Keruntum Sdn Bhd v The Director of Forests & Ors

[2017] 3 MLJ (Hasan Lah FCJ) 281

A
Keruntum Sdn Bhd v The Director of Forests & Ors

FEDERAL COURT (PUTRAJAYA) — CIVIL APPEAL NO 01(f )-22–10

B OF 2014(Q)
ARIFIN ZAKARIA CHIEF JUSTICE, HASAN LAH, ZAINUN ALI, ABU
SAMAH NORDIN AND AZIAH ALI FCJJ
15 MARCH 2017
C
Civil Procedure — No case to answer — Conclusion of plaintiff ’s case
— Whether plaintiff at close of case failed to prove Minister of Resource
Planning/Chief Minister committed tort of misfeasance in public office by
cancelling plaintiff ’s timber licence on political grounds — Whether defendants
D had no case to answer — Whether Minister no duty to testify to refute plaintiff ’s
allegations — Whether no adverse inference could be invoked against defendants
for not calling Minister to testify — Whether plaintiff ’s claim in tort time-barred
under Public Authorities Protection Act 1948 — Whether plaintiff could not
maintain contractual claim for revocation of licence as licence itself was invalid
E and/or tainted with illegality for non-compliance with s 2(2)(b) of the Sarawak
Forests Ordinance

The third respondent had granted the appellant a non-transferrable timber

licence over 188,926 hectares in Baram for a period of 25 years from October
F 1983. Under s 2(2)(b) of the Sarawak Forests Ordinance (‘the Ordinance’),
where a company was issued with such a non-transferrable licence, it had to
obtain the first respondent’s approval to any change in the company’s
controlling shareholding. After it had obtained the licence, the appellant’s
controlling shareholding underwent a major change but it did not obtain the
G first respondent’s approval. On 11 March 1987, the first respondent notified
the appellant that its licence had been revoked (‘the first revocation’). The
appellant challenged the revocation and succeeded in quashing it in the High
Court. The High Court’s decision caused s 2(2) of the Ordinance to be
amended such that, in future, the Minister concerned was required, before
H cancelling or suspending any timber licence/permit, to first give the holder
thereof notice to show cause why the licence/permit should not be
cancelled/suspended. Pursuant to that amendment, the second respondent
(‘R2’), who was also the Chief Minister, issued a show-cause letter to the
appellant in view of the latter’s continuing breach of s 2(2)(b) of the Ordinance.
I The appellant’s request for a right of oral hearing and for arbitration was not
considered a satisfactory reply to the show-cause letter and R2 cancelled the
282 Malayan Law Journal [2017] 3 MLJ

appellant’s licence (‘the second revocation’). The appellant sued the A

respondents in the High Court for declaratory reliefs and damages both for
breach of contract (ie the alleged wrongful cancellation of the licence) and for
the tort of misfeasance in public office. The appellant claimed R2’s cancellation
of the licence was politically motivated and malicious and hence his action was
a misfeasance in public office. The appellant referred to a political attempt (‘the B
Ming Court affair’) to unseat R2 as Chief Minister and claimed that, in
retaliation, R2 had proceeded to revoke the timber licences of those who had
been associated with that attempt and that the appellant’s case was one such
case. Following a trial, the High Court dismissed the appellant’s claims. It held
that: (a) the appellant could not maintain any claim for breach of contract for C
the revocation of the licence because the licence was invalid and/or tainted with
illegality for being in breach of s 2(2)(b) of the Ordinance; (b) the appellant had
failed to prove the licence was cancelled for a political purpose, hence the tort
of misfeasance in public office had not been proven and there was no case for
the respondents, particularly R2, to answer; (c) no adverse inference could be D
invoked against the respondents for not calling R2 to testify; and (d) the
appellant’s claim in tort was time-barred under the Public Authorities
Protection Act 1948 (‘the PAPA’). The trial court’s decision was upheld by the
Court of Appeal (‘the COA’). In the instant appeal against the COA’s decision,
the appellant argued that as it had adduced sufficient evidence to show R2’s E
cancellation of the licence was politically motivated, the courts below were
wrong to have held that it had not proven its case on balance of probabilities to
require R2 to have testified to refute the various allegations that were made
against him. The appellant also contended that limitation did not apply in the
instant case because the revocation of the licence was a ‘continuing wrong’ and F
also because s 2 of the PAPA did not apply to a tort of misfeasance in public
office.

Held, dismissing the appeal:

G
(1) On the facts of the case, there was no duty on the respondents to have
given evidence in their defence. The appellant had not adduced sufficient
evidence to prove that the second respondent knew about the Ming
Court affair before or at the time he made the decision to revoke the
appellant’s licence so as to shift the onus of proof to the defence. The
H
respondents did not have a case to answer at the end of the appellant’s
case. Under the circumstances, the second respondent’s failure to give
evidence could not give rise to any apparent consequences. On the other
hand, there was clear evidence that there was a transfer of the controlling
interests in the appellant company without the consent of the Director of
I
Forests and the appellant had clearly breached s 2(2)(b) of the Ordinance
(see paras 69, 76 & 80).
 Keruntum Sdn Bhd v The Director of Forests & Ors
[2017] 3 MLJ (Hasan Lah FCJ) 283

A (2) The appellant’s failure to prove the second respondent’s knowledge of the
Ming Court affair resulted in its failure, at the end of its case, to prove its
pleaded case that the revocation of the licence was done for a political or
collateral purpose and that the tort of misfeasance in public office had
been committed by the respondents. As such, the evidential burden had
B not shifted to the defence and there was no duty on the respondents,
especially the second respondent, to refute the appellant’s allegations by
way of oral evidence (see para 77).
(3) This court agreed with the trial judge’s finding that the action in respect
of the first revocation of the appellant’s licence was time-barred under
C
PAPA and that the termination of the licence did not result in any
continuing injury to the appellant when it was prevented from entering
the licensed area after the High Court quashed the first revocation. This
court also agreed with the finding that there was only one act of
revocation of the appellant’s licence, which act was completed on
D
11 March 1987; that that act itself did not involve any element of
continuance but constituted a complete cause of action and the appellant
did not need to wait till the High Court had quashed the first revocation
before it commenced its action because what the appellant complained
about was the alleged wrongful act which had caused it loss or damage
E
(see paras 85–86).

[Bahasa Malaysia summary

Responden ketiga telah memberikan perayu lesen kayu balak yang tidak boleh
F dipindah milik ke atas 188,926 hektar di Baram untuk tempoh 25 tahun dari
Oktober 1983. Di bawah s 2(2)(b) Ordinan Hutan Sarawak (‘Ordinan
tersebut’), di mana syarikat dikeluarkan lesen tidak boleh pindah milik, ia perlu
mendapat kelulusan responden pertama untuk apa-apa pertukaran dalam
pegangan saham majoriti syarikat. Selepas is telah memperoleh lesen itu,
G pegangan saham majoriti perayu menjalani perubahan besar tetapi ia tidak
memperoleh kelulusan responden pertama. Pada 11 Mac 1987, responden
pertama telah memberitahu perayu bahawa lesennya telah dibatalkan
(‘pembatalan pertama’). Perayu telah mencabar pembatalan itu dan berjaya
membatalkannya di Mahkamah Tinggi. Keputusan Mahkamah Tinggi
H menyebabkan s 2(2) Ordinan tersebut dipindah agar, pada masa hadapan,
Menteri berkaitan dikehendaki, sebelum membatal atau menggantung
mana-mana permit/lesen kayu balak, untuk terlebih dahulu memberikan
pemegang notis untuk menunjukkan sebab kenapa lesen/permit itu tidak
patut dibatal/digantungkan. Berikutan pindaan tersebut, responden kedua
I (‘R2’), yang juga Ketua Menteri, telah mengeluarkan surat tunjuk sebab
kepada perayu mengenai pelanggaran berterusan perayu terhadap s 2(2)(b)
Ordinan tersebut. Permohonan perayu untuk hak didengar secara lisan dan
284 Malayan Law Journal [2017] 3 MLJ

