Kabatasan Timber Extraction Co v Chong Fah s

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Malayan Law Journal Reports/1969/Volume 2/KABATASA T!MB"R "#TRA$T!% $% & $'%( )A' S'!( * +1969, 2 MLJ 6 * -. January 1969 2 pages +1969, 2 MLJ 6

KABATASAN TIMBER EXTRACTION CO v CHONG FAH SHING FEDERAL COURT KOTA KINABALU AZMI LP, ISMAIL KHAN CJ (BORNEO) AND MACINTYRE FJ CIVIL APPEAL NO X75 OF !"7 #$ J%&'% !"! Contract -- Breach of -- Damages -- Duty to mitigate loss

!n t0s ase te appellants a ontrate to supply t0m3er to te responent to 3e el0&ere at te s0te o4 te sawm0ll to 3e erete 3y te responent5 Te t0m3er was el0&ere 0n tree lots5 Te learne tr0al uge 4oun tat te 2n lot o4 197 logs an 8 o4 te 22 logs 0n te -r lot were not el0&ere to te responent as tey were umpe at a 0stane o4 more tan :.. 4eet 4rom te sawm0ll5 Te learne tr0al uge ga&e ugment 4or  te appellant 4or ;9792581 3e0ng te 3alane ue uner te ontrat an also aware amages to te responent on 0s ounterla0m 4or 3rea o4 ontrat 4or te sum o4 ;1-19258.5 H*+, 0sm0ss0ng te appeal 0n respet o4 te la0m an allow0ng te appeal 0n respet o4 ounter*la0m 3y

reu0ng te amount< 0t was te uty o4 te responent 0n t0s ase to ta=e reasona3le steps to m0t0gate te amage5 Tere was no nee 4or te responent to a&e gone to te e>pense o4 3uy0ng logs 4rom elsewere wen te logs were ly0ng a 4ew unre 4eet away 4rom te sawm0ll an all tat was re?u0re was te a0t0onal e>pense 4or aul0ng tem up to te sawm0ll5 Te appropr0ate amages to 3e aware to te ounterla0m was te appro>0mate ost o4 aul0ng te logs to te sawm0ll w0 amounte to ;1...5 C%-*- *.** /0 Brace v Calder  +179:, 2 @B 2:Payzu Ltd v Saunders +1919, 2 KB :71 Finlay (Fames) & Co Ltd v ! "#i$ %oo ong %'  +1929, 1 KB 8.. Pil$inton v ood  +19:-, $ . FEDERAL COURT

'ichael "' ong  4or te appellants5 S$elley a* eo$ Sie#  4or te responent5 MACINTYRE FJ

Te appellants te Ka3atasan T0m3er ">trat0on $ompany sue te responent a sawm0ller 4or a sum o4 ;8.1295-1 3e0ng te allege 3alane o4 te pr0e o4 81.69 u30 4eet o4 t0m3er sol an el0&ere uner an agreement ate eem3er 6 196-5 !n 0s e4ene te responent am0tte l0a30l0ty to te e>tent o4

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;2.88571 3ut su3et to a ounter*la0m 4or ;-9652. 4or amages ar0s0ng 4rom a 3rea o4 ontrat 3y te appellants5 Te learne tr0al uge 4oun tat te appellants +,, . 'L/  at 0 

