1. Osman Bin Ismail v 1. Kamaralzaman Bin Idris (BA-22NCvC-580-11/2018)

SITI SALMIAH BINTI ISMAIL (NRIC. No.: 910203-05-5208)

UMMI KALSUM BINTI ISMAIL (NRIC. No.: 851116-05-5384)

KAMARIAH BINTI MAIDEEN SHEIK (NRIC. No.: 550805-05-5276)

ISMAIL BIN IDRIS (NRIC. No.: 550805-05-5276) … PLAINTIFFS

KAMARALZAMAN BIN IDRIS (NRIC. No.: 540728-10-5399)

NORMALA BINTI MOHD YATIM (NRIC. No.: 630130-10-5000)

PENTADBIR TANAH

PENDAFTAR HAKMILIK PEJABAT TANAH DAN GALIAN, SHAH ALAM … DEFENDANTS 2 JUDGMENT (Court enclosure no. 16)

This judgment discusses a novel question of whether the plaintiffs (Plaintiffs) in this suit (This Action) can rely on a previous consent order of the Selangor Syariah High Court (Syariah Court’s Consent Order) to resist an application by the first defendant (1st Defendant) to strike out This Action.

The fourth plaintiff (4th Plaintiff) is the former wife of the fifth plaintiff (5th Plaintiff) while the first to third plaintiffs (“1st Plaintiff” to “3rd Plaintiff”) are their children.

The 1st Defendant is the elder brother of the 5th Plaintiff.

The second defendant (2nd Defendant) is the 1st Defendant’s wife. At the time of the filing of This Action, the 2nd Defendant was an undischarged bankrupt.

The 5th Plaintiff was the registered proprietor of land held under title no. H.S. 4568, Mukim Bandar Baru, Salak Tinggi, 43900 Sepang, Selangor (Land). Upon the Land is erected a house (Property) which is occupied by the 1st to 4th Plaintiffs.

The pleadings and affidavits filed by the Plaintiffs and the 1st Defendant in This Action raised various factual disputes. Without resolving these 3 factual disputes, I list down the following transactions in a chronological order:

on 10.12.2004, the 5th Plaintiff executed a trust deed which stated that the 1st to 4th Plaintiffs were the beneficiaries of the Property (Trust Deed). The Trust Deed was registered with the Land Office on 20.12.2004 [Registration (Trust Deed)];

the 5th Plaintiff divorced the 4th Plaintiff in April, 2005;

the 5th Plaintiff affirmed a statutory declaration on 30.3.2007 which alleged that the 1st to 4th Plaintiffs coerced the 5th Plaintiff to execute the Trust Deed (5th Plaintiff’s SD);

on 29.5.2008, the 5th Plaintiff revoked the Trust Deed [Revocation (Trust Deed)];

the 5th Plaintiff executed “Form 14A” on 15.8.2008 in the Land Office in the presence of the Assistant Land Administrator and 1st Defendant whereby the 5th Plaintiff transferred the Land to the 1st Defendant (Form 14A); and

on 2.9.2008, the 5th Plaintiff entered into a Sale and Purchase Agreement of the Property which stated that the 5th Plaintiff sold the Property to the 1st Defendant for RM55,000.00 (SPA).

The 4th Plaintiff filed a suit in the Selangor Syariah High Court No. 10300-017-0205/2018 against the 5th Plaintiff (Syariah Court Suit). In the Syariah Court Suit, on 19.5.2011 the 4th and 5th Plaintiffs recorded 4 the Syariah Court’s Consent Order which stated, among others, as follows:

the Property is “harta sepencarian” of the 4th and 5th Plaintiffs which has been acquired during their marriage; and

the 5th Plaintiff would transfer the Land to the 4th Plaintiff.

In 2015, the 1st and 5th Plaintiffs [Plaintiffs (1st Suit)] filed a suit in Shah Alam Sessions Court No. B52-74-04/2015 against the 1st Defendant (1st Suit) and claimed for the following relief, among others [Original Action (1st Suit)]:

the 1st Defendant shall repay the 5th Plaintiff’s “Employees Provident Fund” money amounting to RM120,000.00 (EPF Money);

an order to invalidate the transfer of the Land to the 1st Defendant [Transfer (1st Defendant)]; and

an order for the 1st Defendant to transfer the Land to the 4th Plaintiff.

