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CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. Pelita Holdings Sdn. Bhd.

& 4 others)

MALAYSIA IN THE HIGH COURT IN SABAH AND SARAWAK AT SIBU SUIT NO. 21-7-2009 BETWEEN

1. 2. 3. 4. 5.

KADAM ANAK EMBUYANG [WNKP 490412-13-5281] GENTA ANAK SAKA [WNKP 460218-13-5299] BARTHOLOMEW AJI LANYAU [WNKP 510814-13-5255] RIMONG ANAK JANTAN [WNKP 490801-13-5365] LAJA @ MERIS AK AUGUSTINE IGOH [WNKP 670512-13-5535] [Suing on behalf of themselves and 163 other proprietors, occupiers, holders and claimants of Native Customary Rights (NCR) land situated at Sg. Kelimut, Kanowit District also known as Block D1 in Kanowit District]. … Plaintiffs AND

1. 2. 3. 4. 5.

PELITA HOLDINGS SDN BHD [Co. No. 182028-W] SUPERINTENDENT OF LANDS & SURVEYS, Sibu, Sarawak. STATE GOVERNMENT OF SARAWAK BOUSTEAD PLANTATIONS BERHAD [Co. No. 1245-M] BOUSTEAD PELITA KANOWIT SDN. BHD. [Co. No. 364761-H] … Defendants 1

CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. Pelita Holdings Sdn. Bhd. & 4 others)

JUDGEMENT A. 1. INTRODUCTION The Plaintiffs who brought this action for themselves as well as on behalf of those whose names are stated in the Annexure to the statement of claim are Iban by race and are natives of Sarawak. 2. The Plaintiffs have acquired native customary rights over their respective NCR Lands as stated and particularized in the map marked "M" annexed to the statement of claim [“the NCR Lands”] located at SG. Kelimut, Kanowit District also known as Block D1 of Kanowit District. The boundaries or extent of the respective said NCR Lands are as particularised in the annexure to the Principal Deed dated 14.1.2002, between the Plaintiffs and the 1st and 3rd Defendant. 3. The 1st Defendant Pelita Holdings Sdn. Bhd. (PHSB) is a company incorporated in Malaysia. 4. The 2nd Defendant is the Superintendent of Lands and Surveys, Sibu, employee of the 3rd Defendant (State Government of Sarawak), having jurisdiction over the native customary lands in question. 2

CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. Pelita Holdings Sdn. Bhd. & 4 others)

5.

The 1st Defendant entered into a joint-venture agreement with Kuala Sidim Berhad (now known as Boustead Plantations Berhad i.e. the 4th Defendant) on 6 May 1998 to develop into an oil palm plantation on all the native customary lands.

6.

The Plaintiff and the 1st Defendant and the 3rd Defendant executed a Principal Deed dated 14 January 2002 to develop the NCR Land into oil palm plantation.

7.

Kanowit Oil Palm Plantation Sdn. Bhd. (now known as Boustead Pelita Kanowit Sdn. Bhd.) i.e. the 5th Defendant was incorporated as the vehicle to implement the palm oil plantation on the NCR Lands.

8.

By the Summons in Chambers dated 15 March 2011, the 1st Defendant applied to add the 4th and 5th Defendants as defendants, the same was granted by the Court with consent of the parties.

9.

I would like to make an observation here. It is to be noted that the map marked “M” referred to by the Plaintiff as the map indicating the NCR Lands is in fact a list marked Annexure “M” setting out the names or persons on whose behalf the Plaintiffs allegedly have brought this action.

10.

There is, however, no dispute by the Defendants that the NCR Lands referred to by the Plaintiffs and the boundaries of 3

The foregoing express provisions in the Principal Deed clearly recognize the native customary rights of the plaintiffs to the NCR Lands mentioned in the Principal Deed. REPRESENTATIVE ACTION 4 .1. C. Clause 2 of the Principal Deed states: “RECOGNITION OF NATIVE CUSTOMARY RIGHT TO LAND Upon the representations made by the NCR Owners and being satisfied that the NCR Owners have acquired Native Customary Rights to or over the said land except State land therein). the Government as agreed.2002. Pelita Holdings Sdn. subject to the terms and condition of this Principal Deed: ….” 13. NATIVE CUSTOMARY RIGHT OF THE PLAINTIFFS The recital of the Principal Deed states: “WHEREAS the said land forms part of all that parcel of land which the Government has approved for development into an oil palm plantation as part of its overall scheme for development of land held currently under Native Customary Rights..CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. 11. Bhd.” 12. & 4 others) the respective NCR Lands are as particularised in the annexure to the Principal Deed dated 14. B.

not their land. …………. He affirmed in his witness statement (WSPW1) that the Plaintiffs have brought this action on their own behalf as well as on behalf of 163 families whose names are stated in the Annexure of the statement of claim. No. If like me I know 5 . It was put to PW1: Q69. 15. Bhd. agree? A Q70 No. the Plaintiffs pleaded that they bring this action on their own behalf as well as on behalf of the names or persons stated in the Annexure to the statement of claim.These statutory declarations from pages 1 to 34 are signed by numerous NCR owners declaring openly that the plaintiffs including you have not been given the authority to commence this action. In paragraph 1 of the statement of claim. During cross-examination of PW1.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. that is. & 4 others) 14. The Plaintiffs called only one witness. I have my own land. Iban still sleeping because they don’t know. you want to disassociate yourself from all these people in the statutory declaration. From your statement here. 16. he was referred to 34 statutory declarations contained in pages 1 to 34 of 1SDBD (1st Defendant’s Supplementary Bundle of Documents). Pelita Holdings Sdn. Agree? A . the 3rd Plaintiff Bartholomew Aji Lanyau.

support. Therefore. 2nd. 6 Takako Sakao v Ng Pek Yuen & Anor [2010] 1 CLJ 381 cited for . iii. The 3rd Plaintiff (PW1) has failed to fulfill the five main criterias to constitute a representative actions as laid down in Smith & Others v Cardiff Corporations [1953] 2 All ER 1373. They all had a common grievance. consistent with the unchallenged documentary exhibits tendered. 1st. iv. namely: i.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. They all had a common interest. Bhd. 4th and 5th Plaintiffs did not come forward to testify on their purported representative capacity to commence this action. They have a common subject matter. & 4 others) 17. (1) an adverse inference ought to be drawn against them under section 114(g) of the Evidence Act 1950 that this action is not a representative action as claimed and (2) the evidence of the 1st defendant is presumed to be true. b. ii. The Action must be for ‘all the members of the class’. Pelita Holdings Sdn. Learned counsel for the 1st Defendant submitted that this action is not a representative action on the following grounds: a.

iv. That PW1 had a different subject matter or grievance as he wanted more contracts for himself. That PW1 failed to show that the Natives had a common grievance on the common subject matter. & 4 others) v. it does not. The 1st defendant sought to show through exhibit 1-34 1SDBD that there are NCR landowners who have not authorized the Plaintiffs to represent them. In my view. The plaintiffs have listed out the natives whom they are representing in the Annexure "M" annexed to the statement of claim. c. in my view. it is not necessary that all the Plaintiffs and those for whom the action is brought must attend court to testify. in a representative action. The relief was in its nature beneficial to them all. which is not the case with the other natives. Bhd. ii.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. 19. Pelita Holdings Sdn. That the reliefs sought by PW1 would certainly harm the interest of the majority Natives concerned. The Plaintiffs and those whom they are representing are the natives who have entered into the Principal Deed. mean that the Plaintiffs 7 . That the majority Natives concerned were happy and did not share PW1’s views. 18. Even there is a faction among the NCR landowners who holds a dissenting view on this action. iii. It was submitted: i.

(as he then was) in Jok Jau Evong & Ors v Marabong Lumber Sdn. & Ors [1990] 2 CLJ (Rep) 2 625. Ltd v. the most serious of which were the blockades in Kelimut and Maong 8 .. Bhd. referred to John v Rees [1969] 2 All ER 274 where Megarry J said at page 284: “The artificial nature of the process is shown by the fact that. The learned judge went on to say: “Subject to the divisions in opinion between the two factions. as Fletcher Moulton LJ.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. all have common interest and a common grievance and seek relief beneficial to all they proposed to represent is they are successful in their action. the plaintiffs and those they purportedly to represent. 21. 20. Senior Manager. Pelita Holdings Sdn. Haidar Mohd.” 22. Bhd. testified that there were road blockades. and they are not liable for costs. Estate Department of Boustead Advisory and Consultancy Services and Boustead Estates Agency Sdn. DW4. though by estoppels or res judicata they will be bound by the results of the case. pointed out in Markl & Co. in addressing the issue of representative action and the common interest test. Noor J. & 4 others) cannot represent those who share the common interest and common grievance as the Plaintiffs. Knight Steamship Co Ltd [1910] 2 KB 1039. a plaintiff suing in a representative capacity does not have to obtain the consent of those whom he purports to represent. Bhd. staged by the NCR Landowners in various estates.

I am satisfied that this is a representative action. especially in 2008 and 2009. 23. The Plaintiffs pleaded in paragraph 5 of the statement of claim that the Defendants and their servants or agents represented to the Plaintiffs and/or promise. the Plaintiffs will benefit or profit through the development of the NCR Lands into an oil palm plantation. 9 . shares and estate in the NCR Land. Pelita Holdings Sdn. In the premise. their respective interests. the profits or benefits to be received after four years of planting 4 years of planting oil palm on the NCR Lands. (4) fraud and (5) illegality. To my mind. this goes to show there is a group of NCR Landowners sharing the same grievance as PW1 and therefore having the common interest in the present proceedings. D. & 4 others) estates by the Landowners. rights. 24. Bhd. and guaranteed to the Plaintiffs that in consideration the Plaintiffs assign absolutely to the 1st defendant as trustee.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. 25. PLAINTIFFS’ CLAIM The Plaintiffs’ claim is founded on (1) negligence (2) breach of trust (3) fraudulent representation.

In paragraph 7 of the statement of claim. 28. Pelita Holdings Sdn.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. 29. 27. The Plaintiffs pleaded in paragraph 6 of the statement of claim that 1st Defendant and/or the 3rd Defendant had failed. Bhd. the Plaintiffs pleaded that the Plaintiffs and/or their representative together with their advocates had attended a briefing at the District Office Kanowit. in paragraph 9 of the statement of claim that the 1st defendant and/or servants or agents of the 2nd and 3rd defendants had fraudulently misrepresented to the plaintiff that such joint venture with the 1st defendant would reap profits for the plaintiffs. & 4 others) 26. The plaintiffs claimed that they have suffered loss and damages as a result of the negligence and/or breach of trust of the 1st and/or 2nd and 3rd Defendants. and were informed by the investor Boustead’s servants or agents that the joint-venture with the st Defendant to date has never achieve any profits so far. neglected and/pr were in breach of their trust given them by the plaintiffs as the development program of the NCR land was a total failure with no foreseeable opportunity of making money or bring benefits or profits to the plaintiffs. In fact. The Plaintiffs pleaded by way of alternative. 10 . the joint venture in question is losing more than RM100 million.

