Abdul Razak Bin Dato' A. S. Dawood v Mohamed Siddiq Bin Anwar Batcha (WA-12ANCVC-137-06/2019)

The Plaintiff had filed a Writ and Statement of Claim against the Defendant for the payment of monies purportedly borrowed by the Defendant from him at the Court below. The Session’s Judge, after hearing submissions from both parties, had struck out the Plaintiff’s claim under Order 18 Rule 19 of the Rules of Court 2012.

Dissatisfied, the Plaintiff had filed a Notice of Appeal to this Court.

Upon hearing submissions by both parties, this Court disallowed the appeal and affirmed the Session’s Judge’s decision with no order as to cost.

Dissatisfied, the Plaintiff had filed an appeal to the Court of Appeal.

Herewith are the grounds of judgement for the decision.

The Plaintiff and the Defendant are closely related. The Defendant has a family business named “P.A. Wahab and 3 Company Sdn. Bhd.” (“the Company”). The Defendant is one of the directors and shareholders of the Company. The Plaintiff is an individual who is also the nephew of “P.A. Abdul Wahab”.

According to the Plaintiff in 2010, the Defendant faced financial difficulties which then led to the failure of the family business, i.e. “P.A. Wahab and Company Sdn. Bhd.”, causing it to nearly lose its business.

As the Defendant needed help, and that nobody from his family were able to assist him, the Plaintiff employed him to work at the Plaintiff’s own company. According to the Plaintiff, during the Defendant’s employment, the Defendant had requested monetary assistance for the Defendant and his family’s expenses. As at the year 2012, the Defendant had borrowed from the Plaintiff a total of RM105,564.00. Apart from that, in 2013, the Defendant had also borrowed monies from the Plaintiff for his own use, or for his family’s.

The Plaintiff also asserted that he lost RM19,000.00 in the loss of value of his Myvi car loaned to the Defendant, which was badly damaged following an accident.

According to the Plaintiff, the Defendant failed to pay. Hence, the Plaintiff had filed a claim at the Session’s Court amongst others for:

to pay back the amount of RM105,564.00 borrowed; 4

to pay to the Plaintiff RM48,000.00 for the amount advanced to the Defendant as financial assistance for the year 2012;

as well as for the year 2013 of RM54,599.00;

and the claim for the loss of value of the Myvi car for RM19,000.00 (Please refer to the Statement of Claim at page 18 of the “Rekod Rayuan”). [11] The Session’s Court had struck out the suit under Order 18 Rule 19 (1) (a), (b), (c) and (d) ROC 2012. C. THE DEFENDANT’S VERSION [12] The Defendant had disputed the claims. The Defendant submitted that the Plaintiff had previously filed several suits against him and others before, based on the same facts and the same issues, and was unsuccessful. The first suit was filed at the Kuala Lumpur Session’s Court No. WA-B52NCC-474- 06/2016. The cause of action was breach of contract and some declaratory reliefs as follows:

He had assisted the Respondent’s/Defendant’s company financially;

He had assisted the Respondent/Defendant in settling the house loan; 5

He had assisted the Respondent/Defendant financially;

