Syed Othman FJ:

This appeal is against the decision of the High Court at Kuching declaring that the exchange of lands on 7 February 1977 between the parties was void by reason of fraud and dismissing the appellant's counterclaim. The lands were, one held by the respondent was at 13 m.s. Simanggang road, Kuching (Kuching land) measuring 8.56 acres and which before the exchange he had wanted to sell for RM115,000 or RM12,500 per acre, and the other which the appellant claimed to have purchased for RM55,000, was at Bukit Igu, Sibu (Sibu land) measuring about 9.40 acres and valued by a chartered surveyor at RM1,880 or RM200 per acre. The transfer forms show that the consideration of each transfer was RM55,000.

The respondent brought his action in May 1977. The appellant in his defence contended that the respondent had told him that he wanted to settle in Sibu and would like to buy land there; the appellant too at the time intended to dispose of his Sibu land; it was the respondent who had proposed the exchange of lands as contained in a letter in Chinese (D1) by the respondent to the appellant dated 1 February 1977.

The appellant counterclaiming against the respondent for damages and costs alleged that as a result of the false allegation by the respondent lodging a caveat prohibiting any dealing in the Kuching land, the appellant had suffered damages and incurred expenses in engaging Counsel.

The respondent's story was as follows: The respondent, an old farmer, towards the end of 1976, told a land broker Thian Foong Chin, PW4 (Thian), that he wanted to sell his Kuching land. Thian introduced him to another land broker Bong Thong alias Bong Khi Shi (Bong) who brought in the appellant. The appellant introduced himself to the respondent as a Sibu broker. The respondent told the appellant that the selling price of Kuching land was RM115,000. The appellant told him he wanted an exchange of Kuching land with his Sibu land which was worth RM175,000. The appellant told him that the Sibu land belonged to a businessman in Sibu, who had asked the appellant to look for land in Kuching. The appellant brought to the respondent the businessman, who was introduced to the respondent as Choo and who brought some money with him. The appellant carried a briefcase. Opening it, he showed the respondent that it contained a lot of money. But when the respondent wanted to touch the money, the appellant closed the briefcase. The respondent asked Choo to make a deposit between RM30,000 and RM40,000 but Choo said he would do so after a sale and purchase agreement had been signed. The next day, Choo, Bong and the appellant came to the respondent's house. They took him to a legal firm. Apparently nothing happened that day and the evidence shows that they met a number of times before the transfer took place. On the day in question they met for lunch and the respondent was taken to the legal firm. The appellant spoke to the office assistant, defence witness No. 2. The respondent did not give any instructions. He could not understand when the office assistant explained the contents of the transfers forms to him. As far as he could make out, the respondent would transfer the Kuching land to the appellant who would transfer the Sibu land to him. The respondent did not do anything because the appellant had told him that the procedure would save stamp duty. Then they saw an advocate, (defence witness No. 3), who in Sarawak also functions as a Solicitor. The respondent could not understand the advocate's explanation because he spoke in Hakka; the respondent is Foochow. At first the respondent refused to sign the transfers. The appellant hit the respondent's hand and leg. After the signing of the transfers, (P2 and P3), the respondent asked for payment. The appellant replied there was no money to be paid because there had been an exchange of lands. He met the appellant two or three times after the signing of the transfers, and asked for payment. Eventually he