Bhd. The planting of oil palm on the NCR Land started in 1996 or 1997 but to date there is no evidence that the joint venture is making money. 11 . c. Having the knowledge that the 1st defendant is not having the status of a native under the Land Code. when in fact this transaction is unlawful under the provisions of the Sarawak Land Code. all the Defendants and/or their servants or agents advised the plaintiffs to sign the Agreement in order to lure the Plaintiffs to part with their right and interest in the NCR Land for the defendants’ benefits. Having knowledge of the fact that the said joint venture would in all likelihood will not be profitable. (Land Code)]. & 4 others) Particulars a. represented to the plaintiff’s that after four years of planting the plaintiffs will receive their shares of dividends from the joint venture. The plaintiffs claim that such payment was not dividend from the profit but borrowed sum from somewhere with the intention of pacifying the plaintiffs’ anger towards the defendants. In the middle of 209. b. Pelita Holdings Sdn. the 1st defendant made some “dividend payment” to the plaintiffs when the joint venture in fact made no profit.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs.

ii. neglected and/or was negligent in protecting the interests of the Plaintiffs in the said NCR Lands against the investors and/or third party who was asked to develop the said NCR Lands. 31. A Declaration order that the Plaintiffs had acquired and/or inherited Native title and/or Native Customary Rights (NCR) over the area as claimed by the Plaintiffs respectively referred to in the Annexure to this Statement of Claim marked as exhibit “M” hereto herein (the said NCR Lands). the plaintiffs alternatively claim that the Principal Deed dated 14 January 2002 between the plaintiffs and the 1st defendant and any other agreement pursuant to this agreement or joint venture involving the plaintiffs is/are null and void and of no legal effect viz-a-viz on ground of fraud and/or section 8 of the Land Code. Bhd. & 4 others) 30. the Plaintiffs claim against the Defendants the following reliefs: i. In the circumstances. A Declaration that the 1st and/or 2nd or 3rd Defendants either jointly or severally were negligent in not ensuring that the third party and/or investor did their part as 12 . Hence. iii. Pelita Holdings Sdn. A Declaration that the 1st Defendant and/or 2nd and 3rd Defendants either jointly or severally had failed.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs.

Alternatively. the Principal Deed dated 14. Bhd. vii. A Declaration order that the Plaintiffs be given back their rights over the said NCR Lands respectively and be allowed to carry on any activities on the said NCR Lands with no order as to costs to the 1st Defendant and/or any 13 . A Declaration that 1st and/or 2nd or 3rd Defendants either jointly or severally were in breached of the trust given them by the Plaintiffs in developing the said NCR Lands in not ensuring that the third party and/or investor did their part as investor to profitably develop the said NCR Lands as guaranteed by all the Defendants to the Plaintiffs. Pelita Holdings Sdn. v. a Declaration that the Plaintiffs were defrauded by the Defendants by misrepresenting to the Plaintiffs that the said venture in developing the said NCR Lands would bring the Plaintiffs profits and benefit which is a total lie. viii. A Declaration that the in view of the breach in trust and the negligent of the Defendants vis-à-vis the Plaintiffs as aforesaid. & 4 others) investor to profitably develop the said NCR Lands as guaranteed by all the Defendants to the Plaintiffs.1.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. between the Plaintiffs and the 1st or 3rd Defendants and any other subsequent agreement pursuant thereof be deemed null and void.2002. iv.

Bhd. E. A mandatory injunction against the 1st Defendant and/or its employees. xii. alternatively.81). as between the Plaintiffs and the 1st Defendant is null and void and of no legal effect vis-à-vis section 8 of the Land Code (Cap. Damages to be assessed by the Registrar. xiii. as 14 . xiv. and servants remove and/or all agents to and cease their operations structures equipments or machineries from the Plaintiffs’ said NCR Lands forthwith. x.2002.1. Pelita Holdings Sdn.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. ix. Costs to be taxed unless agreed. xi. Alternatively. Exemplary damages.1. that the said the Principal Deed dated 14. aggravated damages. ISSUES TO BE TRIED (i) Whether the said Principal Deed dated 14.2002. Any further order or relief as the thinks proper and just. & 4 others) third party or investors for the development of the said NCR Lands.

whether public police need to be considered. & 4 others) between the Plaintiffs and the 1st Defendant is null and void and of no legal effect vis-à-vis section 8 of the Sarawak Land Code (“the Land Code”)? (ii) If the Principle Deed is illegal. (vii) Whether the servants or agents of the 1st. (iii) Whether the Plaintiffs are estopped from resiling from the Principal Deed and the subsequent Joint Venture Agreement? (iv) Whether the principle of unjust enrichment bars the Plaintiffs from being unjustly enriched? (v) Whether the 4th Defendant is entitled to restitution under section 66 of the Contracts Act 1950. (vi) Whether the 1st and/or 3rd Defendants had failed. Pelita Holdings Sdn. neglected and were in breach of their duties as trustees of the Plaintiffs. 2nd and 3rd defendants had fraudulently misrepresented to the plaintiffs that the joint venture with the 1st defendant would reap profits for the plaintiffs? (viii) Whether the Plaintiffs’ claim is statute-barred? 15 .CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. Bhd.

32.(1) Section 8 shall not be deemed to prohibit the acquisition by any non-native of any land to which the provision of that section apply. 16 . shall be deemed to have been entered into for an illegal consideration and. purporting to transfer or confer any such rights or privileges or which would result in such person enjoying any such right or privilege. in particular … any consideration which shall have been paid or furnished shall not be recoverable in any court nor shall any relief be afforded to any person claiming that any consideration promised has not been paid or furnished. & 4 others) (ix) Whether the Plaintiffs have bad motive? F. LEGALITY OF THE PRINCIPAL DEED The first issue concerns the legality of the Principal Deed.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. Bhd. Pelita Holdings Sdn. Section 8 of the Land Code states: “8. or of any rights or interest in or over such land – (a) to (c) – not applicable here. 33. ACQUISITION OF LAND BY NON-NATIVES 9. it is helpful to set out the relevant provisions in the Land Code. Before deliberation on this issue. Save as provided in section 9 — (a) a person who is not a native of Sarawak may not acquire any rights or privileges whatever over any Native Area Land … (b) any agreement.

by notification in the Gazette. 8 of the Sarawak Land Code ('the 17 . in respect of any category of dealing over Native Area Land as stipulated in the notification. by the Majlis Mesyuarat Kerajaan Negeri. widow and administratrix of Nyanau's estate. Thereafter. Nyanau anak Bunya ('Nyanau') was the registered proprietor of a piece of land classified as Native Area Land in Kanowit. a non-native. 34. In Pawa Ajah v Chung Kok Chinag & Anor [2002] 8 CLJ 752 (HC). Pelita Holdings Sdn. Following Nyanau's death in 1998. the plaintiff. a non-native is prohibited from acquiring any rights or privileges over Native Area Land and any agreement purporting agreement conferring such rights or privileges as to allow a non-native enjoy such rights or privileges is deemed to have been entered for an illegal consideration. & 4 others) (d) where such non-native has been deemed to be a native. Sarawak ('the land'). 35. Bhd. having contravened s. the first defendant sold the land to the second defendant and executed a memorandum of transfer in respect thereof. subject to section 9 of the Land Code.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. authorizing the latter to deal with the land. In 1991 Nyanau created a power of attorney in respect of the land in favour of the first defendant. applied for declarations that the power of attorney and the unregistered memorandum of transfer were null and void. By the clear provision of sections 8 of the Land Code.

I would also say that the execution of the power of attorney has resulted in those rights and privileges I have just mentioned being enjoyed and exercised by the first defendant. the right to charge or mortgage or raise a loan on security of the said land. the learned said: “Reverting to the facts of our case. (now JCA) 18 . the unrestricted right to sell the said land. the right to convert the title of the said land or to subdivide and surrender it. although the power of attorney states that the first defendant acts on behalf of Nyanau in exercising those rights.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. Pelita Holdings Sdn. & 4 others) Code') as well as section 2 and 24 of the Contracts Act 1950. a colourable devise entered into to facilitate an evasion of the Code and in fact deemed to be entered into Judge Clement Skinner J. in my view. Thus. have been acquired or gained or obtained or passed to the first defendant . in reality they had passed to and were exercised and enjoyed by the first defendant. 36.a non-native and that has been made possible only by virtue of the power of attorney. it is very apparent that practically every right and privilege except the nominal ownership in the said land has been parted with by Nyanau. The power of attorney was. the right to rent out or lease the said land. From the extent of the rights and privileges which have been granted over the said land under the power of attorney to the first defendant. it is very evident that those rights which are comprised in the usual ownership of the said land viz. In determining the issue whether the power of attorney had been entered for an illegal consideration and was hence invalid. Bhd.

Section 8(a) of the Land Code provides that 'a person who is not a native of Sarawak may not acquire any rights or privileges whatever over ... In 19 . Pelita Holdings Sdn. found that they were in violation of section 8 of SLC and held that the same to be null and void. native customary land . Lembaga Pembangunan Dan Lindungan Tanah & Ors [2011] 1 LNS 145 (HC) . be attracted unless TASB and TETANGGA had rights and privileges over the native customary rights land which the latter would turn into an oil palm plantation under the joint venture agreement.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. the Defendants cannot be heard to say that TASB and TETANGGA had not acquired rights and privileges in the native customary rights land that they have undertaken to develop into an oil palm plantation: How else could DW22 whose sole interest was to do business. the Court. Bhd. In a recent case of Masa Nangkai & Ors v. (now JCA)said: “The Joint Venture Agreement was also in contravention of Section 8 of the Land Code because neither TASB nor TETANGGA had been declared a native at the time of the Joint Venture Agreement and it did not matter that TETANGGA was subsequently declared a native because it is a principle of antiquity that things invalid from the beginning cannot be made valid by a subsequent act.. The learned Judge Linton Albert J. 8(b) of the Code.. which had nothing to begin with has relegated the landowners into absolute obscurity under the Principal Deed and as the landowners are total strangers to the Joint Venture Agreement.. upon examining the principal deed and joint venture agreement.” 37.' The parasitic role of PHSB. & 4 others) for an illegal consideration under s..

