Lingkabau Development Sdn Bhd v Pauzi Bin Antahar (trading As Kaansayan Enterprise) (S-01(NCvC)(W)-561-08/2022)

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THE STATE GOVERNMENT OF SABAH …RESPONDENTS Heard together with CIVIL APPEAL NO. S-01(NCvC)(W)-562-08/2022 … APPELLANT … RESPONDENT 19/06/2026 16:30:25 S-01(NCvC)(W)-561-08/2022 Kand. 46 S/N Ptb5q2Kd0kyMIIh43yPog [In the Matter of High Court in Sabah and Sarawak at Kota Kinabalu Civil Suit No: BKI–22NCvC–81/9–2019 (HC2) … Plaintiff

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THE STATE GOVERNMENT OF SABAH … Defendants] CORAM: LEE SWEE SENG, JCA LIM CHONG FONG, JCA ALWI BIN HJ. ABDUL WAHAB, JCA GROUNDS OF JUDGMENT Introduction [1] In R1 (appeal 561), the appellant’s (Lingkabau Development Sdn Bhd) (“Lingkabau” in short) appeal is against the learned High Court Judge’s (“HCJ”) decision given on 29.6.2022 dismissing its S/N Ptb5q2Kd0kyMIIh43yPog claim. Lingkabau is the Plaintiff in the High Court (“HC”). [2] The respondents in R1 are Fauzi Bin Antahar (the 1st Defendant in the HC), Amat Md. Yusuf (the 2nd Defendant in the HC), Awang Shahriman Datuk Hj. AG Sahari (the 3rd Defendant in HC) and the State Government of Sabah as the 5th Defendant in the HC. In the HC, the 4th Defendant is the Ministry of Natural Resources which was struck out as a party at the request of the Plaintiff. [3] In R2 (appeal 562), the appellant’s (Fauzi Bin Antahar) appeal arose from the same decision of the learned HCJ given on 29.6.2022 dismissing his counterclaim. The appellant is the 1st Defendant in the HC. The respondent in R2 is Lingkabau. [4] Both appeals R1 and R2 are interrelated, arising from the same factual matrix concerning communal land in Sipitang, Sabah, held under title FR194028209 in the name of the Collector as trustee for native beneficiaries pursuant to Section 76 of the Sabah Land Ordinance (Cap. 68) (“the Land”). The Parties [5] For consistency, the parties will be referred to as they were in the HC namely Lingkabau as the Plaintiff; Fauzi Bin Antahar as the 1st Defendant; Amat Md. Yusuf as the 2nd Defendant; Awang Shahriman Datuk Hj. AG Sahari as the 3rd Defendant; and, the State Government of Sabah as the 5th Defendant. [6] The Plaintiff at the material time was involved in the business of S/N Ptb5q2Kd0kyMIIh43yPog extracting and felling of timber. [7] The 1st Defendant at all material times, carried on a timber business under the name and style of Kaansayan Enterprise, particularly in the extraction and felling of timber. [8] The 2nd and 3rd Defendants were at material times, the Secretary and Deputy Secretary of the Natural Resources Office, a department attached to the Chief Minister’s Office which supervises the Lands and Surveys Department/ Jabatan Tanah dan Ukur (“JTU”), Sabah Forestry Department (“SFD”) and Sabah Biodiversity Centre [9] The 5th Defendant, the Sabah State Government was sued as being vicariously liable to account for the acts and/or omissions of the 2nd and 3rd Defendants. Brief Facts and Background [10] On 24.3.2016, the Sabah Land Development Board (“SLDB”) informed the JTU’s director that they had received funding from the Federal Government in the sum of RM11,274,000.00 through the Ministry of Rural and Regional Development to carry out land development on a land registered under Communal Title FR194028209 measuring 1,133.20 hectares situated at Kampung Iburu, in the district of Sipitang ('the Land'). [11] By the said letter, SLDB also applied to JTU to be appointed as the implementing agency to develop the Land into an oil palm S/N Ptb5q2Kd0kyMIIh43yPog plantation. [12] The application from SLDB was forwarded by JTU to Pejabat Hasil Bumi (“PHB”) for its approval and PHB approved the same on 16.6.2016. [13] JTU then conveyed the said approval to SLDB to enter and develop the Land through a letter dated 27.6.2016 (Encl. 17 pp 12-13) subject to the terms and conditions stated herein at paragraph 2 as follows: “2. Sukacita dimaklumkan bahawa,Pihak Berkuasa Kerajaan Negeri telah bersetuju untuk Lembaga Kemajuan Tanah Negeri Sabah (LKTNS) membangunkan kawasan geran komunal tersebut secara usahasama dengan benefisiari. Dengan persetujuan tersebut, pihak tuan atau agen yang dilantik adalah dibenarkan masuk ke kawasan geran komunal FR.194028209 untuk membangunkannya, tertakluk kepada syarat-syarat seperti berikut;

2.1 Pihak LKTNS hendaklah menyediakan surat perjanjian usahasama dan ditandatangani antara LKTNS dengan benefisiari geran komunal tersebut, Tiga (3) salinan surat perjanjian yang telah ditandatangani hendaklah dikemukakan ke pejabat ini, untuk rekod.

2.2 LKTNS hendaklah melantik Juruukur Berlesen untuk mengukur kawasan geran komunal tersebut dengan kos ditanggung oleh LKTNS

2.3 Kawasan tersebut hendaklah dibangunkan untuk tujuan pertanian sahaja sama ada, tanaman kelapa sawit, getah atau ternakan lembu.

2.4 LKTNS atau agen yang dilantik tidak boleh menuntut kepada Kerajaan Negeri, sebarang kerugian daripada usahasama tersebut.

