JUDGMENT

Richard Malanjum J:

The Action

In this action the plaintiffs are seeking for the following orders: (verbatim),

(a) Specific performance by the defendants of the said agreement dated 25 March 1994 in that the defendants are to extract all the merchantable timber standing on the said Land and deliver the same to the plaintiffs;

(b) For an injunction to restrain the defendants, their attorney or servant or agent from committing a breach of the said agreement dated 25 March 1994 in selling the timber extracted from the said Land to any other individual or company, save to the plaintiffs; (c) Damages;

(d) Costs; and

(e) Such other relief as the Court deems fit.

But in his final submissions learned Counsel for the plaintiffs asked for (a) and (b) with (c) as the alternative and (d) thereof.

For the defendants, their defence to the claim may be summarised as follows:

(i) breach of the agreement and failure of the plaintiffs to perform satisfactorily the obligations under the Power of Attorney granted to them;

(ii) that the agreement and the Power of Attorney constituted an assignment of the rights of the defendants in contravention of the provisions of the Forests Enactment 1968 ('the said Enactment') and/ or the Contracts Act 1950 and thus illegal;

(iii) failure of the plaintiffs to comply with the requirement of the State Government, namely, the construction of the Forestry Community Project in the area of the timber land; and

(iv) failure of the plaintiffs to fulfill their other promises besides those stated in the agreement.

However, in his closing submissions learned Counsel for the defendants emphasised on three matters only, namely, on illegality, failure to fulfil additional promises and the non-enforceability of a void contract.

The Agreed Facts

Learned Counsel for both parties at the commencement of the hearing indicated that they had agreed to certain facts. Hence, towards the end of the proceeding the learned Counsel for the plaintiffs submitted a document purporting to be the Agreed Facts and which I marked "A". The contents are herein reproduced in toto:

1. The plaintiffs and the defendants executed a Timber Sales Agreement dated 25 March 1994 wherein the defendants agreed to sell all the merchantable timber on the land as stated in the said agreement to the plaintiffs.

2. There was a Power of Attorney dated 25 March 1994 by the defendants to the plaintiffs. 3. There was a Timber Extraction Agreement between the defendant and Inwill Resources Sdn. Bhd.

Other Relevant Undisputed Facts

From the evidence adduced there were no dispute on the following:

(i) that PW2, Mr. Han Ah Wah is a common director of the plaintiffs and another company, Inwill Resources Sdn. Bhd.;

(ii) that the three documents above-mentioned were all dated 25 March 1994;

(iii) that a timber licence was yet to be issued when the plaintiffs entered into the Timber Sales Agreement with the defendants;

(iv) that the Power of Attorney was also granted by the defendants to the plaintiffs before the issuance of a timber licence to the former;

(v) that some payments were made by the plaintiffs to the defendants upon the execution of the Timber Sales Agreement although the amounts are in dispute;

(vi) that at the time of executing the Timber Sales Agreement and the Power of Attorney the defendants had only secured an approval vide MNR. 401/49/7/2/129 dated 24 June 1993 from the Sabah State Government for their application of a timber land measuring a total area of 1,700 acres more or less at Kg. Balisuk, in the District of Ranau. On the issuance of the timber licence the total area given was 654.40 hectares, at the locality of Sungei Liwagu, Ranau ('the said timber land');

(vii) that when the timber licence in the form of licence to take forest produce - Form I dated 22 April 1996 was issued ('the said timber licence'), it was valid from 22 April 1996 to 19 January 1997;

(viii) that the said timber licence was an ordinary licence