38. subject to the terms and conditions of this Principal Deed:- 20 . shall be void and unenforceable unless the statute itself saves the contract or there are contrary intentions which can reasonably be read from the language of the statute itself". Bhd. This is because the 1st Defendant is not a native and the intention of the Principal Deed is for the 1st Defendant to acquire the rights or privileges in the NCR Lands from the very beginning for a period of 60 years. To press home the arguments. [1990] 1 CLJ 675. On the strength of the two authorities mentioned above. references are made to the following provisions in the Principal Deed. it may be stated as a general principle that a contract the making of which is prohibited by statute expressly or by implication. [1990] 1 MLJ 361 Hashim Yeop A Sani CJ (Malaya) delivering the judgment of the Supreme Court said: "Thus. & 4 others) CHUNG KHIAW BANK LTD v. HOTEL RASA SAYANG SDN BHD & ANOR [1990] 1 CLJ 57 (Rep). the NCR landowners and the 3rd Defendant is illegal. in our view. Pelita Holdings Sdn.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. 39. learned counsel for the Plaintiff contended that the Principal Deed between the 1st Defendant. Clause 2 (a) & (b) of the Principal Deed states: “Upon the representations made by the NCR Owners and being satisfied that the NCR Owners have acquired Native Customary Rights to or over the said land (except State land therein). the Government as agreed.

enjoyment or 21 . Clause 4(1) (b) (c) (i) (ii) (iii) (d) of the Principal Deed states: 4(1). Bhd. Pelita Holdings Sdn. interfere with or impede or disturb the use. (c) whilst the Company is the registered proprietor of the said land (i) the NCR Owners shall have no beneficial. shares and estate in the said land. (b) (c) … that the term for the document of title shall be sixty (60) years from date of registration thereof. & 4 others) (a) to issue at the request of the NCR Owners. (ii) the NCR Owners shall not be entitled to apply for a sub-division or partition thereof under section 25 or 129 respectively of the Code.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. equitable or caveatable interest in the said land or any part thereof. legal. either directly or indirectly or howsoever. (b) they assign absolutely to PHSB as Trustee of their respective interests. rights. (iii) the NCR Owners shall not in any manner.… i.. The NCR Owners hereby jointly and severally declared that:(a)……. a registrable document of title for the said land in favour of the Company.

agreement over in respect of the said land or any part thereof with any other person. the NCR Owner or any of them shall not enter into any dealing. ii. provided that they shall not be entitled to claim any interest. 40. agreement or arrangement by any of the NCR Owners shall be void and invalid. right or estate to any area which. or to a company 22 .4 below. and unenforceable by the NCR Owners or any party or person claiming any interest or right under and virtue of such purported dealing. the Plaintiffs had practically lost their rights and privileges in their respective NCR Lands to either the 1st Defendant who is not a native or accorded a native title at the time of signing the Principal Deed. Learned counsel for the plaintiffs submitted that under the Principal Deed. agreement or arrangement. Bhd. (d) until after the expiry of the terms of sixty (60) years from the date of issue of the document of title for the said land to the Company.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. Clause 4(2) states: (a) The NCR Owners shall only be entitled to claim interests or rights to the said land after the Company ceases to be the registered proprietor thereof. [All emphasis added by the Plaintiffs’ counsel]. pursuant to clause 8. Pelita Holdings Sdn. is required for industrial or related purposes and the market value thereof has been paid to PHSB under clause 8. Any such dealing. & 4 others) development of the said land or any part thereof by the Company.

charges. Learned State Legal Officer further submitted that section 12(2) of the LCDA Ordinance states: “(1) Where a notice has been served upon the owner of any land in a Development Area under subsection (2) of section 11. Status of the 1st Defendant 41. which shall hold the same in trust to sell the land as soon as possible after the same has been developed and to hold the proceeds of the sale in trust for the owner. (c). Bhd. (e). It is. be deemed a non-native of Sarawak. (2) Where the Authority enters into an agreement with the owner of the land to do all such works as may be necessary to develop the land under the complete control of the Authority in accordance with any scheme relating thereto made under subsection (3) of section 11. the Authority may cause to be carried out or may undertake such works for the improvement or development of the land in such manner as is provided in paragraph (b). (d). expenses. and 23 . in my view. (f) or (g) of subsection (1) of section 10. 42. the owner shall forthwith take all necessary steps to convey or transfer his title or rights to the land to the Authority.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. interests. Land Custody Development Authority (LCDA) shall. for the purpose of the SLC. after deducting therefrom all costs. 43. an opportune juncture to consider the 1st Defendant’s status. Learned State Legal Officer for the 2nd and 3rd Defendant submitted that pursuant to section 3 of the Land Custody Development Authority Ordinance (LCDA Ordinance). Pelita Holdings Sdn. & 4 others) which is yet to be incorporated.

or payable under the agreement to the Authority in respect of the development. To avoid confusion. It was submitted that LCDA for all intent and purpose is the trustee for the natives who have rights to the customary land within the area declared as development area. There is a clear fact that the 1st defendant is a Native by virtue of section 3 of the LCDA Ordinance. 45. In doing so. LCDA (through the 1st Defendant) as trustee.” 46. it engages non-natives to undertake the task of carrying out the development work. PELITA is the acronym of LCDA. such a scheme is not illegal. is developing the NCR Lands for and on behalf of the Natives. Bhd. Recital (2) of the Joint Venture Agreement states: “The Sarawak Government has nominated Land Custody Development Authority (hereinafter referred to as “PELITA”) AND PELITA has subsequently nominated PHSB for appointment by the NCR Owners to act as trustee for and on their behalf for the development of the said Land into an oil palm plantation. 44. 24 . Pelita Holdings Sdn. for and on behalf of or for the benefit of the natives. & 4 others) fees incurred by. 47.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs.

when the PELITA/LCDA. or the State Secretary to whim powers have been delegated vide The Delegation of Powers (Dealing in Native Area Land) Notification 1995 (Swk. holding or dealing in any interest. as trustee of the NCR 25 . In my view. 51. The non-native statue of the 5th Defendant is evident in clause 3 of the Joint Venture Agreement (Exhibit D1). Exhibit D2 to confer native status to the 1st Defendant. If. by virtue of the 1st Defendant being an agent of LCDA/ PELITA and therefore entitled to derive the native status enjoyed by LCDA conferred by section 3(2) of LCDA Ordinance.” 49. that the Company be deemed a native for all purposes pertaining to the acquisition. which states: “PHSB shall.N. as soon as practicable after the incorporation of the Company. 55). apply to the Majlis Mesyuarat Kerajaan Negeri.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. 50. for a special direction pursuant to section 9(1)(d) of the Land Code. L. rights or estate in the said land or any part thereof. Bhd.e. Learned counsel for the 4th and 5th Defendant submitted that the 1st defendant is an agent of the PELITA/LCDA and by virtue thereof. & 4 others) 48. it is entitled to derive the native status as conferred by section 3(2) of the LCDA Ordinance. Pelita Holdings Sdn. it begs the question as to why it is necessary for the Majlis Mesyuarat Negeri Kerajaan to subsequently issue a Direction under section 9(1) of the SLC i.

CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. Pelita Holdings Sdn. Bhd. & 4 others)

Landowners, engaged the 1st Defendant (a non-native) as its agent to develop the native customary land into an oil palm plantation, it has merely created a relationship of principal and agency between the two entities. It does not in any way change the character of 1st Defendant as a nonnative. The 1st Defendant remains as a non-native and that is why the Majlis Mesyuarat Negeri Sarawak had to subsequently issue a Direction under section 9(1) of the SLC i.e. D2 to confer natives status on the 1st Defendant. 52. It is to be noted that Pursuant to the Land (Dealing in Native Area Land)(Authorisation)(No. 7) Direction 2011 made under section 9(1)(d) of the SLC, in exercise of the power conferred upon the Majlis Mesyuarat Kerajaan Negeri gazetted in Vol. LXVI No. 12 on 1st April, 2011, the 5th Defendant has been declared and deemed to be Native of Sarawak for the purposes of the SLC (Exhibit D2). The same shall be deemed to have come into force on the 1st December 1995. 53. Further, pursuant to the Land (Dealing in Native Area Land)(Authorisation)(No. 21) Direction 2011 made under section 9(1)(d) of the SLC, in exercise of the power conferred upon the Majlis Mesyuarat Kerajaan Negeri, gazetted in Vol. LXII No. 31 on 11 October 2007, Boustead Pelita Kanowit Sdn. Bhd. i.e. the 1st Defendant has been declared and deemed to be Native of Sarawak for the purposes of the SLC (Exhibit D3). The same shall be deemed to have come into force on 26

CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. Pelita Holdings Sdn. Bhd. & 4 others)

the 6th day of May, 1998.

Is the Principal Deed a Conditional agreement? 54. It is the common stance of all the five Defendants that the Principal Deed is not illegal. They contended that the Principal Deed is a conditional agreement conditional upon the granting of native status to the 1st and 5th Defendants, citing Penguasa (Jabatan Tanah & Survei, Bintulu) & Ors v Amit bin Salleh & Ors [2008] 4 MLJ 567 (CA) for support. 55. It D3. 56. In Amit Salleh case, the respondent (Natives) and Bumisar entered into a joint venture agreement to develop the land (a native communal reserve) for agriculture purpose. Pursuant to joint venture agreement, a joint venture company Bumisar Jaya was formed. Amongst the terms of the joint venture agreement were that Bumisar Jaya would submit a proposal to plant oil palm and other crops on the land and the respondent would apply to the authorities to convert the land from communal reserve land to mixed zone land for at least 60 years. Pending the approval of the various requests, the respondent with the help of Bumisar 27 was submitted that the relevant approvals were

subsequently given as evidenced by Exhibit D2 and Exhibit

CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. Pelita Holdings Sdn. Bhd. & 4 others)

Jaya planted teak and setang trees on the land. The parties terminated the JVA by mutual agreement. Then cessation order was issued on 7.12.1998 and the land ceased to be a native communal reserve. The Respondent commenced action for special damage being value of the loss of the trees and the deprivation of their customary rights, and general damages. 57. The High Court held that although the joint venture agreement, which sought to transfer rights or privileges over native area land to a non-native company, was void for illegality, the respondents were not attempting to recover the consideration from the JV but damages from the loss of the trees planted on the land that they were entitled to be compensated for the loss of their communal rights as well as for the crops. 58. At the appeal, the Court of Appeal posed this question: Is the JV Agreement illegal? In answer thereto, it said:

[15] In order to answer this, one must examine the contents of the JV Agreement against the provision of the law alleged to be contravened. [16] The recital and the operative part of the JV Agreement reveal that the objective of the parties was to enter into a business venture by setting up Bumisar Jaya to develop the said land for agricultural purposes. The shares holdings in this joint venture company were in

