1 This trial has taken 29 hearing days. It commenced on 5 January 1981 and was part-heard on two occasions. What appeared on the pleadings to be a case relating to the construction of certain documents has turned out to be a trial in which the evaluation of the oral evidence given at the hearing has become a matter of vital importance. The notes of evidence of the witnesses I have recorded exceed 350 typed foolscap pages. The submissions of counsel have taken over four hearing days. Mr Gavin Lightman for the plaintiffs, and Mr Philip Cox for the defendants have comprehensively covered the issues of facts and law that arise for decision. Having regard to the course of the proceedings I have described, I am of the view that it is in the interests of everyone that I should give a concise judgment now rather than reserve it and write in extenso.

2 The case relates to a granite quarry in Pulau Ubin. The plaintiffs have a lease of the land from the lessor, the President of the Republic of Singapore, to use and manage the land for the purposes of a granite quarry for a term of ten years from 1 September 1969. The rights and privileges of the President are at all times administered by the Commissioner of Lands. It is not in dispute that since the expiration of the lease on 31 August 1979, the plaintiffs have been allowed to continue granite quarrying operations on the land, until such time the land is required by the Government, on a Temporary Occupation Licence on a month-to-month basis from 1 September 1979.

3 By an agreement in writing dated 2 May 1975 (the 1975 agreement), the plaintiffs granted an exclusive licence to the defendants to use and manage the quarry from 1 May 1975 for the duration of the period of the lease granted to the plaintiffs by the Commissioner of Lands. Under cl 7 it is provided that `At the expiration of the present agreement and if the Commissioner of Lands offer a further lease` to the plaintiffs, then the defendants `shall be given priority to continue with the existing arrangement` subject to the other terms therein. It is common ground that in law the 1975 agreement created a licence coupled with an interest in the land.

4 On 15 December 1978 the defendants` managing director, Mr Lim Kim Hong (Lim) wrote to the manager of the plaintiffs that the 1975 agreement will be expiring on 31 August 1979 and offered `our main terms for the renewal of the agreement`. In the penultimate paragraph of his letter, Mr Lim said:

5 On 14 February 1979 Mr Yeoh Sze Hon (Yeoh), the manager of the plaintiffs, referred to Mr Lim`s letter and said: `I regret to inform you that the Board of Directors do not accept your offer.`

6 On 11 May 1979 the solicitors for the plaintiffs made a counter-offer to the defendants. The solicitors pointed out in their letter that the terms offered were `subject to the renewal of the lease by the Commissioner of Lands ...`. The defendants did not respond to this counter-offer.

7 A meeting was arranged to discuss the renewal of the 1975 agreement. It was held on 10 July 1979 on the 24th floor of Hong Leong Building. The primary issue in this case is whether at that meeting an oral agreement was concluded between the plaintiffs and the defendants. On the state of the pleadings the burden of proof of the existence of the oral agreement was on the defendants.

8 Mr Lim gave evidence that he was the sole representative of the defendants at the meeting. Though Mr Richard Goh, the marketing manager of the defendants, was called to prove that he did not attend the meeting, his evidence is of no assistance to me. Not only has he a poor memory and is an unreliable witness, but for reasons best known to him (perhaps he thought it would demonstrate that he was an unbiased witness) he gave evidence of uncalled for untruths.

9 On the plaintiffs` side, three of the four persons who represented the plaintiffs at the meeting gave evidence at the trial. They were Mr Chng Gim Huat (Chng), a director who de factowas the managing director of the plaintiffs, Mr Kwek Hong Lye (Kwek), chairman of the plaintiffs, and Mr Yeoh, the manager of the plaintiffs. There is no reason for me to doubt their evidence that Mr Richard Goh was at the meeting with Mr Lim.

10 The evidence of what took place at the meeting is fresh in my mind. From the evidence-in-chief of Mr Lim, it is to be inferred that it was a short meeting. He said that after the discussion on the fluctuation of prices of granite between him and Mr Chng, there was a brief conversation between Mr Chng and Mr Kwek, there was a nod from Mr Kwek, and then Mr Chng announced that the 1975 agreement would be extended for a further period of five years with the exclusion of one clause in the agreement. But when I consider the evidence of Mr Lim in cross- examination, I find that it was a fairly long meeting at which many topics were discussed. The examination of the whole of his evidence supports the submission of Mr Lightman that there are many unsatisfactory features in the evidence of Mr Lim, like his inability to recall when he ought to, changes in his evidence after adjournments, outstanding contradictions and there are other disturbing elements in his evidence. One example will suffice. There is the crucial matter of whether the renewal of the lease by the Commissioner of Lands was mentioned at the meeting. As regards it, it is on record in the opening address of Mr Cox that there was no discussion of the lease at the meeting. At one point in the evidence of Mr Lim there is his negative answer. On another occasion he said it was mentioned at the beginning of the meeting. Yet on another occasion, he said it was at the end of the meeting. Finally, there are his responses that he was told of the renewal before the meeting.