untuk penimbangtaraan tidak dianggap jawapan memuaskan kepada surat A

tunjuk sebab itu dan R2 telah membatalkan lesen perayu (‘pembatalan kedua’).
Perayu telah menyaman responden-responden di Mahkamah Tinggi untuk
relif-relif deklaratori dan ganti rugi kerana melanggar kontrak (iaitu
pembatalan salah lesen yang dikatakan itu) dan untuk tort misfeasans dalam
jawatan awam. Perayu mendakwa pembatalan lesen R2 itu bermotifkan politik B
dan berniat jahat dan justeru tindakannya adalah satu misfeasans dalam
jawatan awam. Perayu telah merujuk kepada percubaan politik (‘peristiwa
Ming Court’) untuk menjatuhkan R2 sebagai Ketua Menteri dan mendakwa
bahawa, sebagai membalas dendam, R2 telah meneruskan untuk membatalkan
lesen-lesen kayu balak mereka yang telah dikaitkan dengan percubaan tersebut C
dan bahawa kes perayu hanya merupakan satu daripada kes sedemikian.
Berikutan perbicaraan, Mahkamah Tinggi telah menolak tuntutan perayu. Ia
memutuskan bahawa: (a) perayu tidak boleh mengekalkan apa-apa tuntutan
untuk pelanggaran kontrak kerana pembatalan lesen kerana lesen itu tidak sah
dan/atau dicemari dengan kesalahan undang-undang kerana melanggar D
s 2(2)(b) Ordinan tersebut; (b) perayu telah gagal membuktikan lesen itu telah
dibatalkan kerana tujuan politif, justeru tort misfeasans dalam jawatan awam
tidak dibuktikan dan tiada kes untuk responden-responden, terutamanya R2,
untuk jawab; (c) tiada inferens bertentangan boleh dibuat terhadap responden
kerana tidak memanggil R2 untuk memberi keterangan; dan (d) tuntutan tort E
perayu telah luput masa di bawah Akta Perlindungan Pihak Berkuasa Awam
1948 (‘APPBA’). Keputusan mahkamah perbicaraan telah dikekalkan oleh
Mahkamah Rayuan (‘MR’). Dalam rayuan ini terhadap keputusan MR,
perayu berhujah bahawa oleh kerana ia telah mengemukakan keterangan
mencukupi untuk menunjukkan pembatalan lesen R2 bermotif politif, F
mahkamah bawahan terkhilaf untuk memutuskan bahawa ia tidak
membuktikan kesnya atas imbangan kebarangkalian untuk menghendaki R2
memberi keterangan bagi menyangkal pelbagai pengataan yang telah dibuat
terhadapnya. Perayu juga berhujah bahawa had masa tidak terpakai dalam kes
ini kerana pembatalan lesen itu adalah ‘continuing wrong’ dan juga kerana s 2 G
APPBA tidak terpakai kepada tort misfeasans dalam jawatan awam.

Diputuskan, menolak rayuan:

(1) Berdasarkan fakta kes, tiada kewajipan ke atas responden-responden
H
untuk memberikan keterangan dalam pembelaan mereka. Perayu tidak
mengemukakan keterangan mencukupi untuk membuktikan bahawa
responden kedua mengetahui tentang peristiwa Ming Court itu sebelum
atau pada masa dia membuat keputusan untuk membatalkan lesen
perayu untuk memindahkan beban bukti kepada pembelaan.
I
Responden-responden tidak mempunyai kes untuk menjawab di akhir
 Keruntum Sdn Bhd v The Director of Forests & Ors
[2017] 3 MLJ (Hasan Lah FCJ) 285

A kes perayu. Dalam keadaan itu, kegagalan responden kedua untuk

memberikan keterangan tidak menimbulkan apa-apa akibat yang jelas.
Sebaliknya, terdapat keterangan yang jelas bahawa terdapat pemindahan
kepentingan majoriti dalam syarikat perayu tanpa persetujuan Pengarah
Perhutanan dan perayu jelas telah melanggar s 2(2)(b) Ordinan tersebut
B (lihat perenggan 69, 76 & 80).
(2) Kegagalan perayu untuk membuktikan pengetahuan responden kedua
tentang peristiwa Ming Court telah menyebabkan kegagalannya, di akhir
kesnya, untuk membuktikan kes yang diplinya bahawa pembatalan lesen
itu telah dilakukan bagi tujuan politik atau kolateral dan bahawa tort
C
misfeasans dalam jawatan awam telah dilakukan oleh
responden-responden. Oleh itu, beban keterangan tidak berpindah
kepada pembelaan dan tiada kewajipan ke atas responden-responden,
terutamanya responden kedua, untuk menyangkal pengataan perayu
melalui keterangan lisan (lihat perenggan 77).
D
(3) Mahkamah ini bersetuju dengan penemuan hakim perbicaraan bahawa
tindakan berkaitan pembatalan pertama lesen perayu telah luput had
masa di bawah APPBA dan bahawa penamatan lesen itu tidak
mengakibatkan apa-apa kecederaan berterusan kepada perayu apabila ia
E dihalang daripada memasuki kawasan yang dilesenkan selepas
Mahkamah Tinggi membatalkan pembatalan pertama tersebut.
Mahkamah ini bersetuju dengan penemuan bahawa terdapat hanya satu
tindakan pembatalan lesen perayu, yang mana tindakan itu telah selesai
pada 11 Mac 1987; bahawa tindakan itu sendiri tidak melibatkan
F apa-apa elemen sambungan tetapi merupakan kausa tindakan yang telah
selesai dan perayu tidak perlu menunggu sehingga Mahkamah Tinggi
membatalkan pembatalan pertama tersebut sebelum ia memulakan
tindakannya kerana apa yang diadukan oleh perayu adalah tindakan
salah yang dikatakan yang telah menyebabkan ia rugi atau rosak (lihat
G perenggan 85–86).]

Notes
For a case on conclusion of plaintiff ’s case, see 2(4) Mallal’s Digest (5th Ed,
2017 Reissue) para 6701.
H
Cases referred to
Blue Valley Plantation Bhd v Periasamy a/l Kuppannan & Ors [2011] 5 MLJ
521; [2011] 5 CLJ 481, FC (refd)
Dato’ Pahlawan Ramli bin Yusuff v Tan Sri Abdul Gani bin Patail & Ors [2015]
I 7 MLJ 763; [2014] 9 CLJ 489, HC (refd)
G Scammell and Nephew, Limited v Hurley and others [1929] 1 KB 419, CA
(refd)
286 Malayan Law Journal [2017] 3 MLJ

Karpal Singh v Sultan of Selangor [1988] 1 MLJ 64 (refd) A

Mak Koon Yong & Anor v Municipal Councillors, Malacca [1967] 1 MLJ 256
(refd)
Ng Kim Moi (P) & Ors v Pentadbir Tanah Daerah, Seremban, Negeri Sembilan
Darul Khusus (Negeri Sembilan Township Sdn Bhd & Anor, proposed
intervenors) [2004] 3 MLJ 301, CA (refd) B
Riga Sdn Bhd v Awang Sepian Haji Awang Joini & 3 Ors [2005] MLJU 668;
[2005] 1 LNS 251, HC (refd)
Ronald Beadle v Hamzah HM Saman & Ors [2007] 2 MLJ 201, FC (distd)
Sardar Gurbaksh Singh v Gurdial Singh AIR 1927 PC 230, HC (refd)
Takako Sakao (f ) v Ng Pek Yuen (f ) & Anor [2009] 6 MLJ 751, FC (refd) C
Tan Kim Khuan v Tan Kee Kiat (M) Sdn Bhd [1998] 1 MLJ 697, HC (refd)
Terengganu Forest Products Sdn Bhd v Cosco Container Lines Co Ltd & Anor and
other applications [2011] 1 MLJ 25; [2011] 1 CLJ 51, FC (folld)
Three Rivers District Council v Bank of England (No 3) [2000] 2 WLR 1220,
HL (refd) D
UN Pandey v Hotel Marco Polo Pte Ltd [1980] 1 MLJ 4 (refd)
Wasakah Singh v Bachan Singh [1931] 1 MC 125 (refd)
YAM Tunku Dato’ Seri Nadzaruddin Ibni Tuanku Jaafar v Datuk Bandar Kuala
Lumpur & Anor [2005] 5 MLJ 633; [2005] 7 CLJ 41, HC (refd)
E
Legislation referred to
Evidence Act 1950 ss 101, 102, 103, 106
Federal Constitution art 8, 8(1)
Limitation Ordinance (Cap 49)
Public Authorities Protection Act 1948 s 2, 2(a) F
Sarawak Forests Ordinance 1958 (Cap 126) ss 2(2), (2)(b), 51A, 51A(2),
(3)

Appeal from: Civil Appeal No Q-01–325 of 2010 (Court of Appeal,

Putrajaya) G

Gopal Sri Ram (Colin Lau with him) (Michael Ong & Chang Advocates) for the
appellant.
JC Fong (Talat Mahmood Abdul Rashid, Lonie Pinda and Beatrice Minda
Winston Bala with him) (Sarawak State Attorney General’s Chambers) for the H
respondents.

