Cai Yun Xing v TAN QI GUANG (WA-22NCvC-325-05/2019)

This is an application by the Defendant to set aside the Judgment in Default of Appearance (JID) entered by the Plaintiff dated 1 $ ^{st} $ August 2019. Enclosure 16 was heard before me on 30 March 2026 whereby I dismissed with cost at RM3,000.00 subject to fee allocator.

Based on the Plaintiff's Statement of Claim dated 14 May 2019 (Enclosure 2) the Plaintiff is a citizen of The People's Republic of China. The Defendant is a Malaysian citizen whom resides and/or used to reside in Pontian, Johor Darul Ta'zim. The Plaintiff and the Defendant were friends (Enclosure 17, Defence - exhibit "T-2", Enclosure 20 - Plaintiff's Affidavit in Reply and Enclosure 21 - Defendant's Affidavit in Reply). The Plaintiff claimed that following the Defendant's receipt of RMB 2,137,500.00 from the Plaintiff, both parties entered into a repayment agreement dated 26 August 2016 (the "loan agreement") for the repayment of RMB 1,897,500.00 (the "balance loan amount"), which is equivalent to RM 1,228,552.92 after conversion as at 20 January 2017 (paragraph 8.i of Enclosure 2). The Plaintiff claimed that the Defendant has paid the Plaintiff the sum of RMB 240,000.00 as part payment prior to entering the loan agreement and the Defendant has failed, neglected and/or refused to pay the remaining balance loan amount.

The Plaintiff commenced with the legal action to recover the balance loan amount and obtained a judgment in default in appearance (the "JID") against the Defendant on 1 August 2019 (Enclosures 22 & 24). The Plaintiff is also claiming for interests at the rate of 5% per annum for the balance loan amount from 20 January 2017 until the date of the Court's Judgment and interest rate of 5% per annum on the balance loan amount from the date of the Court's Judgment until the date of full settlement of the balance loan amount, costs and further or other reliefs.

The Plaintiff then initiated a bankruptcy proceeding on 29 May 2025 to enforce the JID (Defendant's Affidavit in Support - Enclosure 17, exhibit T-3). The Defendant received the notification from CTOS on 9 August 2025 of the bankruptcy proceedings (Enclosure 24 and Enclosure 17, exhibit "T-1") via email and the Defendant filed Enclosure 16 on 22 August 2025 to set aside the JID.

The Defendant's main contention is that he has never entered into a loan agreement to borrow the Plaintiff's money. It was submitted by the learned counsel of the Defendant that the Defendant never received the cause papers as he has moved out from his last known address. It was further submitted that the Defendant does not have a permanent address, as evident from the postal card bearing a different recipient (exhibited CYX-1 in Plaintiff's Affidavit in Reply (Enclosure 20)). Relying on the Federal Court's case of Goh Teng Whoo & Anor v Ample Objectives Sdn Bhd [2021] 2 MLRA 682 [2021] 4 CLJ 348 it was submitted that the postal card bearing a different recipient tantamount to the service as irregular and a JID cannot be entered pursuant to Order 10 rule 1(1) of the Rules of Court 2012.

The Defendant's counsel also submitted that the Defendant's defence is of merits as the Defendant never signed a loan agreement with the Plaintiff pointing out that the only one signature penned on the loan agreement is not his signature, and claimed that the signature does not belong to the Plaintiff either (Enclosure 21). The arguable issue on merits highlighted is that no loan agreement existed between the Plaintiff and the Defendant as the loan agreement becomes effective only when both parties signed the loan agreement pursuant to its clause 3, relying on the principle of defence of merits in the case of Lai Yoke Ngan & Anor v Chin Teck Kwee & Anor [1997] 2 MLJ 565.

The Defendant's counsel further submitted that the borrower is one Tan Qi Qiang which is not the Defendant and a copy of his recent passport of year 2022 is exhibited (Enclosure 21 and exhibit T-1). The Defendant claims that he is entitled to proceed with the trial and not to be adjudged bankrupt.