28

There. it was conditional upon the approval by the authorities for alienation and conversion the said land into a Mixed Zone Land before it could be transferred to Bumisar Jaya. Bumisar Jaya was to apply to the authorities concerned "for plantation of oil palms and for other agricultural purposes and shall commence and proceed with the plantation works on approval of the said Proposals". The reason is simply this: the JV Agreement was a conditional agreement. The Court of Appeal went on to say: [18] Having examined these principal terms of the JV Agreement. the Joint Venture Company (Bumisar Jaya Sdn Bhd) and for conversion of the said land from Native Communal Reserve into Mixed Zone Land for a term of at least sixty (60) years". This agreement conferred no right or privilege on Bumisar Jaya to deal with the said land until these pre-conditions were met. The agreement stipulates that the sale is subject to the approval of the Kelantan State Government and Ruler in Council. it is stipulated that "The Development Committee (respondents) shall apply to the authorities concerned for the alienation or transfer of the said land to.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. The Federal Court case of Foo Say Lee v. Pelita Holdings Sdn. Further. the plaintiff had entered into an agreement with the defendant to purchase the defendant's Malay Reserve land in Kelantan. In declaring the agreement is not 29 . Bhd. Under cl. It was conditional upon approvals from the authorities for the planting of oil palm and other agricultural products on the said land. 59. & 4 others) the proportion as disclosed. Ooi Heng Wai [1968] 1 LNS 38 supports this. And in cl. When an agreement contains terms that require compliance with statutory provisions then such agreement cannot be void for illegality. 3. I am of the opinion that they do not contravene this provision of the Code. 2 of this agreement.

I am of the view that the learned trial judge has erred in concluding that the JV Agreement is void for illegality. & 4 others) null and void for illegality the Federal Court said: If you read section 12(i) carefully.” [Emphasis added]. “Be it noted that the purported sale here was an "outright" sale.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. it will be apparent that only attempts to deal in Reservation land contrary to the provisions of the Enactment would be null and void so that though the agreement between the two parties could be regarded as an attempt to deal in reservation land it is not in my view. [19] This approach was reaffirmed by the Federal Court in Haji Hamid bin Ariffin & Anor v. I agree with the following observations made by the Plaintiff in Amit Salleh case: 30 . I would be inclined to consider it valid if it had been conditional and expressed to be subject to the State Authority (1) allowing the land to be exercised under section 4 or (2) agreeing to declare the Siamese lady a Malay for the purposes of the Enactment under section 19. Ooi Heng Wai". an attempt to deal in the land contrary to the provisions of the Enactment. [1976] 2 MLJ 79 where Suffian LP observed. 60. [20] Based on these authorities. vide Foo Say Lee v. Bhd. Pelita Holdings Sdn. Ahmad bin Mahmud [1976] 1 LNS 36. for such an agreement of sale does not purport to vest in a non-Malay right or interest in Malay Reservation land and is not "contrary to the provisions of subsection (1) of section 6".

That the alienation of the land be made only after the land is changed from Native Communal Reserve to Mixed Zone [para 16 of judgment quoted above]. c. & 4 others) a. [para 21]. d. Pelita Holdings Sdn. Learned counsel for the Plaintiffs submits that the Principal Deed in the present case reveals as follows: a. That the natives did the planting of the trees on the said native land as principal. whereas the non-native partner was only assisting in the planting [para 22 of judgment]. That the JV Co. b. That the non-native partner was not in occupation of the native land. 61.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. which allows the non-native partner to plant trees on the said land. Bhd. Bumisar Jaya shall only commence work after approval of the business proposal [para 16 of judgment quoted above]. Clause 2(a) of the Principal Deed states that from the 31 . There was no provision in the agreement. e. The word "occupy" denotes "the taking of possession for one's use" or "to hold on to possession of something" [paras 23-26 of judgment].

legal. (ii) the plaintiffs shall not be entitled to apply for a sub-division or partition thereof under section 25 or 129 respectively of the Code. as Trustee. (i) the plaintiffs shall have no beneficial. Bhd. equitable or caveatable interest in the said land or any part thereof. c. interfere with or 32 . b. Pelita Holdings Sdn. d. either directly or indirectly or howsoever. Clause 4(1)(c) of the Principal Deed states that whilst the JV Company is the registered proprietor of the said Land. & 4 others) very beginning the title over the said NCR land would be issued under the JV Company which was nonexistence then and non-native.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. (iii) the plaintiffs shall not in any manner. Clause 2(c) of the Principal Deed states that the term for the document of title shall be sixty (60) years from date of registration thereof. Clause 4(1)(b) of the Principal Deed states that the Plaintiffs therein jointly and severally assign absolutely to the 1st Defendant who was then not having a native status.

Pelita Holdings Sdn. & 4 others) impede or disturb the use. enjoyment or development of the said land or any part thereof by the JV Co. and unenforceable by the plaintiffs or any party or person claiming any interest or right under and virtue of such purported dealing. Any such dealing. Under the Joint Venture Agreement. a JV Company is to be incorporated by the 1st Defendant and KSB. f. agreement or arrangement. The following significant facts of this case are also observed: a. 62. as a vehicle to undertake 33 . Clause 4(1)(d) of the Principal Deed states that before the expiry of the 60 years period the plaintiffs or any of them shall not enter into any dealing. the 1st Defendant had already signed the Joint Venture Agreement with Kuala Sidim Berhad (“KSB”) (now the 4th Defendant) even before the Principal Deed was inked with the NCR landowners to develop the NCR Lands into oil palm plantation. Bhd. Clause 4(2) of the deed provides that the NCR landowners shall only be entitled to claim interest or rights to the NCR Lands after the JV Company ceases to be the registered proprietor thereof. agreement over in respect of the said land or any part thereof with any other person. e.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. agreement or arrangement by any of the plaintiffs shall be void and invalid.

Pelita Holdings Sdn. b. and in Maong. Pedai. & 4 others) the implementation of oil palm plantation i. and the name of the JV Company shall be Kanowit Oil Palm Plantations bhd. Bhd. Under Q & A13. 63.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. DW4 confirmed that the planting was completed in Kelimut in 1999.Kelimut in 1997. planting had already commenced in the 6 Estates . (now the 5th Defendant) (a non-native) had already entered the NCR 34 . c. Maong in 1998. Bawan and Mapai in 2001. under Clause 1 on Definitions.e. Pedai in 1998. Kanowit Oil palm plantation Sdn. by PHSB (as Trustee for the NCR Owners) and the Developer. It seems that even before the inking of the Principal Deed. for the commercial development on the said land into an oil palm plantation. Jih. Bhd. Bawan in 1998 and Mapai in 1999. according to DW4. Not only that the Joint Venture Agreement was inked prior to the Principal Deed. the Project. Jih in 1998. (now the 5th Defendant). Under cross-examination DW4 confirmed that no other Deed or Agreement had been signed between any of the Defendants and the NCR Owners before 14th January 2002. pursuant to the terms of the said Agreement. “Company” means a Company to be incorporated.

They claimed various declaratory reliefs relating to their native customary rights over land in the disputed area.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. 64. Under the principal deed PHSB. clause 4. (“PHSB” also the 5th Defendant in the present case). a Tetangga Arkab Pelita (Pantu) Sdn. (TASB) (the 3rd defendant). In addition. Bhd. Pelita Holdings Sdn. company formed and co-owned by PHSB and TASB undertook the development of oil palm plantation project. upon examining the principal deed (which contains similar recitals 5. Bhd. Linton Albert J. (TETANGGA). The LCDA wholly owns the Pelita Holdings Sdn. the State Government of Sarawak and a group of native customary rights landowners and a joint venture agreement of the same date between PHSB and one Tetangga Arkab Sdn. they contended that the Plaintiffs were aware that the plan project was to cover native customary rights land whose owners had given their consent as did the 4th defendant without whose sanction and approval the oil palm plantation project could not have been carried out. 65. clause 10 as the 35 . In Masa Nangkai’s case. the plaintiffs claimed to be entitled to native customary rights over the disputed area land. clause 2. Bhd. Bhd. The Defendant denied that the plan project that had been undertaken and established had in any way encroached on the Plaintiff’s alleged entitlement to land under native customary rights. & 4 others) Lands and started to plant the oil palm.

His Lordship said: “…. Firstly. & 4 others) Principal Deed in this case). Secondly. except for the names of the parties). Pelita Holdings Sdn. which has nothing to begin with was relegated the landowners into absolute obscurity under the Principal Deed and as the landowners are total strangers to the 36 .. 66.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. 4 and clause 2. the joint venture agreement between PHSB and TASB (which contains similar recital 1. a company exclusively chosen by PHSB under a joint venture agreement in respect of which the landowners are not even a party to. the native customary rights lands are immediately amalgamated and title is to be issued in the name of the 'joint venture' company and the landowners would have no beneficial legal equitable or caveatable interest in the land to be issued with title. was led to a finding that under the principal deed and the joint venture agreement.1 of the Joint Venture Agreement in the present case. Bhd. the commercial development of the native customary rights land into an oil palm plantation was to be carried out by a joint venture company formed by PHSB and TASB. PHSB was to receive and collect the benefits of the development of the native customary rights land into an oil palm plantation. To demonstrate his points. Thirdly.the parasitic role of PHSB. not the landowners. the rights and privileges of the natives had been reduced to ‘zero”. His Lordship set out the following aspects of the principal deed. In finding that the joint venture was also in violation of section 8 of the Land Code and therefore null and void.