2.5 Perintah Perlindungan Alam Sekitar (aktiviti yang ditetapkan dan Penilaian Kesan Alam Sekitar 2005) seperti yang ditetapkan oleh Jabatan Perlindungan Alam Sekitar, hendaklah dipatuhi.

2.6 Jika LKTNS atau agen yang dilantik memohon untuk membalak dalam kawasan geran komunal tersebut, bayaran dikenakan sebanyak RM14 000.00 (Ringgit Malaysia Empat Belas Ribu Sahaja) iaitu kadar RM5.00 seekar dan hendaklah dibayar kepada Penolong Pemungut Hasil Tanah Sipitang atau mana-mana Pejabat Tanah. Apabila memohon lesen membalak, surat kebenaran ini dan salinan resit pembayaran tersebut hendaklah dikemukakan kepada Pengarah Jabatan Perhutanan.

2.7 Laporan Penilaian Kesan Alam Sekitar (ElA) hendaklah disediakan dan diluluskan sebelum kerja-kerja pembalakan dilaksanakan.” [14] The appeal by the Plaintiff is centred on the issues relating to the right of the Plaintiff to extract timber from the Land. The Plaintiff alleged that there were interferences by all the Defendants which prevented the Plaintiff from carrying on its timber business. [15] The appeal by the 1st Defendant relates to the counterclaim for damages for loss of earnings and expenses incurred due to the interim injunction allegedly wrongfully obtained by the Plaintiff on 27.4.2018 and subsequently the injunction dated 27.6.2018 which was dismissed by the HC. The Plaintiff’s Case [16] The learned HCJ in his Grounds of Judgment (“GOJ”), set out the Plaintiff’s case together with the causes of action relied upon as follows: “7. Although the Plaintiffs cause of action appears to be based on, among others, allegations that it was prevented from entering the subject land "due to the wrongful and/or unlawful interference with the rights of the Plaintiff by the 1st, 2nd and 3rd Defendants or their servants or agents (see BP, page 8, paragraph 22 & 23),” and that the 2nd and 3rd S/N Ptb5q2Kd0kyMIIh43yPog Defendants wrote to the Chief Conservator of Forest to issue a licence to the 1st Defendant to extract timber from the subject land despite knowing that the Plaintiff has a right to develop the subject land into an oil palm plantation for the Co-Owners (see BP, page 8, paragraph 24)." There were also many instances of letter-writing or correspondence which were pleaded, culminating in the District Forest Officer writing to the Plaintiff on 27 December 2017 cancelling its Form 2B licence, and the Chief Conservator of Forest issuing a Form 2B licence to the 1st Defendant on 16 April 2018 as allegedly instructed by the 2nd and 3rd Defendants. See BP, page 8, paragraphs 34 and 35.

It would seem important to ascertain the source of the Plaintiff's rights, so that nature and extent of those rights can be identified and the evidence can be examined to see if there has been any act which can amount to a wrongful interference by the Defendants. In such instances, the first port of call is the Statement of Claim. Learned counsel for the Plaintiff indicated that the rights interfered with were contractual. So, it became important to identify the contract(s).

However, a perusal of the prolix amended Statement of Claim was not of much help. It referred to documents and correspondence on 25 January 2016, 16, 27 June 2016, 21, 22 and 24 November 2016, 16 December 2016, 13 January 2017, 17 and 27 March 2017, 3 and 8 May 2017, 20 S/N Ptb5q2Kd0kyMIIh43yPog and 26 September 2017, 4, 28 and 30 October 2017, 15, 17, 24 and 28 November 2017, 15, 20, 26 and 27 December 2017, 2, 23 and 31 January 2018, 15 February, 6, 7, 23 and March 2018, and 16 April 2018. … … …

A short history of the Plaintiff and 1st Defendant's rights is necessary to give context to their dispute. The documentation referred to is to be found in CBOD Part B Vol 1 (agreed as to existence with the contents to be proved). The page references are to this bundle.

Broadly, in 2016, the Sabah Land Development Board (SLDB) appointed contractors to develop the subject land in Sipitang held under the communal title FR194028209 in the name of the Collector but as trustee and held for the benefit of the natives. See the Land Ordinance (Sabah Cap.68)1 section 76.

To begin with, by letters dated 11.7.2016 and 11.8.2016, SLDB accepted the offer by the Plaintiff to develop 100 hectares and 150 hectares of CT Land (Infrastructure Works) into an oil palm plantation under Phase 6 and Phase 7 respectively. There is no mention of S/N Ptb5q2Kd0kyMIIh43yPog any right to fell or extract timber (see pages 389-392 & pages 393-396).

Similarly, by letter dated 11.7.2016, SLDB accepted the offer by 1st Defendant to develop 100 hectares of CT Land (Infrastructure Works) into an oil palm plantation under Phase 5. Again, there is no mention of any right to fell or extract timber (see pages 377- 380). As those contracts have nothing to do with the felling or extraction of timber which is what the main protagonists are concerned with, they can be disregarded for now.

By letter dated 11.7.2016, SLDB accepted the offer by the Plaintiff to develop 100 hectares of the subject land (described as major works) into an oil palm plantation under Phase 6. The scope of works and location map were as set out as per appendix A and B (see pages 385-388). The completion date was stated to be 23.10.2016. Looking at appendix A, the Plaintiff had to carry out felling of timber for 100 hectares at a total price of RM28,000 and the removal of timbers of planting points and along harvesting paths at a total price of RM17,000.

By letter dated the same day, the 1st Defendant was given the right to remove timber on like terms but under Phase 5.