Hasan Lah FCJ (delivering judgment of the court):

INTRODUCTION
I

[1] This is an appeal by the appellant against the decision of the Court of
 Keruntum Sdn Bhd v The Director of Forests & Ors
[2017] 3 MLJ (Hasan Lah FCJ) 287

A Appeal which affirmed the decision of the High Court. Leave to appeal was
granted by this court on 19 August 2014 on the following questions of law:
(a) whether, in a civil case, a trial judge is entitled to make a finding of
balance of probabilities against a plaintiff in favour of a defendant who
B
never gave evidence or who has declined to give evidence in his own
defence;
(b) whether the elements of the tort of misfeasance in public office as laid
down by the House of Lords in Three Rivers District Council v Bank of
England (No 3) [2000] 2 WLR 1220 should be applied by the courts of
C Malaysia;
(c) whether the mental element of the tort of misfeasance as set out in Three
Rivers District Council v Bank of England (No 3) [2000] 2 WLR 1220 is
sufficiently made out by the execution of a public act for a collateral
purpose;
D
(d) whether the act of revocation of a licence has continuing effect for the
purpose of the law of limitation having regard to the decisions in Mak
Koon Yong & Anor v Municipal Councillors, Malacca [1967] 1 MLJ 256
and Ronald Beadle v Hamzah HM Saman & Ors [2007] 2 MLJ 201; and
E
(e) whether the defence of limitation under the Public Authorities
Protection Act 1948 is available to an action in the tort of misfeasance in
public office having regard to the decision of the House of Lords in
Three Rivers District Council v Bank of England (No 3) [2000] 2 WLR
1220 and that of the English Court of Appeal in G Scammell and
F
Nephew, Limited v Hurley and others [1929] 1 KB 419.

[2] For ease of reference in this judgment the parties will be referred to as
they were in the High Court. The appellant was the plaintiff and the
G respondents were the defendants before the High Court.

BACKGROUND FACTS

[3] The relevant background facts of the case have been set out in details by
H the learned trial judge and the Court of Appeal and they are as follows. The
plaintiff is a private limited company. In 1983, it was granted a timber licence
by the third defendant for a period of 25 years from 10 October
1983–9 October 2008 and for an area of 188,926 hectares in Baram.

I [4] Among the conditions attached to the licence were these:

(a) cl 15 stated that ‘Before any logging contracts are awarded, prior
approval should be obtained from the Director of Forests and from the
288 Malayan Law Journal [2017] 3 MLJ

corporation’; A
(b) cl 31 stated that ‘This licence is not transferrable’; and
(c) the licence incorporated a sixth schedule which formed an agreement
between the plaintiff and Sarawak Timber Development Corp or
STIDC and cl (xi) of the said schedule provided that the plaintiff shall B
not allot, issue or register the transfer of any shares of the plaintiff
without prior consent of STIDC, which consent shall not be
unreasonably withheld.

[5] The shareholders of the plaintiff at the time of the issuance of the C
licence were Hj Deli Abdul Rahman (‘Hj Deli’) and Hj Lonis Ali (‘Hj Lonis’).
On 14 December 1983, both Hj Deli and Hj Lonis transferred all their
shareholdings to Solana Sdn Bhd. At the same time, shares in the plaintiff were
issued to two others with the following shareholding status in the plaintiff:
D
Temenggong … 500 shares
Baya Malang
POU (Baram) … 2,500 shares
Sdn Bhd
Solana Sdn Bhd … 6,998 shares E
Total … 9,998 shares
shareholdings

[6] On 5 July 1984 another issuance of shares took place in Solana Sdn Bhd
with the result that Lembaga Amanah Kebajikan Miri, Lembaga Amanah F
Kebajikan Darul-Falah (BINA), Anib Plantations Sdn Bhd, Crista Holdings
Sdn Bhd, Polycarp Enterprise Sdn Bhd, Hj Lonis, Hj Deli and Datuk
Shahbudin Mat becoming shareholders in Solana Sdn Bhd.

[7] When the above-mentioned transfers of shares in the plaintiff and G

Solana Sdn Bhd were carried out the plaintiff did not obtain consent from the
first defendant as required by s 2(2) of the Sarawak Forests Ordinance 1958
(‘the Ordinance’).

[8] To regularise the transfers, the plaintiff on 6 September 1985 wrote to H

the first defendant to obtain his consent for the transfers of shares to
Temenggong Baya Malang, POU (Baram) Sdn Bhd and Solana Sdn Bhd. The
plaintiff had also on 5 January 1984 wrote to STIDC requesting the same
consent. Only on 1 October 1985 the secretary/legal officer of STIDC, one
Zakaria Kawi informed the plaintiff that since the allotters were members I
of the plaintiff before the plaintiff accepted STIDC’s letter of offer, STIDC’s
 Keruntum Sdn Bhd v The Director of Forests & Ors
[2017] 3 MLJ (Hasan Lah FCJ) 289

A consent was not necessary.

[9] Despite the letter from Zakaria Kawi, the board of STIDC had
considered the plaintiff ’s applications for consent and had decided to refer the
matter to the second defendant for decision.
B
[10] On, or about mid 1986, the plaintiff had obtained permits to enter the
area to start logging operations and for that purpose the plaintiff had entered
into a contract for logging with one Maludan Sdn Bhd on 9 February 1985.
C
[11] On 11 March 1987, the plaintiff received a one sentence letter from the
first defendant informing it that its licence had been cancelled and revoked
(‘first revocation’). The plaintiff filed a suit in the High Court of Kuching to
challenge the revocation. It succeeded and the revocation was quashed by the
High Court. On appeal to the Supreme Court against the High Court’s
D
decision, the Supreme Court held that the second defendant had failed to abide
by the principle of fairness and prudent administration to allow the plaintiff to
make representation as to why its licence should not be cancelled.

E [12] In view of the decision of the High Court, the Sarawak Legislative
Assembly amended s 2(2) of the Ordinance and added a new s 51A therein
which became effective on 1 January 1988. Subsection (2) of s 51A reads:
(2) The Minister shall before cancelling or suspending any licence or permit under
subs (1), give the holder of the licence or permit notice in writing of his intention to
F do so and calling upon the person concerned to show cause to him why such licence
or permit should not be cancelled or suspended, as the case may be.

[13] On 4 April 1988, the second defendant through the permanent

secretary and following the procedure laid down in s 51A of the Ordinance
G wrote to the plaintiff seeking an explanation as to why its licence should not be
revoked in view of the continuing breaches of s 2(2)(b) of the Ordinance. The
plaintiff on 3 May 1988 replied and requested for the right of oral hearing and
arbitration as provided under the licence.

H [14] The second defendant was not satisfied with the plaintiff ’s explanation
and accordingly cancelled the licence (‘second revocation’).

