Gunn Chit Tuan SCJ:

[1] The appellant, Associated Pan Malaysia Sdn Bhd, owner of a quarry as well as a cement manufacturing factory, appealed against the decision of Anuar J in the High Court at Kuala Lumpur on 9 March 1990, in favour of the respondent, Syarikat Teknikal and Kejuruteraan Sdn Bhd, a contractor for quarrying works.

[2] The claim by the respondent was for damages for breach of contracts. There were three agreements entered into between the appellant and the respondent. The first contract for the period from 3 September 1979 to 31 December 1980, was for quarrying works. The respondent was also to carry out operations of constructing haul roads from the quarry to the crushing plant.

[3] For a period of six months after the expiration of the first contract there was no written agreement signed by the parties but the respondent carried on with the quarrying works on terms set out in the first contract.

[4] The second contract was from 1 July 1981 to 30 June 1983, and the third contract was from 1 July 1983 to 30 June 1985. That third contract was extended for another year with effect from 1 July 1985 to 30 June 1986 (see letter dated 4 June 1985).

[5] The appellant was