Pelita Holdings Sdn. it is vivid that under the Principal Deed. 4(1)(b)(c)(d) and 4(2) together with the fact that the 5th Defendant had already entered the NCR Lands to start planting the oil palm. the NCR landowners’ rights and privileges have been reduced to “zero” as they have assigned them absolutely to the 1st Defendant (a nonnative). Bhd. 68. which is to reduced them to “zero”. 37 . the Defendant cannot be heard to say that TASB and TETANGGA had not acquired rights and privileges in the native customary rights land that they have undertaken to develop into an oil palm plantation: how else could DW22 whose sole interest was to do business.” 67. Reading Clauses 2(a)(c). be attracted unless TASB and TETANGGA has rights and privileges over the native customary rights land which the later would turn into an oil palm plantation under the joint venture agreement…. I have no hesitation to adopt the view or comment of the learned Judge on the effect of the principal deed and joint venture agreement on the rights and privileges of the native over their native customary land. & 4 others) Joint Venture Agreement. who then acquired the rights and privileges over the NCR Lands which they have undertaken to develop into an oil palm plantation.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. Although the Plaintiffs’ claim in Masa Nangkai’s case is their entitlement to the native customary rights over the disputed area and they were not parties to the principal deed or joint venture agreement.

supra. In Pawa Ajah. in examining the meaning of the word “acquire” as used under section 8 of the Land Code. By so interpreting that word. Having said that. Ng Ah Siew [1935] MLJ (Vol. I would interpret the word ‘acquire’ in the context in which it appears as meaning no more than to “gain” or “obtain” or “exercise” rights
and privileges over Native Area Land. 70. In that case the court first determined the intention of the Enactment by reading the relevant sections of the Enactment and then examined the transaction that had been entered into between the appellant and the respondent as a whole before deciding whether there was an attempt to evade the provisions of the Enactment. & 4 others) 69. the learned Judge said: Reverting to the facts of our case.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. Pelita Holdings Sdn. IV) where the court was called upon to interpret certain provisions of the Malay Reservation Enactment which prohibited the transfer or vesting of any right or interest of any Malay in reservation land to a non-Malay. Bhd. Clement Skinner J. the 38 . it is my view that the approach I should take in resolving this issue is that adopted by the appellate court in Idris bin Haji Mohamed Amin v. I do not
think that construction would lead to any absurdity or repugnancy or inconsistency with the rest of the provisions of the section or of the Code. In arriving at the finding that the rights of the Plaintiff in Pawa Ajah’s case had been “acquired” through the execution of the Power of Attorney. said: Accordingly. it is very evident that those rights which are comprised in the usual ownership of the said land viz.

Thus. although the power of attorney states that the first defendant acts on behalf of Nyanau in exercising those rights. and the 1st Defendant 39 .CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. in reality they had passed to and were exercised and enjoyed by the first defendant. the right to rent out or lease the said land. who is entrusted to find non-native to develop the Lands. the right to charge or mortgage or raise a loan on security of the said land. I would also say that the execution of the power of attorney has resulted in those rights and privileges I have just mentioned being enjoyed and exercised by the first defendant. & 4 others) unrestricted right
to sell the said land. have been acquired or gained or obtained or passed to the first defendant – a non-native and that has been made possible only by virtue of the power of attorney. Bhd. the right to convert the title of the said land or to subdivide and surrender it. The power of attorney was. From the extent of the rights and privileges which have been granted over the said land under the power of attorney to the first defendant. [See also. a colourable devise entered into to facilitate an evasion of the Code and in fact deemed to be entered into for an illegal consideration under s. Norhazlena Abdurani & Ors [2004] 7 CLJ 1] 5th Defendant was Developer For The NCR Landowners? 71. Pelita Holdings Sdn. it is very apparent that practically every right and privilege except the nominal ownership in the said land has been parted with by Nyanau. This brings me to the contention of the 4th and 5th Defendants for whom it has been submitted that the 1st Defendant is the trustee or agent of the NCR landowners. Awang Osen Awang Mat v. in my view. 8(b) of the Code.

it is vividly clear that Amit Salleh’s case is distinguishable from the facts in this case. but upon careful perusal of the contents of the Principal Deed and the Joint Venture Agreement.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. 74. In the present case. The Court of Appeal turned to the evidence which recorded that “the plaintiff planted the said trees through Bumisar Jaya”. 72. As such. Pelita Holdings Sdn. Bumisar Jaya carried out the task for and on behalf of the respondent who were at all material time the principal. Thus. the 1st Defendant entered into the JV Agreement with KSB (now the 4th Defendant) even before the inking of the Principal Deed with the NCR landowners. Further. the project is not illegal as the 5th Defendant is doing the planting on behalf of the NCR landowners. & 4 others) had engaged the 5th Defendant to develop the Lands into oil palm plantation. as stated earlier. citing Amit Salleh’s case for support. Bhd. The non-native was not in occupation of the Native Communal Reserve. At first blush this argument is persuasive. Kanowit Oil Palm Plantation 40 . 73. There was no provision in the agreement which allowed the non-native to plant trees on the land. The facts in Amit Salleh’s case distinctly show that the JV company Bumisar Jaya shall only commence work after approval of the business proposal and that alienation of the land be made only after the land was changed from Native Communal Reserve to Mixed zone.

the argument that the 5th Defendant was developing the oil palm plantation on behalf of the NCR Lands holds no water. 75. Bhd. Pelita Holdings Sdn. they reflect that the 5th Defendant had already acquired the rights and privileges over the NCR Lands for which it was incorporated to develop into an oil palm plantation. a nonnative. Quite to the contrary. it is my finding that the Principal Deed is not a conditional agreement as contended by the defendants. It is unchallenged fact that the retrospective effect of Exhibit D2 and D3 effectively confirmed the native status of the 1st 41 . The facts paint a picture not of the 5th Defendant planting oil palm trees for the NCR landowners. incorporated as a vehicle to implement the oil palm plantation project. The intention of the Principal Deed and the JV Agreement has clearly circumvented the prohibition in section 8 of the Land Code. In the light of the reasons aforesaid. Bhd.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. (now the 5th Defendant) had entered into the NCR Lands and started planting the oil palm thereon well before the execution of the Principal Deed. Retrospective Effect Of Exhibit D2 And D3 76. Thus. For this reasons. On the contrary. & 4 others) Sdn. the Principal Deed and the Joint Venture Agreement have clearly stripped the NCR landowners of their rights and privileges in the NCR Lands and the same are bestowed upon the 5th Defendant. I hold that they are illegal agreements.

78. I can do no better than to echo the following words Linton Albert J.” G. As stated earlier. Bhd. 1998. In this connection. the illegality produced by breach of section 8 remains. in Masa Nangkai. In absence of a validating clause to remedy and cure the actions which have produced the illegality. & 4 others) Defendant from 1 December 1995 and that of the 5th Defendant from 6 May.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. To my mind. That was illegal. supra: “the Joint Venture Agreement was also in contravention of section 8 of the land Code because neither TASB nor TETANGGA had been declared a native and it did not matter that TETANGGA was subsequently declared a native because it is a principle of antiquity that things invalid from the beginning cannot be made valid by a subsequent act. PUBLIC POLICY 42 . the 1st Defendant and 5th Defendant were non-native when they acquired the right and privileges over the NCR Landowners in contravention of section 8 of the SLC. Pelita Holdings Sdn. Exhibit D2 and D3 merely regulate their status by conferring the 1st defendant and the 5th Defendant a native status. Does the retrospective effect of Exhibit D2 and D3 validate the illegality produced by the breach of section 8 of the SLC? I should think not. 77.

& 4 others) 79. The views upon the principles of illegality operating under s 24 of our Contracts Act 1950 as expressed by the Chief Justice of Malaya on that occasion continue to be good law” 43 . citing Fusing Construction Sdn. Bhd. Bhd. [1990] 1 CLJ 675. [1990] 1 MLJ 361 is misplaced because it has been overruled by the Federal Court in Lori (M) Bhd (Interim Receiver) v Arab-Malaysia Finance Bhd [1999] 3 MLJ 81. v EON Finance Bhd & Ors [2000] 3 MLJ 95. but to further consider the question of public policy. harsh words of the documents therein. On the point that Chung Khiaw Bank case. Learned counsel for the 4th and 5th Defendant submits that the duty of the court is not only to look at the cold.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. & Anor [1990] 1 CLJ 57 (Rep). on Chung Khiaw Bank Ltd v Hotel Rasa Sayang Sdn. supra. Pelita Holdings Sdn. Bhd. it is useful to refer to this passage uttered by Sri Ram JCA in Fusing Construction: Now although so much of the judgement in the Chung Khiaw case as relates to s 67 of the Companies Act 1965 has been revered by the judgement of the Federal Court in Lori (M) Bhd Arab-Malaysian Finance Bhd [1999] 3 MLJ 81. 80. 81. we are unable to detect any overruling of the passage we have quoted a moment ago. supra. has been overruled by Lori case. [To read]. And public policy clearly favours for the preservation of the sanctity of contract and the observance by parties therein to the terms/ arrangement agreed. It was further submitted that the reliance by the High Court in Masa Nangkai.

That is the position in common law. Paragraphs (a).. Pelita Holdings Sdn. …. it would also seem clear that in considering illegality under the common law. 44 . Paragraph (a) deals with what is forbidden or prohibited by law. Section 24 of the Contracts At 1950 is explicit in that if an agreement is forbidden by law or prohibited by law or of such nature that it would be defeat the law. If the agreement is prohibited by law or forbidden by law or of such nature that it would defeat the law then the question of public policy does not arise at all. The relevant passage in Chung Khiaw case quoted in Fusing Construction reads: From the authorities. (b) and (e) of s 24 of the Contracts Act 1950 should be read disjunctively. The statute provides expressly that the considerations or objects referred to in paragraphs (a). The question of public policy arises only in para (e) where the court considers an agreement to be immoral or otherwise opposed to public policy. …. that agreement is unlawful and void. para (b) deals with what could be defeated the object of any law. (b) and (e) of s 24 shall be unlawful and the agreement which ensures shall be unlawful and void. But the courts in this country are bound by statutory provisions of our Contracts Act 2950. & 4 others) 82. The provisions of s 24 of our Contracts Act 1950 referred to earlier are explicit statutory injunctions. the question of public policy is often considered.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. and para (e) deals with public policy.. Bhd.

Native Customary Land or Interior Area Land (collectively referred to as classified lands) and stipulates that any agreement purporting to transfer or confer any such rights or privileges shall be deemed to have been entered into for an illegal consideration.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. 84. by notification in the Gazette. in respect of any category of dealing over Native Area Land as stipulated in the notification. 45 . Bhd. & 4 others) 83. this prohibition does not apply to a non-native who has been deemed to be a native by the Majlis Mesyuarat Negeri. the prohibition in section 8 is not absolute as section 9 of the same Code provides ways by which nonnative may acquire the land classified in section 8. Pelita Holdings Sdn. pursuant to paragraph (d) of section 9. Paragraph (b) thereof stipulates that illegal consideration which shall have been paid or furnished shall be irrecoverable in any courts and para (c) which impose a penal sanction against any persons who entered into the illegal an agreement purporting to transfer o confer any such rights or privileges. The clear wording in section 8 of the Land Code expressly prohibits non-native acquiring rights or privileges over Native Area Land. These two provisions show the serious intention of the Legislature in protecting and preserving the indigenous people’s native customary rights and privileges over the classified lands. However. Amongst others. The purpose undoubtedly is to protect and preserve the right or privileges of native customary rights which the indigenous people have acquired over the classified land.

