Lee Hun Hoe (Borneo) CJ:

I have read the judgement of Chang Min Tat FJ with which I agree. I would like to say a few words on two matters.

First, an attempt was made by respondents to amend the defence and counterclaim during the hearing of this appeal. Normally, application for amendment should be made at the trial as early as possible to prevent surprise. The terms of the amendment should also be submitted at the earliest possible time to the other party or parties and handed to the Judge when the application is made. Appellant only came to know of the intention of respondents to apply for amendment on the day of the hearing of this appeal. Although r. 8(1) of the Federal Court (Civil Appeals) (Transitional) Rules, 1963 and O. 58 r. 4 of the Rules of the Supreme Court confer on this Court the power of the High Court as to amendment it has rarely been exercised. If amendment was necessary respondents should ask for leave to make it at the proper time and in the proper manner. This Court will only permit amendment on very good ground and strong justification. Leave to amend was refused.

Secondly, the defence of illegality must fail in limine. The significant common feature of the cases of Lo Su Tsoon Timber Depot V. Southern Estate Sdn. Bhd. and Sundang Timber Co. Sdn. Bhd. v. Kinabatangan Development Co. Sdn. Bhd. was the transfer by a colourable device of rights under a timber licence issued under the forest legislation. In both cases the agreements were held to be illegal, being in breach of the forest legislation. The facts of the present case are very different from the two cases in that the transaction did not involve the transfer of rights under a timber licence which was in the hands of Sugut Enterprise Co. Sdn. Bhd. The transaction merely involved the taking over by one contractor from another contractor of contract works for and with the consent of Sugut Enterprise Co. Sdn. Bhd. A TOL is not the same as a timber licence as the former is issued by the Land Office under the provisions of the Sabah Land Ordinance. It is difficult to see how the transaction between two contractors not involving any transfer of rights under a timber licence could be said to be illegal. Appellant tried all he could to get the Assistant Collector of Land Revenue to grant a TOL to respondents. Until the TOL was cancelled, respondents had been using the road and houses under it. Although the TOL is not transferable the statute does not prohibit letting of a house built on land held under a TOL. The letting on rent does not amount to a transfer of a licence and is not illegal. In Govindaraju V. Krishnan and Ban Seng v. Yap Pek Soo appellant never transferred the TOL to respondent. All the appellant did was to permit respondent to use his rights under that TOL. There was nothing illegal about such an arrangement.

I agree that the appeal be allowed with costs here and in the Court below and that judgment be entered in favour of appellant in the sum claimed and that the counterclaim be dismissed. Deposit to be refunded to appellant.

JUDGMENT

Chang Min Tat FJ (read by Lee Hun Hoe CJ (Borneo):

The appellant, Tindok Besar Estate Sdn. Bhd, was the contractor employed under an agreement in writing dated 20 October 1971, by Sugut Enterprise. Co. Sdn. Bhd. (Sugut) for the extraction of timber. The extraction was to be at the rate of 2,400 acres per year so that in a concession of 17 square miles or 9,600 acres approximately, the contract had about four years to run. The contractor was to furnish the necessary vehicles and to provide the buildings for the accommodation of the workers and for other necessary purposes and also to build the road leading to and from the timber area. It consequently bought under hire-purchase agreements five caterpillar vehicles. It applied for and obtained a Temporary Occupation Licence (TOL) and over the ribbon of land comprised in the TOL, it constructed at its own costs a road. Perhaps the more correct ver