Case 1 : Borneo Helicopters Sdn Bhd & Ors v Sabah Air Aviation Sdn Bhd

(formerly known as Penerbangan Sabah Sdn Bhd) [2015] 1 MLJ 656

COURT OF APPEAL (PUTRAJAYA)

[40] In our judgment, on a proper construction of the management agreement, there

are two time periods in cl 6.02 which must be complied by the respondent. The first is
cl 6.02.1(a)(i), which requires the respondent to give a 30 days' notice in writing to
the first appellant specifying the default and requiring remedy thereof within
reasonable time. Next, is cl 6.02.1(a)(ii) which states that if the default shall continue
for 60 days after receipt of such notice, the respondent shall give a notice in
writing specifying when such termination shall take effect. We agree with the
contention of learned counsel for the first appellant that both are mandatory
requirements. In our judgment, the High Court erred in failing to properly and
judicially appreciate that the management agreement on its true construction, requires
the respondent to give adequate notice to the first appellant to make good the failure,
neglect or contravention complained of when the same is explicitly stated in
cl 6.02.1(a)(i). The High Court also erred in failing to appreciate that the respondent
had in breach of cl 6.02.1(c)(iii) of the management agreement deprived the first
appellant the right to be informed when the termination shall take effect.
[41] Having regard to the evidence contained in the appeal record and after reading
the judgment of the High Court, we also conclude that the respondent has failed to
prove any merit regarding its other causes of action, that is to say, alleged
misapplications of monies by the first and second appellants, issue pertaining to
helicopter lease agreement dated 4 June 2009 entered into with Layang-Layang Udara
Sdn Bhd, alleged deception on the public administration and alleged conspiracy to
defraud. We do not feel that further elaboration is necessary on these issues
considering the fact that parties in the main argued on matters relating to the bank
guarantee and cl 6.02.1, which we have discussed earlier.

Case 2 : SK STYROFOAM SDN BHD v PEMBINAAN LCL SDN BHD

[2004] 5 MLJ 385

HIGH COURT (KUALA LUMPUR)

[22] I think the statement that 'the contrary view has been taken in New South Wales',
is a reference to the 1971 decision of Eriksson v Whalley which would not be entirely a
correct description of the law in New South Wales bearing in mind the 1989 decision
of Kennedy (a decision of the Supreme Court of New South Wales) unless the said
textbook writer was not aware of the 1989 decision. For these reasons, I think Fajar
Menyensing would be an appropriate decision to follow. The second Malaysian decision
on this issue is the case of DMCD Museum Associates Sdn Bhd v Shademaker (M) Sdn Bhd
(2) [1999] 4 MLJ 243, a decision of Kamalanathan Ratnam J which dealt with a
building contract. A preliminary issue was raised with regard to the validity of the
notice of determination which was sent 'by hand'. The learned judge
distinguished Fajar Menyensing and relied on the general clause in the contract on
service of notices to hold that the service by hand was valid service. The learned judge
does not appear to have been referred to the line of authorities cited above apart from
and purposive approach in the UK and Australian cases. Fajar Menyensing. However,
he has clearly and correctly taken the business commonsense. It is noted that cl 2(4)
of the contract here (see p 9 of encl 2) is quite similar to the cl 32 referred to
in DMCD Museum Associates. Clause 2(4) reads as follows:
(4) The Contractor shall upon signing notify the Architect in writing of an
address where notices and Architect's instructions under this Contract may be
served upon him. In the event of the Contractor failing to notify the Architect
of such an address or failing to notify the Architect of any change in such
address, notices and Architect's instructions shall be deemed served upon the
Contractor if sent by registered post to his address stated in the contract, or if
left at his office on the site and a receipt is obtained from the contractor's
foreman-in-charge.
[23] The words of this clause would support the business cornmonsense approach
that the key issue between the parties is that notices are in fact served. The key issue is
not how the notices are served as long as they are served. To conclude on this point, I
am of the view that the arbitrator fell into a clear error when he ignored the entire line
of cases set out above and the clear trend of the current day to take a business
commonsense approach. He fell into error when he rejected summarily as he did (as p
301) the request to take such an approach. He followed the wrong law in taking a
formalistic and mandatory approach to the procedural requirements of sending
notices under the contract. The arbitrator was therefore wrong in concluding that the
contractual determination by the applicant of the contract failed.