Regarding the 1st Suit -

the 1st Defendant filed a counterclaim for the Plaintiffs (1st Suit) to pay rent to the 1st Defendant for staying at the Property [1st Defendant’s Counterclaim (1st Suit)];

the Plaintiffs (1st Suit) could not comply with a direction by the learned Sessions Court Judge (SCJ) to file a common bundle of documents to be used for the trial of the 1st Suit. Hence, the learned 5 SCJ imposed a “peremptory order” to be complied by the Plaintiffs (1st Suit) [Peremptory Order (1st Suit)];

the Peremptory Order (1st Suit) was not fulfilled by the Plaintiffs (1st Suit). Consequently, on 7.11.2016 the learned SCJ gave the following order, among others [SC’s Order (1st Suit)] -

the Original Action (1st Suit) was struck out; and

the 1st Defendant’s Counterclaim (1st Suit) was allowed;

the Plaintiffs (1st Suit) appealed to the High Court against SC’s Order (1st Suit) [Appeal (1st Suit)]. In the Appeal (1st Suit), the Plaintiffs (1st Suit) filed the following two applications -

an application in court enclosure no. 2 for an extension of time to file the record of appeal [Enc. 2 (1st Suit)]; and

an application in court enclosure no. 4 for leave of court to adduce new evidence for the hearing of the Appeal (1st Suit) [Enc. 4 (1st Suit)];

on 19.2.2018 the learned Zalita Bt. Zaidan JC dismissed Enc. 2 (1st Suit), Enc. 4 (1st Suit) and Appeal (1st Suit) with costs [HC’s Order (1st Suit)]; and

the Plaintiffs (1st Suit) applied for leave of the Court of Appeal to appeal against the HC’s Order (1st Suit) but this application was dismissed with costs by the Court of Appeal on 2.10.2018 [CA’s Order (1st Suit)]. 6 C. This Action

The Plaintiffs pray for the following relief in This Action, among others:

declarations that Form 14A and SPA are invalid;

an order to compel the third and fourth defendants to cancel the registration of the Transfer (1st Defendant); and

an order for the 1st and 2nd Defendants (Defendants) to return EPF Money to the 5th Plaintiff.

The 1st Defendant filed an application in court enclosure no. 16 to strike out This Action (Enc. 16) on the following grounds:

This Action is scandalous, frivolous and vexatious as understood in O 18 r 19(1)(b) of the Rules of Court 2012 (RC); and

This Action constitutes an abuse of court process under O 18 r 19(1)(d) RC. According to the 1st Defendant -

by reason of the CA’s Order (1st Suit), the Plaintiffs are barred by res judicata doctrine from filing This Action; and

the Plaintiffs are vexatious litigants in view of the institution of the 1st Suit and Syariah Court Suit. D. Issues

The following questions arise in Enc. 16: 7

are the Plaintiffs barred by the two limbs of res judicata doctrine from filing This Action? In this regard, can the Plaintiffs rely on the Syariah Court’s Consent Order that the Property is “harta sepencarian” of both the 4th and 5th Plaintiffs which cannot be sold to the 1st Defendant?;

whether there are factual issues raised by the Plaintiffs which merit a trial of This Action;

are the Plaintiffs “vexatious litigants” within the meaning of paragraph 17 of the Schedule to the Courts of Judicature Act 1964 (CJA) which warrants the court to strike out This Action?; and

whether it is in the interest of justice for the court to exercise its discretion under O 18 r 19(1) RC read together with O 1A and O 2 r 1(2) RC to allow the Plaintiffs to amend their Statement of Claim (SOC) in This Action. E. Are Plaintiffs barred by res judicata doctrine from filing This Action?

The two limbs of the res judicata doctrine (2 Limbs) have been explained by Peh Swee Chin FCJ in the Supreme Court case of Asia Commercial Finance (M) Bhd v Kawal Teliti Sdn Bhd [1995] 3 MLJ 189, at 197-198, 198 and 199-200, as follows:

once a court has finally decided a case (1st Case), the principle of cause of action estoppel bars a person (X) and/or X’s “privy” from filing any action after the 1st Case (Subsequent Case) based on a 8 cause of action which has been decided in the 1st Case (1st Limb); and

issue estoppel principle prevents X and/or X’s privy from raising any issue in the Subsequent Case which -

has been raised in the 1st Case; or

can be raised with reasonable diligence in the 1st Case (2nd Limb).

The 1st Suit had been filed by the 1st and 5th Plaintiffs against the 1st Defendant. It is clear that the 2nd to 4th Plaintiffs are privies of the 1st and 5th Plaintiffs (by way of family relationship) while the 2nd Defendant is a privy of the 1st Defendant (by way of marriage).