Further, by letter dated 11.8.2016, SLDB accepted the offer by Plaintiff to develop 150 hectares of the subject land S/N Ptb5q2Kd0kyMIIh43yPog (described as major works) into an oil palm plantation under Phase 7. The scope of works and location map were as set out per appendix A and B (page 397-400). The completion date was stated to be 24.10.2016. Looking at appendix A, the Plaintiff has to carry out felling of timber for 150 hectares at a total of RM42,000 and the removal of timbers of planting points and along harvesting paths at a total of RM25,500.

To sum up the rights of the Plaintiff and the 1st Defendant vide those letters of award, it can be seen that they were only appointed as contractors for different phases of development of the subject land. Both of them had limited rights over the timber on the relatively small and different parts of the subject land. Certainly, at that point in time, the timber felling or removal, so far as the Plaintiff was concerned, was only for phases 6 and 7 - not the whole area of communal title which comprises 1,133.20 hectares. Even then, the removal of timber was restricted to planting points and along the harvesting paths.

There would have been letters of extension as the completion dates in the original contracts between SLDB on the one hand, and the Plaintiff and the 1st Defendant, separately, on the other hand, were 23 and 24 October 2016.

Learned counsel for the 2nd, 3rd and 5th Defendants was at pains to point out that the Plaintiff and the 1st Defendant's contracts were terminated by SLDB on 10th January 2018. See CBOD Part B Vol, pages 408-413. In their Defence, it S/N Ptb5q2Kd0kyMIIh43yPog was pleaded vide paragraph 10(6) that "both the Plaintiff and the 1st Defendant failed to complete the development on the Communal Title within the specified period until the fund allocated by the Federal Government for this project expired on 31.12.2017. Therefore, SLDB issued notice of termination dated 10.01.2018 to both the Plaintiff and the 1st Defendant." See WSDW2, Q & A 17.

These letters of termination were enumerated in the List of Documents of the 2nd, 3rd and 5th Defendants, but were not disclosed by the Plaintiff and 1st Defendant. All these letters of termination referred to a letter of extension dated 25 September 2017 (which was not produced).

By letter dated 24 January 2018, SLDB informed the Lands & Surveys Department/Jabatan Tanah dan Ukur (hereinafter "JTU") that it had terminated the contracts with both the Plaintiff and 1st Defendant on 10 January

In the letter dated 24 January 2018, the SLDB stated: "Disebabkan kelewatan memulakan kerja-kerja pembangunan (sehingga menjejaskan) prestasi projek, Lembaga telah mengeluarkan beberapa notis peringatan dan surat lanjutan masa pada tahun 2017 kepada kedua-kedua kontraktor tersebut. Oleh kerana pembangunan tanah masih tidak dapat disiapkan sehingga (peruntukkan) kewangan luput pada 31 Disember 2017, maka notis penamatan kerja telah dikeluarkan kepada kontraktor-kontraktor terlibat pada 10 Januari 2018. tersebut." See CBOD Part B Vol 1, pages 415-416.” S/N Ptb5q2Kd0kyMIIh43yPog The appeal [17] There is no issue regarding the termination of the development contracts of the Plaintiff and the 1st Defendant above by SLDB on the 10.1.2018. [18] The dispute arose when the Forestry Department issued a notice to the Plaintiff directing that all operations under the Form 2B licence be halted. Pursuant to the Plaintiff’s application, the validity of the said licence was extended, but ultimately expired on 8.1.2018. Approximately three months thereafter, on 16.4.2018, the 1st Defendant was issued with a Form 2B licence. Whether the 1st, 2nd and 3rd Defendants had interfered in relation to the issuance/termination of Form 2B licence [19] The Plaintiff contends that it could have renewed the validity of its Form 2B licence but for the wrongful and unlawful interference of the 2nd and 3rd Defendants, which culminated in the issuance of a Form 2B licence to the 1st Defendant. As a consequence, the Plaintiff’s right to extract timber from the Land was detrimentally affected. [20] The Plaintiff also alleged that the 1st Defendant had instigated the villagers/beneficiaries to prevent the Plaintiff’s servants or agents from entering the Land. S/N Ptb5q2Kd0kyMIIh43yPog [21] In respect of the alleged instigation by the 1st Defendant, the learned HCJ had analysed the evidence by the witnesses and stated at paragraphs 50-51 of his GOJ: “50. As for the 2nd allegation of unlawful interference, there is no tangible or credible evidence that the 1st Defendant had instigated the villagers to prevent the Plaintiff's servants or agents from entering the subject land. Although PW1 testified that he had photographs to prove the allegation, he admitted that the people in the photographs in CBOD Part B, pages 357-358 were the villagers and not 1st Defendant's staff. See NOP, Q & A 46-48. PW1 also admitted that it was his own assumption that the villagers were the 1st Defendant's staff. See NOP, Q

