Mt Ventures Sdn Bhd v Qm Print Sdn Bhd (02(i)-6-03/2024(W))

The primary issue in these appeals is whether the Appellants have a right to appeal the dismissals of their respective interlocutory applications to strike out pleadings in view of the recent amendments to section 68 of the Courts of Judicature Act 1964, more particularly section 68(1)(f) CJA. Section 68(1)(f) CJA, as amended by section 8 of the CJA (Amendment) Act 2022, which states as follows: “Section 68 CJA Non-appealable matters

No appeal shall be brought to the Court of Appeal in any of the following cases: ……

(e)where a High Court dismissed any application for a summary judgment;

(f)where a High Court dismissed any application to strike out any writ or pleading and

(g)where a High Court allowed any application to set aside a judgment in default.”

The question that arises for consideration in this court is the effect of section 68(1)(f) CJA: is the section to be read literally and in a grammarian fashion, or is it to construed holistically and purposively in line with the object and purpose of the entirety of the CJA in relation to civil appeals? 2

If the section is read literally, it would follow from subparagraph (f) that all decisions of the High Court dismissing applications to strike out a writ or pleading would be unappealable. However, an approach in line with section 17A of the Interpretation Acts 1948 and 1967 may give rise to a different construction.

Consider for example a situation where a derivative action is filed but the threshold requirements are not met. This is a preliminary point of law that does not genuinely require the adducing of further oral evidence to determine whether or not the action is validly instituted under the law. If the High Court does not strike out the derivative action for failure to comply with threshold matters, it would follow that the matter would have to go through a full trial prior to adjudication on a point of law that could have been determined at the outset.

The significant point to be made is that there is no requirement for further evidence and yet parties would be put to the expense, cost, and time of a full trial for no good reason. Similarly, with a case relating to locus or the capacity of a plaintiff to bring an action, the same result would ensue. Indeed, the strain of a prolonged and arguably unnecessary trial that is imposed on the litigants, and more importantly the considerable delay in determining the action are relevant matters for the purposes of construing the purpose and intent of the amendment introduced vide section 68(1)(f) CJA.

Therefore, the question for this court is whether that was the actual intention and purpose of the amendment as it now subsists under section 68(1)(f) CJA. It might well be argued that that is indeed the intent of the legislature in view of the clear and express words in the subsection.

However, would such an argument remain tenable where for example there is the necessity to determine a matter of state immunity?

If a pleading which relies on state immunity is found to be insufficient to strike out a claim under Order 18 rule 19 Rules of Court 2012, it would then follow that the matter has to go through a full trial. The very purpose of state immunity as a public international law doctrine would be rendered 3 nugatory. Can it be said that in such a situation a literal meaning should be accorded to section 68 CJA? It would appear not. [See Kerajaan Malaysia v LFL Sdn Bhd and another appeal [2024] MLJU 3015 (‘LFL’); see also Sundra Rajoo a/l Nadarajah v Menteri Luar Negeri, Malaysia & Ors [2021] MLJU 943 (‘Sundra

Put simply, there are many preliminary points of law that fall to be considered and which may well finally determine parties’ rights in a striking-out application. Was it the intent of the legislature to preclude such matters from being determined conclusively at the outset and to put the parties through the trial procedure? This would defeat the purpose of any attempt to expedite the clearing of cases through the courts. For this reason, we are of the view that the construction to be accorded to section 68(1)(f) CJA is not as straightforward as adopting a literal and grammarian approach. The construction of the subsection requires a consideration of the relevant provisions of the CJA so as to achieve a correct and harmonious reading of the same.

We concluded that, when section 68(1)(f) CJA is construed holistically and harmoniously with section 67 CJA and necessarily section 3 CJA, it will be found to be applicable to cases where the High Court determines that further oral evidence needs to be adduced in order that it can arrive at a decision which finally disposes of the parties’ rights. In such instances there is no right of appeal because the parties’ rights have not been finally disposed of or fully adjudicated upon.

As such the court effectively defers the final determination in these cases to enable the adducing of further oral evidence. To allow an appeal at this juncture would effectively mean an unwarranted interruption in the flow of the legal process, given the substantive right of appeal that each litigant is entitled to once the parties’ rights have been finally disposed of. The failure to strike out at a preliminary point can comprise the subject matter of the appeal at the end of trial. However, where the striking out is targeted at a specific point of law which has the capacity to determine the 4 entire cause or action finally, the right of appeal accrues or vests at that point. Appeal No. 02(i)-6-03/2024(W) (‘MT Ventures’)

The Respondent, QM Print Sdn. Bhd., operated a factory with the permission of the owner, Pan Mei-Yun. Adjacent to this factory were premises owned by the First Appellant, MT Ventures Sdn. Bhd., and occupied by the Second Appellant, Multi Top Auto Supplies Sdn. Bhd.