& 4 others) 85. 86. Pelita Holdings Sdn. Bhd. This is because the Principal Deed and the Joint Venture 46 . supra.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. The facts as alluded to in the above clearly show that even before the issue of Exhibit D2 and D3 which give native status to the 1st Defendant and the 5th Defendant. ESTOPPEL Learned counsel for the 1st defendant submits that the Plaintiffs by their conduct cannot resile from the Principal Deed and the subsequent Joint Venture Agreement. the rights and privileges of the NCR Landowners were relegated to naught while the 5th Defendant had acquired the rights and privileges of the native customary rights over the NCR Land that they undertook to develop. In my judgement. 87. Since it does not fall into paragraph (e) of the Contracts Act. The making of these agreements are prohibited by statutes expressly and falls under paragraph (a) of the Contracts Act 1950. on the authority of Lori case. it is not necessary to consider the question of public policy. the 5th Defendant had already entered the NCR Lands and started cultivation and under the Principal Deed and the Joint Venture Agreement. the Principal Deed and the subsequent Joint Venture Agreement have contravened section 8 of the Land Code. H.

Boustead Treading [1995] Sdn. 88. 89. and to now plead alleged illegality of the Principal Deed in order to avoid the contract altogether. Pelita Holdings Sdn. Leong Huat Sawmill (Pte) Ltd v Lee Man See [1985] 1 MLJ 47. the plaintiffs are estopped from denying the promise and encouragement by themselves given to the 4th Defendant to develop the estates of the 5th Defendant. they cannot blow hot and cold and reap the inequitable benefits by declaring the agreements are illegal and wanting the native customary land back. Learned counsel for the 4th and 5th Defendants submits that applying the doctrine of promissory estoppel. Bhd. Having caused the 4th and 5th Defendant and the 1st defendant over the years to perform the contracts to their detriment and the 4th and 5th Defendant having invested millions to develop the native customary land. & 4 others) Agreement are not illegal in the first place. a document which was none of the 4th or 5th Defendants’ doing. Bhd.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. And upon this “promise” the 4th and 5th Defendants had relied to their detriment. 47 and Arab-Malaysia . It is also submitted that the Plaintiffs are estopped from denying the promise to the 4th Defendants that 60% of the joint-venture of the oil palm plantation on the Plaintiffs’ NCR Landowners would be for the benefit of the 4th Defendant. [1995] 4 CLJ 283. v Merchant Ban k Bhd. Reliance is placed on BSNC Corporation Bhd v Affin Holdings Bhd & Anor [2009] 8 MLJ 11.

the 4th and 5th Defendants would have an equitable interest in the oil palm plantation of the 5th Defendant. With respect. Additionally. Moreover. 48 . under the Joint Venture Agreement the 5th Defendant being a non-native had acquired and enjoyed the rights and privileges over the native customary land as from 1997 in contravention of section 5 of the Land Code. Pelita Holdings Sdn. submits learned counsel for the 4th and 5th Defendants. I do not think the equitable doctrine of estoppel is available to the 4th and 5th Defendants to be used as a sword in the present situation. which the Court ought to uphold and enforce. Thus. right from the start upon the inking of the Principal deed. It is not true that it was encouraged by the 1st defendant to enter the native customary land and to develop it. the Defendants had intended to acquire and enjoy the rights and privileges of the native customary land over which the oil palm plantation project. 92.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. Bhd. 91. As had been stated earlier. I have stated given my reason Exhibit D2 and Ex D3 do not remedy and cure the action which have produced the illegality produced by breach of section 8. & 4 others) 90. the 5th Defendant had entered the native customary land in 1997 even before the inking of the Principal Deed. meaning the Defendants were trespassing upon the NCR Lands.

His Lordship said: It is settled law that any attempt to contract out of clear statutory provisions will be void and wholly ineffective as being contrary to public policy (see Hotel Ambassador (M) Sdn Bhd v Seapower (M) Sdn Bhd [1991] 1 MLJ 221). & 4 others) 93. 49 . Bhd. in the sense that a court of equity will not attempt to enforce a covenant which is void at law (see 14 Halsbury's Laws(3rd Ed) p 526).CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. and governs the case with all its circumstances. as I have pointed out earlier. In this respect. or the particular point. 94. either at the common or statute law. In Hj Taib v Ismail [1971] 2 MLJ 36. a departure from it' (see Snells' Principles of Equity (26th Ed) p 26). I am of opinion that the maxim equity follows the law applies. it is established law that equity follows the law. In the case of Holee Holdings (M) Sdn Bhd v. Chai Him & Ors [1997] 1 LNS 424. is direct. and can as little justify. supra. Pelita Holdings Sdn. See Amit Saleh’s case. Augustine Paul JC referred to few cases where equitable principle including that of estoppels cannot be invoke in an illegal transaction prohibited by law. 'Where a rule. Syed Agil Barakbah J (as he then was) said at p 39: In the present case. a court of equity is as much bound by it as a court of law. The principle of Estoppel is a principle in equity. there cannot be a contractual licence because the parties apart from having contracted outside the Ordinance also contravened the provisions of the Ordinance which rendered the contract void and unenforceable at law.

Edgar Joseph Jr J (as he then was) said at p 356: In these circumstances. In other words. Pelita Holdings Sdn. particularly when as here. In Beesly v Hallwood Estates Ltd [1960] 2 All ER 314.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. in registering the charge. the charge having been registered in breach of an explicit statutory prohibition imposed on the title to the charged land pursuant to the provisions of s 120 of the NLC 1965. the non-compliance goes to the root of the thing. that which a statute has declared shall not be valid nor can compliance therewith be dispensed with even by consent of the parties or by failure to plead or argue the point at the onset: Surajmull v Triton Insurance Co Ltd AIR 1925 PC 83. if the terms of a statute are absolute and do not admit of any relaxation or exemption. the title or interest of the chargee is defensible since registration thereof had been obtained by means of an insufficient or void instrument (s 340(2)(b)) and also because the Registrar of Titles. Buckley J said at p 324: 50 . The defence of estoppels accordingly fails since there cannot be an estoppels to evade the plain provisions of a statute: Jagabandhu v Radha Krishna ILR 36 Cal 920. anything done in contravention thereof. Accordingly. & 4 others) In United Malayan Banking Corp Bhd v Sykt Perumahan Luas Sdn Bhd (No 2) [1988] 3 MLJ 352. Bhd. no court is at liberty to enforce as valid. had acted ultra vires the powers conferred upon him: s 340(2)(c). will be ultra vires and no person can be estopped from putting forward the contention that what was done was illegal or void: University of Delhi v Ashok Kumar Chopra AIR 1968 Delhi 131.

Bhd. and the former party has so acted. the latter party may be restrained in equity from enforcing the obligation on any footing inconsistent with the belief so induced and may be so restrained notwithstanding that he had received no consideration for the modification of his rights. in my judgment. As I understand this part of the law.) In Lloyds Bank plc v Carrick [1996] 4 All ER 630. any unregistered contract by the estate owner for the conveyance of the legal estate. it was held that a proprietary estoppel over an interest cannot be created indirectly when its direct creation has been prohibited by statute. as against the bank. it cannot create a cause of action. which has been described as promissory estoppel. nor to negative the operation of a statute (see 15 Halsbury's Laws (3rd Ed) p 176). be invoked to render enforceable a right which would otherwise be unenforceable. & 4 others) On this part of the case counsel for the plaintiff referred me to Central London Property Trust Ltd v High Trees House Ltd [1956] 1 All ER 256. it is that where one party is under an existing legal obligation to another. (Emphasis added.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. or not enforce it to its full extent. Hughes v Metropoliton Ry Co (1877) 2 App Cas 439 and to the statement derived from Combe v Combe [1951] 1 All ER 767 which is contained in 15 Halsbury's Laws (3rd Ed) p 175. It cannot be 51 . intending the former party to act on that footing. who has so acted as to lead the former party to believe that the latter will not enforce that obligation. or for the time being. The doctrine may afford a defence against the enforcement of otherwise enforceable rights. It cannot. Morritt LJ said at pp 641–642: Section 4(6) of the 1972 Act invalidates. Pelita Holdings Sdn.

Pelita Holdings Sdn. and by means of a proprietary estoppel binding on the bank. that which Parliament prevented her from obtaining directly by the contract it has declared to be void.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. 96. It was submitted that the development of the estate of the 5th Defendant on the native customary land were from the financing and investment of the 4th Defendant. the principle of unjust enrichment would bar the Plaintiffs from being unjustly enriched at the expense of the 4th Defendant. Bhd. & 4 others) unconscionable for the bank to rely on the non-registration of the contract. without which there would not have been any development of the native customary land from which the Plaintiffs are reaping the dividends and profit. On the strength of the above authorities that equitable principles advanced by the 4th and 5th defendants cannot be used to assist them. I do not see how it could be right to confer on Mrs Carrick indirectly. 95. now 52 . UNJUST ENRICHMENT It was contended for the 4th and 5th Defendant that if the Plaintiff succeeded in their claim. I.

v Perbadanan Nasional Bhd. [1991] 2 AC 548 and Woolwich Building Society v. The plaintiff is entitled to recover not damages. Bhd. but a quantified sum from a defendant who was not necessarily a wrongdoer and who was not bound by any contract or express undertaking to pay the sum claimed by the plaintiff. Karpnale Ltd [1992] 4 All ER 512. [1558-1774] All ER Rep 581 at 585). the principle does not give the courts a discretionary power to order repayment whenever it seems in the circumstance of the particular case just and equitable to do so.. Bhd. This principle has been authoritatively recognized in two judgments of the House of Lords: Lipkin Gorman (a firm) v. under a mistake of law). Macferlan [1760] 2 Burr 1005 at 1012. The recovery of money in restitution is not. [1993] AC 70. A person who has been unjustly enriched at the expense of another is required to make restitution to the other: see American Law Institute's "Restatement of the Law. IRC (No 2) [1992] 3 All ER 737. Restitution" (1937) Chapter 1. the recovery of money paid under a mistake of fact (though not. [2011] (relied on by the 4th and 5th Defendant). 1993) pp 12-13). a (b) (c) (d) (e) 53 . The circumstances in which such a noncontractual obligation can arise are various. Notwithstanding its roots in natural justice and equity. the Court of Appeal held: “We would gratefully distil the relevant fundamental principles as follows: (a) The principle of unjust enrichment requires the recipient of money to repay it when the circumstances are such that it is contrary to 'the ties of natural justice and equity' for him to retain it (see Lord Mansfield CJ's celebrated dictum in Moses v. . and Goff and Jones "The Law of Restitution" (4th edn. & 4 others) 97. or where the consideration in return for which the money was paid has failed.. Pelita Holdings Sdn. In Fernrite Sdn. historically and so far as English law is concerned. are well established examples.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. as a general rule.

