JUDGMENT

Ismail Khan (Borneo) CJ:

This is an appeal from the judgement of the High Court at Kota Kinabalu. whereby the respondents obtained judgement against the appellants in the sum of $255,000. The learned trial Judge dismissed the appellants' counterclaim for $83,128,08. The circumstances leading to the action in the High Court are as follows. The Forest Officer, Sabah, issued a licence under the Forest Rules, 1954 on the 14 September 1965 authorising the Beaufort Timber Extraction Cooperative Society (hereinafter called the licensees) to extract timber at Lumadan in area about 3,370 acres (hereinafter called the concession).

By a power of attorney dated the third day of 1965, (hereinafter called the first deed) the licensees appointed the Jesselton Development limited their attorneys in respect of the rights under the licence. There is power to substitute under the deed.

By a deed dated the 13 September 1966 (hereinafter referred to as the second deed) the Jesselton Development Ltd appointed the respondents in their place as attorneys for the licensees. The respondents exercised their rights under the licence until the year 1968 when they failed to pay royalty and other dues