Under cross-examination, the Plaintiff's manager, Vun Nyuk Ching, PW3, was also unable to establish the Plaintiff's allegation that the 1st Defendant had instigated the villagers to prevent the Plaintiff's servants or agents from entering the subject land. In fact, he admitted that it was his own "assumption and speculation." See NOP, Q & A 132. It was a dispute involving the Plaintiff and the Ketua Kampung. See NOP, Q & A 139-140.” [22] On the evidence adduced at trial, we concur with the learned High Court Judge that the Plaintiff has failed to establish its S/N Ptb5q2Kd0kyMIIh43yPog allegation that the 1st Defendant instigated the villagers to obstruct the Plaintiff’s servants or agents from entering the subject Land. The photograph relied upon depicts only villagers allegedly preventing the Plaintiff’s entry and, on its face, suggests a dispute between the Plaintiff and the Ketua Kampung. If indeed the villagers had prevented the Plaintiff from exercising its right to develop the Land, the proper cause of action would lie against the villagers themselves. [23] With respect to the allegation of wrongful interference, the Plaintiff contends that it arose when the 2nd Defendant, representing PHB, addressed a letter dated 17.11.2017 (Encl. 17, p. 80) to the Director of JTU. Of relevance is paragraph 2 of that letter: “2 Dimaklumkan bahawa pejabat ini tidak ada halangan membenarkan Syarikat Kaansayan Enterprise melaksanakan kerja-kerja pembersihan dan memungut sisa-sisa kayu bagi tujuan pembangunan kawasan tersebut di Geran Komunal Kg. Iburu. Kelulusan tersebut hendaklah tertakluk kepada syarat-syarat yang ditentukan oleh pihak Jabatan Tanah & Ukur dan Lembaga Kemajuan Tanah Negeri Sabah.” [24] The Plaintiff further alleges that a second instance of interference is evident from the letter dated 20.12.2017 (Encl. 17, p. 87) issued by the 2nd Defendant of PHB to the Chief Conservator of Forest (“CCF”). Of particular relevance is S/N Ptb5q2Kd0kyMIIh43yPog paragraph 2 of that letter, which states as follows: “2 Untuk makluman Ybhg. Datuk, Sy. Kaansayan Enterprise adalah Syarikat yang dilantik oleh Lembaga kemajuan Tanah Negeri Sabah melalui surat rujukan LKTNS.600-2/17 bertarikh 26 Oktober 2017 untuk melaksanakan kerja-kerja pembangunan tanah dan infrastruktur Sahaja. Oleh yang demikian, pejabat ini bersetuju agar Sy. Kaansayan Enterprise diberi kebenaran untuk memohon lesen Borang 2B untuk melaksanakan kerja-kerja pembersihan, pengeluaran sisa-sisa kayu dan Pembangunan di dalam kawasan geran komunal FR 194028209 di Kg. Iburu, Sipitang.” [25] As to the Plaintiff’s allegation of a third instance of interference, reference is made to the letter dated 23.1.2018 (Encl. 17, p. 92) issued by the 3rd Defendant of PHB to the CCF. Of particular relevance is paragraph 2 of that letter, which states as follows: “2 Untuk makluman Ybhg. Datuk, saya diarahkan untuk mengesahkan bahawa pejabat ini mengekalkan keputusan ke atas Sy. Kaansayan Enterprise sebagai syarikat yang dilantik dan diberi kebenaran untuk memohon lesen Borang 2B bagi melaksanakan kerja-kerja pembersihan, pengeluaran sisa-sisa kayu dan pembangunan di S/N Ptb5q2Kd0kyMIIh43yPog dalam kawasan geran komunal FR 194028209 di Kg. Iburu, Sipitang [26] In respect of the final instance of interference, the Plaintiff refers to the letter dated 6.3.2018 by the 2nd Defendant of PHB to the CCF (Encl. 17 p. 97) which states (at paragraph 2) as follows: “2. Sehubungan dengan itu, pejabat ini sekali lagi mengesahkan bahawa Sy. Kaansayan Enterprise adalah Syarikat yang dilantik dan diberi kebenaran untuk memohon lesen Borang 2B bagi melaksanakan kerja-kerja pembersihan, pengeluaran sisa-sisa kayu dan pembangunan di dalam kawasan geran komunal di kg Iburu, Sepitang. [27] In assessing the evidence pertaining to the impugned letters, the learned High Court Judge set out his findings at paragraphs 49 and 55–63 of his GOJ: “49. In respect of the 1st allegation, there was no evidence that the 1st Defendant had requested the 2nd and 3rd Defendant to direct the Chief Conservator of Forests to issue a Form 2B to the 1st Defendant, or for the Conservator of Forests not to renew the Form 2B licence of the Plaintiff, or to suspend it. In fact, the Form 2B licence was not issued to the Plaintiff but in the name of the Collector, who is the registered S/N Ptb5q2Kd0kyMIIh43yPog owner and trustee of the subject land for the beneficiaries. The letters dated 17 November 2017 and 20 December 2017 from the 2nd Defendant do not support the Plaintiff's 1st allegation. as will be shortly seen from an examination of the said correspondence. … … …

In respect of the letter dated 17 November 2017 (CBOD Part 8, page 267), it was pleaded that "the 2nd Defendant had wrongfully and unlawfully written to the Director of Lands & Surveys Department that the Ministry of Natural Resources had no objection to the 1st Defendant to be appointed as the contractor to develop the said Land" although it knew "the Plaintiff was already appointed by SLDB to be the contractor to develop the said Land." See BP, pages 7-8, Amended Statement of Claim, paragraph 20.

To understand the letter dated 17 November 2017 in its proper context, it is necessary to refer to the pertinent passage which reads as follows: "Dimaklumkan bahawa pejabat ini tidak ada halangan untuk membenarkan Syarikat Kaansayan Enterprise melaksanakan kerja-kerja (pembersihan) dan memungut sisa-sisa kayu bagi tujuan pembangunan kawasan tersebut di Geran Komunal Kg. lburu. S/N Ptb5q2Kd0kyMIIh43yPog Kelulusan tersebut hendaklah tertakluk kepada syarat-syarat yang ditentukan oleh pihak Jabatan Tanah & Ukur dan Lembaga Kemajuan Tanah Negeri Sabah."

There appears to be nothing wrong with the letter as it states that the Pejabat Hasil Bumi has no objection to allowing the 1st Defendant to carry out works "pembersihan dan memungut sisa-sisa kayu bagi tujuan pembangunan kawasan tersebut di Geran Kommunal Kg. lburu." From that sentence it seems clear that the 2nd Defendant only mentioned that he has no objection to the 1st Defendant clearing and collecting residual wood for the purpose of developing of the subject land. And that too is subject to compliance with the conditions already laid down in the contracts between SLDB and the 1st Defendant on the limited areas.

