Mahadev Shankar JCA

This is an appeal by Prestasia Sdn Bhd ('the company') against the dismissal of their claim for tribute from the respondent, Mow Wai Lan ('Mow') under a quarry lease agreement.

In February 1992, the company had secured the rights to operate a quarry on a piece of land ('the land') within the Bukit Cerakah Forest Reserve, on the terms set out in a letter dated 21 February 1992 from the Forest Department of Selangor.

The exploitation of these rights became the subject matter of a formal agreement between the parties dated 18 August 1992 ('the agreement'). Mow was represented by Shearn Delamore & Co ('Mow's previous solicitors') and the company was represented by Messrs LE Tan & Co ('the company's solicitors'). The agreement is a formal document running into some 11 pages. Quite simply, the objective of the agreement was for the company to make over all its mining rights to the land to Mow. This objective was achieved in the agreement by providing that the company would give Mow an irrevocable power of attorney to conduct all the required operations on the land by way of a lease for 30 years. Upon the execution of the agreement, Mow was required by cl 9 of the agreement to pay 'RM100,000 as deposit for her compliance with the terms of the agreement'. Such deposit was 'to be returned to her upon termination of the agreement free from interest'. Clause 3 of the agreement provided that the 30-year lease shall commence immediately upon the execution of the agreement, and that Mow shall commence excavation works on the land within eight months from the execution of the agreement failing which the company was entitled to terminate the agreement. Clause 6 of the agreement provided the rate of tribute shall be RM1.50 per ton of rocks, stones, and other material produced and sold from the land with a provision that Mow shall pay to the company a minimum of RM15,000 by way of tribute per month in the event that the rocks produced shall be less than 10,000 tons per month. Clause 13 of the agreement provided that it was expressly agreed that:

(i) if a party hereto fail to perform the terms of the agreement, the party shall be entitled to specific performance; and

(ii) the company shall have the right to terminate the lease in the event of non-payment of tribute money or non-compliance by Mow with the terms and conditions of the agreement by giving Mow six months' notice in writing.

By cl 4 of the agreement, the company demised to Mow all the quarries, strata, seams, and bits of rock and other minerals which may be obtained by quarrying and excavating from the surface and underground workings within the land. For this purpose, by cl 5, the company granted to Mow the right to enter the land to search for and obtain by excavations and quarrying the demised rock, spar and other minerals and to carry away, make merchantable and dispose of the same for Mow's own use and benefit. Amongst other rights granted by the company to Mow was in cl 5(5), ie 'to make the rocks got hereunder into marketable products and for that purpose to erect on the land and operate asphaltic concrete patching plants and other appliances and conveniences'. Nowhere in the agreement did the company represent or warrant the quality of the rocks or minerals to be found therein. The only place in the agreement where the word granite appears is in cl 11 (sub-para 3(iii)) which required Mow 'to keep regular and proper records of the quantity of granite, rocks, stones and other minerals'. By cl 11(ii) of the agreement, Mow took upon herself the obligation to pay tribute on or before the 10th day of the next calendar month following upon the sales of the rocks and stones and the products in the month before, and by cl 11(ii) of the agreement, Mow contracted to obtain all the necessary licences, permits, permissions and approvals from the relevant authorities in order to work the land.

On or about 9 October 1992, a licence was obtained from the Director