100. the thing so done or delivered.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. and such other person enjoys the benefit thereof. Section 71 of the Contracts Act 1950:“Where a person lawfully does anything for another person. or to restore. or delivers anything to him. the latter is bound to make compensation to the former in respect of. and. not intending to do so gratuitously. Bhd. in exchange for the 60% benefits and profits in the joint-venture for the oil palm plantation.” 99. ” [Emphasis added by counsel] 98. It was submitted that given the clear and unchallenged evidence pointing to the financial contribution of the 4th Defendant in order to develop the NCR Lands. Pelita Holdings Sdn. [1991] 2 AC 548 at 578 per Lord Goff. nevertheless. it is denied on the basis of legal principle: See Lipkin Gorman [1992] 4 All ER 512 at 532. there is a clear basis for the grant of restitution in favour of the 4th Defendant in the event that the Plaintiffs be successful in their claim in the main suit (which is denied). A claim to recover money at common law is made as a matter of right. The question to be asked is this: Did the Plaintiffs benefit from the oil palm plantation project? The planting of the oil palm started in 1997 and the NCR landowners received their first 54 . & 4 others) matter of discretion for the court. even though the underlying principle of recovery is the principle of unjust enrichment. on the principals as enunciated above. where recovery is denied.

55 . Year 2010. which is RM250 per hectare.393 million in 2008. remarked . supra. Linton Albert J. The breakdowns of the dividends are: Year 2008.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. is. In Masa Nangkai. In our case. 104. Year 2011. 103. RM300 per hectare. 102. Bhd. RM150 per hectare.4 million for 2011. followed by RM1.00 per hectare. RM150. by any standard a pittance. Pelita Holdings Sdn. & 4 others) divided of RM1. RM100 per hectare for all estates.00 per hectare a miserly sum considering the fact that oil palm planted on their land had been harvested for more than three years. RM1.678 million in 2009. the NCR Landowners only received a misery sum of RM100-RM250 per hectare since 1997. The Plaintiffs (including PW1) accepted the dividends. A divided of RM150 per hectare after almost 14 years (from the time the 5th Defendant started planting on the native customary land in 1997) or almost 7 years from the execution of the Principal Deed. “It matters not that the landowners have been paid some dubious “up front” money of RM120.699 million in 2010 and RM3.” 105. 101. Year 2009. except for Kelimut estate.

According to DW3. for the company to pay dividend. Bhd. It is curious as to how the 5th Defendant who could not make enough profit to give out divided in previous years was able to make profit and give out dividend at the period where there was blockades disrupting the operation and productivity of the oil palm. According to him.. it cannot pay divided.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. DW3 Chin Sup Chien. Pelita Holdings Sdn. told the court under crossexamination that the 4th and 5th Defendants were not in the financial position to pay divided in September 2009 or any time before 2009. Bhd. it must achieve profit. The 5th Defendant tried to paint a picture that the yield improved and profit improved. 109. If it does not achieve profit. the 4th and 5th Defendants would be able to break even in 2024. [Q & A 281-285 of the notes of proceedings]. 56 . 108. hence the 5th Defendant was able to give divided from 2009-2000. & 4 others) 106. 107. I believe PW1 who testified that he attended a meeting during which the 4th and 5th Defendants’ agent informed that the joint venture with the 1st defendant had until then not achieved any profit. It had in fact made a loss of more than RM100 million. the Chief Financial Officer of Boustead Estate Agency Sdn.

111. and the Plaintiffs be given any of the remedies sought. Pelita Holdings Sdn. the 4th and 5th Defendants have forgotten that they have enjoyed the rights and privileges over the native customary land over all these years without paying anything to the Plaintiffs until 2009. as pleaded 57 .CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. So. & 4 others) 110. Just think. 112. the 4th Defendant are still entitled to. In alleging unjust enrichment. it is not true that the Plaintiffs have enriched themselves through the giving up of their native customary land for development into the oil palm plantation project. For the reasons stated aforesaid. SECTION 66 OF THE CONTRACTS ACT 114. I find no merits in the contention of unjust enrichment. they have been using the Plaintiffs’ NCR Land all the while from 1997 until 2007 without paying a single cent for the use of the lands. I believe PW1 who said that the Plaintiffs received their first dividend because there was blockades and complaints. Bhd. 113. I also believe that but for these complaints the NCR Landowners might not even received any dividend. J. Learned counsel for the 4th and 5th Defendant further contended that if the Principal Deed were to be held illegal in any way.

the 1st Defendant was appointed as the trustee of the Plaintiff. The 1st Defendant and/or the 3rd Defendant had failed.” 117. It is evidently clear that pursuant to clause 4.1(b) of the Principal Deed. 115. Bhd. 118. Suffice it to say that section 66 is not available to the 4 th and 5th Defendant because they are not the parties to the Principal Deed. The question is: whether 3rd Defendant stands in the same position as that of the 1st Defendant too? 58 . The Plaintiffs pleaded in paragraph 6 of the statement of claim thus: “6.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. Pelita Holdings Sdn. & 4 others) therefore in the counterclaim. WHETHER THE 1ST AND/OR 3RD DEFENDANTS HAD FAILED. neglected (sic) and/or were in breached of their trust given them by the Plaintiffs as the development of the said native customary lands was a total failure with no foreseeable opportunity of making money or bring benefits or profits to the Plaintiffs. restitution as is provided for in Section 66 of the Contracts Act. K. citing Lori (M) Bhd (Interim Receiver) V Arab-Malaysian Finance Bhd [1999] 3 MLJ 81. NEGLECTED AND WERE IN BREACH OF THEIR DUTIES AS TRUESTEES OF THE PLAINTIFFS 116.

Learned counsel for the Plaintiffs relied on Kerajaan Negeri Selangor & Ors v. In a system of Parliamentary democracy modelled along Westminster lines. The court explained what this “fiduciary duty” entails in the following words: When dealing with the plaintiffs’ claim against the defendants in respect of the gazetted portion. that it to say. through Parliament. But it is never 59 . the ultimate donors of the power. At other times it is to be exercised for the general good of the nation as a whole. The power is accordingly held in trust for the people who are. & 4 others) 119. This finding was never attacked before us during argument. The donee of the power – the public body – may be a Minister of the Crown or any other public authority. Sometimes the power conferred is meant to be exercised for the benefit of a section or class of the general public. Bhd. Pelita Holdings Sdn. it is Parliament which is made up of the representatives of the people that entrusts power to a public body. Sagong Tasi & Ors [2005] 4 CLJ 169. the learned judge found the first and fourth defendants to be fiduciaries. It follows that every public authority is in fact a fiduciary of the power it wields.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. in the public interest. The judge’s judgment on this point is as follows: There is nothing startling in the trial judge holding the first and fourth defendants to be fiduciaries in public law. It does this through the process of legislation. where the Court of Appeal agreed to the pronouncement of the learned trial Judge of the fact that the Selangor State Government in that case owe a fiduciary duties to the indigenous respondents in that case. as is the case here.

It was submitted that the legal role of the 3rd Defendant as clearly stated in the above authorities is that of a “trustee or fiduciary” vis-a-vis the Plaintiffs. the native customary land was developed into oil palm plantation 60 . 120. The 3rd defendant should intervene at any time to ensure that the interests of the Plaintiffs herein are protected from the beginning to the end. In that case the land in question had been acquired and compensated by the appellant under the Aborigines Peoples Act. Pelita Holdings Sdn. The respondents were claiming for entitlement to compensation for the deprivation of their land in accordance with the Land Acquisition Act. Instead the 3rd defendant chose to leave everything in the hands of the 1st Defendant. it is clearly proven that the 3rd Defendant was involved from the very beginning of the said project as shown through all the documents at page 1 to 13 of PBD. 121. the courts will intervene in the discharge of their constitutional duty.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. It was also submitted that in the present case. Bhd. In our instant case. & 4 others) meant to be misused or abused. 122. 1960. Learned State Legal Officer for the 2nd and 3rd Defendants contended that Sagong Tsai’s case should be distinguished from the present case. 1954. And when that happens.

the principle of the Government being a trustee or fiduciary to the people is incorporated under Article 39(1) of the Sarawak Constitution. 126. 124. “It shall be the responsibility of the Yang di-Pertua Negeri to safeguard the special position of the Natives and the legitimate interest of other communities in accordance with the provision of this Article”. 123. and was informed by the Bounstead’s servants or agent that the joint venture with the 1st Defendant to date has never achieved any profit. 61 . In my view. & 4 others) which the Plaintiff had consented to and the crux of the Plaintiffs’ claim is purely on contractual dispute. The question now is whether the 1st Defendant and/or the 3rd Defendant had breached their duty as trustees. with the servants of the 1st Defendant and Boustead PELITA Kanowit Sdn. Pelita Holdings Sdn. I am of the view that the 3rd Defendant is in the same position of the 1st Defendant as the trustee of the Plaintiffs. In fact. Bhd. As such. he and a few of the Plaintiff together their advocate attended a briefing at the District Office Kanowit. 125. the joint venture of the native customary land is losing more than RM100 million up until then. which states. Bhd. PW1 told the court. that on 25 March 2009. which is unchallenged.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs.

560. The 5th Defendant’s operations were financed solely by the 4th defendant. Bhd. By the end of year 2007.” 129. The loans carried interest at 8% per annum as of that date. amount owing to and the 4th Defendant advances interest stood of of at RM380. the estate was okay. 62 .681. financially by the end of 2007? Shareholders’ equity of the 5th Defendant was a deficit of RM160. DW3 who said in his witness statement marked WSDW3: Q11.088.955 had exceeded ordinary share capital of RM34.065 comprising unpaid about about RM185.648. But on the operation side. Pelita Holdings Sdn.334.776. What was the position of the 5th Defendant. DW3 testified in cross-examination: Q281 Can you tell the court by the month of September 2009.110. & 4 others) 127. Such fear was confirmed by the financial controller of the 5th Defendant.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs.955 because accumulated losses of RM194.000 (refer to page 9 of the audited financial statements 31 December 2008). 128.746. RM194. the project related to this claim as far as the 4th and 5th Defendants was concerned was still losing? A Yes. A11. PW1 said that this disclosure shocked the Plaintiffs as by then it was the 8th year after the planting of the oil palm and there is still certainty of when the investor could break even in their business.