Firstly, I am of the view that regarding the Property, the 1st Suit cannot bar the Plaintiffs from filing This Action. This is because according to the Syariah Court’s Consent Order, the Property constitutes “harta sepencarian” of the 4th and 5th Plaintiffs, namely the Property has been acquired during the marriage of the 4th and 5th Plaintiffs. In other words, the Property is the matrimonial property of the 4th and 5th Plaintiffs and the 5th Plaintiff cannot sell or dispose of the Property to the 1st Defendant. According to Article 121(1A) of the Federal Constitution (FC), civil courts have “no jurisdiction in respect of any matter within the jurisdiction of the Syariah courts”. As such, the Sessions Court, High Court and Court of Appeal in the 1st Suit have no jurisdiction over “harta sepencarian” of 9 Muslim couples. The 1st Defendant has to apply in the Selangor Syariah High Court to set aside the Syariah Court’s Consent Order which provides that the Property is the “harta sepencarian” of the 4th and 5th Plaintiffs. So long as the Syariah Court’s Consent Order subsists, civil courts must take judicial notice of it and the Plaintiffs can rely on it to sustain This Action regarding the Property and to resist Enc. 16. This is the first ground why the 2 Limbs do not bar This Action.

The 2 Limbs are not mandatory statutory provisions intended by Parliament to be applicable in all circumstances. Res judicata doctrine is an equitable concept based on case law and should not be applied indiscriminately so as to cause an injustice or inequity. I rely on the following three Court of Appeal cases:

Gopal Sri Ram JCA’s (as he then was) judgment in Chee Pok Choy & Ors v Scotch Leasing Sdn Bhd [2001] 4 MLJ 346, at 356, 357 and 358;

Mohamad Ariff JCA’s decision in Tanalachimy a/p Thoraisamy & Ors v Jayapalasingam a/l Kandiah & Ors (sued as liquidators of the Great Alonioners Trading Corp Bhd) & another appeal [2014] 4 MLJ 85, at [46]; and

the judgment of Idrus Harun JCA (as he then was) in Francis Joseph Puthucheary v Eng Securities Sdn Bhd [2015] 4 CLJ 433, at [28] and [29].

There is a triable issue on whether it is just and equitable to apply the 2 Limbs to bar the Plaintiffs from filing This Action (1st Triable Issue). The 1st Triable Issue arises as follows: 10

whether the 5th Plaintiff is mentally competent to execute the following documents and transactions -

5th Plaintiff’s SD;

Revocation (Trust Deed);

Form 14A;

SPA; and

the handing over of the 5th Plaintiff’s EPF Money to the

whether the Defendants have exercised undue influence over the 5th Plaintiff so as to induce the 5th Plaintiff to -

transfer the Land to the 1st Defendant; and

hand over the 5th Plaintiff’s EPF Money to the Defendants; and

there was no trial in the 1st Suit. In other words, the merits of the 1st Suit had not been decided at all by the Sessions Court, High Court and Court of Appeal. The 1st Suit solely concerned the enforcement of the Peremptory Order (1st Suit). In view of the 1st Triable Issue, in the interest of justice I cannot apply the 2 Limbs to strike out This Action. The 1st Triable Issue can only be decided after a trial of this case. 11 F. Are there issues to be tried in This Action?

If there is at least one issue to be tried in this case, Enc. 16 must be dismissed - please see the judgment of Gopal Sri Ram JCA (as he then was) in the Federal Court case of Lai Yoke Ngan & Anor v Chin Teck Kwee & Anor [1997] 3 CLJ 305, at 331. Lai Yoke Ngan has been followed by Ramly Ali FCJ in the Federal Court in Seruan Gemilang Makmur Sdn Bhd v Kerajaan Negeri Pahang Darul Makmur & Anor [2016] 3 CLJ 1, at [28].

Premised on the affidavits filed regarding Enc. 16, I am satisfied that there are at least four triable issues in this case (4 Triable Issues) which merit a trial of This Action. These 4 Triable Issues are as follows:

the 1st Triable Issue has been explained in the above paragraph 17;

whether the 5th Plaintiff has the mental capacity to execute the documents and transactions as stated in the above sub-paragraphs 17(1)(a) to (e) (2nd Triable Issue);

did the Defendants exercise undue influence over the 5th Plaintiff so as to induce the 5th Plaintiff to perform the transactions listed in the above sub-paragraphs 17(2)(a) and (b) (3rd Triable Issue); and

whether the Defendants had committed a tort of fraud against the 5th Plaintiff in respect of the Property and EPF Money (4th Triable Issue). 12 G. Are Plaintiffs “vexatious litigants”?

