JUDGMENTBY: BUTTROSE J, CHUA AND WEE CHONG JIN JJ

BUTTROSE J In this action the plaintiffs claim was for $ 86,000 against the defendants as drawers of two cheques each for $ 43,000 dated the 2nd and 10th September, 1961, respectively payable to the plaintiffs which were duly presented for payment on or about the 13th November, 1961, but dishonoured. Notice of dishonour was given to the defendants by letter dated the 29th December, 1961.

The defence was that these two cheques were handed by the defendants to the plaintiffs as agents for Compagnie Asiatique de Navigation S.A. of Paris (hereinafter called the Company), the owners of the vessel Obokil as collateral security for the payment of charter hire due on redelivery of the vessel on completion of her charter period. The defendants alleged that the company was indebted to them in the sum of $ 141,349.34 being money paid by the defendants on their behalf in connection with another vessel the Danakil owned by the company.

The defendants claimed to set off against the plaintiffs claim an equal amount of the debt due to them, namely, $ 86,000.

They also counterclaim the sum of $ 55,349.34 being the amount alleged to be due to them after deducting the sum of $ 86,000, the amount of the plaintiffs claim.

After the defence was filed the plaintiffs applied by motion under O.XXXI r.6 of the Rules of the Supreme Court to sign judgment for $ 86,000 and to have the defendants counterclaim struck out or excluded under O.XXII r.15. An affidavit was filed in support of the motion by the plaintiffs and an affidavit in opposition was filed by the defendants. On the motion coming on before Rose C.J., the plaintiffs were given judgment for $ 86,000. A stay of execution was ordered pending conclusion of arbitration proceedings between the defendants and the company relating to the counterclaim in these proceedings and the counterclaim was ordered to be excluded under O.XXII r.15 of the Rules of the Supreme Court.

It is from that Order that the defendants now appeal. The plaintiffs are cross-appealing against that part of the Order imposing a stay of execution.

In so far as the subject matter of the present proceedings is concerned, it is not in dispute that the plaintiffs were the agents of the company.

On the pleadings as they stand there is, so it seems to me, a clear admission by the defendants of liability on the two cheques sued upon.

Furthermore, in paragraph 3 of the defendants affidavit filed in opposition to the judgment it is expressly stated that they admit owing the sum of $ 86,000 albeit to the company of which the plaintiffs are the agents. It is perhaps not unworthy of note in passing that no attempt was made in the affidavit to substantiate the pleading that these cheques were handed over as collateral security.

The plaintiffs case is, in my opinion, clear and straightforward. They are the holders and payees of these two cheques drawn by the defendants which were dishonoured on presentation. There is a clear admission by the defendants of liability in respect of these cheques and that they owe the sum of $ 86,000. As against this the defendants contend that in respect of another vessel the Danakil under a contract made in Paris with which the plaintiffs are in no way concerned a sum of $ 141,349.34 is due and owing to them, $ 86,000 of which they seek to set off against the plaintiffs claim and they counterclaim the balance. The position appeared to be that the Danakil was confiscated by the Indonesian Government. The defendants contended that this excused them from further payments of charter hire while the company, on the other hand, maintained that the defendants were not thereby discharged but liable in damages for the loss of the vessel. It has been agreed between the defendants and the company that this dispute should be settled by arbitration in London.

Now where a plaintiff brings an action on a bill of exchange as here and the defendant counterclaims on what

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