JUDGMENT

Raja Azlan Shah FJ:

This appeal raises points of intricacy and commercial importance. The action was in respect of a claim for damages based on a wrongful dishonour of a cheque drawn by the respondent on the partnership account with the appellant bank ('the bank'). In the Court below the respondent was the plaintiff and the bank the defendants. The trial Judge, after hearing the evidence awarded a sum of $1,000 by way of damages for breach of contract. However, he declared that the action founded on libel was statute-barred by virtue of item 11 of the Schedule to the Sabah Limitation Ordinance (Cap. 72).

The following facts were either proved or not in dispute. The partnership firm of Wing Kwong Brothers, Sandakan, trading as general importers and exporters, was formed immediately after the liberation in 1946. The, original partners consisted of three brothers - the respondent, Yong Kee and Yong Cheong. After Yong Cheong's death his share was transmitted to his son Yong Kah Lam. The partnership opened an account with the bank. The respondent and Yong Kee were the only partners authorised to sign cheques for and on behalf of the firm. In 1948 the bank attempted to regulari