[15] Though the plaintiff was accorded the right of appeal to the Majlis
Mesyuarat Kerajaan Negeri under s 51A(3) of the Ordinance against the
I second revocation, it did not do so as it was of the opinion that there would not
be a fair hearing as the second revocation was politically motivated and done in
290 Malayan Law Journal [2017] 3 MLJ

bad faith. It was the case for the plaintiff that the second revocation of the A
licence by the second defendant was motivated by malice and his action
amounted to misfeasance in public office. The plaintiff further contended that
s 51A of the Ordinance was unconstitutional as it contravened art 8 of the
Federal Constitution.
B
[16] Subsequent to the second revocation, the licensed area of the licence was
divided into four parts and licences were issued to three other companies
including PPES Resorts Sdn Bhd which is a company owned by the Sarawak
Economic Development Corp (‘SEDC’).
C
[17] The plaintiff then brought a suit for a declaratory relief and for damages
as regards both the first and second revocations. It based its claim both in
contract and in the tort of misfeasance of public office. After a trial at which
oral and documentary evidence was led, the High Court found against the
plaintiff on all issues. The plaintiff then appealed to the Court of Appeal. The D
appeal was heard and dismissed on 5 March 2013.

DECISION OF THE HIGH COURT

[18] In his judgment the learned trial judge listed out five main issues for E
determination by the court. They are as follows:
(1) whether the plaintiff ’s claim in respect of the first revocation is
statute-barred by reason of the Public Authorities Protection Act 1948
(‘the PAPA’) and/or the provisions of the Sarawak Limitation F
Ordinance?
(2.1) whether there had been breach or contravention of s 2(2) of the
Ordinance by the plaintiff in having allowed its controlling shares to be
transferred without authorisation of the Director of Forests or a person
authorised by him in that behalf? G

(2.2) if there was such breach, whether the licence was rendered invalid and/or
tainted with illegality?
(3.1) whether the first and second revocation were unlawful or contrary to law
and should be set aside? H

(3.2) was the revocation of the plaintiff ’s timber licence done to serve a
political purpose?
(4) whether s 51A of the Ordinance (as amended) is ultra vires art 8(1) of
the Federal Constitution? and I
 Keruntum Sdn Bhd v The Director of Forests & Ors
[2017] 3 MLJ (Hasan Lah FCJ) 291

A (5) if the court finds in favour of the plaintiff ’s claim for compensation,
damage or loss, what is the quantum thereof?

[19] With regard to the first issue, the learned trial judge found that the
plaintiff ’s claim in tort on the first revocation was time-barred. On the second
B issue the learned trial judge held that the plaintiff was in breach of s 2(2) of the
Ordinance when it allowed its controlling shares to be transferred without the
authorisation of the first defendant and accordingly the licence was tainted
with illegality. The plaintiff ’s claims and cause of action for breach of contract
or breaches of the licence could not be maintained.
C
[20] On the third issue, the learned trial judge answered that in the negative.
On the facts of the case the learned trial judge held that the revocation of the
licence did not amount to misfeasance in public office. It was also held that the
termination of the plaintiff ’s licence was not done for a political purpose.
D
[21] The learned trial judge found it unnecessary to address the fourth and
the fifth issue.

DECISION OF COURT OF APPEAL

E
[22] As regards whether the plaintiff ’s claim in respect of the first revocation
was statute-barred by reason of the PAPA and/or the provisions of the Sarawak
Limitation Ordinance, the Court of Appeal observed that the plaintiff ’s cause
of action concerned the second defendant’s alleged tort of misfeasance in public
F
office and also an action for the breach of contract in terminating the licence
without the requisite three months notice. The date of the revocation was
11 March 1987 and the date of the filing of this suit was 31 July 1990.

G [23] The Court of Appeal agreed with the finding of the High Court that the
plaintiff ’s claim in tort for the first revocation was time-barred and as for the
cause of action on contract, the plaintiff had breached the Ordinance because
the shares were transferred without the authorisation of the first defendant.

H [24] On the allegation of a general plan and oral agreement by the plaintiff
through Tun Abdul Rahman (‘PW9’) and the plaintiff ’s contention that the
learned trial judge failed to appreciate that the defendants’ case suffered a fatal
flaw in not calling the second defendant as a witness to rebut the evidence of the
plaintiff ’s witnesses, the Court of Appeal agreed with the finding of facts that at
I best the general plan was a personal initiative of PW9 to which the third
defendant was not a party. The Court of Appeal further agreed with the finding
292 Malayan Law Journal [2017] 3 MLJ

of the learned trial judge that even if there was a general plan, the plaintiff still A
had to comply with the legal requirement in s 2(2) of the Ordinance.

[25] The Court of Appeal agreed with the learned trial judge that the licence
was rendered invalid and tainted with illegality because of the breach of s 2(2)
of the Ordinance by the plaintiff. The Court of Appeal opined that public B
policy dictates that the plaintiff cannot bring its action based on a licence
tainted with illegality.

[26] With regard to the issue of whether the first and second revocations
were lawful or contrary to law the plaintiff raised the following factors: C

(a) there was no oral hearing conducted prior to the second revocation;
(b) the decision was irrational and unreasonable in the circumstances;
(c) the decision is disproportionate or offended the principle of fairness; D
and
(d) the decision was motivated by malice which amounted to public
misfeasance.
E
[27] The Court of Appeal observed that the learned trial judge had applied
the principle of law to the factual matrix correctly and found no error in the
trial judge’s grounds. Further, it was observed that they were all findings of fact
by the trial judge and the Court of Appeal did not find any appealable error
from his grounds.
F

[28] The final issue considered by the Court of Appeal was whether the
revocation of the plaintiff ’s timber licence was done to serve a political
purpose? The Court of Appeal, after having considered the trial judge’s
grounds, agreed with the trial judge’s decision not to accept the plaintiff ’s G
contention. The Court of Appeal agreed with the findings of the trial judge that
there was no direct evidence in court to show that the first and the second
defendant knew about the Ming Court affair meeting prior to the cancellation
of the plaintiff ’s licence and to link the aforesaid cancellation to a political
motive was a mere conjecture. H
SUBMISSIONS OF THE PLAINTIFF

[29] The submissions on the issues relating to the first three questions are
interrelated and can be dealt with together. I

[30] It was submitted that in the present case the evidence adduced by the
 Keruntum Sdn Bhd v The Director of Forests & Ors
[2017] 3 MLJ (Hasan Lah FCJ) 293

A plaintiff at the end of the plaintiff ’s case was sufficient in law to establish the
tort of misfeasance in public office and that the second defendant cancelled the
plaintiff ’s licence in bad faith, that is to say, he did it for an improper or ulterior
motive.

B [31] Malice, which is the ingredient the plaintiff is relying upon, is a state of
mind. The plaintiff must rely on circumstantial evidence to prove this element.
It was submitted that the correct question to be asked at the close of the
plaintiff ’s case is whether a prima facie inference of malice may fairly be drawn
from the evidence gathered at that stage.
C

[32] It was submitted that the plaintiff had led evidence which prima facie
showed that the Ming Court affair existed and that the plaintiff ’s licence was
cancelled because of PW9’s participation in support for the Ming Court affair.
D
[33] In the plaintiff ’s written summary of argument on questions 1, 2 and 3,
dated 1 August 2016, the plaintiff set out 14 circumstantial evidence in the case
from which, it was submitted, a prima facie inference of malice may be drawn
against the second defendant.
E
[34] It was further submitted that in assessing the evidence at that stage, the
court must for the purpose of deciding whether a prima case has been made out
accept the evidence given on behalf of the plaintiff as true. In support of that
contention learned counsel cited the case of Wasakah Singh v Bachan Singh
F
[1931] 1 MC 125.

[35] It was therefore submitted that both the High Court and the Court of
Appeal erred in their decisions when they required the plaintiff to prove its case
G on a balance of probabilities against the second defendant at the close of its
case.

[36] It was submitted that it was incumbent for the second defendant to have
given evidence in respect of both the knowledge of the plan and the reason for
H revocation as he was a party to the suit against whom an allegation of
knowledge had been levelled and specific allegations of malice were made. In
support of that proposition learned counsel for the plaintiff cited the Indian
case of Sardar Gurbaksh Singh v Gurdial Singh AIR 1927 PC 230 at
pp 233–234. It was further submitted that it is fair to infer that had the second
I defendant given evidence, his testimony would have favoured the plaintiff.