A fire on 2 July 2021, allegedly originating from the premises owned by the First Appellant and occupied by the Second Appellant, damaged both premises. Subsequently, Pan Mei-Yun purported to assign her rights to the Respondent, enabling it to pursue legal action, and the Respondent proceeded to file a suit against the Appellants seeking damages.

In response, the Appellants filed an application in the High Court to strike out portions of the suit on the grounds that the Respondents do not have locus standi to bring such a suit as they are not the owners of the damaged property. Appeal No. 02(i)-17-06/2024(W) (‘Azinal’)

The Plaintiffs, comprising the daughter and administrators of the estates of two sons of the late Datuk A.S. Dawood, filed a suit in 2017 alleging that 540,000 shares in a family company (the 5th Defendant) were fraudulently transferred from the deceased to his first wife, Ammaji, which in turn led to the improper sale of 180 acres of land from the 5th Defendant to the 6th Defendant. The dispute is complicated by prior litigation over the validity of the same land sale, although the present Plaintiffs were not parties to that earlier case.

The 6th Defendant, now the Appellant, applied on 26 July 2022 to strike out the suit under Order 18 Rule 19, arguing that it is barred 5 by the doctrine of res judicata as a result of the prior litigation alluded to.

Reverting to the key issue, namely how section 68(1)(f) is to be construed, we found that if the section is read literally, it would follow from subparagraph (f) that all decisions of the High Court dismissing applications to strike out a writ or pleading would be unappealable. However, an approach in line with section 17A of the Interpretation Acts 1948 and 1967, which mandates a purposive construction of statutes, gives rise to a different construction.

The parties, and consequently the courts below, did not see this as the relevant issue and thus addressed the matter from a different lens. Their submissions and the courts’ reasoning centred around the question of when the right to appeal vested in the parties and whether the amendment operated retrospectively so as to remove the right of the party to appeal the dismissal of a striking out.

We therefore posed several questions to counsel in the course of the hearing, inter alia, in the form of a mind map to ascertain the proper approach to be adopted in arriving at a proper construction of section 68 (1)(f) CJA. This included a consideration of sections 3 and 67 of the CJA. After we had done so, parties sought leave of court to have amicus curiae to address the Court on these issues. Accordingly, parties filed further submissions in response to our questions, as did amici curiae.

In this vein, the following issues will be discussed:

The position in law prior to the amendment to section 68 CJA, in particular the construction of section 3 CJA and section 67 CJA;

(ii) The position in law post the amendment of section 68 CJA; 6

(iii) Do the parties in the present case possess a right to appeal the dismissal of their striking-out applications?

(iv) Alternative approach to resolution of these appeals.

The position in law prior to the amendment to section 68 CJA, in particular the construction of section 3 CJA and section 67 CJA

The leading authorities of Kempadang Bersatu Sdn Bhd v Perkayuan OKS No 2 Sdn Bhd [2019] 4 MLJ 614 (‘Kempadang’) and Asia Pacific Higher Learning Sdn Bhd v Majlis Perubatan Malaysia & Anor [2020] 2 MLJ 1 (‘Asia Pacific’) confirm that section 3 CJA and section 67 CJA should be read together such that section 3 CJA is applicable to delimit the proceedings in which civil appeals can be brought.

Following on from this, we are of the view that section 3 CJA should be read as operating together with section 67 CJA and section 68(1)(f) CJA to determine whether the dismissal of a striking-out of a pleading or writ can, or cannot, comprise the subject matter of an appeal.

We have discussed this matter in some depth in our full judgment.

In brief, our reasons for so concluding are as follows:

Section 67 confers a general jurisdiction on the Court of Appeal to hear all appeals in respect of any civil cause or matter.

Section 68 CJA limits the nature of appeals that can be brought to the Court of Appeal, including section 68(1)(f) CJA which precludes the bringing of appeals in respect of the dismissal of an application to strike out a pleading or writ;

Therefore section 68 CJA has to be read in conjunction with section 67 CJA as the former, i.e. section 68 CJA, provides the 7 exceptions to the general nature of the latter, i.e. section 67 CJA. And section 68(1)(f) CJA is a part of section 68 CJA.