The impugned letter cannot be taken as a directive to the Chief Conservator of Forests to cancel the Form 2B licence to the Plaintiff, more so when he was not the addressee or recipient of the letter.

There is no evidence that the Chief Conservator of Forests cancelled the Form 2B licence issued in the name of the Collector as a result of this letter of 17

As will be recalled, the Chief Conservator of Forests in fact went on to extend the validity of the Form 2B licence by letter dated 15 S/N Ptb5q2Kd0kyMIIh43yPog December 2017.

I now turn to consider the 2nd Defendant's letter dated 20 December 2017 to the Chief Conservator of Forest in respect of which the Plaintiff took umbrage.

The Plaintiff's complaint is unmeritorious. The pertinent passage states that for the information of the Chief Conservator of Forests, the 1st Defendant is the contractor appointed by SLDB by its letter dated 25 October 2017 to carry out development and infrastructure works only.

The 2nd Defendant then goes on to say that his office agrees for the 1st Defendant "untuk memohon lesen Borang 2B untuk melaksanakan kerja-kerja pembersihan, pengeluaran sisa-sisa kayu dan pembangunan di dalam kawasan geran Komunal... 11 For the avoidance of doubt, the passage is reproduced verbatim as follows: "2. Untuk makluman Ybhg Datuk, Sy. Kaansayan Enterprise adalah syarikat yang dilantik oleh Lembaga Kemajuan Tanah Negeri Sabah melalui surat rujukan LKTNS.600-2/17 bertarikh 25 Oktober 2017 untuk melaksanakan kerja-kerja pembangunan tanah dan infrastruktur sahaja. Oleh yang demikian, pejabat ini bersetuju agar Sy. Kaansayan enterprise ini diberi kebenaran untuk memohon lesen Borang 2B untuk melaksakan kerja-S/N Ptb5q2Kd0kyMIIh43yPog kerja pembersihan, pengeluaran sisa-sisa kayu dan pembangunan di dalam kawasan geran komunal FR194028209 di Kg. lburu, Sipitang."

While the 2nd Defendant agreed for the 1st Defendant to apply for the Form 2B licence which is subject to the agreement of the Chief Conservator of Forests, the application would have been subject to SLDB's letter dated 25 October 2017 which did not go beyond referring to the Ketua Kampung's letter dated 18 October 2017 stating that the support was to allow the 1st Defendant to "mengeluarkan sisa-sisa kayu supaya pembinaan teres dan infrastruktur dapat dijalankan." [28] The learned State Counsel for the 2nd, 3rd and 5th Defendants argued that the PHB was not aware of the appointment of the contractors by SLDB. She referred to the letter by JTU to Setiausaha Hasil Bumi dated 15.11.2017 (Encl. 6 p.108) informing PHB of the appointment of the Plaintiff and the 1st Defendant as contractors by SLDB. [29] We note that all the letters regarding the appointment of the contractors prior to the letter dated 15.11.2017 were letters or communications between the JTU and SLDB which did not involve PHB. For instance, a letter dated 24.11.2016 (Encl. p. 48) from SLDB to JTU informing about the appointment of the Plaintiff as a contractor to carry out development works. There was also a letter dated 25.10.2017 (Encl. 17 p. 4) from SLDB to JTU stating that the 1st Defendant was also appointed as one of S/N Ptb5q2Kd0kyMIIh43yPog the contractors to carry out the development works and referring to the support of the Ketua Kampung through a letter dated 18.10.2017 (Encl. 21 p. 164) for the 1st Defendant to remove timber. [30] The 3rd Defendant Awang Shahminan, the Deputy Secretary of PHB gave evidence that PHB was not aware of the appointment of the Plaintiff prior to the said letter dated 15.11.2017 from JTU to PHB. In fact, from the series of events, PHB’s letter dated 17.11.2017 was in reply to JTU’s letter dated 15.11.2017 merely to state that PHB had no objection for the 1st Defendant to do clearing works and collecting residual woods for the purpose of developing of the Land. As regards to PHB’s letter dated 20.12.2017, it was also in reply to the letter by the CCF dated 6.12.2017 enquiring PHB on the rightful contractor appointed to carry out the development works. [31] Thus, we agree with the findings of the learned HCJ that the 2nd and the 3rd Defendants who were the Secretary and Deputy Secretary of PHB, in writing the impugned letters, cannot by any stretch of imagination can influence or rather interfere with the decision of the CCF in cancelling the Plaintiff’s Form 2B licence and further in issuing the same to the 1st Defendant. [32] For completeness, the letter dated 23.1.2018 by the 3rd Defendant of PHB to the CCF (3rd interference) and the letter dated 6.3.2018 by the 2nd Defendant of PHB to the CCF (final interference) also did not support the allegation of the Plaintiff that there were such interferences by the 2nd and 3rd S/N Ptb5q2Kd0kyMIIh43yPog Defendants of the Plaintiff’s right to extract timber from the Land. We echo with the learned High Court Judge’s view that, similar to the letters dated 17.11.2017 and 20.12.2017, the letters dated 23.1.2018 and 6.3.2018 merely to confirm that the 1st Defendant was the contractor appointed by SLDB and was to be allowed to apply for a Form 2B licence to carry out site clearance, removal of residual woods and development works on the Land. [33] We are in agreement with the learned trial judge that there is no evidence of unlawful interference by the 2nd Defendant and 3rd Defendants with respect to the non-renewal of the licence to the Plaintiff and the issuance of the licence to the 1st Defendant after the licence to the Plaintiff had expired. [34] The Plaintiff cannot speculate that the non-renewal of its Form 2B licence when it expired on 8.1.2018 must be the result of the unlawful action of the 1st Defendant when there is no evidence of that. It is an open market for anyone to apply for such a licence based on the ability to fulfil the requirements as may be prescribed by the relevant authority. It is for the Secretary of PHB to state who they support in the application for the said licence and in this case, they supported the 1st Defendant’s application as the 1st Defendant had the support of the villagers. Thus, the evidence fell short of proving any unlawful interference by the 1st Defendant of the Plaintiff’s business. [35] If at all the Plaintiff is alleging that its licence was not renewed unlawfully and/or that the 1st Defendant’s licence was issued S/N Ptb5q2Kd0kyMIIh43yPog unlawfully, then the proper remedy would be by way of a judicial review action. In fact, the evidence adduced is that the villagers in the Communal Title supported the appointment of the 1st Defendant and not the Plaintiff as the contractor to fell the trees and extract the timber. Whether the Plaintiff has locus to sue the 1st, 2nd, 3rd and 5th Defendant since Form 2B was issued in the name of the Collector [36] The Plaintiff claimed that it had the right to extract and remove the timber as it was appointed by SLDB and the beneficiaries agreed for the Plaintiff to carry out such works. The Plaintiff refers to the letter from SLDB to the Director of JTU dated 24.11.2016 (Encl. 17 p. 48). [37] The Plaintiff further claimed that the payment of RM14,000.00 by the 1st Defendant pursuant to the condition at clause 2.6 of the letter dated 27.6.2016 was rejected. The Plaintiff refers to the letter from JTU to the Assistant Collector of Land Revenue dated 12.1.2017 which states that the Memorandum of Amendment ref L.S.1908.1.14/59 dated 26.8.2016 had been cancelled. [38] Having scrutinised the letter and its attachment, we could not find any alleged cancellation of the payment of RM14,000.00 made by the 1st Defendant. We agree instead with the submission of the learned counsel for the 1st Defendant that the Memorandum of Amendment ref L.S.1908.1.14/59 dated

