Law updates - Administrative law (Malaysian law unless otherwise stated)

*Abbreviations
HC = high court
COA = court of appeal 
FC = federal court 
 
Government of the State of Sabah v Suwiri Sdn Bhd [COA]

 Condition 6(vi) of the licence expressly states that any area already logged would no longer form part of the concession area. Coupled with the fact that the issuance of the licence was discretionary pursuant to s 24(1) of the enactment, the respondent was estopped from claiming any right over the area where it had completed extraction of the timber. Any renewal of the licence that include the areas already logged would be contrary to express terms of the licence. The respondent would have known that both the form 1 licence and a renewal of the licence was not possible and its acceptance thereof was inconsistent with the claim against the areas already logged. Condition 21 is clear in that the appellant was not obliged to renew the licence if the respondent did not prove the matters preventing it from carrying out its obligations. The respondent failed to substantiate its claim that bad weather and road conditions prevented it from logging the concession area. The respondent's reliance on the letter from the snr to the director of forestry approving the renewal of the licence to prove a binding contract was misplaced since pw1's evidence in the high court showed that the respondent was never in fact privy to the correspondence. The said letter could not confer any right to the respondent. Further, the said letter was not final approval for the licence since it was still subject to the provisions of the enactment and the director of forestry carrying out a survey of the area. Actual authority to approve the licence was vested in the director of forestry and not the snr. Therefore, there was no issue as to whether the appellant could resile from the purported approval as the appellant was never contractually or legally bound to renew or extend the licence. The appellant's failure to renew the licence was not a violation of the respondent's legitimate expectations for the following reasons. The appellant, being a public authority, could not be prevented or estopped by its previous conduct from carrying out its obligations or statutory powers and duties. By commencing this action, the respondent was attempting to prevent the appellant from issuing a licence to any other applicant. The renewal of the licence in respect of the areas inspected and closed would be contrary to condition 6(vi) of the licence, which had since ceased to be part of the concession area. The respondent also failed to prove that the snr possessed the authority to commit and bind the appellant under the provisions of the enactment or that it had acquired any right pursuant to internal correspondence that it was not privy to. Further, the approval by the snr was not final since it was still subject to the provisions of the enactment and the director of forestry carrying out a survey of the area. The high court based its award of damages on the respondent's profit projection. Although unchallenged, the said profit projection was insufficient to establish actual losses likely to be incurred taking into account the exigencies inherent in the timber trade. However, the evidence showed that the respondent had, by obtaining 2 successive licences, in fact extracted timber from the entire concession area. It could not have therefore suffered any loss and hence the award of damages was untenable in fact and in law.

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