As such, all the shares in the Respondent’s/Defendant’s company, P. A Wahab & Company Sdn. Bhd. ought to be transferred to the Appellant as consideration. [13] In the first suit, the Appellant’s/Plaintiff’s claim was rejected by the Sessions Court and the Appellant/Plaintiff had appealed to the High Court under Suit No. WA-12BNCC-14-05/2017. The High Court affirmed the decision of the Session’s Court. What was telling was that the High Court, after evaluating all the evidence, made a finding that there was no evidence that the Appellant/Plaintiff assisted the Respondent financially. Dissatisfied with the High Court, the Appellant/Plaintiff filed an appeal to the Court of Appeal. However, the Appellant later withdrew the appeal without any reason. [14] According to the Defendant, the Plaintiff/Appellant had filed a second suit against the Company Secretary of the Company vide Civil Suit No. WA-22NCC-318-07/2018 at the High Court based on the same facts and issues, and the cause of action was based on negligence of the Company Secretary in discharging his duty. The Respondent/Defendant applied to intervene and made an application to strike out the suit under Order 18 Rule 19 of the Rules of Court 2012. The Court allowed the Defendant’s/Respondent’s application. 6 [15] Further, according to the Defendant, the Plaintiff/Appellant filed another suit, which was WA-22-NCVC-524-07/2019. In that suit, the Appellant/Plaintiff was seeking the Respondent/Defendant to return the money which was allegedly paid by the Plaintiff/Appellant. The Defendant/Respondent filed an application to strike out the claim under Order 18 Rule 19 Rules of Court 2012, and the Court allowed the Respondent’s/Defendant’s said application. It was also based on the same facts and issues. D. ANALYSIS AND FINDINGS OF THIS COURT [16] This Court had perused the Appeal Records, which contained all the cause papers including the affidavits. Some of the exhibits include notes of Evidence/Notes of Proceedings/Grounds of Judgment of previous hearings and other cause papers. This Court had also heard the submissions of parties. This Court opined that the Session’s Judge did not make any errors in allowing the Defendant’s application to strike out the Plaintiff’s claim for the following reasons: [17] This Court agreed that this is not the first claim filed by the Plaintiff. It was preceded by many other claims before, that was based on the same facts and issues. Of pertinence was the first suit which was Civil Suit No. WA-B52NCC-474-06/2016 filed in the Session’s Court where in essence, the claim was breach of contract. The claims were rejected by the Session’s Court. 7 [18] On appeal to the High Court, the appeal was rejected. Eventhough the High Court affirmed the Sessions Judge’s decision, the learned High Court Judge made a finding of fact that there was no clear documentary evidence that the Plaintiff had given any financial assistance/made personal payments to the Defendant (see Defendant’s Affidavit “MS-1” at page 47 to 71 of the Grounds of Judgement of the learned High Court Judge). [19] The Plaintiff then filed an appeal to the Court of Appeal but later withdrew it. That being so, that fact that the Plaintiff did not give any financial support to the Defendant stands. Further, the Defendant averred that the monies given by the Plaintiff to him are allowances given to him whilst working with the Plaintiff. This was confirmed by one of the Plaintiff’s own witnesses in another Suit, WA-B52NCC-474-06-2016 at the Session’s Court (see Affidavit “MS-3” – Notes of Evidence at page 88 whereby SP5 confirmed that the Defendant had worked for the Plaintiff and was paid an “allowance”). [20] Few other suits followed including this Writ and Statement of Claim filed on 7/1/2019, and all were based on the same facts and issues. The law is trite that no person can file a claim twice as this goes against the principles of multiplicity of claim and goes against the doctrine of res judicata. That doctrine also precludes a litigant from relitigating the matter and raising in subsequent proceedings, matters which could and therefore, should have been litigated in earlier proceedings (Tetuan Ros, Lee & Co v. Tan Ming Yew [2013] 4 CLJ 807). 8 [21] Similarly, in the case of Bukit Baru Villas Sdn Bhd v. Malaysia Building Society Berhad [2017] 1 MLRH, where the Court adopted the Federal Court’s case of Asia Commercial Finance

(M) Berhad (infra), and held that: “[2] The doctrine of res judicata is not confined to causes of action or issues which the court is actually asked to decide or has already decided. It covers also cause of action or issues or facts which, though not already decided as a result of the same not being brought forward due to negligence, inadvertence or deliberately, are so clearly part of the subject matter of the litigation and so clearly could have been raised, that it would be an abuse of the process of the court to allow a new proceeding to be started in respect of them.” [22] In the Supreme Court case of ASIA COMMERCIAL FINANCE