26.8.2016 which was cancelled had no bearing on the payment of RM14,000.00 made by the 1st Defendant on 29.8.2016 (see Encl. 7 p. 157) [39] In any event the 1st Defendant was issued with Form 2B licence on 16.4.2018 and valid for two months until 16.6.2018. However, the 1st Defendant claimed that Kaansayan Enterprise was unable to carry out the extraction or removal of the remnants of the trees due to the injunction wrongfully obtained by the Plaintiff. Hence, it counterclaimed for loss of earnings and expenses incurred during the public auction against the Plaintiff which we shall deal with in turn. [40] On 17.3.2017, JTU informed the Plaintiff that the its payment of RM14,000.00 had been received by JTU through receipt No. 01201701002020 dated 13.1.2017 (Encl. 17 pp 53-54). The Memorandum of Amendment was endorsed in the said Communal Title (Encl. 17 p. 56). [41] The Plaintiff claimed that Form 2B licence was issued to the Plaintiff and valid for 2 months from the date of the Memorandum dated 20.9.2017 (Encl. 17 pp. 65-66). Form 2B licence was issued by the CCF under the name of the Collector as Trustee for the beneficiaries. The beneficiaries are the natives listed out in the attachment to the Communal Title (Encl. 17 pp 87-99). [42] The learned State Counsel for the 2nd, 3rd and 5th Defendants argued that the Plaintiff has no locus to file this action S/N Ptb5q2Kd0kyMIIh43yPog because Form 2B licence was issued by the CCF under the name of the Collector and not the Plaintiff (see item 3 of the said Memorandum from the CCF to Pegawai Perhutanan Daerah Sipitang dated 20.9.2017). [43] In reply, learned counsel for the Plaintiff submitted that the special terms of the Communal Title require the Collector to abide by the directions and decisions of the Director of Lands and Surveys, who alone determines the terms governing the administration of the trust (Encl. 6, p. 128). The Plaintiff further relied on the letter from JTU dated 17.3.2017 (Encl. 17, p. 56), contending that since the Director of JTU had acknowledged receipt of RM14,000.00 from the Plaintiff and the Memorandum of Amendment was duly endorsed in the Communal Title, the Plaintiff was thereby permitted to extract timber from the Land. It was additionally argued that although the Form 2B licence was issued in the name of the Collector as the registered owner of the Land, the Collector remained bound by the directions and decisions of the Director of Lands and Surveys, who had expressly granted permission to the Plaintiff to extract timber. [44] We find the Plaintiff’s submission untenable. Firstly, upon our perusal of the letter from JTU to the Plaintiff dated 17.3.2017 (Encl. 17, p. 56), no express approval was granted to the Plaintiff to extract timber or to remove timber residue from the Land. Moreover, the Form 2B licence had not yet been issued at that time, as it was only subsequently issued by the CCF on 20.9.2017. Secondly, as rightly highlighted by the S/N Ptb5q2Kd0kyMIIh43yPog learned State Counsel, the payment of RM14,000.00 was not the sole condition to be satisfied before the Plaintiff could remove the trees; additional pre-conditions were also required to be fulfilled. [45] The learned High Court Judge stated at paragraphs 35 and 36 of his GOJ: “35. The Plaintiffs contention that the licence to extract timber is for 2 years from 12 January 2017 (NOP, page 326, lines 4-6) is untenable. The Plaintiff's payment of RM14,000.00 to the Lands & Surveys Department for the amendment to the land title conditions so as to allow for timber extraction is not by itself sufficient. It was merely one of the approvals that had to be obtained.