[37] With regard to the issue of limitation, learned counsel for the plaintiff
submitted that it does not apply for two reasons. First, because the act of
revocation was a continuing wrong. It was submitted that the correct approach
294 Malayan Law Journal [2017] 3 MLJ

is to look at the consequences of the wrong done. If the injury or harm A

consequent upon the wrongful act is a continuing one then a statute of
limitation will not apply.

[38] Secondly, it was submitted that s 2 of the PAPA does not apply to a tort
of misfeasance in public office. In support of the argument learned counsel B
relied on the case of G Scammell and Nephew, Limited v Hurley and others
[1929] 1 KB 419 at p 427.

SUBMISSIONS OF THE DEFENDANTS

C
[39] Learned counsel for the defendants submitted that the questions of law
in this appeal are not supported or underpinned by facts found concurrently by
both the High Court and Court of Appeal that there was a breach or
contravention of s 2(2) of the Ordinance by the plaintiff by allowing its D
controlling shares to be transferred without authorisation of the Director of
Forests or a person authorised by him in that behalf.

[40] It was submitted that the issues in the appeal are mainly on findings of
facts by the learned trial judge which were affirmed by the Court of Appeal. In E
such circumstances, the Federal Court, in the exercise of its appellate
jurisdiction, should not disturb the concurrent findings of facts or to draw its
own inferences from such facts.

[41] With regard to the first question it was submitted that on the facts of the F
case both the High Court and the Court of Appeal have found as a fact that the
plaintiff had not adduced sufficient evidence to shift the burden of proof to the
defendants. Having regard to the plaintiff ’s own evidence from PW9, it is
insufficient to prove the crucial ingredient of the tort that the second
G
defendant’s decision to cancel the licence was to serve a political purpose.

[42] It was submitted that on the evidence adduced by the plaintiff the
courts below were correct to hold that the plaintiff had failed to adduce
evidence, if believed, is sufficient to prove its case and therefore the second H
defendant had no case to answer.

[43] Learned counsel for the defendants contended that the plaintiff ’s
pleadings did not allege that the second defendant had any knowledge of the
‘oral agreement’ or ‘general plan’. According to learned counsel, under s 106 of I
the Evidence Act 1950 (‘the EA’) the burden of proving any fact which is
especially within the knowledge of that person is upon him. This question
involved the legal principles governing the burden of proof and onus of proof
and ss 101, 102 and 103 of the EA.
 Keruntum Sdn Bhd v The Director of Forests & Ors
[2017] 3 MLJ (Hasan Lah FCJ) 295

A [44] It was submitted that the burden of proof rests throughout the trial on
the party on whom the burden lies. The onus of proof relates to the
responsibility of adducing evidence to discharge that burden of proof. This
burden shifts constantly during the trial from one side to the other according to
the scale of evidence or other preponderance. When the burden shifts to the
B other party, it can be discharged by cross-examination of witnesses of the party
upon whom the burden of proof lies or by calling witnesses or by giving
evidence himself or by a combination of the different methods. No adverse
inference can be drawn against that party for failure to give evidence himself.
C
[45] It was submitted that the learned trial judge had ruled that the
evidential burden had not shifted on the defendants to call the second
defendant to testify on the matter referred to by the plaintiff, namely the onus
of proving misfeasance in public office had not shifted to the defence. As such
the principle of law enunciated by Elphinstone CJ in Wasakah Singh and
D
applied in Takako Sakao (f ) v Ng Pek Yuen (f ) & Anor [2009] 6 MLJ 751 by the
Federal Court does not apply to the facts and circumstances of this case.

[46] In the alternative it was submitted that even if the onus of proof had
E shifted to the defence, the defence had called nine witnesses whose evidence
had been accepted by the trial court in answer to the allegations made against
the defence in regard to the revocation of the licence and therefore no adverse
inference should be drawn against the second defendant for not giving
evidence. In addition, there was a clear concession and admission by the
F plaintiff that there was transfer of controlling shares in the plaintiff company
without consent of the Director of Forests and the consequential finding of the
trial judge that there was a contravention of s 2(2) of the Ordinance.

[47] As regards the second question, it was submitted that the principles in
G Three Rivers District Council v Bank of England (No 3) have been consistently
applied by the Malaysian courts. On the evidence available the learned trial
judge found that there was no evidence of targeted malice behind that decision
to revoke the licence.

H [48] As regards the third question, it was submitted that there was no factual
basis to support this question as the learned trial judge found that the plaintiff
had contravened s 2(2) of the Ordinance and when the second defendant
revoked the licence he was not aware of the Ming Court affair.

I [49] As regards the fourth and fifth questions which relate to the issue of
limitation it was submitted that this issue only applies to the first revocation
which was made on 11 March 1987. However the action was commenced by
the plaintiff on 31 July 1990, which is more than three years after the
revocation. It was submitted that the limitation period under s 2(a) of the
296 Malayan Law Journal [2017] 3 MLJ

PAPA is absolute and the period of limitation runs from the date of revocation A
of the licence and the issue of ‘continuance of the injury’ has no application to
the facts of this case.

[50] It was also submitted that any tort which involved ‘a mental element’ is
not excluded by the provision of s 2(a) of the PAPA. Furthermore, in the instant B
case the plaintiff failed to prove the tort of misfeasance against the defendants.

DECISIONS OF THIS COURT

[51] On the issue of whether the questions as framed are academic we take C
note of the fact that this issue was raised at the leave stage and was rejected by
this court. In dealing with this issue we agree with the observation made by this
court in Terengganu Forest Products Sdn Bhd v Cosco Container Lines Co Ltd &
Anor and other applications [2011] 1 MLJ 25 at p 49; [2011] 1 CLJ 51 at
pp 80–81. D
[41] So in my view, once leave is granted the appellate panel should not again
consider whether leave should or should not have been given unless that leave was
erroneously granted because certain established law or statute which would lead the
court hearing the appeal to dismiss the appeal in limine was not brought to the
attention or overlooked by the leave panel. Also, to use the word of Abdul Hamid E
Mohamad JCA in Raphael Pura v Insas Bhd & Anor [2003] 1 MLJ 513, ‘It is res
judicata’. The appellate panel should respect the leave panel and just proceed to hear
the appeal, even if the appeal is groundless. More often than not no reasons are given
at leave stage.
F
[52] In order to deal with the first question it is necessary to reproduce the
relevant part of the judgment of this court in Takako Sakao which can be found
in paras 4–6 of the judgment and they are as follows:
[4] In our judgment, two consequences inevitably followed when the first
respondent who was fully conversant with the facts studiously refrained from giving G
evidence. In the first place, the evidence given by the appellant ought to have been
presumed to be true. As Elphinstone CJ said in Wasakah Singh v Bachan Singh
[1931] 1 MC 125 at p 128:
If the party on whom the burden of proof lies gives or calls evidence which, if it
H
is believed, is sufficient to prove his case, then the judge is bound to call upon the
other party, and has no power to hold that the first party has failed to prove his
case merely because the judge does not believe his evidence. At this stage, the
truth or falsity of the evidence is immaterial. For the purpose of testing whether
there is a case to answer, all the evidence given must be presumed to be true.
I
Now, what the trial judge did in the present case is precisely what he ought not to
have done. He expressed dissatisfaction with the appellant’s evidence without asking
himself that most vital question: does the first defendant/respondent have a case to
answer? This failure on the part of the trial judge is a serious non- direction
amounting to a misdirection which occasioned a miscarriage of justice. The trial
 Keruntum Sdn Bhd v The Director of Forests & Ors
[2017] 3 MLJ (Hasan Lah FCJ) 297

