Haidar Mohd. Noor J:

The plaintiff, Sarawak Building Supplies Sdn. Bhd. ("SBS") is a company limited by shares incorporated and registered in Malaysia pursuant to the Companies Act 1965 and having its registered office at no. 57, 2nd Floor, Mission Road, Sibu, Sarawak. SBS was the holder of Forest Timber Licence No. T/3019 ("the said licence") covering an area of 64,757 acres of timber land in the Takan Pelagus area, Sarawak issued by the Director of Forest, Sarawak (first defendant) with the approval of the Minister of Forestry (now the Minister of Resource Planning)(second defendant) pursuant to the provisions of the Forest Ordinance (Cap. 126) on 28 December 1979. The said licence was valid for a period of ten years commencing from the date of issue. The third defendant is the Government of the State of Sarawak. By a letter dated 11 March 1987 the first defendant on the direction of the second defendant, gave notice to SBS revoking the said licence without assigning any reason and before the expiry of the period of the said licence. Hence, the filing of this writ by SBS against the defendants seeking a number of claims.

The defendants entered conditional appearance through their advocate, Mr. J. C. Fong, who was duly authorised to act on their behalf vide authorisation under s. 24(3) of the Government Proceedings Ordinance 1956, as extended to Sarawak by the Modifications of Laws (Government Proceedings and Public Authorities Protection) (Extension and Modification) Order 1956 (L.N. 67 of 1965) issued by the acting State Attorney-General (encl. 8). Subsequently, the defendants filed a summons-in-chambers dated 17 April 1990 under O. 12 r. 7(1) of the Rules of the High Court 1980 ("RHC") for an order that:

(a) this action filed in the name of the plaintiff - company, Sarawak Building Supplies Sdn. Bhd., be struck out or dismissed or stayed;

(b) the advocates on record Messrs. L.L. Kee & Co. were never or not properly authorized to act on behalf of the plaintiff - company; and

(c) the costs of and incidental to this action and to this application be paid by the advocates on record, Messrs. L.L. Kee & Co. to the defendants.

At the hearing of the summons in chambers (encl. 11) the defendants elected to rely only on the following grounds:

(i) no authority has been given by the board of directors of the plaintiff company and/or the majority of its shareholders for this action to be commenced in the name of the plaintiff company;

(ii) this action was improperly instituted in the name of the plaintiff company;

(iii) Messrs. L.L. Kee & Co. were never authorised to act for the plaintiff company;

(iv) it is improper to maintain this action in the name of the plaintiff company.

The paramount issue therefore is whether this action has been properly brought or should be maintained or continued in the name of SBS. Mr. J.C. Fong concedes that the summons succeeds or fails depending on the determination of this issue by the Court.

Facts

Initially SBS was under the control of Huang Ee Hoe and Huang Shoou Shinu (the Huangs) as its directors, when the said licence was given to SBS on 28 December 1979 by the first defendant. Subsequently on 20 May 1980 both of them entered into a joint venture agreement (Exhibit "HEH4") with Tiong Ik Kiong and Tiong Thai King ("the Tiong's) inviting Tiong Ik King and Tiong Thai King or their nominees to take up 255,000 shares and such shares are described as "A" ordinary shares and 245,000 shares are to be taken up by Huang Ee Hoe and Huang Shoou Shinu or their nominees and such shares are described as "B" ordinary shares in SBS. The necessary amendments will be made to the articles of association of SBS on the due execution of HEH-4 to allow holders of "A" ordinary shareholders the power to appoint not more than seven directors and likewise for holders of "B" ordinary shareholders to appoint not more than six directors in SBS. Both the holders of "A" and "B" ordinary shareholders shall have the power