63 . the company must achieve profit. and administrative side. Q283 A Would the 4th and 5th defendants at that stage be able to pay dividend to the participant of the project in 2009? For the company to pay dividend. DW3’s evidence supports what PW1 and the Plaintiffs had been told in the meeting. He named them as Slvester Entri Anak Maran. it is okay. DW3’s foregoing testimony is in respect of the month of September 2009. 2nd or 3rd Defendant had promised them to be paid their first dividend after four years of planting the oil palm. it was not possible to pay dividend. Bhd. & 4 others) Q282 A What do you mean by that? That means. costs. Were they in the position to pay any dividend at any time before 2009? From the company financial position. Q284 A Q285 A I am asking were the 4th and 5th Defendants in the position to pay dividend in September 2009? No. if you exclude the interest. it cannot pay dividend. Mr Yap of Boustead and Steven Sunny. and the meeting in Kanowit attended by PW1 was in March 2009. 131.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. Pelita Holdings Sdn. If it does not achieve profit. 130. PW1 said that the agents or servants of the 1st.

Notwithstanding that the Plaintiffs did not call the named Sylvester Entri Anak Maran. Hence.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. which states. Given that the concept of developing NCR land into oil palm plantation was new to the native landowners in the mid-90s. it is fair to say that the NCR landowners would need to be convinced to participate in the development scheme. It is pertinent to consider the objective of the development of NCR lands into oil palm plantation.) Haji Abdul Taib Mahmud. it is highly probable that the representatives of the 1st Defendant and the 3rd 64 . The objective is best described in the following words penned by YAB Datuk Patinggi Tan Sri (DR. in his “Perutusan” on the program book for the launching of the oil palm plantation project in Kanawit found on page 4 Exhibit PBD. I say so for the following reasons. Chief Minister of Sarawak. it is reasonably expected of them for wanting to know what it was in it for them in terms of monetary benefit and how soon they would enjoy these benefits. Since the objective of the NCR Lands Development is to raise the living standard of the rural indigenous folks. Mr Yap of Boustead and Steven Sunny. I believe it is highly probable that such representation had in fact been made. & 4 others) 132. “Rancangan Kerajaan untuk memajukan Tanah NCL adalah merupakan rancangan yang terbaik untuk meletakkan taraf hidup Bumiputra di luar Bandar diatas garis kemiskinan…” 134. Pelita Holdings Sdn. 133. Bhd.

137. Bhd. The 4th and 5th Defendants sought to adduce evidence through DW4. landowners are outside foreign workers. Pelita Holdings Sdn. 65 . land development of the project. It is unlikely for them to tell the NCR Landowners that they have to wait for the company to make profit before they could enjoy dividend. PW1 testified that the NCR landowners received the first dividend in 2008 in a paltry sum between RM120-250 per hectare. NCR wages resistant higher to than or the industry disputes/ownership amongst landowners. 135. 136. unreasonable demands on the management of the 5th Defendant and blockades. challenges such as NCR landowners are not focused on the landowners demanded practice. NCR landowners are unfamiliar with agricultural practices.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs.129 hectares are available for development). DW3 said in cross-examination that the 4th and 5th Defendant would be able to break even in Year 2024. to show the reasons that have affected the profitability of the project.639 hectares out of 14. such factors include reduced available development area (only 12. & 4 others) Defendants would have represented to the NCR Landowners that they would receive profit after four years.

the Plaintiffs had no income whatsoever from the NCR Lands. neglected and/or in breach of the trust given to them by the Plaintiffs. the fact remains that the Plaintiffs did not receive their divided after four years of planting and they received their first divided only after eight years or so from the Principal Deed. Pelita Holdings Sdn. Further. 139. 2ND AND 3RD DEFENDANTS HAD FRAUDULENTLY MISREPRESENTED TO THE 66 . only after the blockades and suing the 1st to 3rd Defendants in court. the Plaintiffs have proved on the balance of probabilities that 1st and 3rd defendants had failed. Bhd. The 3rd Defendant having been involved right from the start in the development program in encouraging the natives to participate in the development program as shown in Exhibit 1 to 13 of PBD should ensure that the interest of the Plaintiffs are protected from beginning to end.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. instead of leaving everything in the land of the 1st Defendant. and by L. WHETHER THE SERVANTS OR AGENTS OF THE 1ST. The 1st and 3rd Defendant have breached their trust duty as the development program on the NCR Land was a total failure with no foreseeable opportunity of bring benefits or profit to the Plaintiffs. & 4 others) 138. The divided thus received was not from the profit as evident in DW3’s testimony. only paid to pacify the Plaintiffs’ anger towards the Defendants. In my judgement. in the meantime before the Plaintiffs could receive their dividends. Whatever the reasons that may be.

e. the party cannot raise limitation unless pleaded. 142. Learned counsel for the 1st defendant submits that PW1 reneged and breached the Principal Deed due to greed of wanting more profit. & 4 others) PLAINTIFFS THAT THE JOINT VENTURE WITH THE 1ST DEFENDANT WOULD REAP PROFITS FOR THE PLAINTIFFS? 140. when the Principal Deed was signed and/or misrepresentation occurred.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. Having considered the submission and the evidence adduced by the Plaintiff in this connection. it was contended that under section 143. N. the time would begin to run from the time when the act was caused i. LIMITATION 2(a) of the Public Authorities Protection Act. M. Upon a careful perusal of the statement of defence filed by all the Defendants. because he knows now that NCR Land had been planted with oil palm trees. For all the Defendants. Hence. BAD MOTIVE 141. Pelita Holdings Sdn. Bhd. 1948. it is to be noted that none of the Defendants have pleaded the issue of limitation. millions have been 67 . on the authority of Mohd Ali Abdul Majid [2012] 1 CLJ 691. suffice it to say that the Plaintiffs have not proved on beyond reasonable doubt the fraudulent misrepresentation.

Q & A 76. 70. The failure. Bhd. 144. In my impression. Pelita Holdings Sdn. whose anger and bitterness had resulted from his failure to obtain contracts from the Defendant. & 4 others) invested. 69. Learned counsel for the 4th and 5th Defendants submits that the credibility of PW1 has been compromised to a very large extent as the ravings of a bitter man. the anger of the PW1 is understandable as he has felt let down on the promise that the NCR landowners would be paid the first dividend four years after the planting of the oil palm had commenced. fraudulent misrepresentation because he wanted to cancel the Principal Deed. he has his rights and 68 . negligence. so he alleged illegality. 145.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. Instead of having received the reasonable profit. In my judgement. or the inability rather. He readily admitted he tried to get contract from the 5th Defendant and was unhappy that they gave them to Semananjung people instead. 146. which he said was too little. He also admitted that the attitude of the NCR Land by not allowing outside workers or Indonesian workers to enter their land had caused problems for the estate. PW1 is an honest witness who admitted that the focus of the claim is the profit. Even then the dividend he finally got to receive was a pittance. See. to call other witness to support his case lends credence to the proposition that PW1 is acting alone herein in this action.

the Plaintiffs did not bring this action with bad motive. he does not stand alone in having this feelings judging from the blockades that took place in 2008 and 2009. Bhd. COUNTER CLAIM OF 4th and 5th DEFENDANTS 148. the court finds as follows: a. O.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. In conclusion. b. I dismiss the counterclaim of the 4th and 5th Defendants. In the light of what has been said under Paragraph J “Section 66 of the Contracts Act”. The retrospective effect of D2 and D3 only regularise the 69 . In my judgement. that the Plaintiffs have proven on the balance of probabilities that the Principal Deed and the JV Agreement are illegal and therefore null and void. 147. In my opinion. P. Pelita Holdings Sdn. CONCLUSION 149. & 4 others) privileges in his NCR Land being reduced to naught for a paltry sum and not having opportunity to obtain contracts in the estate. That it is admitted fact that the Plaintiffs have NCR over the land described in the Principal Deed (the said NCR Land”).

b.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. As such. d. A Declaration that in view of the breach in trust of the 1st and 3rd Defendants vis-à-vis the Plaintiffs as aforesaid. the following orders are made: a. that the Plaintiffs have proved on the balance of probabilies that the 1st and the 3rd Defendants have breached or negligent or failed in their fiduciary duty to the Plaintiffs. & 4 others) capacity of the 1st and 5th Defendants but do not validate the illegality produced by breach of section 8 of the SLC. A Declaration that the 1st and 3rd Defendants either jointly or severally were negligent in not ensuring that the third party and/or investor did their part as investor to profitably develop the said NCR Lands as guaranteed by all the Defendants to the Plaintiffs. c. As the defence of Limitation is not pleaded and the Defendant cannot rely on it to defeat the Plaintiffs’ claim. estoppel is not available as a sword to the Defendants. Accordingly. the 70 . Bhd. e. that the Plaintiffs have failed to prove beyond reasonable doubt the fraudulent misrepresentation. Pelita Holdings Sdn. 150.

e.1.2002. Bhd.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. f. & 4 others) Principal Deed dated 14. Pelita Holdings Sdn. servants and/or agents to cease operations and remove all structures and their equipments or machineries from the Plaintiffs’ said NCR Lands within 15 days hereof. Cots be to the Plaintiffs.2002. A Declaration order that the Plaintiffs be given back their rights over the said NCR Lands respectively and be allowed to carry on any activities on the said NCR Lands with no order as to costs to the 1st Defendant and/or any third party or investors for the development of the said NCR Lands. the Principal Deed dated 14.81). 71 . d. A mandatory injunction against the 1st Defendant and/or its employees. between the Plaintiffs and the 1st and 3rd Defendants and any agreement in connection thereto are deemed null and void.1. as between the Plaintiffs and the 1st Defendant is null and void and of no legal effect vis-à-vis section 8 of the Land Code (Cap. c. [The rest of the page is intentionally left blank].

Lot 5430. Mr.……. Pelita Holdings Sdn. 93350 Kuching. & 4 others) Dated the 30th day of April.………………… DATUK YEW JEN KIE. 9. Shankar Ram Messrs. 1st & 2nd Floor. Petra Jaya. 2012. 97000 Bintulu. Jalan Rumbia. Leslie Entigar Linton Messrs Battenberg & Talma Advocates No. Advocates No. Mcwillyn Jiok Sarawak State Attorney-General’s Chambers Tingkat 15 & 16.6. Section 50. For Plaintiff: …. J. Lot 355. Advocates 1st Floor. 93100 Kuching. Law Gek Soon Road. Baru Bian & Co. 93502 Kuching. Baru Bian Messrs. Mr. For 1st Defendant: For 2nd & 3rd Defendants: For 4th & 5th Defendants: 72 . 2nd Floor. Mr. RH Plaza. Jalan Lapangan Terbang. Wisma Bapa Malaysia.CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. Thomas Shankar Ram & Co. Bhd. Block G. Mr.

CASE NO: 21-7-2009 (Kadam Anak Embuyang & 3 others vs. & 4 others) Notice: This Judgment is subject to formal correction on typographical errors. 73 . Bhd. Pelita Holdings Sdn.