(delivering the Judgment of the Court): The respondent, Manang Selaman anak Nyalau alias Lim Kim Tui is registered as the proprietor of that parcel of land situate at Bintawa, Kuching, Sarawak containing an area of 5.84 acres, more or less and comprised in Kuching Lease of State Land No. 5352 of 1952 (hereinafter referred to as the said land). On February 4, 1974 the respondent executed two documents, viz. (a) Agreement and (b) Declaration of Trust. In the latter document, the respondent declares that he is holding the said land together with another piece of land situate at Mugok Ayer Trejun, Kuching, Sarawak containing an area of 1.34 acres, more or less and described as Lot 4412 Muara Tebas Land District (for which we are not concerned) in trust for the appellant, Manang Lim Native Sdn. Bhd. A caveat was lodged by the appellant on December 12, 1974 in respect of the said land and this caveat was duly registered at the Kuching Land Registry office as Instrument No. L8916/1974 (hereinafter called the said caveat). On December 2, 1982 the respondent took out a Originating Motion in the High Court at Kuching pursuant to section 177(1) of the Sarawak Land Code (Cap. 81) for an order to remove the said caveat. An affidavit was filed in support of the motion. The appellant delivered an affidavit opposing the application. After hearing the submissions of learned counsel for the parties the learned judge ordered the said caveat be removed and awarded costs also to the respondent. The learned judge said:

"I hold that the two documents, namely, the agreement and the trust deed above referred to, are illegal as being made in contravention of the provisions of section 8 of the Land Code, in that they relate to a dealing which is prohibited by law, and are, therefore, void and unenforceable. Consequently, the respondent (the appellant in this appeal) can have no valid claim to an interest in the said land under or by virtue of the said two documents or either of them, such as would entitle it to maintain the caveat lodged by it against the said land."

It is common ground that the said land is classified as "Native Area Land" under the Sarawak Land Code (Cap. 81) and for the purpose of this appeal "Native Area Land" has been statutorily defined in section 2 of the Code to mean "land other than Mixed Zone Land (a) held by a native under a document of title".

Under section 8 of the Code it is enacted that:

"Save 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 …

(b) any agreement, purporting to transfer or confer any such rights or privileges or which would result in such person enjoying any such right or privilege, shall be deemed to have been entered into for an illegal consideration and, in particular … any consideration which 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."

However, the rights and privileges of any native shall not be adversely affected by any agreement to which paragraph (b) applied (see paragraph (e)).

Section 9 reads:

(1) Section 8 shall not be deemed to prohibit the acquisition by any non-native of any land to which the provisions of that section apply, or of any rights or interest in or over such land —

(a) under or by virtue of any law for the time being regulating prospecting for minerals, including mineral oils, or the taking of forest produce;

(b) whenever such non-native has become identified with and subject to any native system of personal law;

(c) whenever such non-native has been issued with any permit relating to Native Area Land or Native Customary Land, issued under any rules made under section 8A of the former Land (Classification) Ordinance, 1948, or issued under rules in that behalf under section 213, to the extent of the rights conferred by such permit;