 el0&ere some 191- u30 4eet o4 t0m3er &alue at ;2:91-57. an tat te responent a pa0 to aount o4 some sums amount0ng to ;16.815- 0nlus0&e o4 an a&ane epos0t o4 ;:...5 Aor0ngly e entere ugment 4or te appellants 4or te outstan0ng 3alane o4 ;972581 an osts5 C0t regar to te ounter*la0m te learne uge aware amages 0n te sum o4 ;1-19258. o4 w0 a sum o4 ;1299258. was 4or loss o4 pro40t ar0s0ng out o4 te 4a0lure to supply 1.72 u30 4eet o4 t0m3er 3e0ng te 044erene 3etween te ?uant0ty agree to 3e el0&ere an te ?uant0ty atually el0&ereD an a sum o4 ;2.. 4or e>tra ost 0nurre 3y te responent 0n 0r0ng a trator to aul logs w0 a 3een plae ontrary to te terms o4 te ontrat at some 0stane 4rom te s0te o4 te sawm0ll5 Te 4ats o4 te ase are as 4ollows5 Te appellants a&0ng o3ta0ne a oness0on to ut an remo&e t0m3er 4rom P0tas "state at Ka3atasan ontrate uner te a4oresa0 agreement to supply to te responent su t0m3er tey temsel&es 0 not re?u0re 4or e>port namely ampor seraya o3a sulu an selengan 3atu to te e>tent o4 not less tan -.... u30 4eet 3ase on te measurements mae 3y te )orest epartment 4or te purpose o4 ollet0ng royalty5 !t was agree tat te logs were to 3e el0&ere at te s0te o4 te sawm0ll to 3e erete 3y te responent 0n P0tas "state on a l0ene to 3e o3ta0ne 3y te appellantEs 4rom te )orest epartment5 !t was 4urter agree tat on el0&ery an aeptane o4 any ?uant0ty o4 t0m3er te responent soul pay -.F o4 te pr0e at te agree rates w0t0n - a ys o4 el0&ery an te 3alane w0t0n tree alenar monts 4rom ate tereo45 Su3se?uently te appellants appl0e 4or an o3ta0ne a l0ene 0n te0r name to 3u0l an operate a sawm0ll an te responent 3u0lt te sawm0ll at a s0te mutually osen 3y te part0es5 Te s0te osen was near te on4luene o4 te Ka3atasan R0&er an a tr03utory an lose to te GPen=alanG or plae 4rom w0 te appellants 4loate te0r e>porta3le t0m3er to te sea5 $onse?uently te spae 4or ump0ng te logs lose to te sawm0ll was a&a0la3le on one s0e o4 te sawm0ll only te oter tree 3e0ng too lose to te water4ront5 Beause o4 t0s pro3lem te ?uest0on arose at te tr0al as to wat was a reasona3le 0stane 4rom te sawm0ll 4or te logs to 3e epos0te 0n orer to onst0tute el0&ery Gat te s0teG as st0pulate 0n lause - o4 te agreement5 Te learne tr0al uge el tat a 0stane o4 :.. 4eet 4rom te sawm0ll was te l0m0t w0t0n w0 te logs soul a&e 3een el0&ere to onst0tute el0&ery at te s0te5 'ong Kee Su0 te manag0ng partner o4 te appellant 40rm epose at te tr0al tat 0s ompany a el0&ere 81.69 u30 4eet o4 t0m3er to te responent 0n - lots namely te 1st lot ons0st0ng o4 2. logs measur0ng 1-.- u30 4eet 0n Mar 1968 te 2n lot ons0st0ng o4 197 logs measur0ng 2.9- u30 4eet at te en o4 May 1968 an te -r lot ons0st0ng o4 22 logs measur0ng 29- u30 4eet 0n June 19685 !n regar to te 1st an te -r lots 'ong Kee Su0 proue e30t notes s0gne 3y te responent a=nowleg0ng ree0pt o4 te same 3ut 0n regar to te 2n lot e proue a e30t note w0 was not s0gne 3y te responent5 Te w0tness a&erre owe&er tat te responent a aepte el0&ery o4 te 2n lot o4 logs 3eause tey were measure 3y an o4400al o4 te )orest epartment only a4ter e a selete tem5 Te tr0al uge el tat te appellants a 4a0le to el0&er te 2n lot o4 logs Gat te s0teG 3eause tey were umpe at a 0stane o4 more tan :.. 4eet 4rom te sawm0ll5 !n regar to te -r lot o4 22 logs te responent am0tte el0&ery o4 17 logs only measur0ng 17. u30 4eet5 Tese logs were sa0 to a&e 3een towe own te Ka3atasan R0&er to Kuat 4or el0&ery to anoter sawm0ll operate 3y te responent at a plae alle Se?uat05 Te responent as not ross*appeale an tere4ore tere 0s no 0spute 0n t0s appeal regar0ng te el0&ery o4 2. logs an 17 logs measur0ng 191- u30 4eet5 Te ?uest0ons ra0se 3e4ore us were<