A judge was at that stage not concerned with his belief of the appellant’s evidence. She
had given her explanation as to the discrepancies in the figures. And her evidence
does not appear to be either inherently incredible or inherently improbable. In these
circumstances it was the duty of the judge to have accepted her evidence as true in
the absence of any evidence from the first respondent going the other way. He
B however failed to direct himself in this fashion thereby occasioning a serious
miscarriage of justice.
[5] The second consequence is that the court ought to have drawn an adverse
inference against the first respondent on the amount of the appellant’s contribution
to the purchase price as well as the existence and the terms of the mutual
C understanding or agreement that she had with the first respondent. Where, as here,
the first respondent being a party to the action provides no reasons as to why she did
not care to give evidence the court will normally draw an adverse inference. See
Guthrie Sdn Bhd v Trans-Malaysian Leasing Corp Bhd [1991] 1 MLJ 33. See also
Jaafar bin Shaari & Anor (suing as Administrators of the Estate of Shofiah bt Ahmad,
D deceased) v Tan Lip Eng & Anor [1997] 3 MLJ 693 where Peh Swee Chin FCJ said:
‘The Respondents had chosen to close the case at the end of the appellant’s case.
Although they were entitled to do so, they would be in peril of not having the
evidence of their most important witness and of having an adverse inference drawn
against them for failing to call such evidence should the circumstances demand it’.
There are two other authorities that are of assistance on the point. In Wisniewski v
E
Central Manchester Health Authority [1998] PIQR 324, Brooke LJ when delivering
the judgment of the Court of Appeal quoted from a number of authorities
including the following passage from the speech of Lord Diplock in Herrington v
British Railways Board [1972] AC 877:

F The appellants, who are a public corporation, elected to call no witnesses, thus
depriving the court of any positive evidence as to whether the condition of the
fence and the adjacent terrain had been noticed by any particular servant of
theirs or as to what he or any other of their servants either thought or did about
it. This is a legitimate tactical move under our adversarial system of litigation.
But a defendant who adopts it cannot complain if the court draws from the facts
G
which have been disclosed all reasonable inferences as to what are the facts which
the defendant has chosen to withhold.
Brooke LJ then went on to say this:
From this line of authority I derive the following principles in the context of the
H present case:
(1) In certain circumstances a court may be entitled to draw adverse
inferences from the absence or silence of a witness who might be expected
to have material evidence to give on an issue in an action.
I (2) If a court is willing to draw such inferences, they may go to strengthen the
evidence adduced on that issue by the other party or to weaken the
evidence, if any, adduced by the party who might reasonably have been
expected to call the witness.
298 Malayan Law Journal [2017] 3 MLJ

(3) There must, however, have been some evidence, however weak, adduced A
by the former on the matter in question before the court is entitled to draw
the desired inference: in other words, there must be a case to answer on
that issue.
(4) If the reason for the witness’s absence or silence satisfies the court, then no
such adverse inference may be drawn. If, on the other hand, there is some B
credible explanation given, even if it is not wholly satisfactory, the
potentially detrimental effect of his/her absence or silence may be reduced
or nullified.
The other case is Crawford v Financial Institutions Services Ltd (Jamaica) [2005]
UKPC 40, where Lord Walker of Gestingthorpe when delivering the advice of the C
Privy Council said:
It is well settled that in civil proceedings the court may draw adverse inferences
from a defendant’s decision not to give or call evidence as to matters within the
knowledge of himself or his employees. D
Sarkar on Evidence (16th Ed) at p 1837 states:
It is the bounden duty of a party personally knowing the whole circumstances to
give evidence and to submit to cross- examination. Non-appearance as a witness
would be the strongest possible circumstance to discredit the truth of his case
E
Gurbakhsh v Gurdial AIR 1927 PC 230.
[6] In the present instance, there is no doubt that the first respondent had intimate
knowledge of the material facts relevant to the dispute and that she was privy to the
several steps through which the transaction had proceeded. Based on the authorities
already cited, it is patently clear that the trial judge in the present case ought to have F
held that the failure of the first respondent to give evidence apart from discrediting
her case strengthened the appellant’s case on those vital points that lay at the axis of
the dispute between the parties. This, the trial judge clearly omitted to do. Instead,
he treated the first respondent’s failure to appear and give evidence as a matter of no
apparent consequence. His non-direction upon such a crucial point as this certainly
G
amounts to a misdirection which has occasioned a miscarriage of justice. To
conclude the first issue, it is our judgment that there was no judicial appreciation of
the appellant’s evidence. A reasonable tribunal correctly directing itself on the facts
and the relevant law would have held that the appellant had indeed contributed
RM194,610 towards the purchase price of the building that there was a mutual
understanding between the appellant and the first respondent that they shall be H
beneficial co-owners of the property in question in equal shares; and that the first
respondent had acted in breach of that understanding.

[53] In Takako Sakao, the appellant and the first respondent were partners in
the business of a restaurant. Sometimes in 1992, they decided to acquire the I
building in which the restaurant had its business. Each of them was to
contribute towards the purchase price. The appellant paid a sum of money as
her contribution towards the price. The first respondent purchased the
property in question on 6 March 1992, for a sum of RM950,000 and had it
 Keruntum Sdn Bhd v The Director of Forests & Ors
[2017] 3 MLJ (Hasan Lah FCJ) 299

A registered in her sole name. In mid-1996 the first respondent sold the property
to the second respondent.

[54] The appellant then instituted proceedings to enforce the trust she
claimed had arisen in her favour. The first respondent did not attend court nor
B give evidence nor take any part in the case. All she did was merely to put
forward arguments on why the appellant’s caveat ought to be removed.

[55] In the instant case, the second defendant also did not give evidence even
C though specific allegations were made against him. However, the defence had
called nine witnesses whose evidence had been accepted by the trial court in
answer to the allegations made against the defence in regard to the revocation
of the licence. It was also established at the close of the plaintiff case that there
was a transfer of controlling shares in the plaintiff company which was in
D contravention of s 2(2) of the Ordinance.

[56] In dealing with this issue, the learned trial judge in the instant case had
this to say:
In coming to the above finding I have not overlooked the submission of the plaintiff
E that the Minister of Resource Planning/Chief Minister is a party having personal
knowledge of the material facts in dispute and therefore the Minister should have
been called to give his evidence failing which the court should draw an adverse
inference against the defendants. Thus it was alleged by the plaintiff that the
Minister knew the existence of the general plan, that he knew that Tun Abdul
F Rahman had an oral agreement and understanding with Datuk Nor Tahir regarding
the general plan, that the Minister knew the ultimate beneficiaries of the plaintiff ’s
licence, that Datuk Nor Tahir as Chairman of the Board to refer the plaintiff ’s
application for share transfer to the Minister. In support of its contention that the
court should draw an adverse inference in the circumstances where the Minister did
not come to give evidence, the plaintiff referred me to the decision of the Federal
G Court in Takako Sakao (f ) v Ng Pek Yuen (f ) & Anor [2009] 6 MLJ 751.
I accept, as I am bound to, what was held by the Federal Court in Takako Sakao’s
case, but with all respect I find that decision of no assistance to the plaintiff here,
because I do not find that the evidential burden has shifted on the defendants to call
the Minister to testify on the matters referred to as the plaintiff has been unable to
H prove on a balance of probabilities a case for the Minister to answer in respect of
each of the matters the Minister is alleged to have personal knowledge about as I
have already made findings that there is no evidence produced by the plaintiff to
show that the Minister in fact knew or had knowledge about them. Accordingly it
is not appropriate on the facts of this case to draw an adverse inference against the
I defendants for not calling the Minister to testify.

[57] On the same issue, the Court of Appeal made the following observation:
[36] The Federal Court in view of the lack of evidence to rebut the appellant’s
evidence held that Judgment should have been given to the appellant. The Federal
300 Malayan Law Journal [2017] 3 MLJ

Court in coming to its decision relied on the case of Wasakah Singh v Bachan Singh A
[1931] 1 MC 125 and quoted with approval the dicta of Elphinstone CJ. If one
looks at that quotation carefully, the learned Chief Justice talks of evidence which ‘if
it is believed’. What we take that to mean is simply the evidence of the appellant
must reached a level that is to be believed. If the evidence of the appellant through
cross examination by the respondent’s counsel is devalued so to speak or not reached B
a level to be believed, then the trial judge is entitled to conclude that the appellant
had not proved its case requiring the respondents to rebut. The burden of proof had
not shifted at the end of the appellant’s case at trial. That is what happened in the
trial court here. The learned judge actually was very mindful of the principle of
Takako case …
C

[58] As stated in Takako Sakao two consequences followed when a party who
was fully conversant with the facts studiously refrained from giving evidence.
The first is that the evidence given by the other party ought to have been
presumed to be true. The second consequence is that the court ought to have D
drawn an adverse inference against a party who has a case to answer but did not
care to give evidence on the issue in the action.

