Gopal Sri Ram JCA:

[1] This is an appeal against the decision of the High Court setting aside an injunction obtained ex-parte by the appellant (the plaintiff in the Court below) against the respondents (defendants in the Court below). For convenience, the parties will, throughout this judgment, be referred to as plaintiff and defendant. The injunction obtained by the plaintiff enjoined the defendants and their agents from, inter alia, entering the parcel of a timber concession known as Block 549 or from giving any effect to any agreement, apart from the agreement with the plaintiff to sell him the timber logs harvested from the said parcel. On 28 November 1994, the plaintiff moved this Court on an urgent basis for an interim injunction in terms of the order that was discharged to secure the status quo pending the disposal of the appeal. After having heard argument we allowed the plaintiff's application, exercising the powers conferred on us by s 44 of the Courts of Judicature Act, 1964. In view of the urgency of the matter, there being an imposition of a temporary restraint upon the defendants and the interest of the State Government as issuing authority being indirectly involved, we directed that the appeal proper be heard on 12 December 1994. Accordingly, the appeal came up before us on that date. After hearing submissions of Counsel we allowed the appeal, indicating that we would give our reasons for the decision we handed down and this we now do.

[2] The brief facts relevant to this appeal are these. On 9 October 1990 the State Government of Trengganu wrote a letter to Kilang Perkayuan Hj Mohd Noor ("the firm"). In it they offered to the firm a licence to enter upon and harvest timber from two parcels of a concession measuring an area of about 1000 acres and demarcated as compartments 48 and 412 respectively. The offer was accepted. As at the date of that letter the 1st defendant was the sole proprietor of the firm. On 13 January 1991, before any licence was issued, the firm (in effect the 1st defendant) entered into a written agreement ("the Agreement") with the plaintiff under the terms of which it sold to the plaintiff all the timber located on the two parcels. By a letter dated 28 January 1991, the State Authority wrote to the firm calling for the payment of the premium and other dues. The sums called for having been settled, the State Authority issued the licence firstly in respect of compartment 412 in respect of which no dispute arises. Large sums of money were paid by the plaintiff to the 1st defendant, some of which were, according to the plaintiff's affidavit evidence, in advance of the due dates for payment, including the premiums due to the State in respect of both parcels. In response to a question by the Court, Encik Das, who appeared for the plaintiff before us (but who was not Counsel in the Court below) said that the plaintiff had paid the firm RM870,000. The plaintiff began to harvest timber from compartment 412 using the services of a Mr Ng Kim Vooy of Zaman Enterprise and as we have said, without there being any dispute. Whose agent Mr Ng was in the whole transaction is the subject of some controversy. When the plaintiff came to harvest timber from compartment 408, he discovered that that parcel had been subjected to logging by neighbouring loggers. The compartment had been left in a state in which it did not accord with the terms or the description accorded it in the original grant in the licence. It is the plaintiff's case that, at this stage, an arrangement was arrived at whereby the firm was to apply for a parcel to replace compartment 408. This was done and the State issued a new licence to the firm in respect of a new parcel designated as compartment 549 which is the subject of the present litigation. In its letter dated 18 October 1993, approving the replacement, the State made it clear that all moneys paid to it under the previous grant would be taken into account in reckoning the premium