Section 25(2) CJA and paragraph 17 of the Schedule to CJA (Paragraph 17) state as follows: “Powers of the High Court s 25(1) …

Without prejudice to the generality of subsection (1) the High Court shall have the additional powers set out in the Schedule: Provided that all such powers shall be exercised in accordance with any written law or rules of court relating to the same. Schedule to CJA [Paragraph 17] Vexatious litigants Power to restrain any person who has habitually and persistently and without reasonable cause instituted vexatious legal proceedings in any court, whether against the same or different persons, from instituting any legal proceedings in any court save by leave of a Judge. A copy of any such order shall be published in the Gazette.” (emphasis added).

As explained in the above paragraph 15, only the Selangor Syariah High Court can decide on whether the Property constitutes “harta sepencarian” of the 4th and 5th Plaintiffs and by virtue of Article 121(1A) FC, civil courts cannot have jurisdiction over such a matter. Accordingly, the Syariah Court Suit cannot be said to be a vexatious action filed by the 4th and 5th Plaintiffs. 13

This Action raises 4 Triable Issues and cannot be a vexatious legal proceedings within the meaning of Paragraph 17.

In any event, Paragraph 17 does not empower the court to strike out This Action. If any person (Y) has “habitually and persistently and without reasonable cause instituted vexatious legal proceedings in any court” against another person (Z), Z may apply to the High Court pursuant to Paragraph 17 for a perpetual injunction to restrain Y from instituting any legal proceedings in any court save by leave of that High Court. I should add that by reason of Article 121(1A) FC, the civil courts cannot decide that the Selangor Syariah Court Suit is vexatious as understood in Paragraph 17. H. Whether court should strike out This Action or allow Plaintiffs to amend SOC

O 1A, O 2 r 1(2) and O 18 r 19(1) RC provide as follows: “Regard shall be to justice O 1A In administering these Rules, the Court or a Judge shall have regard to the overriding interest of justice and not only to the technical non-compliance with these Rules. Non-compliance with Rules O 2 r 1(1) …

These Rules are a procedural code and subject to the overriding objective of enabling the Court to deal with cases justly. The parties are required to assist the Court to achieve this overriding objective. 14 O 18 r 19(1) The Court may at any stage of the proceedings order to be struck out or amended any pleading or the endorsement, of any writ in the action, or anything in any pleading or in the endorsement, on the ground that -

it discloses no reasonable cause of action or defence, as the case may be;

it is scandalous, frivolous or vexatious;

it may prejudice, embarrass or delay the fair trial of the action; or

it is otherwise an abuse of the process of the Court, and may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be.” (emphasis added).

Firstly, the court has a discretion under O 18 r 19(1) RC. In Novaviro Technology Sdn Bhd v QL Plantation Sdn Bhd & Anor, Watermech Engineering Sdn Bhd (Third Party) [2018] 11 MLJ 392, at [28], I have decided as follows: “[28] The use of the permissive term “may” in O 18 r 19(1) RC means that the court has a discretionary power to strike out a suit under any one or more of the paragraphs in O 18 r 19(1)(a) to (d) RC.” (emphasis added).

It is decided in Jyothy Laboratories Ltd v Perusahaan Bumi Tulin Sdn Bhd [2019] 3 MLRH 454, at [16(5)], as follows: 15 “[16(5)] O 2 r 1(2) RC is not found in the Rules of High Court 1980 (RHC). Provisions in RHC which are identical to O 1A and O 2 r 3 RC were only introduced in RHC with effect from 16.5.2002 [please see Rules of the High Court (Amendment) 2002, PU(A) 197/02]. …” (emphasis added). In view of O 1A and O 2 r 1(2) RC, the court’s discretionary power under O 18 r 19(1) RC should be applied with regard to the “overriding interest of justice”. Cases which have been decided before the introduction of O 1A and O 2 r 1(2) RC, should be read with caution.

Even before the enforcement of O 1A and O 2 r 1(2) RC, in an application to strike out a suit under O 18 r 19(1) RC, in the interest of justice, the court may dismiss the striking out application and allow a plaintiff to amend the SOC so as to “save” the action - please see the judgment of Mahadev Shankar JCA in the Court of Appeal in Muniandy s/o Subrayan & Ors v Chairman & Board Members of Koperasi Menara Maju Bhd [1991] 1 MLJ 557, at 560 and 561.

