GROUNDS OF DECISION

1. There are two appeals this morning, against the decision of the Deputy Registrar (Encl. 82):

(a) ;the dismissal of an application under Order 14 of the Rules of the High Court 1980 against the plaintiff; and

(b) ;for striking out the plaintiff's statement of claim, under 0. 18 r. 19 of the Rules of the High Court 1980 against the 2nd and 3rd defendant.

Brief facts:

2. The plaintiff claimed against the 1st defendant for services or works done, and the defendant paid the plaintiff by a cheque dated 18th March, 1998 for RM438,000 drawn on Utama Bank (M) Bhd. When the said cheque was presented for payment the Bank [3] dishonoured it. The plaintiff sued the 1st defendant, the drawer of the said cheque, and the 2nd and 3rd defendants, as guarantors per Letter of Guarantee dated 2nd February, 1996. First Appeal 3. Learned counsel for the plaintiff, Mr. Benny Zaidi submitted that a cheque received or paid for a contract of goods or services is for all purpose to be treated as cash. If the cheque is dishonoured the payee is entitled to summary judgment. This is known as the "cheque rule". Generally it is correct as between the immediate parties but it is not so if it is proven that no consideration is given for the said cheque or that the consideration has failed or is illegal.

4. The defendants averred that the cheque was issued for no consideration or that the consideration had failed. The cheque was issued in respect of the plaintiff's payment voucher dated 18th May, 1995 (Exh. STY6) which is reproduced below:-

"PAYMENT VOUCHER Date 18/MAY/1995 Vr. No. LedgerCash Book Folio AccountsNo. of Appendix Pay toPhua Chat Syn @ Phua Tai Tin BIC. K.666608 DollarsFOUR HUNDRED THIRTY-EIGHT THOUSAND ONLY PARTICULARS AMOUNT Being payment for purchase Main-Bright Holdings Sdn. Bhd. 30% shares Lot 208 Blk 11 24/03/95 (commission)13,000.00 Lot 208 Blk 11 24/03/95 1st payment300,000.00 Merry Garden 24/03/95 1st payment33,000.00 Deposit Interest charges92,000.00 Due Date: 18th May 1996 Bank Cheque No. Bu-046039TOTAL 438,000.00 One year post dated cheque Authorized by [4]

United Establishment Sdn. Bhd.

Received Payment"

5. It will be seen from the above (Exh STY6), the said cheque was issued for the payment of:

i) ;30% shares in Main Bright Holdings Sdn. Bhd. owned by the plaintiff;

ii) ;the purchase of a piece of land in Merry Garden;

iii) ;the commission in the purchase of (ii); and

iv) ;interest for late payment on 18th May, 1996.

6. At the time of the agreement, the plaintiff had not possessed the 30% shares in Main Bright Holding Sdn. Bhd. This fact is admitted by the plaintiff in para. 2 of his Reply dated 22nd August, 1996 that the 30% shares were not in his possession. It was merely speculative as the 30% shares could not be issued and transferred to the name of the 1st defendant.

7. The piece of land in Merry Garden is in fact Lot 208, Block 11 Muara Tebas Land District which is within the Native Area Land. Section 8 of the Land Code (Cap 81) prohibits the sale of the said land to a non-native. There is no evidence to show that the plaintiff or the 1st defendant is a native within the meaning of the Land Code. Any sale of the said land to the defendant would be unlawful as it would be in contravention of the provisions of Section 8, which provides:

"Same as provided in section 9

(a) a person who is not a native of Sarawak may not acquire any rights or privileges whatever over any Native Area Land, Native Customary Land or Interior Area Land.

(b) any agreement purporting to transfer or confer any such rights or privileges, shall deemed to have been entered into for an illegal consideration; and, in particular but without prejudice to paragraph (d), any consideration shall have been paid or furnished shall not be recoverable in any court nor shall any relief be afforded to any person claiming that any consideration promised has not been paid or furnished;

............."

Section 9 is not relevant to the instant case.