It was submitted that the amount sum claimed by the Plaintiff is contrary to Order 42 rule 12 of the Rules of Court 2012 as the Plaintiff is claiming interests at the rate of 5% per annum commencing from 20 January 2017, prior to the date of judgment.

The Defendant's counsel also submitted that the Plaintiff's claim should be filed in China in reference to section 23 (1) of the Court Judicature Act 1964 based on the fact that the loan agreement is in the Chinese language which is based on the currency Renminbi (RMB) of China and involves a national of The People's Republic of China.

Briefly, the learned counsel for the Plaintiff submitted that the Defendant's application is defective in law as the Defendant had not obtained leave to enter an appearance out of time nor filed any appearance prior to filing Enclosure 16 based on Order 12 rule 5 of the Rules of Court 2012. The Plaintiff's counsel also relied on the case of Then Fook Kiong & Anor v Paragon Concrete Sdn Bhd [2025] CLJU 626.

The Plaintiff's counsel submitted that an application to set aside the JID must be filed and served on the Plaintiff within 30 days from the date the judgment is received by the Defendant: Order 42 rule 13 of the Rules of Court 2012. It was further submitted that the Defendant filed this application six (6) years later on 22 August 2025 which is out of time with no explanation as to the inordinate delay, arguing that it is a clear abuse of court's process and ought to be dismissed on this ground alone (Enclosure 20 dated 16 October 2025).

This Court heard that the Plaintiff served the JID by AR Registered Post, Registered Post and Certificate of Posting as exhibited and the Plaintiff had also personally emailed a copy of the JID to the Defendant at his last known email address. The Plaintiff had also conducted two separate searches with the National Registration Department in November 2018 when this suit was commenced and in May 2025 during the bankruptcy proceedings which both bear the same registered address for the Defendant (paragraphs 13.1 & 13.2 of Enclosure 20 and exhibit "CYX-2"). It was submitted that the Defendant did not disclose his new address nor offered any indication of his own residence and failure to update would be in breach of Regulation 15 of the National Registration Regulation 1990 (paragraph 13.3, Enclosure 20).

In relation to the proper service of the JID, the Plaintiff's counsel relied on the recent High Court case of Heo Joon Siong v Yap Kong Yew [2023] 1 LNS 2350 by applying the ordinary postal rule where in receipt including communication by email is considered as sufficient service. The Plaintiff's counsel also pointed out the email transmission used in the JID is the same email address as notified by CTOS to the Defendant which shows that the Defendant was in receipt of the judgment.

The Plaintiff's counsel also submitted that the Defendant did not disclose meritorious defence as required as it was not supported by factual evidence, relying on the case of Lai Yoke Ngan & Anor v Chin Teck Kwee & Anor [1997] 3 CLJ 305; Perintis Mahkamah Bhd (Dahulunya dikenali sebagai "Infinity Trustee Bhd") v Abd Wahab bin Arifin [2025] MLJU 1519.

In relation to the allegation of the loan agreement not signed by the Defendant, a screenshot of the relevant portion of the loan agreement was reproduced where the name of the Defendant clearly showed as "Tan Qi Guang" and not as "Tan Qi Qiang" as alleged by the Defendant. Further to that, it was argued that the Defendant exhibited a copy of his current passport dated 25 January 2022 whereas the loan agreement was executed on 26 August 2016.

The Plaintiff's counsel also highlighted the Defendant's admission as in paragraph 3(b) of the Defendant's proposed defence which shows that the Defendant in fact received monies from the Plaintiff to which the loan agreement dated 26 August 2016 was duly entered into by the Defendant (Enclosure 17).

In a setting aside of JID application, the Court's first duty is to determine if the JID was obtained regularly or irregularly. If the judgment is irregular then it ought to be set aside ex defitio justitiae. On the other hand, if it is regularly obtained, as decided by the Federal Court in Hasil Bumi Perumahan Sdn Bhd & Ors v United Malaysian Banking Corp. Bhd [1994] 1 CLJ 328 the applicant must show that he has a defence on the merits.