Approval had also to be obtained and was subject to a Form 2B licence issued by the Chief Conservator of Forests who is under the Pejabat Hasil Bumi, as testified by the Deputy Director of the Lands & Surveys Department. See WSDW3, Q & A 12. [46] Upon perusal of the Memorandum from the CCF to the Pegawai Perhutanan Daerah Sipitang dated 20.9.2017, we note that approval for the issuance of the Form 2B licence was expressly made subject to the conditions stipulated therein, which were required to be fulfilled. It was incumbent upon the Plaintiff to establish compliance with all such conditions, which, in our view, S/N Ptb5q2Kd0kyMIIh43yPog the Plaintiff has failed to do. [47] On the issue of locus, the learned HCJ had dealt with it at paragraphs 38 to 40 of his GOJ where he stated: “38. The net effect of the evidence in paragraphs 24 to 31 above is that the Form 2B licence was expressly stated to be in the name of the registered owner ("pemilik tanah iaitu Collector As Trustee") although the Plaintiff and DW4 laboured under the misapprehension that the licensee was the Plaintiff which was at best a contractor. At most, the Form 2B licence ran from 20 September 2017 to 27 December 2017.

Now, the Form 2B licence was not produced in evidence although it may be said to be a significant piece of evidence. The Chief Conservator of Forests was not called as a witness although he issued the Form 2B licence and extended its validity, and wrote the Memoranda and letters which were referred to at trial. Since the Form 2B licence was not issued in the name of the Plaintiff, it had no rights thereunder and could not sue in respect thereof.

Indeed, section 24(6) of the Forest Enactment, 1968, provides: "A licence shall be personal to the holder thereof and shall not be transferable in any manner whatsoever, and shall cease to be valid on the death of such holder or if such holder is declared to be S/N Ptb5q2Kd0kyMIIh43yPog insolvent under the provisions of any written law." And section 16 states: "Notwithstanding anything in this Enactment or in any other written law, no admitted right or conceded privilege shall be transferred by way of grant, sale, lease, charge or other manner, except succession on death, without the written consent of the Minister." [48] We thus agree with the findings of the learned High Court Judge that the Plaintiff has no locus to file this action as Form 2B licence was issued in the name of the Collector as Trustee and being the owner of the Land. [49] The Plaintiff’s appointment as contractor for the development of the Land was terminated on 10.1.2018. Although the Plaintiff claimed a right of entry and extraction of timber by virtue of the Form 2B licence issued on 20.9.2017, that licence was valid only for two months, expiring on 20.11.2017, and in any event had lapsed by 8.1.2018. 1st Defendant’s Counterclaim [50] It was the 1st Defendant’s case that the 1st Defendant’s Kaansayan Enterprise was the rightful contractor having obtained approval from PHB for the issuance of Form 2B by the CCF on 16.4.2018. [51] Hence, the 1st Defendant’s counterclaim is founded upon the interim injunction obtained by the Plaintiff against the 1st Defendant on 27.4.2018, about 11 days after the issuance of Form 2B, S/N Ptb5q2Kd0kyMIIh43yPog restraining the 1st Defendant from carrying out timber logging activities on the Land. Consequent to the injunction, the 1st Defendant’s Form 2B licence lapsed on 16.6.2018. As the Plaintiff’s action is unsustainable in its entirety, the interlocutory injunction must be treated as having no further effect. [52] The 1st Defendant relied upon the Joint Venture Agreement between the Beneficiaries and Kian Jaya Contractors, together with the Power of Attorney, both dated 6.6.2016, as well as the Supplementary Agreement between the same parties dated 28.6.2016, to demonstrate the Beneficiaries’ consent to the appointment of the 1st Defendant as contractor. [53] The 1st Defendant counterclaimed the sum of RM3,945,105.60, representing the loss of profit allegedly suffered as a result of the injunction wrongfully granted against it. [54] The 1st Defendant also counterclaimed the sum of RM818,129.75 being the losses in the form of expenses incurred by the 1st Defendant. [55] Further, the 1st Defendant counterclaimed the money in the joint bank account in the sum of RM1,038,126.90 being the proceeds of sale of timber felled and extracted pursuant to the Court Order dated 27.6.2018. The High Court’s Findings in respect of the 1st Defendant’s counterclaim S/N Ptb5q2Kd0kyMIIh43yPog [56] The learned High Court Judge dismissed the 1st Defendant’s counterclaim as it was not proven on a balance of probabilities against the Plaintiff. [57] The learned High Court Judge provided his reasoning in dismissing the 1st Defendant’s counterclaim. Amongst others he held as follows:

To begin with consent said to be given by the beneficiaries is hotly disputed as appears from letters, the evidence of PW2, police reports, and so on. In any case, it is doubtful that the consent of 171 out of 191 beneficiaries can be binding on the rest who did not give consent, when the timber extraction rights are over the whole of the subject land which comprises undivided shares.

The Ketua Kampung was not called as a witness, nor any of the beneficiaries. The amended witness statement of the Ketua Kampung, Yussof Bin Karul, filed on 22 February 2022 will be disregarded as it was not signed and he did not give testimony although the trial was adjourned on 17 February 2022 to enable him to appear as a witness on 21 February 2022. [58] The learned High Court Judge further at paragraphs 86-88 held as follows: “86. It was argued for the 1st Defendant that while "the Chief S/N Ptb5q2Kd0kyMIIh43yPog Conservator of Forest only approved for the area of 250 hectares", the 1st Defendant may apply progressively for the entire land." See NOP, page 355, lines 14-18. To predicate a claim for loss of earnings or profits on a future progressive incremental application is both disingenuous and speculative.

It is an extravagant claim which ought to be dismissed, more so as the Chief Conservator of Forest did not give evidence that if the 1st Defendant were to subsequently make such an application, he would have allowed the 1st Defendant to log beyond the 250 hectares.

