JUDGMENT

Arifin Zakaria FCJ:

The Background

[1] This is an appeal pursuant to leave of this court on the single question which reads: "When an action is based on and founded on the tort of conversion, does property pass to a party under a sub-contract agreement, as regards ownership of such property?". Before we proceed to consider the question posed to us, it is necessary to briefly state the facts pertinent to this appeal.

Brief Facts

[2] A timber concession was given by the State Government of Pahang to one Mohamad Aminallah to fell and extract timber from a concession area. By an agreement dated 6 May 1994, he appointed Chan Kwek Meng (the first defendant in the High Court) as the principal contractor to fell and extract timber from the concession area. Under the agreement Chan is entitled to sell the felled timber. Chan in turn appointed Lim Kuoh Wee, the respondent herein, to fell and extract the timber under an agreement dated 28 January 1995, between him and the respondent. About a year later the respondent discovered that Chan had extracted the timber from the concession area and sold them to the appellant. The respondent then went to Chan's stockpile area and there he fou