting facilities in accordance with the terms and conditions hereinafter provided.

As for the terms of the Agreement, the obligations imposed by the Agreement on Sababumi can be summarised this way:-

(1) to purchase 100 acres of land f