Compliance with statutory requirements is essential to uphold the validity of licenses, which cannot support claims that involve illegality.

[1] This is an appeal against the decision of the High Court of Kuching dismissing the appellant/plaintiff 's claim against the respondents/defendants. The appellant's claims in substance concern declaratory reliefs in respect of two revocations of a timber licence issued to the appellant by the 2^nd respondent and general damages for breach of contract and in tort of 'misfeasance in public office'.

[2] We, after hearing submissions, dismissed the appeal with costs and now give our grounds of judgment.

Background Facts

[3] The background facts have been set out in details by the learned judge and we adopt them. In this judgment we only set out the salient parts of the same.

[4] The appellant through its Director Haji Mohd Louis Ali, had, on 27 July 1982 applied to the then Minister of Forestry Datuk Haji Nor Tahir for a timber licence and the application was approved on 19 July 1983 by the Minister. A Forest Licence T/0279 (licence) was then issued to the appellant by the then Director of Forests. The licence was for a period of 25 years from 10 October 1983 to 9 October 2008 and for an area of 188,926 hectares.

[5] The conditions attached to the licence were these:

a. Clause 15 of the licence stated that 'before any logging contracts are awarded, prior approval should be obtained from the Director of Forests and from the Corporation'.

b. Clause 31 stated that 'This licence is not transferrable'.

c. The licence incorporated a sixth schedule which formed an agreement between the appellant and Sarawak Timber Development Corporation or STIDC and cl (xi) of the aforesaid schedule provides that 'the appellant shall not allot, issue or register the transfer of any shares of the appellant without the prior consent of STIDC, which consent shall not be unreasonably withheld'.

[6] The shareholders of the appellant at the time of the issuance of the Licence were Haji Deli Abdul Rahman (Haji Deli) and Haji Louis Ali (Haji Louis). However on 14 December 1983, both Haji Deli and Haji Louis at the behest of PW5 (Norlia Abdul Rahman) transferred all their shareholdings to Solana Sdn Bhd. The evidence also shows that at the same time the shares in the appellant were issued to two others with the following shareholding status in the appellant:

Temenggong Baya Malang ... 500 shares

POU (Baram) Sdn Bhd......... 2,500 shares

Solana Sdn Bhd ................... 6,998 shares

Total shareholdings............... 9,998 shares

[7] On 5 July 1984 another issuance of shares took place in Solana Sdn Bhd with the result that Lembaga Amanah Kebajikan Melayu Miri, Lembaga Amanah Kebajikan Darul-Falah (BINA), Anib Plantations Sdn Bhd, Crista Holdings Sdn Bhd, Polycarp Enterprise Sdn Bhd, Haji Louis Ali, Haji Deli and Datuk Shabuddin Mat becoming shareholders in Solana Sdn Bhd.

[8] It is undisputed that when the licence was issued in 1983 and the time when the just-mentioned transfers of shares in the appellant and Solana Sdn Bhd, no consent was obtained from the Director of Forests as required by s 2(2) of Forests Ordinance (Sarawak) (Cap 126) ('Forests Ordinance') which reads as follows:

"Where a licence or permit is, under this Ordinance, declared not to be transferable, the licence or permit shall, unless the conservator or a person authorised by him in that behalf directs, be invalid if:

(a) the holder thereof transfers the licence or permit;

(b) in the case of a licence or permit issued to a company, the controlling shares in the country are transferred;

(c) in the case of a licence or permit issued to a partnership, there is a change, save by operation of law, in the partnership; or

(d) the holder thereof enters into an agreement with any other person, the effect of which is to enable th