SOUTHWIND DEVELOPMENT SDN BHD

v HASS PLANTATION SDN BHD

[1996] 5 MLJ 85

PREPARED BY:
NOOR FARHANA BINTI ABDUL HALIM
LEB130070
Rectification:
- Generally, rectification is one of the remedies provided by the Specific Relief Act 1950 for
breach of contract that occurs.

- The relevant provisions in granting or applying for rectification is provided in Section 30, 31
and 32 of the Specific Relief Act.
It is common ground that before any rectification can be made there must have been
incidence of mutual mistake.
- The mistake of one party is not a good ground for rectification.

Elements:
i) There must equitable and conscientious agreement.
ii) It is essential that both parties had precisely the same intention on which the
document is inaccurate.

Pollock & Mulla on Indian Contracts and Specific Reliefs Acts (10th Ed); In a proper case
the court will amend the language of an instrument for the purpose of making it accord
with the true intention of the parties, having ascertained what that intention was and
also that the words as they stand fail to express it.
FACTS OF THE CASE

Plaintiff: Contractor@ Land Developer

Defendant: Estate Owner-> In fact not the true owner of the land involved; only a desirous
employer to develop the land.
1) An agreement (TCF-1) was executed between Pf and Df to regulate the
performance of works to turn 4,856 hectares of agriculture land to palm oil estates.
2) It is not disputed that the owner of the land is Seatex Development Sdn Bhd.
3) The subject matter of this case is the written agreement (TCF-1) in which the
Df contended that Pf had breached one of the clauses.
4) The pf by an originating summons brought this case and submit that there was
inadvertence in the usage of the words Estate Owner instead of Employer
when TCF-1 was prepared by the pf without any professional help.
5) Accordingly, it is the case of the plaintiff that there was a mutual mistake when the
relevant clauses in TCF-1 made references to Estate Owner instead of
Employer.
6) As such, the pf is applying under s 30 of the Specific Relief Act 1950 to rectify the
agreement (TCF-1) by substituting the words, the Employer for the words, the
Estate Owner in few clauses.
Judgments and Principles:
Issue 1: What were the elements to be established before rectification
would be allowed?
- There must have been incidence of a mutual mistake before rectification
can be made; Lim Hong Shin v Leong Fong Yew (1922) 2 FMSLR 187. In
order to assess mutual mistake, court must;
i. be satisfied that all the parties thereto intended to make an
equitable and conscientious agreement. (s 31 of the SRA)
ii. enquire the intention of the parties of the agreement and its
intended legal consequences and not to confine the enquiry to
what the language of the instrument intended to be. (s 32 of the
SRA).

-It Is essential that both parties have had the precisely the same intention
on the point of which the document is inaccurate.
Held:
-Court is satisfied on balance of probabilities that TCF-1 was intended to be equitable and
conscientious agreement. This is based on the terms therein and the conduct of the parties
in ensuring its performance to indicate that intention. (TCF-2, TCF-3, TCF-14; proves the
contractual relationship of the parties in this case to carry out the work.)

-Having considered the relevant provisions of TCF-1, the words Estate Owner appeared in
the provisions does not reflect the intended purpose of the parties.
E.g: Clause 12 TCF-1 reads:
The contractor shall not without the written consent of the Estate Owner.. assigned this
contract or sub-contract

-This is because the defendant was not the true owner of the land and that the agreement
had nothing to do with Seatex (Land Owner). As, the defendant is only the employer of
plaintiff who wish to develop the land. Thus, to obtain the approval of the Estate owner
would be irrelevant.
 Issue 2: Whether evidence adduced sufficiently made out a case for
rectification?
-Court followed the principle enunciated in Oh Hiam v Tham Khong [1980] 2 MLJ
159; the case for rectification must be made out having regard to the evidence and
circumstances of the case.

Held:
-Based on the arrangements and agreements between the parties, it is sufficiently
adduced that TCF-1 was intended to be the only agreement between the parties (to
carry out the work) and not just an agreement to govern the relationship between
the parties.
-In the course of the performance of the works pursuant to the agreement TCF-1,
the defendant knew that the plaintiff was involved and in fact dealt with plaintiff.
-Thus, evidence had been sufficiently adduced for rectification to be made.

Accordingly, court allowed the application for rectification of the agreement TCF-1
by substituting the words the Employer for the words the Estate Owner.