11 In contrast to the evidence given by Mr Lim, the evidence for the plaintiffs of what took place at the meeting is more complete and vivid. One gets a clear picture of that business meeting, of the negotiations that took place between Mr Lim and Mr Chng consequent upon the failure of the parties to agree to a renewal of the 1975 agreement through the exchange of letters. Put shortly, the evidence for the plaintiffs is that the parties did not come to any agreement at the meeting, because they could not agree on the terms for the renewal of it. It is common ground that the meeting ended with Mr Lim being told to go back and write a letter.

12 A finding of importance I have to make is whether there was any mention at the meeting on 10 July 1979 on the subject of the grant of a lease by the Commissioner of Lands. It is the plaintiffs` case that Mr Lim was told at the meeting that any agreement on the terms for the renewal of the 1975 agreement was conditional to the Commissioner of Lands giving a new lease to the plaintiffs. Mr Lim`s case however is that at that meeting he was clearly told that the lease had been renewed. I find as a fact that the plaintiffs` case is the true account. The matter is put beyond doubt in the letter of Mr Lim written two days after the meeting, on 12 July 1979. I am not concerned here with the body of the letter in which I find Mr Lim sets out his understanding (italicized for emphasis) of the discussions had at the meeting. In the context of the matter I am dealing with, it is the statement of Mr Lim in the last sentence of his letter that is crucial. It corroborates the oral evidence given for the plaintiffs and refutes the defendants` version of the discussions had at the meeting. The last sentence of Mr Lim`s letter reads as follows:

13 On the phrase `Quarry Licence` in the above sentence, there is the evidence of the wife of Mr Lim that she had typed the letter, that the letter was dictated to her in Mandarin by her husband, and that the words `Quarry Licence` was spoken by him to her in English. I need not dwell on her evidence. It is clear from a reading of her evidence that, as was submitted by Mr Lightman, she was a dutiful wife who gave evidence to serve the interests of her husband.

14 Mrs Lim was called to buttress the evidence of Mr Lim that at the meeting of 10 July 1979 there was a discussion not on the grant of a lease by the Commissioner of Lands but on the issue of a licence for the quarry by the Public Works Department, and that is why Mr Lim had referred in his letter to the `Quarry Licence`. I do not want to go into the topic relating to the issue of licence by the Public Works Department canvassed at the hearing. Mr Lightman has dealt with it fully and I accept his submissions thereon. As for the phrase `Quarry Licence` in the letter, I am satisfied that by making reference to the Commissioner of Lands Mr Lim, as he had done in his letter of 15 December 1978, was referring to the `quarry lease` because the interest of the Commissioner of Lands is in the lease and not in the issue of licence by the Public Works Department. I am also satisfied that Mr Lim knew very well that the issue of licence by the Public Works Department has got nothing to do with the Commissioner of Lands.

15 So then, on the findings I have made on the evidence of the witness who testified before me, I am satisfied that on the discussions had at the meeting on 10 July 1979, the evidence for the plaintiffs is to be altogether preferred to the evidence given for the defendants. I find as a fact that no contract was concluded at this meeting for the renewal of the 1975 agreement.

16 Next, there is a legal issue equally central to the case. It is the issue of illegality. For the plaintiffs, it is contended that the 1975 agreement (and the alleged renewal of it) is rendered unlawful by the Sand and Granite Quarries Act (Cap 282) (the Act). The solicitors for the defendants too, in the exchange of correspondence with the plaintiffs` solicitors before action, had formed the same view. It is now urged upon me for the defendants that there is nothing in the agreement that makes it illegal under the Act.

17 On the policy and object of the Act, I accept the submissions of Mr Cox that the Act regulates and controls the operation of granite quarrying which is potentially dangerous and liable to cause a nuisance to the environment; that it effectively controls the working conditions within the quarry and safeguards all persons working or present in or about the quarry; and that it provides effective control of the quarrying operations so as to safeguard the rights of adjoining occupiers and any other persons who may be adversely affected thereby.