[59] It is undisputed that the plaintiff ’s stand was that the decision to revoke
the licence by the second defendant was politically motivated. To prove its case E
the plaintiff relied mainly on the evidence of PW9 who testified that he had
briefed the second defendant on the general plan when the second defendant
succeeded him as the Chief Minister. The implementation of the general plan
was left to Datuk Nor Tahir and several others. The plaintiff was part of the
F
general plan. The licence was issued to the plaintiff on 19 July 1983 for a period
of 25 years and it covered an area of 188,926 hectares in Baram.

[60] According to PW9, the second defendant held him responsible for the
Ming Court affair. For that reason, the second defendant proceeded to act G
against companies connected with PW9 to cancel their timber licences. The
plaintiff was one of such company.

[61] To give credence to the evidence of PW9 on the general plan, Datuk
Kamal Hussain (‘PW4’) and Norlia Abdul Rahman (PW5) testified in court. H
PW4 related the instructions given by PW9 to him in the presence of Datuk
Nor Tahir to provide names of three companies for the issuance of the timber
licence.
I
[62] PW5 testified that in order to implement the general plan as devised by
PW9 she prepared and issued the circular resolutions of the plaintiff dated
14 December 1983 to transfer Datuk Deli’s and Hj Louise Ali’s shares to Solana
Sdn Bhd and allot the controlling shares in the plaintiff to three parties.
 Keruntum Sdn Bhd v The Director of Forests & Ors
[2017] 3 MLJ (Hasan Lah FCJ) 301

A [63] The learned trial judge, after minutely examining the evidence of the
plaintiff ’s witnesses, found that at best the general plan was a personal initiative
of PW9 to which the government was not a party. He provided seven broad
grounds for his conclusion which has been summarised by the Court of Appeal
as follows:
B
(a) failure on the part of the appellant to plead this ‘general plan’ in its
pleadings at its earliest opportunity;
(b) the evidence shows that the conduct of the then Minister of Forest as
chairman of STIDC is inconsistent to the existence of this general plan;
C
(c) the evidence of Haji Deli is inconsistent to the existence of the general
plan;
(d) Solana Sdn Bhd the biggest shareholder in the appellant was not in
existence when the Licence was issued in 19 July 1983; and
D (e) despite the fact that Tun Abdul Rahman was the Chief Minister from
7 July 1970–26 March 1981, there is no evidence to show that he had
issued any licence that was to implement the general plan during his
tenure which he could have easily done.

E
[64] The learned trial judge further held that even if there was a general plan,
the plaintiff still had to comply with the legal requirement of s 2(2) of the
Ordinance and there was non-compliance to that provision and the licence was
rendered invalid and/or tainted with illegality.
F
[65] On the issue of whether there was misfeasance in public office, the
learned trial judge found that the plaintiff failed to prove this tort against the
first and second defendants. His reasons for such finding can be found in his
grounds of judgment. Among the reasons are:
G
(a) since August 1985, which was two years before the first revocation, the
second defendant had already directed his mind to dealing with a serious
problem about the prevalence of timber licensees selling their shares in
companies issued with timber licences;
H (b) there were evidence that the plaintiff had contravened s 2(2) of the
Ordinance;
(c) the decision to revoke the plaintiff ’s licence along with that of some of
other licences was made at a meeting where the Chief Minister, the State
I Attorney-General, Director of Forests (DW7) and Hj Abdillah (DW9)
were present. The meeting was arranged by Datuk Dr Yusoff (DW6)
and it was his evidence that the meeting was held to discuss not just one
cancellation but to discuss the cancellation of timber licences in
violation of s 2(2) of the Ordinance; and
302 Malayan Law Journal [2017] 3 MLJ

(d) from PW8 and PW9 own evidence the Chief Minister did not know A
about the Ming Court affair at the time the decision to revoke the
plaintiff ’s licence was made.

[66] On the issue of whether the revocation of the plaintiff ’s timber licence
was done to serve a political purpose, the issue has to be considered in the light B
of Ming Court affair and the manner in which the licence was cancelled.

[67] The Ming Court affair concerned a move to get 28 state assemblymen
to cross the floor of the state assembly in an attempt to remove the second C
defendant as the Chief Minister. A press conference by the group of politician
opposed to the Chief Minister was held on 9 March 1987. On 10 March 1987,
there was a press report which carried the headline ‘Taib lashes out at ‘wealth
for power’ attempts to destabilize and grab power’. On the same day, there was
a meeting between the Chief Minister, Datuk Leo Chai (DW7), Hj Abdillah D
(DW9) and the then state attorney general to discuss the termination of timber
licences. On 11 March 1987, there was another press report quoting the Chief
Minister as saying he was watching the use of timber money to destabilise the
state government. It was against this backdrop that on 11 March 1987 the
plaintiff ’s licence together with 25 other licences were revoked. Hence, it was E
the contention of the plaintiff that the revocation of the plaintiff ’s timber
licence was done for political purpose and done hurriedly.

[68] The learned trial judge did not accept the plaintiff ’s argument. The
learned trial judge gave several reasons for his finding on this issue which can be F
summarised as follows:
(a) not all timber licences of those who opposed the government were
revoked;
(b) based on the evidence the Chief Minister did not know about the Ming G
Court affair until earliest on 1 March 1987;
(c) there was a breach of s 2(2) of the Ordinance by the plaintiff;
(d) as early as when the Chief Minister took over the forestry portfolio from
Datuk Nor Tahir on 12 July 1985, the Chief Minister was briefed by the H
Director of Forests about the prevalence of timber licensees transferring
their licences through the sale of shares in the companies issued with
timber licences and that this was a serious problem which resulted in the
Chief Minister issuing the directive that there should not be a transfer of
shares or change in contractors without reference to the Minister. In the I
learned trial judge’s opinion, the termination of 26 timber licences can
be seen as a reflection of the extent and seriousness of the problem faced
by the Director of Forests regarding transfer of shares and change of
contractors; and
 Keruntum Sdn Bhd v The Director of Forests & Ors
[2017] 3 MLJ (Hasan Lah FCJ) 303

A (e) there is evidence of investigation on shareholdings and other details of

timber companies which were carried out in January and February 1987
by Datuk Leo Chai (DW7) and Hj Abdillah (DW9). According to the
learned trial judge this evidence shows that the revocation of the
plaintiff ’s licence was neither hurried nor without proper investigation
B as alleged.

[69] Both the High Court and the Court of Appeal made a concurrent
finding of facts that the plaintiff had not, at the end of its case, discharged its
C
burden of proof in respect of its allegations that there was misfeasance in public
office and the revocation of its licence was done to serve a political purpose. In
other words the evidential burden had not shifted to the defendants. As such
the defendants did not have a case to answer at the end of the plaintiff ’s case.
Under the circumstances the failure of the second defendant to give evidence
D could not give rise to any apparent consequences.

[70] In order for the plaintiff to succeed in its case that the cancellation of its
licence was to serve a political purpose, it is necessary for the plaintiff to adduce
evidence if believed, sufficient to prove that the second defendant knew about
E the Ming Court affair prior to the cancellation of the plaintiff ’s licence. Both
the High Court and the Court of Appeal found that the plaintiff had not
adduced direct evidence to show that the second defendant knew about it. It
was also the finding of the courts below that to link the aforesaid cancellation
to a political motive is a mere conjecture.
F
[71] The learned trial judge accepted the evidence of PW8 (Datuk Salleh
Jaffaruddin) who was one of the key men involved in the Ming Court affair that
the Ming Court affair was not made known to the second defendant. PW8 also
G went on to say in his cross-examination that on 11 March 1987 news of the
Ming Court affair had not been published or confirmed.

