Parties must adhere to their pleadings; the absence of a claim in conversion or evidence to support such a claim necessitates dismissal of related appeals.

JUDGMENT

Mary Lim Thiam Suan JCA:

[1] These two related appeals were respectively filed by the 1st and 2nd defendants. The High Court had allowed the respondent's claim for specific performance of an agreement to extract timber and had further ordered the appellants to pay damages in the sum of RM2,680,511.68 for the timber extracted. Upon full consideration of the submissions, the records of appeal and the grounds of judgment, both appeals were unanimously allowed.

[2] For ease of reference, the parties will be referred to as they were at the High Court.

Material Background

[3] The 1st defendant is the registered and beneficial owner of a total of 467 parcels of native titles lands located in Kampung Kieyap, Ranau and measuring an area of over 5,000 acres [the said lands]. Timber could be found on the said lands.

[4] On 22 March 2011, the plaintiff and the 1st defendant entered into an agreement wherein the 1st defendant agreed to sell to the plaintiff "all the Commercial Timber extracted from the said lands" irrespective of timber species at the rate of RM700,000.00 in which "20% shall be paid upon signing of this Agreement, putting on tractor on site 20%, issuance of Form I or Form II B timber licence 20% on and on first Loading of timber 40%" [Timber Sale Agreement]. We pause here to note that although the term "Agreement" is mentioned in the Amended Statement of Claim, we understand that it must necessarily refer to the Timber Sale Agreement.

[5] Pursuant to cl 4 of the Timber Sale Agreement, the timber may only be extracted within a specified "time window"; that is, the plaintiff "shall commence extractions of all Merchantable Timber from the said Land within one month from the approval date of Timber Extraction Licence from the Forestry Department"; and "shall complete the timber extraction within 24 months from the day of this Agreement."

[6] On that same date, the 1st defendant granted the plaintiff a Power of Attorney, appointing the plaintiff "to be my true and lawful Attorney for me and in my name or in its name and on my behalf to do all or any of the following acts matters and things in connection with and in relation to the said Land" [First PA]. Although the First PA is stated as "shall deem terminated and with no legal effect within 24 months from the date hereof", it is not in dispute that the First PA was for the duration of 24 months from 22 March 2011, automatically expiring on 21 February 2013. What is in dispute is the matter of a Second PA.

[7] Apparently, the plaintiff did not extract timber from all of the said lands within the 24 month's period. He claimed that he "could not proceed with the timber extraction" because he did not have the requisite licence from the Forestry Department to do so. He blamed this on the 1st defendant, claiming that the 1st defendant had misrepresented himself as the registered owner of all 467 native titles when he was registered owner to only 120 native titles and even then, only 18 titles constituted "block of parcels". The plaintiff also claimed that the Forestry Department was only willing to issue licence for parcels constituting a block and not for scattered or separated parcels of land, as was supposedly the state of the 1st defendant's lands. According to the plaintiff, this meant he was only able to extract timber from "around 18 titles constituting a block of parcels".

[8] After raising these matters with the 1st defendant, the 1st defendant executed a Second PA in favour of the plaintiff and further assured the 1st defendant that he will "do what was necessary to have all the 467 native titles registered in his name". The plaintiff claimed that despite his assurances, the 1st defendant failed to have the titles registered in his name, as a result of which he could not proceed with the timber extraction.

[9] The plaintiff then discovered that the 2nd defendant had entered into and extracted timber from part of the said lands which the 1st defendant had already sold to him.