18 The objects are achieved in the following provisions of the Act:

19 The cumulative effect of these provisions is that once a licensing officer has issued a licence in respect of a particular quarry, it is the licence and the licensee alone who must manage, use and operate the quarry. It goes without saying that the licensee would have to employ persons to work on the quarry. The licensee may even employ independent contractors. But to carry out the avowed objects of the Act, the licensee must have exclusive possession of the quarry, and the licensee must exercise effective control over the persons working on the quarry.

20 The question that I have to consider is this. Looking at the 1975 agreement, does the agreement authorise the plaintiffs or the defendants to use or manage the land at Pulau Ubin for the purposes of a granite quarry? To answer the question, I turn to the agreement.

21 It is clear from a consideration of these clauses that the defendants have exclusive possession of the quarry, they have a licence coupled with an interest in the land. They also have the right to quarry as they think fit on their own account without any limitation subject only, to their obligation to comply with the Act and of the other statutory provisions relating to granite quarries. In my judgment, it is the defendants who are using or managing the land for the purposes of a granite quarry without a licence from the licensing officer authorizing them so to do. It follows therefore that the 1975 agreement is rendered unlawful under the Act. Accordingly, as conceded by Mr Lightman, the plaintiffs` claim to purchase the machinery pursuant to cl 19 of the 1975 agreement is unenforceable.

22 Finally, I want to say something on the defence mounted for the defendants. Their case is, on the footing that there was an oral agreement concluded between the parties on 10 July 1979, the plaintiffs had by the end of August 1979 reneged it. They say that the plaintiffs went back on the oral agreement because the plaintiffs had given a licence to another company, Island Concrete (Pte) Ltd on terms more advantageous to the plaintiffs than under the oral agreement they had with the defendants. This, they say, was unjust and inequitable to them. Island Concrete, like the plaintiffs, is under the control of the Hong Leong Group.

23 To make out the defence, the defendants called Mr Tan Hee Chee (Tan), the manager of Island Concrete, as part of the defendants` case. He said the plaintiffs approached Island Concrete after their negotiations with the defendants to renew the 1975 agreement had broken down. He maintained that Island Concrete had entered into a sub-contract with the plaintiffs to operate the quarry in Pulau Ubin. In support of his claim, he produced certain documents. There is no need to refer to them here. When Mr Chng gave evidence for the plaintiffs, he was cross- examined at length by Mr Cox, both on the documents that had been produced by Mr Tan and on the claim of the plaintiffs that they had a sub-contract with Island Concrete. Mr Lightman has submitted that all these are irrelevant matters. I cannot agree with him. The cross-examination of Mr Chng was relevant to credit, and the facts that have emerged in the cross-examination would have been material to the defence had the alleged oral agreement of 10 July 1979 been proved by the defendants.

24 Now, on the evidence before me, I am satisfied that the documents produced by Mr Tan do not show the true nature of the relationship between Island Concrete and the plaintiffs. In this context, I accept the evidence of Mr KS Chung and Mr Tan Geok Ser who said that as the solicitors for the plaintiffs they were told by the representatives of the plaintiffs when they were given instructions in this case that the plaintiffs had entered into a sub-contract with Island Concrete. But the solicitors were not told or shown the documents which Mr Tan produced in court. Included in the documents are contracts alleged to have been made between the plaintiffs and Island Concrete without the benefit of legal advice.

25 On a review of the whole of the evidence on this subject, the conclusion I come to is that the arrangement the plaintiffs have with Island Concrete is similar in nature to the terms in the 1975 agreement the plaintiffs had with the defendants. The plaintiffs have given Island Concrete a licence coupled with an interest in the land in Pulau Ubin to use and manage the land for the purposes of a granite quarry. Like the 1975 agreement, the arrangement the plaintiffs have with island Concrete is illegal under the Act. It is also in breach of the temporary occupation licence given to the plaintiffs by the Commissioner of Lands.

26 I now come back to the claim of the plaintiffs. For the reasons I have given, there will be judgment for the plaintiffs (a) for the payment of the arrears due to the plaintiffs from the defendants under the 1975 agreement; (b) a declaration that the licence granted to the defendants by the 1975 agreement expired on 31 August 1979 and that the plaintiffs are and have been since such date entitled to possession of the quarry; (c) an injunction as claimed in the statement of claim; and (d) costs. The counterclaim of the defendants is dismissed with costs.

27 Claim allowed ; counterclaim dismissed.