1) 1)

weter te tr0al uge was ust040e 0n ol0ng on te e&0ene tat te 2n lot o4 197 logs an 8 out o4 te 22 logs 0n te -r lot were or were not el0&ere to te responentH an weter te tr0al uge was ust040e 0n assess0ng amages at ;1-19258. on te 3as0s o4 loss o4  pro40tH

!n regar to te ?uest0on o4 el0&ery o4 te 197 logs te learne uge 0n ol0ng tat tey were not el0&ere Gat te s0teG too= 0nto ons0erat0on te 4at tat te appellants were partly respons03le 4or reat0ng te pro3lem o4 spae 3y agree0ng to te s0te were te m0ll was ereteD tat tey =new 4rom te &ery 40rst tat

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te m0ll was e?u0ppe w0t a w0n apa3le o4 aul0ng logs 4rom a 0stane o4 :.. 4eet onlyD an tat 0n a3out July 1968 tey sol te0r 0nterest 0n te t0m3er oness0on to anoter ompany =nown as te K0na3alu $ompany togeter w0t te0r trator w0 was 4ormerly use to aul te t0m3er to te &00n0ty o4 te sawm0ll as te wor= progresse5 Tus te learne uge appears to a&e ons0ere w0t are e&ery aspet o4 te e&0ene an we an 40n no reason 4or 0sagree0ng w0t 0s 40n0ng +,, . 'L/  at 1 

 tat te 2n lot o4 197 logs was not el0&ere to te responent at te s0te o4 te sawm0ll5 !n regar to te 8 logs apart 4rom te reasons g0&en 3y te learne tr0al uge te e30t note ">030t P5 learly sows tat esp0te te a=nowlegement o4 ree0pt o4 22 logs 3y te responent only 17 logs were towe to te responentEs sawm0ll own te r0&er5 o e&0ene was alle to pro&e tat te rema0n0ng 8 logs were e&er el0&ere to or remo&e 3y te responent5 Ce aga0n see no reason to upset a 40n0ng o4 4at 3y te tr0al uge5 !n regar to te la0m 4or amages ar0s0ng out o4 te sort*supply o4 t0m3er 0t 0s lear 4rom te e&0ene tat a te appellants el0&ere te 2n lot o4 197 logs at te s0te o4 te sawm0ll te total amount el0&ere woul a&e 4ar e>eee te m0n0mum re?u0rement5 !t 0s not en0e tat 197 logs were umpe some 0stane away 4rom te sawm0ll5 Tere 0s also no ou3t tat te logs were measure 3y te )orest epartment an te appellants a pa0 te royalty on tem5 Te 3rea o4 ontrat 0n t0s ase was not a repu0at0on o4 te ontrat as a wole 3ut a 4a0lure to el0&er one ons0gnment w0t0n :.. 4eet o4 te m0ll ow0ng to want o4 spae5 Te ontrat pro&0es tat te measure o4 amages soul 3e te 044erene 3etween te agree pr0e an te pre&a0l0ng mar=et pr0e to te e>tent o4 te amount 0n sort supply plus transport e>penses5 Te law owe&er 0mposes a uty on e&ery person wo su44ers amages on aount o4 3rea o4 ontrat to ta=e reasona3le steps to m0t0gate te amage5 !n 2nson3s Pr0n0ples o4 te "ngl0s Law o4 $ontrat 22n "0t0on at page :.8 te 4ollow0ng passage appearstent o4 te amage ause 3y te 3rea5 'e annot la0m to 3e ompensate 3y te party 0n e4ault 4or loss w0 0s really ue not to te 3rea 3ut to 0s own 4a0lure to 3ea&e reasona3ly a4ter te 3rea5 GTus altoug te measure o4 amages 4or 3rea o4 a ontrat to el0&er goos 0s or0nar0ly te 044erene 3etween te ontrat pr0e o4 te goos an te mar=et pr0e at te t0me wen el0&ery soul a&e 3een g0&en yet 04 te pla0nt044 m0gt a&e m0t0gate 0s loss 4 or e>ample 3y any 0mme0ate purase at a low pr0e o4 goos to replae tose not el0&ere or 3y aept0ng a reasona3le o44er 4rom te e4enant to ma=e goo part o4 te loss t0s 0s to 3e ta=en 0nto aount 0n assess0ng 0s amages IBrace v Calder  +179:, 2 @B 2:- Payzu Ltd v Saunders  +1919, 2 KB :715 !t 0s a ?uest0on o4 4at 0n ea ase weter e as ate as a reasona3le man m0gt a&e 3een e>pete to at an e 0s not re?u0re to r0s= 0s ommer0al reputat0on Finlay (Fames) & Co Ltd v ! "#i$ %oo ong %'  +1929, 1 KB 8.. or to em3ar= pon ompl0ate l0t0gat0on IPil$ington v ood  +19:-, $ . 0n orer to m0t0gate 0s loss5G