Pursuant to O 18 r 19(1) read with O 1A and O 2 r 1(2) RC, in the interest of justice I have exercised my discretion as follows:

This Action is not struck out; and

the Plaintiff is granted leave to amend the SOC so as to plead the material facts relied on by the Plaintiffs in respect of the 4 Triable Issues. 16

I have decided not to strike out This Action because -

This Action is not barred by the res judicata doctrine - please refer to the above Part E. In this regard, the Plaintiffs can rely on the Syariah Court’s Consent Order to oppose successfully Enc. 16;

the 4 Triable Issues justify a trial of This Action (please see the above paragraph 19). In view of the 4 Triable Issues, This Action is -

not scandalous, frivolous or vexatious within the meaning of O 18 r 19(1)(b) RC; and

not an abuse of court process as understood in O 18 r 19(1)(d) and O 92 r 4 RC;

this is not a plain and obvious case for the court to strike out This Action - please refer to the judgment of Mohd. Dzaiddin SCJ (as he then was) in the Supreme Court case of Bandar Builder Sdn Bhd & Ors v United Malayan Banking Corporation Bhd [1993] 3 MLJ 36, at 43;

even if it is assumed that This Action is weak and is not likely to succeed, such a fact in itself is not a ground to strike out This Action - Bandar Builder Sdn Bhd, at p. 44; and

the Plaintiffs have a fundamental right of access to justice under Article 5(1) FC (Fundamental Access To Justice) - please see the Federal Court’s judgment delivered by Gopal Sri Ram FCJ in Sivarasa Rasiah v Badan Peguam Malaysia [2010] 3 CLJ 507, at 514-515. Unless This Action is obviously 17 unsustainable, I will not deprive the Plaintiffs of their Fundamental Access To Justice.

I have exercised my discretion to allow the Plaintiffs to amend the SOC so as to plead the material facts relied on by the Plaintiffs regarding the 4 Triable Issues. This exercise of discretion is premised on the following reasons:

the three-fold objective of RC is to ensure a just, expeditious and economical disposal of cases - please see O 34 r 1(1)(b) RC and CELCOM (M) Bhd & Anor v Tan Sri Dato’ Tajudin bin Ramli & Ors and another case [2017] 4 AMR 418, at [19] and [20]. It is only just, expeditious and economical for the Plaintiffs to amend the SOC so that all the relevant issues can be finally decided by the court;

a final decision of the civil court regarding the validity of the 5th Plaintiff’s SD, Revocation (Trust Deed), Form 14A, SPA and Transfer (1st Defendant) will assist the enforcement of the Syariah Court’s Consent Order;

upon the Plaintiffs’ amendment of the SOC, the Defendants have a right to amend their Defence and if necessary, the Defendants may include a counterclaim; and

no prejudice will be caused to the Defendants because -

the 1st Defendant has the right to raise the defence of res judicata after the trial of this case; 18

costs of Enc. 16 shall be paid by the Plaintiffs to the 1st

if This Action is finally dismissed and if the Defendants have suffered loss and damage as a result of This Action, the Defendants have the following remedies as explained in Ranjeet Singh Sidhu & Anor v Zavarco plc & Ors [2016] 2 CLJ 97, at [64], as follows - “[64] I have not overlooked Mr. Robert Low’s submission that if This Suit is not struck out, a lawyer (I may add, any party) may be simply sued on a mere allegation of fraud. If the defendants in This Suit are able to resist successfully this action with proof of bad faith and abuse of court process on the part of the Plaintiffs, the defendants have the following recourse:

the defendants may apply to court under Order 59 rule 16(2) and (4) RC for costs of This Suit to be paid by the Plaintiffs on an indemnity basis (and not on a standard basis). …; and

if the defendants have suffered substantial loss and damage due to This Suit which exceeds costs payable on an indemnity basis, the defendants have the following options -

to claim for damages for tort of abuse of court process - please see Gopal Sri Ram JCA’s judgment in the Court of Appeal case of Malaysia Building Society Bhd v Tan Sri General Ungku Nazaruddin Ungku Mohamed [1998] 2 CLJ 340, at 352-356; and/or 19

(ii) an action for tort of malicious prosecution may be filed - please see Thomson LP’s judgment in the Federal Court in Rawther v Abdul Kareem [1966] 2 MLJ 201, at 203 and 204-205.” (emphasis added). I. Conclusion

Premised on the above reasons, I decide Enc. 16 as follows:

This Action is not struck out;

the Plaintiffs are granted leave to amend the SOC within 14 days from the date of the oral decision regarding Enc. 16 and the Defendants have a consequential right to amend their Defence and to include a counterclaim as the Defendants see fit; and

the Plaintiffs shall pay costs of Enc. 16 to the 1st Defendant. WONG KIAN KHEONG Judge High Court of Malaya Shah Alam, Selangor Darul Ehsan DATE: 10 AUGUST 2020 20 Counsel for Plaintiffs: Puan Syuhaila Binti Abdul Latip (Messrs Syuhaila & Associates) Counsel for 1st Defendant: Encik Kumaresan A/L Venugopal (Messrs Huang, Khairun, Kumar & Associates)