1. Megamars Sdn Bhd v 1. Linktech Technology Sdn Bhd (BA-12ANCVC-172-10/2019)

This is the Appellants/Defendants’ appeal against the decision of the 5 Learned Session Court Judge (LSCJ) to dismiss the Appellants’/ Defendants’ application to set aside the Judgment in Default of Appearance dated on the 10th of June 2019 against the Appellants/Defendants. 10

The relevant cause papers pertaining to this suit are as follows :- Enclosure No. Document Type 1 Notice of Appeal 3 Rekod Rayuan (Mahkamah Sesyen) 4 Afidavit Penyampaian 9 Rekod Rayuan Tambahan 14 Hujahan Bertulis Perayu 22 Hujahan Balasan Perayu 30 Hujahan Bertulis Responden 35 Hujahan Balasan Perayu 39 Hujahan Bertulis Responden 48 Notis Rayuan ke Mahkamah Rayuan 15 3

Under a suit No. BA-B52NCVC-165-05/2019 (“Present Suit), the Respondent’s claim against the Appellants, among others for the sum of

The Respondents at all material times were involved in the business of mechanical engineering works and have the knowledge and expertise in power plant works. The Appellants had desired to participate in tender of the Sabah Electrical Sdn Bhd (“SESB”) to supply and commission Guillotine 10 Dampers, Lateral Duct and Expansion Joint in the Power Plant Station in Patau-Patau Labuan (referred to “the Project”).

The Appellants had appointed the 2nd Respondent for the job and in line with the appointment, the Appellant had requested the 2nd Respondent to 15 make a site visit to Patau-Patau, Labuan whereby the 2nd Respondent had on the 4th of May 2015 made a working visit. The 2nd Respondent had dealt with the Engineer of SESB in Patau-Patau Labuan. The 2nd Respondent then continued in preparing tender.

Purchase Order was issued on the 21st of October 2015 for the sum of RM 430,500.00 to the 1st Respondent. The 3rd Appellant informed that 10% of the invoice sum will be paid after the 2nd Respondent upon returned from working visit in India. However, the Appellants failed to make payments to the Respondents. On the 27th of April 2016, the Purchase Order was 25 cancelled without reasonable excuse.

The Chronology of Proceedings is adopted from the Appellants’ counsel submission with certain amendments, which are as follows:- 4

1.

25.04.2017 1st Respondent/Plaintiff filed Summons and Statement of Claim against the Appellants/Defendants vide Civil Suit No: BA-B52NCvC- 143-04/2017 (hereinafter referred to as “the Previous Suit”)

2.

26.05.2017 Appellants/Defendants filed their Defence and Counterclaim.

3.

14.08.2017 1st Respondent's/Plaintiff's Summary Judgment application pursuant to Order 14 Rule 1 of the Rules of Court 2012 was dismissed by the Sessions Court (with costs of RM 2,500.00.)

4.

11.10.2017 1st Respondent/Plaintiff filed Notice of Application [Enclosure 18] to amend the Summons and Statement of Claim so as to include Jonsan

5.

11.01.2018 1st Respondent's/Plaintiff’s application to amend Summons and Statement of Claim dismissed by the Sessions Court with costs of RM 500.00.

6.

15.01.2018 1st Respondent/ Plaintiff filed a Notice of Appeal against the decision of the Sessions Court dismissing Enclosure 18 5

7.

02.03.2018 1st Respondent/Plaintiff discontinues and withdraws its Summons and Statement of Claim with liberty to file a fresh; affirmed by the 2nd Respondent/ Plaintiff on 06.08.2019. Admission by the 2nd Respondent/Plaintiff that the pleadings in respect of the Previous Suit were closed and the cause of action was ready for full trial on the 7th of March 2018

8.

22.03.2018 1st Respondent/Plaintiff discontinues and withdraws its Notice of Appeal against the decision of the Sessions Court dismissing Enclosure 18 application for amendment of the Summons and Statement of Claim to include Jonsan Arumainathan as the Second Plaintiff; see paragraph 21(c)[at page 73 of the Appeal Record] of the 2nd Respondent's Affidavit-in-Reply affirmed on 06.08.2019 9. From 2nd of March 2018 to 6th of May 2019 i.e. for a duration of 1 year and 2 months procrastinationInon-action by the Respondents/ Plaintiffs.

10.

07.05.2019 Respondents/Plaintiffs files a fresh Summons and Statement of claim against the Appellants/Defendants vide Civil Suit No: BA-B52NCvC-165-05/2019 (hereinafter referred to as “the Current Suit”) "on the same cause of action based on the same or substantially the same factual situation" as the cause of action in 1st Suit. 6

11.

