Chow Ye An & 21 yang lain v Euroland & Development Sdn Bhd (BA-22NCvC-210-05/2021)

CHOW YE AN [IDENTITY CARD NO. : 890203-08-5428]

CHEAH KAI LIN [IDENTITY CARD NO. : 920513-07-5502]

KHOR WAI YANG [IDENTITY CARD NO. : 901010-08-6935]

LOO MEI KEE [IDENTITY CARD NO. : 861220-56-5754)

IZHAR HADAFI BIN ABDUL HALIM [IDENTITY CARD NO. : 861220-56-5754)

LEE HAW JING [IDENTITY CARD NO. : 830322-05-5323)

TAN SOKE CHIUN [IDENTITY CARD NO. : 840607-05-5764)

YAP WEN KWONG [IDENTITY CARD NO. : 961008-14-5857)

CHOO CHUN LIM [IDENTITY CARD NO. : 870814-56-5123)

CHOO CHIN YEE [IDENTITY CARD NO. : 920701-14-5352)

TEH YUH ZHEN [IDENTITY CARD NO. : 730514-01-5002)

CHIEW SAI WENG [IDENTITY CARD NO. : 700501-01-5743) 2

SONG CHEE POH [IDENTITY CARD NO. : 861122-59-5407)

ONG LOO SEE [IDENTITY CARD NO. : 910601-10-6058)

LIEW WEE HOUNG [IDENTITY CARD NO. : 811116-14-5367)

SIEW YIN LING [IDENTITY CARD NO. : 861229-56-5550)

LIM BEE CHENG [IDENTITY CARD NO. : 880715-08-6548)

LOH KIT WEI [IDENTITY CARD NO. : 890917-14-6683)

WONG CHUN FEI [IDENTITY CARD NO. : 940405-14-6041)

WONG PEI SAN [IDENTITY CARD NO. : 860806-56-5650)

ALEX KHOW PIN FONG [IDENTITY CARD NO. : 850530-14-5559)

NG SU YEE [IDENTITY CARD NO. : 871014-56-5154) ..... PLAINTIFFS [Plaintif-Plaintif memulakan dan membawa tindakan perwakilan ini, menyaman dalam kapasiti peribadi dan sebagai seorang wakil kepada kesemua dua puluh (22) Plaintif-plaintif / Pembeli-pembeli hartanah dalam projek pembangunan perumahan yang dikenali sebagai “Damai Vista” menurut peruntukan undang-undang yang ditetapkan di bawah Aturan 15 Kaedah 12 Kaedah-Kaedah Mahkamah 2012] AND EUROLAND & DEVELOPMENT SDN BHD (COMPANY NO. : 936529-K) ….. DEFENDANT AND 3 ALL WAYS BUILDER SDN BHD [COMPANY NO. : 201601041757 (1212699-X)] ….. THIRD PARTY GROUNDS OF JUDGMENT (Enclosure 29: Defendant’s Application for Extension of Time for Filing and Serving Statement of Claim in Third Party Proceedings)

The broad issue in the matter at hand is whether the Court is bound to conduct a joint trial of the plaintiff’s original action and the defendant’s third party action irrespective of the inconvenience and other undesirable factors concerning joint trial in the case.

The Plaintiffs, a group of 22 purchasers, have filed the present suit against the Defendant-developer wherein the Plaintiffs are claiming for declaration against the developer’s purported notices of termination, for rescission of contract and other reliefs in connection with the statutory Sale and Purchase Agreements on residential properties in a residential development project. The gist of the Plaintiffs’ complaint is that the Defendant-developer’s purported termination of their Sale and Purchase Agreements was null and void and that after the lapse of about 5 years since the date of the Sale and Purchase Agreements the Defendant-developer still has not completed the project nor has it handed over the vacant possession of the residential units to the Plaintiffs-purchasers.

Within the time prescribed by O. 16 r. 1(1) of the Rules of Court 2012 and without the leave of the Court, the Defendant-developer on 2 November 2021 issued and served a Third Party Notice (Enclosure 10) against All Ways Builder Sdn Bhd, its main contractor who was appointed to carry out the construction works in the development project. The main bases of the Defendant-developer’s claim for contribution and damages against its main contractor All Ways Builder Sdn Bhd (“All Ways Builder”) are the allegations that (a) All Ways Builder refused and/or failed to fully complete the construction of the Damai Vista Project within the time limited for it to do so; and

(b) despite All Ways Builder bearing the primary obligation to make payments and to settle the claims of the sub-contractors for the 4 Damai Vista Project, All Ways Builder failed, refused, and/or neglected to do the same thereby prolonging and/or causing to prolong the completion of the Damai Vista Project.

The Defendant-developer filed its Defence (Enclosure 11) on 2 November 2021 very shortly after its filing of the Third Party Notice.

On 17 January 2022 the Defendant-developer vide Enclosure 24 filed an application for leave to amend the Third Party Notice by adding five (5) Directors and officers of All Ways Builder as co-defendant in the Third Party Notice and third party proceedings. The gist of the Defendant-developer’s complaint against the proposed new third parties is that All Ways Builder and proposed new parties had conspired and combined together wrongfully and with the sole or predominant intention of injuring Euroland and/or causing loss to them by illegally and unjustifiably causing Euroland’s funds to be channelled out through the Damai Vista Project through lawful and/or unlawful means and thereby prolonging and/or causing to prolong the completion of the Damai Vista Project.

After having read the cause papers and the Defendant’s submission, this Court on 18 April 2022 dismissed the Defendant-developer’s application in Enclosure 24 for the addition of new parties to the Third Party Notice.