However section 67 CJA cannot be construed without reading into it, section 3 CJA. And in this context section 3 CJA (as held in Kempadang and Asia Pacific) delimits the types of appeals that can be brought. It precludes rulings made in the course of a trial or hearing which do not finally dispose of the rights of the parties. Conversely, where a Court has made an order in the course of a trial or hearing which does finally dispose of the rights of the parties, it is appealable.

If section 68(1)(f) CJA is to be construed in conjunction with section 67 CJA and section 3 CJA, it then follows that section 68(1)(f) CJA should be read to take into consideration section 67 CJA as well as section 3 CJA, which precludes any appeal from an order which does not finally dispose of the rights of the parties.

Section 68(1)(f) CJA would also have to be interpreted in consonance with sections 67 and 3 of the CJA where an order does finally dispose of the rights of parties. This in turn means that orders for the striking out of a writ or pleading which do finally dispose of the rights of parties would not be a ‘ruling’ under section 3 CJA.

And where a ‘decision’ does dispose of the rights of parties finally it is appealable under section 67. As such, section 68(1)(f) CJA has to be read harmoniously with both sections 67 and 3 CJA. Therefore section 68(1)(f) CJA has to be construed so as to provide an exception to section 67 but not so as to take away a substantive right of appeal that accrues to a party.

Where a decision finally disposes of a party’s rights, then a right of appeal accrues to, or vests in that party in accordance with sections 67 and 3 of the CJA. That right of appeal is not taken away by section 68(1)(f) CJA, which 8 serves to ensure that appeals are not taken in instances where no rights have finally been disposed of. In short, section 68(1)(f) CJA serves to clarify the entrenched position in law that generally no appeals are available under sections 67 and 3 CJA where no rights of the parties have been finally disposed of.

In other words, section 68(1)(f) CJA cannot be construed in vacuo and literally so as to warrant a reading that all dismissals of applications to strike out a writ or pleading are unappealable.

Having established the foregoing, we flesh out the underlying law supporting the legal construction of section 68(1)(f) CJA above.

The starting point is understanding that the purpose of legislation is a key element of interpreting statutes; purpose is not merely a secondary tool to be had regard to when statutes are ambiguous.

In Malaysia especially, having regard to the statutory mandate outlined by section 17A of the Interpretation Acts 1948 and 1967; statutory construction is not a matter left to the interpretive choices of judges. Amendment to the CJA and insertion of Section 3 CJA vide Amendment Act 1998 – To expedite Court Proceedings primarily in the Appellate

The specific amendments made in 1998 when amending the CJA to include the definition of ‘decision’ was made with express reference to the government’s aspiration to provide an efficient system of administering justice. It is expressly said in the Hansard, that the amendments were made with the purpose of speeding up the hearing process of cases in the Court of Appeal and Federal Court. 9

This purpose is borne out also by the other amendments that were made, inter alia, to sections 44 and 80 introducing a time limit of 10 days for any aggrieved party to file an application for a review of an order made by a single judge before a panel of three judges in the Court of Appeal and Federal Court.

Indeed, the general purpose of the CJA should also be appreciated. The CJA lays out a statutory basis to enable the formulation of rules of court for the just and expeditious disposal of the cases that come before the courts. In relation to the Rules of Court 2012, David Wong JCA’s (as he then was) exposition in Christopher ak Bandi @ Josny v Tumbung ak Nakis & Anor (Jamil bin Sindi, third party) [2016] 4 MLJ 100 is highly instructive: “The philosophy behind the new regime of civil procedure is simply to attend a “just, expeditious and economical” disposal of an action. Litigants through their respective counsel must understand that they must put their house in order before a case goes to trial and once the trial commenced courts will not tolerate any delay except in the most exceptional circumstance. Putting one's house in order simply means that parties and their counsel must be aware that they have a duty to frame their case fully in all their causes of action and defences prior to the start of trial. Conducting one's case by instalment must not be allowed in the context of the present regime of civil procedure. It is an undeniable fact that many cases had been stayed pending appeals to higher court on matters similar to the factual matrix in this case, which undoubtedly had delayed the disposal of these cases.” (Emphasis added)

Therefore, when interpreting the CJA, primary regard must be accorded to this specific purpose. In this context it should be borne in mind that section 3 delimits the types of ‘decisions’ that are appealable. Judgement, Order and Ruling

It is clear the CJA envisions the touchstone of ‘judgment’ and ‘order’, as used in section 3 to define what constitutes an appealable 10 ‘decision’. This refers to matters which finally dispose of the parties’ rights. Put another way, it is only a final ‘judgment’ or ‘order’ that is appealable. This is evidenced by a number of textual indications.