10.06.2019 Respondents/Plaintiffs obtained Judgment-in-Default of Appearance against the Defendants'

12.

16.07.2019 Appellants/Defendants filed a Notice of Application [Enclosure7] to set aside the Respondents/Plaintiffs default judgment.

13.

30.09.2019 Appellants'/Defendants' interlocutory application (Enclosure 7) to set aside default judgment was dismissed with costs of RM 1,000.00.

14.

10.10.2019 Appellants/Defendants filed a Notice of Appeal [Enclosure 1] against the decision of the Sessions Court dismissing Enclosure 7 with costs.

15.

11.10.2019 Appellants/Defendants filed a Notice of Application [Enclosure 23] before the Sessions Court for a stay of execution/enforcement of the default judgment. 16

27.11.2019 Appellants'/Defendants' Enclosure 23 application was dismissed with costs of RM 1,500.00 by the Sessions Court. 17

03.12.2019 Appellants/Defendants have filed pursuant to Civil Appeal No: BA-12ANCvC-172-10/2019 a Notice of Application [Enclosure 6] dated 3rd of December 2019 pursuant to the decision of the Sessions Court in not granting a stay of execution/enforcement of the default judgment 7 dated 10th of June 2019. DECISION/FINDINGS 5 8. Having read the Record of Appeal and heard the submission of both parties, I hereby allowed this appeal. My reasons are elaborated below.

It is trite law that if a Judgment in Default is properly obtained by the Plaintiff, the Defendant is required to show that he has a defence on merits. This 10 proposition of law can be found in the judgment of the Supreme Court in the case of Hasil Bumi Perumahan Sdn Bhd & Ors v United Malayan Banking Bhd [1993] 1 MLRA page 648-649 as follows :-. “Consistent with the decision of our own Courts in the past in dealing with issues such as those under O. 13 r. 8 and O. 19 r. 9 the guidelines in Evans v. Bartlam (supra) should be accepted. In our view, in order to succeed in his application under these Orders the applicant must show that he has a defence which have some merits and which the Court should try. To use common and plain language, the applicant must show that his defence is not a sham defence but one that is prima facie, raising serious issues as bona fide reasonable defence that ought to be tried because obviously if the defence is a sham defence there is no defence and the application must fail. It can hardly be emphasised that in order for the Court to arrive at a decision that the defence has merits it must perforce make a reasoned assessment of the justice of the case by forming a professional view of the probable outcome of the case, but this is stating the obvious. It involves a mental process that goes through the mind of a Judge when making a decision in any case, weighing the evidence of a litigant against that of another on the facts alleged by a party against those of the other before finally coming to a decision. At any rate whether we follow Saudi Eagle or Evans v. Bartlam, both cases only lay down, not rules of law, that must be stringently complied with but merely guidelines to assist a 8 Judge in the exercise of his discretion. So long as the Judge exercises his discretion according to principles of law the appellate Court would hesitate to interfere with the Judge's exercise of discretion. It is for the Appellants to convince us that this is a proper case for our interference with the learned Judge's exercise of his discretion under O. 19 r. 9.”

At the outset and suffice to say, I am inclined to agree with the Respondents’/Plaintiffs‘ counsel submission that the said Judgment In Default against the Appellants/Defendants are a proper and a regularly obtained 5 judgment.

Thus, the next pertinent question is whether the Appellants/Defendants have shown that they have a defence on the merits. 10

It is the contention of the Respondents’/Plaintiffs’ counsel that the failure to produce a draft Statement of Defence in the application to set aside a regular judgment obtained in the Current Suit, will result to an outright dismissal of the said application. To support this contention, the Respondents/Plaintiffs cited the case of Pengkalen Concrete Sdn Bhd v Chow Mooi & Another [2003] 15 6 CLJ 326 where the Court held that :- “In this current case, it was indisputable that the Defendants had failed to produce that all important draft statement of defence. Without them, I was thus without an option but to find again for the Plaintiff, even on this second ingredient. Common sense would convince anyone that to allow the appeal and set aside a default judgment when no prima facie defence worthy of considering was before the Court, would portray the Court as lame ducks prolonging the agony of all parties. Without them before me, I could only conclude that the Defendants were definitely not serious in their attempts to challenge the ……..” 9

However, upon perusal of the Rules of Court 2012 itself, I find there is no express requirement under the Rules of Court 2012 that a draft Statement of Defence must be produced and exhibited to support an application to set aside Judgment in Default. In the case of Sensini Marketing Sdn Bhd v. Hong Da Fesyen Sdn Bhd [2020] MLJU 352, the Court held inter alia, :- 5 “[13] It was a practice of applicants to also exhibit in the supporting affidavit a draft Statement of Defence. But as we learnt from the case of Court of Appeal case of Lee Hee Hong v. Eon Bank Bhd [2014] 5 MLJ 808 (“Lee Hee Hong”), the omission of a proposed or draft Statement of Defence is not fatal. The Court can and will still proceed to examine the affidavits for a prima facie defence on the merits.”