My attention is drawn to the cause papers relied by the Defendant as affirmed in his Affidavit In Support (Enclosure 17, paragraph 3(1)(a) (e) dated 22 August 2025) whereby no leave to enter appearance application was filed. Pursuant to Order 12 rule 5 of the Rules of Court 2012 a defendant may not enter an appearance in an action after judgment has been entered unless leave of the court is obtained: Wan Mohd Sofian Wan Md Saad v MBF Finance Bhd [2000] 1 AMR 846. I also rely on the recent 2025 High Court of Sabah And Sarawak case submitted by the Plaintiff, Then Fook Xiong & Anor v Paragon Concrete Sdn Bhd [2025] CLJU 626.

There is no evidence produced by the Defendant that the leave of court to enter an appearance has been obtained as it was not served on the Plaintiff. The leave is necessary as it is a preparatory move to set aside a judgment and for leave to defend (Malaysian Civil Procedure 2024, Volume 1, Sweet & Maxwell, page 115) Without the Court's leave to enter a late appearance, the Defendant lacks the standing to proceed with its Enclosure 16 including to set aside the JID and to file a defence: Then Fook Xiong (supra). I am of the view on that basis alone, the application should be dismissed. However, for the purpose of completeness, I would also lay out my views on other issues raised by both counsels.

On the issue as to whether the service was regular or otherwise, I find that the service was regular. Reason being there are six (6) ways for a service to take place following Order 62 rule 6(1)(a)-(e) of the Rules of Court 2012 which also includes electronic communication for instance electronic mail. The Plaintiff's counsel submitted with exhibits of the multiple methods of serving the JID to the Defendant. The Plaintiff served the JID by AR Registered Post, Registered Post and Certificate of Posting and the Plaintiff had also personally emailed a copy of the JID to the Defendant at his last known email address. The fact shows that the Defendant would have received the email on the judgment based on the same email address the Defendant received the notification email from CTOS.

Further to that, the Defendant's failure to update his current address or his particulars with the National Registration Department is not a defence with merits. A defence on the merits means the defendant discloses an arguable and triable issues and not merely show a prima facie defence: PL Construction Sdn Bhd v Abdullah Said [1989] 1 MLJ 60; Hasil Bumi (supra).

I am mindful, as no leave was granted to the Defendant to enter a late appearance, his defence could not be used. However, I would like to refer to the Defendant's proposed Defence (Enclosure 17), there is a clear admission that the Defendant has received money from the Plaintiff however could not recall on the exact amount owed. The Defendant claimed that the borrowing happened for more than 10 years and his bank account in China is no longer active. The Defendant also claimed that he has given money to the Plaintiff but could not recall the exact amount. I find these affirmations by the Defendant established the fact that there was money exchanged between the Defendant and the Plaintiff. As a lender for a sum of money, it may not be possible to forget the amount lent if one may not remember the exact amount.

Interesting enough, the Defendant's passport exhibited by the Defendant was dated 25 January 2022 which is after six (6) years from 2016, bearing a new passport number whereas the loan agreement was executed on 26 August 2016 (paragraph 38 of Enclosure 22). It would thus be logical to make comparison of documents of the same year which is 2016, the year of the loan agreement rather than using the passport of year 2022. The Defendant did not elaborate further in his affidavit the reason of his reliance on a passport that was issued in year 2022.

Upon close scrutiny of the loan agreement, the parties to the loan agreement are named as Cai Yun Xing and Tan Qi Guang which the latter is the Defendant's name. Only in the translation version of the loan agreement in Bahasa Malaysia and in the English language, the spelling of the name of the Defendant differs.

