A Joint Venture Agreement concerning communal land is void ab initio if executed without necessary approvals from the government authority, resulting in lack of enforceability and rights over the land.

The Plaintiff's Case

[1] The Plaintiff is a company of limited liability in the oil palm plantation business which is suing the Defendants, who are the beneficiaries and registered owners of a parcel of land situated at Kampung Ingkukunoh in Keningau, measuring 60.23 hectares more or less held under a communal title, viz, Native Title No 133188542 ("the Land").

[2] The Plaintiff's cause of action is premised on the breach of a Joint Venture Agreement dated 10 January 2013 ("the JVA") with the 15 Defendants.

[3] On the same day, the 1st Defendant was made the donee of a power of attorney ("the PA") by the other Defendants to carry out and execute all acts in relation to the Land.

[4] Under the terms of the JVA, which was for a period of 30 years and renewable for 30 years, the Plaintiff agreed to develop the Land by planting and maintaining oil palm trees for the purpose of harvesting the fresh fruit bunches ("FFB") for profit which would be shared on a ratio of 70:30 (between the Plaintiff and the Defendants respectively.

[5] It was agreed that the "pembayaran pembahagian peratusan bersih" as just described would be payable after 4 years.

[6] It was also agreed that there would be an annual deduction of 15% to cover the costs of developing the oil palm estate.

[7] The Plaintiff says it has expended much money to develop the oil palm estate since 2013.

[8] The Plaintiff's case is that the Defendants have trespassed on the Land, in particular the 13th Defendant, who has harvested the FFB and sold them to an undisclosed third party, thus causing it losses of RM120,000.00.

[9] The Plaintiff wants to compel the Defendants to abide by and perform the terms of the JVA, and to restrain their trespass. It also seeks damages to be assessed, and costs on an indemnity basis.

The Defendants' Case

[10] The 6th, 7th, and 13th Defendants entered appearance, defended the action, and counterclaimed against the Plaintiff for an injunction to restrain the Plaintiff and its agents from entering, occupying, and planting on the Land. The 1st Defendant was said to be in ill health or incapable of speech, and was not served. The Plaintiff has thus not proceeded as against the 1st Defendant. The other Defendants took no part in the proceedings, though service of process was effected on them.

[11] The 6th, 7th, and 13th Defendants' pleaded case is that "the copy of the JVA, which was not signed by the Plaintiff, nor attested, was obtained by the said Defendants from the 1st Defendant."

[12] If, at all, it was meant to suggest that the JVA was not executed, the copy of the JVA in CBOD Part B bears the signature of the Directors, including PW1. It was not put to PW1 that he did not sign the JVA. In fact, PW1 was cross-examined on the basis that the JVA had been signed.

[13] In any case, one would think that it is not an issue for determination since it is an agreed fact that "on 10 January 2013, the Plaintiff and the Defendants entered into a Joint Venture Agreement (Perjanjian Usahasama)..... ". See SAF, para 3.

[14] With that out of the way, the main thrust of the 6th, 7th, and 13th Defendants' pleaded case is that there was no prior consent from the Director of the Lands & Surveys Department for the JVA, although the special terms of the title deed and the Land Ordinance required it. In consequence, the JVA was void ab initio, and unenforceable in line with s 24(a), (b) and (c) of the Contracts Act 1950 .

[15] Further, the Land is trust property, and as the Collec