First, the words ‘judgment’ and ‘order’ are used with the word ‘sentence’. While the word ‘sentence’ of course is inapplicable to the civil context, it is clear that it connotes an element of finality of disposition of the parties’ rights. Therefore, the terms ‘judgment’ and ‘order’ should be construed similarly.

Secondly, judgment and order, while they differ in terms of definition, both need to display the element of finality when construed in the context of section 3 CJA, because that is a pre-requisite for the ability to appeal. In that context, it is important to note that it is not every order that is appealable but only those which have the character of disposing of the parties’ rights.

Thirdly, it is significant that the legislature chose to use both the words judgment as well as order. If it had been the intention of the legislature that only final judgments were appealable and none other, then there would have been no requirement to include the word ‘order’. However, the fact that it is included in section 3 CJA clearly allows for orders which are not judgments per se to be appealable provided they finally dispose of the parties’ rights.

Indeed, the key requirement for something to be non-appealable under section 3 of the CJA is that the ‘ruling’ in question ‘does not finally dispose of the rights of the parties’.

Therefore, there is a final disposal of rights where either:

the rights of the parties under the main suit are finally disposed of; or 11

where the rights of the parties that are ancillary or separate from the parties’ substantive rights under the suit, but also crucial to the parties are disposed of; and

where in both instances, the indicia of the final disposal of the parties’ rights is measured by an irreparable, irreversible or irrevocable loss or prejudice, which may not be easily compensated.

However, where one needs further oral evidence to determine an issue, namely where the said evidence is needed for the courts to properly adjudicate upon a claim, the matter is non-appealable as there cannot truly be said to have been a final disposition of rights. In other words, where the court is merely deferring its decision in order to hear evidence, the matter is non-appealable. Is the Dismissal of a Striking-Out Application Generally Appealable?

There is generally no final disposal of the parties’ substantive rights where a striking out application is dismissed and the matter is set down for trial for oral evidence to be adduced. All that the court is doing is deferring the adjudication of the parties’ substantive rights under the suit, until such oral evidence is adduced and considered such that the court can arrive at a decision which finally disposes of rights of parties.

There is simply a deferral of the ‘decision’ to a later date. The dismissal of such an application is not a ‘decision’ as envisaged in section 3 CJA. Put another way, the court is exercising its inherent and statutory discretion to decide the matter fully at a later date after hearing oral evidence; the court is deferring the adjudication of the parties’ rights and not deciding upon it.

There is also no freestanding right to appeal a decision on the dismissal of a striking out. When a judge says that the court will adjudicate on the rights of the parties at a later date, there is no substantive right being taken away. What is taken away is the right to have the matter struck out preliminarily, instead of a full hearing, 12 but this does not finally dispose of the parties’ rights, and is therefore not normally envisaged under section 3 CJA as being a right giving rise to an appealable ‘decision’.

The amendment has simply clarified what has always been the correct reading of the law, namely that a dismissal of a summary judgment or a striking-out application is not appealable because it merely defers the decision envisaged in section 3 CJA.

It is here that the Appellant’s submission that Parliament does not legislate in vain is answered. The effect of the amendment is to clarify the position in law due to the practical, not the legal, uncertainty of the position. In other words, the amendments were not strictly necessary for dismissal of striking-out applications to be non-appealable, but due to the fact that litigants were, nevertheless attempting to appeal such rulings, notwithstanding that their rights which remained intact would be adjudicated upon at a later date. In other words, by amending the CJA to make things clearer, Parliament was not legislating in vain.

The fact that the courts have entertained these appeals prior to the amendment in section 68(1)(f) CJA does not mean that the right of appeal existed or was entrenched, for the reasons above; therefore, the amendment in fact does not remove accrued rights, and certainly not any vested right of appeal.