(M) SDN BHD v. KAWAL TELITI SDN BHD (1995) 3 MLJ 189, the Court said the following: “What is res judicata? It simply means a matter adjudged, and its significance lies in its effect of creating an estoppel per rem judicatum. When a matter between two parties has been adjudicated by a court of competent jurisdiction, the parties and their privies are not permitted to litigate once more the res judicata, because the judgment becomes the truth between such parties, or in other words, the parties should accept it as the truth; res judicata pro veritate accipitur. The public policy of the 9 law is that, it is in the public interest that there should be finality in litigation - interest rei publicae ut sit finis litium. It is only just that no one ought to be vexed twice for the same cause of action - nemo debet bis vexari pro eadem causa. Both maxims are the rationales for the doctrine of res judicata, but the earlier maxim has the further elevated status of a question of public policy.” [23] The Supreme Court in that case preferred the broader approach as public policy warrants that there must be a finality in every litigation. The Supreme Court further said: “It is important to bear in mind the manner in which the issue estoppel operates in preventing such contradiction of the previous judgment... There is one school of thought that issue estoppel applies only to issues actually decided by the court in the previous proceedings and not to issues which might have been and which were not brought forward, either deliberately or due to negligence or inadvertence, while another school of thought holds the contrary view that such issues which might have been and which were not brought forward as described, though not actually decided by the court, are still covered by the doctrine of res judicata, ie doctrine of estoppel per rem judicatum. We are of the opinion that the aforesaid contrary view is to be preferred; it represents for one thing, a correct even though broader approach to the scope of issue estoppel. It is warranted by the weight of authorities to be illustrated later. It is completely 10 in accord or resonant with the rationales behind the doctrine of res judicata, in other words, with the doctrine of estoppel per rem judicatum. It is particularly important to bear in mind the question of the public policy that there should be finality in litigation in conjunction with the exploding population; the increasing sophistication of the populace with the law and with the expanding resources of the courts being found always one step behind the resulting increase in litigation.” [24] The decision of ASIA COMMERCIAL FINANCE (M) SDN BHD (supra), was referred in the case of KERAJAAN MALAYSIA v. MAT SHUHAIMI SHAFIEI [2018] 3 CLJ 1, where the Federal Court agreed with the decision of the Supreme Court. [25] In the case of Dato’ Sivanathan Shanmugam v. Artisan Fokus Sdn Bhd (2015) 2 CLJ 1062 , the Court of Appeal decided that the doctrine also applies to non-parties. More importantly is that the doctrine seeks to prevent abuse of the Court’s process, by disallowing litigants to relitigate its cause for the same relief and based on the same subject matter which was already finalised. The Court said: “In the present appeal, since the present action would undoubtedly involve going over precisely the same facts as in the previous HTF suit, and accepting the broader approach and the wider sense of res judicata as the preferred and correct legal position, the fact that the parties to this suit are different from the HTF suit does not disentitle the appellant to invoke the doctrine of 11 issue estoppel to bar the respondent from relitigating a specific issue that had been decided in the prior separate action. The doctrine also applies to a non-party. It is therefore not necessary for parties to be the same in both actions. What the doctrine seeks to prevent is an abuse of the process of the court by attempting to make a double claim as well as allowing the plaintiff to relitigate its cause for the same relief and based on the same subject matter for which judgment had successfully been obtained in the HTF suit and to produce the same set of facts, the same witnesses and the same documents (see Seruan Gemilang Makmur Sdn Bhd v. Badan Perhubungan UMNO Pahang Darul Makmur).” [26] This Court also observed that the claims for purported financial assistance/loan for 2012 was out of time and hence are barred by Section 6 of the Limitation Act 1953. [27] Under the principle of Striking Out, under Order 18 Rule 19 (1)

(a), (b), (c) and (d) Rules of Court 2012, a claim can only be struck out for the following reasons: “(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— 12

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.

No evidence shall be admissible under subparagraph

(a).” [28] This Court will now explain the principles regarding those sub paragraphs as follows:

Sub para Rule 19 (1) (a) – The pleadings and endorsements disclosed no reasonable cause of action or defence, as the case may be; [29] The striking-out procedure is summary in nature. It should only be adopted when it is conspicuously clear that the claim on the face of it is obviously unsustainable, i.e. the test is whether on the face of the Statement of Claim alone (i.e. without looking at the affidavit evidence) whether the Court is prepared to conclude 13 that the cause of action is obviously unsustainable – (see New Straits Times (M) Bhd vs Kumpulan Verta Niaga Sdn Bhd & Anor (1985) 1 MLJ 226; Bandar Builder Sdn Bhd & Others vs UMBC (1993) 3 MLJ 36; Seruan Gemilang Makmur Sdn Bhd vs Kerajaan Negeri Pahang Darul Makmur & Anor (2016) 3 CLJ 1 (FC)). [30] In the Federal Court’s case of Serac Asia Sdn Bhd v. Sepakat Insurance Brokers Sdn Bhd [2013] 6 CLJ 673 (Federal Court) pages 698-699, it was held that recourse to this summary process can only be adopted when it can clearly be seen that the claim is on the face of it is “obviously unsustainable”. In other words, the Courts should exercise its powers only when it is obvious that the claim is bound to fail. The Federal Court said: “We also make this observation on the application of the court’s summary power to strike out a pleading under O. 18 r. 19 Rules of Court 2012 (successor to RHC 1980). Although the power to strike out is a wide discretion, it should be exercised with care and only when the threshold requirement of “an obvious and unsustainable case” can a pleading be struck out.” [31] In the present suit/claim, as it is precluded by the doctrine of res judicata, and also the claim (part) was already time barred, hence, there is no reasonable cause of action available to start with. It follows that the claim is “obviously unsustainable” and should be struck out. 14