The objection on the signing of the loan agreement is based on the argument by the defendant that there was only one signature which is not the Defendant's and neither belongs to the Plaintiff. The Plaintiff never denied that it was his signature as well as his thumbprint. There are two thumbprints on the loan agreement. The loan agreement as exhibit CYX-3 was affirmed on 16 October 2025 (Enclosure 20), was officially translated into the English language and the Bahasa Malaysia language by the Chinese Language Interpreter of Shah Alam Court, Selangor. The second paragraph of the loan agreement states the effect (of the loan agreement) that takes place. The first paragraph states that the borrower will be liable for breach of contract. It was also translated that both parties' thumbprint are placed in the loan agreement: " (Both Parties Thumbprint)".

No where in the Defendant's affidavit that he denied that either one of the thumbprints does not belong to the Defendant nor did the Defendant objected to the two thumbprints in the loan agreement. I viewed that based on the principle of burden of proof, the Plaintiff has discharged the burden of proof and the onus of proof which then shifted to the Defendant to be rebutted: Lechumanan Chettiar Alagappan @ L Allagappan & Anor v Secure Plantation Sdn Bhd [2017] 3 MLRA 501, Federal Court. The burden of proof and the onus of proof stayed intact on the Defendant.

It would be prejudicial if the setting aside application is allowed as the Plaintiff had demanded for the balance of the loan amount under the loan agreement dated 26 August 2019 via the cause papers. The documents and records may not be easily available, in fact based on the Defendant's own admission that his bank account in China is no longer active would be more prejudicial to the Plaintiff if the Plaintiff wishes to apply for transaction records or banking details of the Defendant or if the payment is to be made to the Plaintiff in Chinese currency Renminbi.

To conclude, I am of the view that the JID dated 1 August 2019 was regularly obtained. Unless the Defendant is granted leave to enter a late appearance, the Defendant has no standing to proceed with its application under Enclosure 16. I hereby dismissed Enclosure 16 with cost at RM3,000.00 subject to fee allocator. Dated 30th March 2026 (ZALITA BINTI ZAIDAN) (JUDICIAL COMMISSIONER) (HIGH COURT CIVIL NCVC3) (HIGH COURT OF KUALA LUMPUR) (IN THE FEDERAL TERRITORY, MALAYSIA) Plaintiff's Counsel : Tan Lik Wei Messrs Tay Chai Huat & Co Defendant's Counsel: Tan Ben Lee Messrs Aimanlooi & Ben Cases Referred: Goh Teng Whoo & Anor v Ample Objectives Sdn Bhd [2021] 2 MLRA 682 [2021] 4 CLJ Lai Yoke Ngan & Anor v Chin Teck Kwee & Anor [1997] 2 MLJ 565 Then Fook Xiong & Anor v Paragon Concrete Sdn Bhd [2025] CLJU 626 Heo Joon Siong v Yap Kong Yew [2023] 1 LNS 2350 Lai Yoke Ngan & Anor v Chin Teck Kwee & Anor [1997] 3 CLJ 305 Perintis Mahkamah Bhd (Dahulunya dikenali sebagai "Infinity Trustee Bhd") v Abd Wahab bin Arifin [2025] MLJU 1519 Hasil Bumi Perumahan Sdn Bhd & Ors v United Malaysian Banking Corp. Bhd [1994] 1 CLJ 328 Wan Mohd Sofian Wan Md Saad v MBF Finance Bhd [2000] 1 AMR 846 Then Fook Xiong & Anor v Paragon Concrete Sdn Bhd [2025] CLJU 626 PL Construction Sdn Bhd v Abdullah Said [1989] 1 MLJ 60 Lechumanan Chettiar Alagappan @ L Allagappan & Anor v Secure Plantation Sdn Bhd [2017] 3 MLRA 501 Act/Law Referred: Order 10 rule 1(1), Order 12 rule 5, Order 42 rule 12, Order 42 rule 13, Order 62 rule 6(1)(a)-(e) of the Rules of Court 2012 Section 23 (1) of the Court Judicature Act 1964 Order 12 rule 5 of the Rules of Court 2012 Articles Referred: Malaysian Civil Procedure 2024, Volume 1, Sweet & Maxwell, page 115