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IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR
(COMMERCIAL DIVISION)
SUIT NO. 22NCC-430-06/2013
AFFIN BANK BERHAD
AND
BOSTONWEB ACADEMY SDN. BHD. & 4 ORS.
GROUNDS OF JUDGMENT
Enclosure 10 is the Defendants’ application pursuant to Order 18
Rule 19 (1) (a) (b) and (d) and/or O92 of the Rules of the Court 2012
(ROC) for an order to strike out the Plaintiff’s Writ and Statement of
Claim (“SOC”) on the grounds that it is plain and obvious that the
Plaintiff does not have a cause of action. The Statement of Claim is
scandalous, frivolous and vexatious and or an abuse of the process
of the Court. For the purpose of the hearing of Enclosure 18 the
following documents were considered by this Court:The Grounds for the Application
i.
The Defendants obtained a final judgement by the
Sanction Order dated 4.3.2013;
ii.
Final judgment cannot be challenged; and
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iii.
No appeal against the Sanction Order.
Background
On 1.3.2013 the Defendants filed an application for a Sanction Order
pursuant to section 176 companies Act (CA).
The Court granted the Sanction Order on 4.3.2013. The Plaintiff
then filed an application to intervene on 22.3.2013. However the
application was dismissed on 15.5.2013.
Plaintiff’s Claim
The relief sought by the Plaintiff:i.
That the Sanction Order dated 4.3.2013 is set aside;
ii.
That the Scheme of Arrangement and the Scheme of
Compromise approved by the Court is struck out; and
iii.
Costs.
Decision
It is only in plain and obvious cases that the Court will dismiss an
action summarily. In the case of Lee Nyan Choi v. Voon Noon
[1979] 2 MLJ 28 Lee Hun Hoe CJ (Borneo) at page 29 observed
that,
“ The power to dismiss an action summarily without permitting a party to
trial is a drastic power and should be exercised with utmost caution. The
power of summary procedure should only be resorted to on plain and
obvious cases.”.
The Federal Court in Roslan bin Abdullah v. New Zealand Co. Ltd.
[1981] 2 MLJ 324 and in Golden Century Development Sdn. Bhd.
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v. Ganhoe & Anor [1983] 1 MLJ 86 referred to the English case, AG
of Duchy of Lancaster v. L & NW Railway Co. [1892] 3 Ch 274 and
observed that summary procedure,
“ …can only be adopted when it can clearly be seen that a claim or
answer is on the face of it ‘obviously unsustainable’…”.
The principle relating to O18 r.19(1) RHC was considered in Bandar
Builder Sdn. Bhd. v. United Malayan Banking Corporation Bhd.
[1993] 3 MLJ 36, Mohamad Dzaiddin SCJ (as he then was) said at
page 43 that,
“ It is only in plain and obvious cases that recourse should be had to
summary process under this rule (per Lindley MR in Hubbuck& Sons ltd
v. Wilkinson, Heywood & Clark Ltd.) and this summary procedure can
only be adopted when it can be clearly seen that a claim or answer can
only be adopted when it can be clearly seen that a claim or answer is on
the face of it ‘obviously unsustainable’.”.
His Lordship goes on to say that such process,
“ …cannot be exercised by a minute examination of the documents and
facts of the case, in order to see whether the party has a cause of action
or a defence…The court must be satisfied that there is no reasonable
cause of action or that the claims are frivolous or vexatious or that the
defences raised are not arguable.”.