Read purposively to reduce delays, and in light of the fact that the deferral of a decision does not dispose of any substantive rights, nor usually prejudice the parties in any material manner, sections 3 and 67 of the CJA should be read as not granting a right to appeal the deferral of a judgment or order which does not finally dispose of the rights of the parties. This follows from a purposive and contextual construction of the statute. Indeed, it should be recalled that section 3 CJA is a section on general interpretation and must be read in ‘the context [it] requires’ (see section 3 CJA). This means that section 3 is to be read in the context of the provisions of the CJA as a whole. 13

We have dealt with the issue of how ‘in the course of’ a hearing is to be interpreted in the full body of the judgment.

Suffice to say, the dismissal of a striking-out application which is ‘in the course of’ the full hearing of the cause or matter, and does not finally dispose of the parties’ rights, constitutes an unappealable ‘ruling’ under section 3 of the CJA.

However, this is not always the case. There will be situations where the dismissal of a striking out will cause grave prejudice to the parties’ rights, such that there is an ability to appeal. This is most apparent for example where the court does not have jurisdiction to hear the matter due to the non-fulfilment by the plaintiff of certain threshold conditions.

This is evident for instance where the threshold requirements for a derivative action are not met and the court nonetheless does not strike it out, determining that a full hearing of the dispute on the merits is necessary. If an appeal against the dismissal of such a striking out application is not allowed, premised on a literal reading of section 68(1)(f) CJA, then this in turn would result in a trial which in no way assists the court in adjudicating upon the threshold requirements or merits of the derivative action. The oral evidence would not assist in determining whether the preliminary point of the threshold requirement for bringing a derivative action has been met. In such an instance, the hearing would prolong rather than expedite the disposal of the matter.

But most importantly a reading of section 68(1)(f) CJA in that fashion would run contrary to sections 3 and 67 of the CJA. This is because the rights of the parties would have been finally disposed of on an adjudication of the preliminary point. Therefore, the right of appeal would have accrued at the point when the court determined the preliminary point of law relating to whether the threshold for a derivative action had been met. This means in practice that the right 14 of appeal would have accrued on the dismissal of the striking-out application.

(ii) The position in law post the amendment of section 68 CJA

To reiterate, section 68(1)(f) CJA does not alter the position in law in sections 3 and 67 CJA; therefore, even with the insertion of section 68(1)(f) CJA, there remain cases where the dismissal of striking-out applications remain appealable.

This must mean reading section 3 CJA, section 67 CJA and section 68 CJA harmoniously. As canvassed earlier, if a decision finally disposes of the parties’ rights, it will constitute an appealable ‘decision’ under section 3 such that it falls within the Court of Appeal’s jurisdiction as conferred by section 67 CJA.

(iii) Do the parties in the present case possess a right to appeal the dismissal of their striking-out applications? MT Ventures

The essential basis of the Defendants’ striking out application is a challenge to the locus standi of the Plaintiff. They argue that the damage suffered is to the owner of the premises, namely Pan, and therefore the Plaintiffs do not possess the right to sue.

At face value therefore, this is a question of whether the Plaintiff fulfils the threshold requirement of locus standi. This is, as stated, a threshold requirement that the Plaintiff must fulfil in order for the suit to be brought and therefore they have a right to appeal the dismissal of the striking out application.

The essential dispute centres around whether the claim by the Respondents are barred by res judicata. In particular, the Appellant argues that the Respondents are bound by an earlier Federal Court 15 decision which they suggest covers the same ground such that the present suit should be struck out.

Again, the issue raised by the Appellant is a true jurisdictional objection; if the matter is indeed res judicata, the Defendants have a right not to be tried. Therefore, the dismissal of the striking-out application in the present case finally disposes of their right not to be subjected to duplicative litigation.

(iv) Alternative Approach to Resolution of These Appeals

Alternatively to our foregoing conclusion, we examine in this section, the parties’ initial submissions and adjudicate on the same by way of an alternative answer to our conclusion above.

Section 68 CJA should not be read as displacing the Macnaghten presumption or as operating retrospectively to take away the vested right of appeal that both parties possessed in the present case. In other words, even if one reads section 68(1)(f) CJA literally so as to remove the parties’ rights to appeal the dismissal of a striking-out application, this cannot apply so as to remove the vested rights of the parties. Therefore, even under this alternative ground, the Appellants possess a right to appeal the dismissal of their striking-out applications.

We therefore order that both appeals be reinstated and heard in full before the Court of Appeal.

In light of the reasoning above, we see no need to answer the leave questions posed by the parties.

The court will now hear parties on costs.