Mohd Saari Yusoff JCA:

In the court below, the respondent (hereinafter referred to as "the plaintiff") applied and obtained order under O. 18 r. 19 RHC 1980 for striking out statement of defence. The present appeal is by the appellant (hereinafter referred to as "the defendant") against the said order.

The salient facts as disclosed in the affidavits are as follows:

Between 1 March 1979 and 27 April 1989, the plaintiff employed the defendant as a company secretary. During his tenure of office, it was alleged that the defendant had failed to account RM2,585,828.01 which formed the subject matter of dispute in the present action. The upshot of the said allegation was that the plaintiff lodged a police report and also instituted two civil suits against the defendant.

Later on 10 November 1989, both parties executed a deed of settlement (exh. W1) (hereinafter referred to as '"the deed"). Under the deed, the defendant agreed to pay the plaintiff RM1.2 millions by instalments on dates as stipulated in the deed. In consideration, the plaintiff agreed to withdraw the police report and two civil suits namely MR 48/89 and MR 49/89.

Pursuant to the terms of the deed, the plaintiff wi