It is trite law that a pleading should only be struck out if it is shown
that it is on the face of it ‘obviously unsustainable’. It is a summary
power to be sparingly exercised It should be exercised only in cases
where it is conspicuously clear that the claim on its face is obviously
unsustainable (Re: Pet Far Eastern (M) SdnBerhad v. Tay Young
Huat& Others [1999] 2 CLJ 886; [1999] 5 MLJ 558). If it can be
shown that the pleadings disclose some cause of action or raised
some question fit to be decided, however slight the chances of
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succeeding, the case should not be regarded as suitable for summary
striking out (Re:Omega Holdings Berhad v. Dato’ Tiah Thee Kian &
Ors [2002] 7 CLJ 125; [2002] 6 MLJ 20). In the case Abdul Rahim
Abdul Hamid & Ors v. Perdana Merchant Bankers Bhd & Ors
[2000] 2 CLJ 457, Mokhtar Sidin, JCA, writing for the Court of
Appeal, in reliance, inter alia, on the case of Bandar Builder Sdn.
Bhd. held, as follows:
“ In considering an application under O. 18 r. 19(1)(a), the Court has to
take into account the statement of claim on the face of it and no
consideration whatsoever shall be paid to the evidence in the form of
these affidavits. So long as the statement of claim discloses a
reasonable cause of action, however weak the claim is the claim cannot
be struck off summarily. At that stage of the proceedings it is not for us
or for the learned judge of the High Court to consider the merits of
Carah’s claim. On an application under O. 18 r. 19(1)(a) the Court has
only to consider whether the statement of claim discloses a reasonable
cause of action.”.
The well established principle is that the Court will not summarily
strike out pleadings, except only in plain and obvious cases where
the claim or counterclaim is plainly and obviously not sustainable. In
Owen Sim Liang Khui v. Piasau Jaya Sdn. Bhd. & Anor [1996] 4
CLJ 716; [1996] 1 MLJ 113, a recent decision of the Federal Court,
Gopal Sri Ram, JCA at p. 136 said:
“ The power to summarily strike out a pleading must be sparingly
exercised, and in respect of the philosophy that underlies the exercise of
that power, we can do no better than to quote from the judgment of
Mohamed Dzaiddin SCJ in Bandar Builder Sdn. Bhd. v. United Malayan
Banking Corp, Bhd. [1993] 4 CLJ 7; [1993] 3 MLJ 36 at p. 44:
“ This court as well as the court below is not concerned at this
stage with the respective merits of the claims. But what we have
to consider is whether the counterclaim discloses some cause of
action and, likewise, whether the defence to counterclaim raises a
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reasonable defence, It has been said that so long as the pleading
disclose some cause of action or raise some question fit to be
decided by the judge, the mere fact that the case is weak and not
likely to succeed at the trial is no ground for the pleadings to be
struck out (see Moore v. Lawson [1915] 31 TLR 418 and Wenlock
v. Moloney & Ors. [1965] 1 WLR 1238).”.
Applying the principles laid down in the two aforementioned leading
authorities to the present application before me, having taken into
account the totality of the facts and circumstances of this case, and
the very detailed submissions of learned Counsel for both parties, I
am of the considered view and agree with the Defendant that this is a
plain and obvious case for me to strike
out the Plaintiffs Statement
of Claim under O. 18 r 19 (1)(a). The Plaintiff’s claim against the
Defendants is frivolous, vexatious and its pleadings are otherwise an
abuse of the process of the Court. In view of the fact that this Court
could decide the issue to be ventilated without having to go through
the normal process of full-blown trial and that issue could be resolved
herein there was nothing left to be ventilated by this Court in a full
trial. My reasons are as follows:i.
The Plaintiff did not appeal against the Sanction
neither did they file an application to set aside or stay
the Sanction Order granted by the High Court.
ii.
The application to intervene was dismissed by the said
High Court and the Plaintiff did not appeal against that
decision.
iii.
The Sanction Order has been perfected.
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Accordingly based on the reasons mentioned above I allowed the
prayers sought by the Defendants with costs.
sgd.
(HASNAH BINTI DATO’ MOHAMMED HASHIM )
Judge
High Court of Malaya
Kuala Lumpur.
6th January 2014
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Counsels:
For the Plaintiff/Appellant:
Messrs. Jaffar & Menon
- S. Kalikumari
For the Defendant/Respondent:
Messrs. SK Cheong
- S.K. Cheong