[72] The plaintiff relied on the evidence of PW9 and several reports in the
local newspapers to show that the second defendant knew about the Ming
H Court affair and the cancellation of its licence was done on political ground.
However, PW9 merely alleged the cancellations was taken on political ground
(see his witness statement dated 19 September 2004 at pp 3793–3794 of the
appeal record). To support PW9’s allegation, the plaintiff adduced
documentary evidence in the form of the newspaper reports of the statements
I allegedly made by the second defendant to the press relating to the cancellation
of the timber licences to prevent timber money from being used against the
government.
304 Malayan Law Journal [2017] 3 MLJ

[73] The following newspaper reports were adduced in the trial by the A
plaintiff to prove its allegation that the second defendant knew about the Ming
Court affair and the licence was revoked on political ground:
(a) People’s Mirror dated 10 March 1987 headed ‘Taib lashes out at ‘wealth
for power’ attempts’ (exh P260) and captioned ‘BIG SHOT’S TIMBER
B
LICENCE REVOKED’ (exh P128);
(b) Borneo Post dated 11 March 1987 captioned ‘The timber connection’
(exh P77);
(c) Star newspaper dated 11 March 1987 captioned ‘REVOLT AGAINST
C
TAIB’ (exh P252);
(d) People’s Mirror dated 14 April 1987 captioned ‘Orang Ulu folk assured
of share’ (exh P268); and
(e) People’s Mirror dated 10 April 1987 captioned ‘Taib makes his stand on
D
timber money’ (exh P125).

[74] Learned counsel for the defendants contended that the newspaper
reports are not admissible as their authors were not called to testify. In support
of that contention learned counsel cited the case of YAM Tunku Dato’ Seri E
Nadzaruddin Ibni Tuanku Jaafar v Datuk Bandar Kuala Lumpur & Anor
[2005] 5 MLJ 633; [2005] 7 CLJ 41.

[75] We agree with the submission of learned counsel for the defendants that
the newspaper reports are inadmissible as the authors of the report were not F
called to testify. The truth or otherwise of their contents were not proven. It is
well established that inadmissible evidence does not become admissible by
reason of a failure to object (see Karpal Singh v Sultan of Selangor [1988] 1 MLJ
64). Without the press reports there is no evidence to prove that the second
defendant knew about the Ming Court affair and the cancellation of the G
plaintiff ’s licence was done for a collateral or political purpose.

[76] Based on the evidence before the court, we agree with the High Court
that the plaintiff had not adduced sufficient evidence to prove that the second
defendant knew about the Ming Court affair before or at the time he made the H
decision to revoke the plaintiff ’s licences so as to shift the onus of proof to the
defence. On the other hand, there was clear evidence that there was a transfer
of controlling interests in the plaintiff company without the consent of the
Director of Forests and the plaintiff had clearly breached s 2(2)(b) of the
Ordinance. I

[77] The plaintiff ’s allegation that the revocation of its licence was done for
a political or collateral purpose and the defendants had committed the tort of
misfeasance in public office could only be proven if it was proved that the
 Keruntum Sdn Bhd v The Director of Forests & Ors
[2017] 3 MLJ (Hasan Lah FCJ) 305

A second defendant was aware of the Ming Court affair at the time the decision
was made to revoke the plaintiff ’s licence. The plaintiff ’s failure to prove the
second defendant’s knowledge of the Ming Court affair had resulted in its
failure to prove its pleaded case that the revocation of the licence was done for
a political or collateral purpose and the tort of misfeasance in public office
B against the defendants at the end of its case and as such the evidential burden
had not been shifted to the defence. As such there was no duty on the
defendants, especially the second defendant, to refute the plaintiff ’s allegation
by way of oral evidence.
C
[78] It is settled law that the burden of proof rests throughout the trial on the
party on whom the burden lies. Where a party on whom the burden of proof
lies, has discharged it, then the evidential burden shifts to the other party (see
UN Pandey v Hotel Marco Polo Pte Ltd [1980] 1 MLJ 4). When the burden
D shifts to the other party, it can be discharged by cross-examination of witnesses
of the party on whom the burden of proof lies or by calling witnesses or by
giving evidence himself or by a combination of the different methods. See Tan
Kim Khuan v Tan Kee Kiat (M) Sdn Bhd [1998] 1 MLJ 697.

E [79] The findings made by the learned trial judge are mainly findings of facts
and he gave credible reasons for his findings. He had the benefit of hearing
testimonies and observing the demeanour of the witnesses. Those findings of
facts were affirmed by the Court of Appeal. It would need very clear and
convincing reasoning to justify us to reverse what has already been decided. We
F have looked at those findings of facts by the learned trial judge and the detail
reasons given by him and we are satisfied that, on the facts of the case, any
reasonable tribunal would have made similar findings.

G [80] We find it unnecessary to answer the first question of law posed in this
appeal because on the facts of this case there was no duty on the defendants to
give evidence in their defence.

[81] As regards the second question, it is clear from the submission of the
H parties that the principles of law enumerated in Three Rivers District Council
have been accepted and applied by the Malaysian courts. See the case of Dato’
Pahlawan Ramli bin Yusuff v Tan Sri Abdul Gani bin Patail & Ors [2015] 7
MLJ 763; [2014] 9 CLJ 489, Riga Sdn Bhd v Awang Sepian Haji Awang Joini
& 3 Ors [2005] MLJU 668; [2005] 1 LNS 251, Ng Kim Moi (P) & Ors v
I Pentadbir Tanah Daerah, Seremban, Negeri Sembilan Darul Khusus (Negeri
Sembilan Township Sdn Bhd & Anor, proposed intervenors) [2004] 3 MLJ 301.

[82] Under the circumstances we find it unnecessary to answer the second

question.
306 Malayan Law Journal [2017] 3 MLJ

[83] As regards the third question posed in this appeal, we also find it A
unnecessary to answer it as it has not been proved that the revocation of the
plaintiff ’s licence was done for a collateral purpose. To answer a legal question
not related to the facts of the case would be an academic exercise (see Blue Valley
Plantation Bhd v Periasamy a/l Kuppannan & Ors [2011] 5 MLJ 521; [2011]
5 CLJ 481). B

[84] We will now deal with the fourth question of law. On the issue of
limitation, the relevant provision is s 2(a) of the PAPA and it, inter alia,
provides that any suit against any person for any act done in pursuance or C
execution or intended execution of any written law or of any public duty or
authority shall not lie or be instituted unless it is commenced within 36 months
next after the act, or in the case of a continuance of injury or damage, within 36
months next after the ceasing thereof.
D
[85] The learned trial judge held that the action in respect of the first
revocation of the plaintiff ’s licence was time-barred as it was filed three years
four months and 20 days after the revocation, which was outside the 36
months period. The trial judge did not accept the plaintiff ’s contention that the
termination of the licence resulted in a continuing injury to the plaintiff when E
the plaintiff was prevented from entering the licensed area after the High Court
quashed the first revocation. The learned trial judge held that there was only
one act of revocation of the plaintiff ’s licence which act was completed on
11 March 1987. That act itself did not involve any element of continuance. It
constituted a complete cause of action and the plaintiff did not need to wait till F
the High Court quashed the revocation before it commenced its action because
what the plaintiff complained about was the alleged wrongful act which caused
the loss or damage to it. The learned trial judge also held that the facts in Ronald
Beadle v Hamzah HM Saman & Ors can be distinguished.
G
[86] We agree with the finding of the learned trial judge on this issue and we
do not find any merit in the plaintiff ’s argument on this issue. For the reasons
given we answer the fourth question of law in the negative.
H
[87] We find it unnecessary to answer the fifth question as the plaintiff failed
to prove the tort of misfeasance in public office against the defendants.

[88] We accordingly dismiss the appeal with costs.

I
 Keruntum Sdn Bhd v The Director of Forests & Ors
[2017] 3 MLJ (Hasan Lah FCJ) 307

A Appeal dismissed.

Reported by Ashok Kumar