The power of attorney must be strictly construed, with the authority of the attorney being clearly outlined, and severability principles apply to invalid clauses in such documents.

Mah Weng Kwai JCA:

Brief Facts

[1] On 19 April 1979 the respondent granted a revocable and general Power of Attorney (the first PA) to one Hassan bin Othman (Hassan).

[2] Pursuant to cl 6 of the first PA, Hassan as an attorney could let, sell, lease, subdivide, surrender or amalgamate any of the respondent's lands; and pursuant to cl 13, Hassan could 'purchase and accept transfer of lands, mines, houses and movable and immovable properties and for that purpose to sign all necessary agreements, transfers and other documents' on behalf of the respondent.

[3] About nine years later, on 10 December 1988, on an application by Hassan, the State Director of Lands and Mines, Kelantan, granted a 10-year "Pajakan Melombong" (Mining Lease) to the respondent.

[4] On 30 November 1999 some 11 years after the Mining Lease had been granted to the respondent, Hassan granted a special Power of Attorney (the second PA) to one Mustapha bin Mohamed (Mustapha) to act on behalf of the respondent in matters in respect of the Mining Lease. Clause 13 of the second PA provided that it was "irrevocable".

[5] In February 2000 Mustapha under the authority of the second PA entered into a Memorandum of Understanding (MOU) with the appellant allowing it to fell and extract timber and to mine for gold on the land comprised in the Mining Lease (the said land).

[6] Following the February 2000 MOU, Mustapha entered into two agreements with the appellant on 10 April 2000 for the extraction of timber and mining on the said land.

[7] On 19 October 2000 the State Director of Lands and Mines extended the mining lease for another period of 10 years in favour of the respondent.

[8] On 3 December 2000 the State Director of Lands and Mines issued the mining certificate for the said land to the respondent.

[9] At all material times the appellant paid for the cost of survey of the said land, 'prospecting tests', a sum of RM230,000.00 to Mustapha as consideration for the two agreements, premiums, quit rents and deposit for the Mining Lease.

[10] On 8 January 2001 that is, before the timber licence could be issued by the Jabatan Perhutanan Negeri to the respondent on 21 February 2001, the respondent executed a Deed of Revocation to revoke the first PA. The appellant was informed of the Deed of Revocation by one Mejar Abdullah, an agent of the respondent on 19 April 2001. Although Hassan was cited as the second party in the Deed of Revocation, it was not signed by Hassan.

[11] Following the revocation of the first PA, the respondent entered into an agreement with Warisan Tiara (M) Sdn Bhd to extract the timber and to mine the said land.

[12] The appellant and the respondent failed to arrive at an amicable settlement herein, resulting in the appellant filing its claim.

The Appellant's Claim

[13] The appellant in its statement of claim prayed for a declaration that the two agreements dated 10 April 2000 are valid and binding on the respondent; a declaration that the Deed of Revocation dated 8 January 2001 revoking the first PA was null and void; an injunction to restrain the respondent from allowing any third party to extract the timber and to mine the said land and for damages.

[14] Essentially, the appellant claimed that it had the right to fell and extract the timber and to mine the said land by virtue of the second PA granted by Hassan to Mustapha and by virtue of the two agreements entered into between Mustapha and the appellant.

[15] The appellant maintained that the revocation of the first PA by the respondent did not invalidate its rights under the two agreements.

The Respondent's Defence

[16] The respondent's defence was that he had granted the first PA to Ha