I respectfully concur and adopt the finding of the said decision in that, the failure to produce a draft Statement of Defence is not fatal to an application to 10 set aside a Judgment in Default. What is required for the Appellants/Defendants is to show by way of an affidavit that they have a defence on the merits. Ideally, it would have been better for the Appellants/Defendants just to annex a draft Statement of Defence in their Affidavit in Support for the Court to ascertain whether the 15 Appellants/Defendants have a defence on the merits. In the Current Suit, instead of annexing a draft Statement of Defence, the Appellants/Defendants had instead, produced and exhibited their previous Statement of Defence and Counter Claim (Exhibit MSRGR-5) in the Previous Suit, in their affidavit to support to set aside the Judgment in Default against them. It is not disputed 20 that the Respondents’/Plaintiffs’ action under the Current Suit against the Appellants/Defendants is based on the same cause of action or substantially the same factual situation as the Previous Suit. I am of the view that as the said Statement of Defence and Counterclaim in the Previous Suit was annexed and marked as an Exhibit MSRGR-5 in the Appellants’/Defendants’ 25 10 Affidavit In Support affirmed on the 16th of July 2019, the said Statement of Defence and Counterclaim should be accepted as part of an affidavit as per the approach taken by PS Gill J (as he was then) in the case of Badrul Zaman PS Md Zakariah v Tamil Nesan (M) Sdn Bhd & Ors [2001] 4 MLJ

The relevant passage is reproduced below. 5 “It is pertinent to bear in mind that in all these cases, the learned judges had considered the draft defences that were filed when deciding whether to set aside the regular judgment in default. Such has apparently been the accepted practice. The learned registrar in this particular instance, however, took the view that since the defence had not been deposed in an affidavit, and a purported defence was merely annexed to the said affidavit, the whole application of the defence was a non starter.” My view is simply this. An affidavit of merits must be supported by an application to set aside a regular judgment. However, if the purported defence is exhibited to an affidavit, it in effect forms part of the affidavit, and should be accepted as part of an affidavit of merits. The case of Palaniappa Chettiar v Tan Jan & Anor [1965] 31 MLJ 182 is cited in support. But to merely refer to a purported defence which is not part of the affidavit and unsworn is wholly inadmissible and goes against the authority of Fira Development. Fortunately, the Defendant in this instance here, annexed the said purported defence to their affidavit, and it could be regarded as if they had copied it out in the affidavit (see Palaniappan Chettiar). Appeal allowed with costs.” 11

Further, it had been highlighted to this Court by the Appellants/Defendants that the 1st Respondent had filed a Summary Judgment application against the Appellants/Defendants in the Previous Suit, in which, the said application had been dismissed by the same Learned Session Court Judge.

Upon perusal of the previous Statement of Defence and Counter Claim (Exhibit MSRGR-5) which becomes part of the Affidavit in Support of the Appellants’/Defendants’ application to set aside the said Judgment in Default of Appearance against them, I am of view that the Appellants/Defendants have shown there is a defence on the merits in the Current Suit.

In light of aforesaid reason, I hereby allow the appeal herein and set aside the said Judgment in Default of Appearance dated on the 10th of June 2019 against the Appellants/Defendants; and cost of RM 2,000.00. 15 Dated 14th of September 2021 signed 20 (KHAIRIL AZMI BIN HAJI MOHAMAD HASBIE) Judicial Commissioner High Court Shah Alam 25 For the Appellants : Encik Kumar Karthigesu (Messrs Nashir Johal & Co.) 30 For the 1st & 2nd Respondents: Puan Mary M.Anthony (Messrs S.Mathavan & Nur Hafizah) 12

Lee Boon Tatt & Ors v Takhdir Trading Sdn Bhd [1984] 2 MLJ 341.

Hasil Bumi Perumahan Sdn Bhd & Ors v United Malayan Banking Bhd [1993]

Pengkalen Concrete Sdn Bhd v Chow Mooi & Another [2003] 6 CLJ 326.

Sensini Marketing Sdn Bhd v. Hong Da Fesyen Sdn Bhd [2020] MLJU 352.

Badrul Zaman PS Md Zakariah v Tamil Nesan (M) Sdn Bhd & Ors [2001] 4 MLJ 403. 15

Rules of Court 2012. 20 25 30