As for the 1st Defendant's claim for expenditure said to have been incurred in the sum of RM818,129.75, it will have to be disallowed as they would have been incurred prior to the grant of the Form 2B licence and even then, it was only conditional approval for 2 months. It could not have legally logged in the absence of the requisite approval of the Forestry Department.” [59] The 1st Defendant’s counterclaim was advanced under three heads namely the claim for the loss of profit or earnings, the costs and expenses in the felling of the trees due to the wrongfully granted injunction and the incidental costs involved including the net proceeds of the public auction of the timber felled as ordered by the High Court in prayer (iii) of its order of 27.6.2018. [60] In respect of the claim for loss of profit during the period of the S/N Ptb5q2Kd0kyMIIh43yPog injunction, namely from 27.4.2018 until the expiry of the Form 2B licence on 16.6.2018, we find that the 1st Defendant has failed to adduce evidence substantiating the alleged loss. The claim was premised on projected profits, calculated on the assumption that all trees capable of being felled were in fact felled within that period. We further find that the 1st Defendant has not produced evidence of the resources available at the material time to achieve such full realisation of timber extraction from the Land. We are therefore constrained to disallow the claim. Nevertheless, we concur with the learned High Court Judge that, at most, the 1st Defendant is entitled only to nominal damages, which we assess at RM10,000.00. [61] As for the 1st Defendant’s claim for costs and expenses amounting to RM818,129.75, allegedly incurred in the felling of trees, we agree with the learned High Court Judge that such trees could not lawfully have been felled prior to the issuance of the requisite licence, which was only granted on 16.4.2018. Accordingly, the claim under this head cannot be regarded as validly incurred and is therefore disallowed. Public Auction of the timber felled from the Land [62] In respect of the net proceeds from the public auction ordered by the High Court on 27.6.2018, which were directed to be deposited into a joint bank account in Sandakan in the names of the Plaintiff’s solicitors and the 1st Defendant’s solicitors and placed on monthly term deposit, we note that no order was made by the learned High Court Judge concerning those proceeds. Both the S/N Ptb5q2Kd0kyMIIh43yPog Plaintiff and the 1st Defendant now assert claims from this Court to the return of the deposit. [63] It is undisputed that the timbers were felled by the 1st Defendant. However, both parties were unable to establish with certainty the specific areas from which the timbers were felled, namely whether it originated from Phase 5, Phase 6, or Phase 7. [64] The Plaintiff nevertheless contends that the proceeds of the auction sale ought to be released to it, on the footing that it was the rightful contractor and that the timber had been unlawfully felled by the 1st Defendant. [65] Both the Plaintiff and the 1st Defendant were given the right to develop the Land according to their respective phases and their respective rights were terminated by the SLDB on the same day i.e. 10.1.2018. [66] Similarly, both the Plaintiff and the 1st Defendant were issued with the licences to fell and extract timber under Form 2B of the Forest Rules 1969 which is the “Licence to Take Forest Produce on Prepayment of Royalty”, “to cut, collect and remove forest produce …” on the Land. [67] The evidence led was that such a licence was given to the Plaintiff as the contractor for the period from 20.11.2017 and expired on 20.12.2017 with a further extension was given expiring on 8.1.2018. It was not renewed thereafter. S/N Ptb5q2Kd0kyMIIh43yPog [68] Likewise, the 1st Defendant also paid RM14,000.00 for the licence under Form 2B and the 1st Defendant was given the licence for 2 months from 16.4.2018 and expiring on 16.6.2018. [69] Since both the Plaintiff and the 1st Defendant were granted rights to extract timber from the Land pursuant to Form 2B licences issued by the CCF within their respective durations, all proceeds realised from the public auction of the timber shall be paid to the SLDB for distribution to the lawful parties under the development contract agreement, with the Collector acting as Trustee. We accordingly order that the sum be paid forthwith together with all interest accrued until such payment. We find this to be the proper order, notwithstanding that SLDB is not a party to the joint account in which the monies are presently deposited. Conclusion [70] Based on the above reasons, we find that the High Court had not erred in dismissing the Plaintiff’s claim against all the Defendants. We thus dismiss the Plaintiff’s appeal (appeal 561) with costs of RM15,000 to the 1st Defendant subject to allocatur and another RM15,000 to the 2nd, 3rd and to 5th Defendants collectively, subject to allocatur. [71] In respect of the 1st Defendant’s appeal (appeal 562), we allow it in part with respect to nominal damages and so we allow costs of RM5,000 to the 1st Defendant as appellant, subject to allocatur. S/N Ptb5q2Kd0kyMIIh43yPog Dated this: 15th June 2026 -sgd-ALWI BIN HJ. ABDUL WAHAB JUDGE COURT OF APPEAL COUNSEL: S-01(NCvC)(W)-561-08/2022 For the Appellant : Caroline Hee Jin Chiu (Morgan Tsen with her) Messrs. Tan Pang Tsen & Co For the 1st Respondent : Liew Chih Ching (Delonia Chong and Irwin Chang With him) for the 1st Respondent. Messrs. Lind Willie Wong & Chin For the 2nd, 3rd and 4th Respondent : Devina Teo (Dayangku Noranisah Pengiran Hassnel with her) Jabatan Peguam Besar S/N Ptb5q2Kd0kyMIIh43yPog Negeri Sabah S-01(NCvC)(W)-562-08/2022 For the Appellant : Liew Chih Ching (Delonia Chong and Irwin Chang With him) Messrs. Lind Willie Wong & Chin For the Respondent : Caroline Hee Jin Chiu (Morgan Tsen with her)