!n te 0nstant ase tere was no nee 4or te responent to a&e gone to te e>pense an trou3le o4 3uy0ng logs 4rom elsewere wen te logs were ly0ng a 4ew unre 4eet away 4rom te sawm0ll 4or te mere ta=0ng an all tat was re?u0re was a0t0onal e>pense 4or aul0ng tem up to te sawm0ll5 !nstea o4 o0ng tat te responent la0ms to a&e purase t0m3er to ma=e goo te sortage an proue erta0n 30lls w0 were am0tte 0n e&0ene an mar=e ">030t 5:5 !t 0s s0gn040ant tat te learne tr0al uge 0 not re4er to tem 0n 0s ugment5 'e must a&e a a goo reason 4or 0gnor0ng tem5 Tey relate to purases mae 3etween May an August 196: an te transat0ons appear too remote to 3e onnete w0t te appellantsE 4a0lure to el0&er t0m3er 0n June 19685 Ce t0n= tat te appropr0ate amages to 3e aware 0n t0s ase soul 3e te appro>0mate ost o4 aul0ng te loge to te sawm0ll5 Te responent sa0 0n e&0ene tat 0n August 1968 a4ter te appellants a sol te0r t0m3er oness0on to K0na3alu $ompany tey o44ere to arrange w0t tat ompany to aul te logs to te sawm0ll 3ut e a reete te o44er5 'e also sa0 an ! ?uote< GTe K0na3alu $ompany wante ;1...5 ! tol tem ! oul not pay5 )0nally tey aepte ;2.. 4or aul0ng te logs5 Te trator 0 not tow te te logs5 !t 0 not go at all5G !n our op0n0on te appropr0ate amount o4 amages to 3e aware 0n t0s ase soul 3e ;1...5

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Te appeal aga0nst te ugment o4 te ourt 3elow 0n respet o4 a la0m 0n te su0t 0s ere3y 0sm0sse w0t osts an we allow te appeal 0n respet o4 te ounter*la0m 3y reu0ng te amount aware to ;1... w0t te ost o4 te appeal to te appellants5 A123 L4P4 an I-2%3+ K%& C4J4 (B0&*0)  onurre5  2**eal in res*ect of the claim dismissed4 2**eal in res*ect of the counter-claim allo#ed5