(ii) Sub para Rule 19 (1)(b) - The pleading or the endorsement is scandalous, frivolous or vexatious; [32] In striking out application pursuant to O 18 r. 19 (1) ROC 2012, the Court of Appeal in Indah Desa Saujana Corp Sdn Bhd & Ors v. James Foong Cheng Yuen [2008] 2 MLJ 11 held that in the context of O 18 r. 19 (1) (b), the term “scandalous” is taken to mean wholly unnecessary and irrelevant and not just upleasant allegations and “frivolous” or “vexatious” means that the pleadings are obviously unsustainable. In considering this ground, affidavit evidence and undisputed facts may be referred to. [33] In the case of Middy Industries Sdn Bhd & Ors v. Arensi-Marley (M) Sdn Bhd [2013] 3 MLJ 511 (Court of Appeal) page 516, the Court of Appeal said: “… The words “frivolous or vexatious” generally refer to a groundless action or statement with no prospect of success, often raised to embarrass or annoy the other party to the action. In considering whether any proceedings were vexatious or frivolous, one is entitled to and ought to look at the whole history of the matter and it is not to be determined by whether the pleading discloses a cause of action or not (see: Attorney General of Duchy of Lancaster v. London & North Western Railway Co [1892] 3 Ch 274; and Re Vernazza [1959] 2 All ER 200). It was decided in the above cases that “frivolous or vexatious actions 15 mean cases which are obviously frivolous or vexatious or obviously unsustainable.” [34] Here, the Plaintiff has been filing one suit after another which were based on the same facts and issues after every “defeat”. This is obviously a scandalous, frivolous and vexatious claim.

(iv) Sub para Rule 19 (1) (d) – The pleading and endorsement is otherwise an abuse of the process of the Court; [35] In Tan Wai Hong & Ors (supra), the Court of Appeal said: “(i) The Oxford English Dictionary defines “abuse (of process) as:- the wrong or improper use, misuse, misapplication, perversion; turning the wrong way, diversion to an improper use, corruption, distortion”. A pleading is an abuse of process if the litigation process is used for improper purpose; eg, where the proceedings constitute a sham; where the process of the court is not being fairly or honestly used, or is employed for some ulterior or improper purpose.” [36] Thus, it is obvious that the abuse of Court process includes consideration of public policy and the interests of justice and this means that Court processes must be used bona fide and in a proper manner. The case of Godrej Sara Lee Ltd v. Siah Teong Teck & Anor (Part 1) [2007] 7 MLJ 153 (High Court) Page 159 defines what actually means to abuse the process of the Court in the following words: 16 “[22] The case of Gabriel Peter (supra), addressed the meaning of "an abuse of the process of the Court". At page 384 the Court of Appeal, Singapore said: "The term "abuse of the process of the Court", in Order 18 rule 19(1)(d), has been given a wide interpretation by the Courts. It includes considerations of public policy and the interests of justice. This term signifies that the process of the Court must be used bona fide and properly and must not be abused. The Court will prevent the improper use of its machinery. It will prevent the judicial process from being used as a means of vexation and oppression in the process of litigation. The categories of conduct rendering a claim frivolous, vexatious or an abuse of process are not closed and will depend on all relevant circumstances of the case. A type of conduct which has been judicially acknowledged as an abuse of process is the bringing of an action for a collateral purpose...if an action was not brought bona fide for the purpose of obtaining relief but for some other ulterior or collateral purpose, it might be struck out as an abuse of the process of the Court." [37] To sum up, it is evidently clear that for the foregoing reasons, the Plaintiff has no reasonable cause of action against the Defendant, and the claim should be struck out. Further, as the claims were already heard in an earlier suit/ suits, and that part of the claim was filed out of time, this Court opined that this suit is frivolous, scandalous and vexatious, and should be struck out. 17 [38] This Court also opined that the Plaintiff’s deliberate attempt to relitigate the same issue on the financial assistance/ loan is an abuse of the process of the Court. In the case of Stephenson v Garett [1898] 1 Q.B 677 C.A the English Court ruled that it is an abuse of the court’s process to litigate again over an identical question which has already been decided. Also, as in the case of Dato’ Sivanathan Shanmugam (supra) which decided that what the doctrine of res judicata seeks to prevent is an abuse of the court in making a double claim. Further, there should always be a closure or finality in every litigation. E. CONCLUSION [39] For the foregoing reasons, this Court found that the learned Session’s Judge did not commit any appealable error which warrants appellate intervention in striking out the Plaintiff’s claim. The appeal was hence dismissed with no order as to cost. The Sessions Judge’s decision was hence affirmed. Dated: 10th April 2020 (DATO’ AHMAD BIN BACHE) Judge Civil High Court NCvC 3 Kuala Lumpur 18 Parties: Plaintiffs/ Appellant: Encik Muhammad Rafique & Encik Akif Rusli Solicitors TETUAN LAW PRACTICE OF RAFIQUE No. 25-3A, SunwayMas Commercial Centre Jalan PJU1 /3B 47301 Petaling Jaya SELANGOR DARUL EHSAN Defendant/ Respondent’s: Mr. K. Navindran & Mr. S. Preakas Solicitors TETUAN PREAKAS & PARTNERS No. 33-2-5, Block C, Jaya One Jalan Universiti 46200 Petaling Jaya SELANGOR DARUL EHSAN