Dissatisfied with the said decision, the Defendant-developer has appealed to the Court of Appeal. This Court’s Grounds of Judgment have been provided to the parties and can be found in [2022] MLJU 1177 and [2022] AMEJ 0612.

By Enclosure 29 the Defendant-developer applied for extension of time to file the Statement of Claim against the Third Party.

On 16 June 2022 this Court dismissed the application for extension of time with no order as to costs, terminated the proceedings on the third party notice by striking out the third party notice with liberty for the Defendant-developer to file a new separate suit against the Third Party-contractor and, if the Defendant so wishes, to join the directors of the contractor (i.e. the persons named in Enclosure 24 application) as co-defendants in that new and separate suit.

Dissatisfied with the said decision dated 16 June 2022, the Defendant-developer has appealed to the Court of Appeal. 5

The relevant provisions of the ROC 2012 regarding joinder of parties and joinder of causes of action include the following:

“Court may order separate trials (O. 15, r. 5)

Third party directions (O. 16, r. 4)

(a) if the liability of the third party to the defendant who issued the third party notice is established on the hearing, order such judgment as the nature of the case may require to be entered against the third party in favour of the defendant;

(b) order any claim, question or issue stated in the third party notice to be tried in such manner as the Court may direct; or

(c) dismiss the application and terminate the proceedings on the third party notice, and may do so either before or after any judgment in the action has been signed by the plaintiff against the defendant.

In cases where parties or causes of action have already been joined in the Third Party Notice which have already been issued, O.16 r. 4(3) and O.16 r.4(4) of ROC 2012 empower the Court to order separate trials of the main suit and the third party proceeding or separate trials of the causes of action where circumstances are appropriate for doing so, to wit, where it appears to the Court “proper for having the rights and liabilities of the parties most conveniently determined” . This criterion on conveneince is similar to one of the limbs of the provisions in O.15 r.5 which stipulate it as “it appears to the Court that the joinder of causes of action or of parties, as the case may be, may embarrass or delay the trial or is otherwise inconvenient .”

The criterion regarding convenience of the trial and the determination of the rights and liabilities of the various parties in the joined proceedings is a common criterion for considering whether to order joint trials or separate trials. From the similar criterion of convenience, it can be concluded that joinder of causes of action and joinder of trials whether in the same original action or in the third party proceeding is dependent upon the Court’s discretionary assessment of whether or not it appears that such joinder of causes of action or joint trials would be convenient for determining the rights and liabilities of the various parties in the joint proceedings.

Convenience in this context is not the convenience of one party at the expense of inconvenience, prejudice or injustice to another party in the joined proceedings. The question of convenience or inconvenience has to be considered by striking a balance between the conflicting interests of the various parties in the joined proceedings in light of the underlying policies and important features of the court rules and also in light of the policy and objective of the applicable statute. Thus, the convenience in this context cannot be viewed in isolation, but should be viewed in the overall context of the Rules of Court 2012 including the policies underlying the court 7 rules and the important features in the court rules and also, in cases relating to the purchasers’ claims against the developer in respect of the statutory sale and purchase agreements under the Housing Development (Control and Licensing) Act, the policy and objective of the said Act.

O. 34 r.1(1) of the ROC 2012 provides as follows: Orders and directions for just, expeditious and economical disposal of proceedings (O. 34, r. 1)

(1) Notwithstanding anything in these Rules, the Court may, at any time after the commencement of proceedings, of its own motion, direct any party or parties to the proceedings to appear before the Court, in order that the Court may make such order or give such direction as it thinks fit so that—

(a) all matters which must or can be dealt with on interlocutory applications and have not already been dealt with may so far as possible be dealt with; and

(b) such directions may be given as to the future course of the action as appear best adapted to secure the just, expeditious and economical disposal thereof. (emphasis added)

The phrase “Notwithstanding anything in these Rules” in O.34 r.1(1) shows that the criteria and objective of “just, expeditious and economical disposal” of civil proceedings are overriding considerations in managing civil proceedings and conducting trials in civil suits in the courts, and these criteria and objective override any contrary provisions in the other parts of the rules of court.

Hence, in considering whether or not a joint trial of causes of action or joinder of parties would be inconvenient, the Court should take into account and give due weight to the question of just, expeditious and economical disposal of civil suits in court - a main policy and/or important feature of the court rules as embodied in O. 34 r.1(1). APPLICATION OF LEGAL PRINCIPLES TO THE PLEADED

In our present case, the Plaintiffs are claiming for rescission and other reliefs in connection with the statutory Sale and Purchase Agreements on residential properties, whereas the Third Party 8 Notice involves the Developer/Defendant suing the building contractor in the Third Party Notice for failure to complete the construction works in the project and failure or neglect to pay the subcontractors for the completion of the construction works in the project: see the Third Party Notice in Enclosure 10. The basis of the Plaintiffs’ cause of action and reliefs against the Defendant-developer (i.e. the statutory Sale and Purchase Agreement) is different from the basis of the Defendant-developer’s causes of action and reliefs against the main contractor (i.e. the building contract), the documents for the two actions are very likely to be different, and the witnesses are likely to be different. As purchasers in the project, the Plaintiffs in the main action are likely to rely on the standard Sale and Purchase Agreement and a few other documents which are not voluminous, whereas the building contract between the Defendant-developer and the Third Party – main contractor is very likely to be voluminous, their building contract disputes on delays and related issues are likely to be many, complicated and prolonged. It appears to this Court that the trial of the issues in the main action between the Plaintiff and the Defendant would be very much simpler and shorter than the trial of the issues in the third party proceeding between the Defendant-developer and the Third Party-main contractor.

The full trial dates for this action has been set down for 8 days in November and early December 2022. The Plaintiffs and the Defendant has completed the pleadings, bundles of documents and other pre-trial preparations except for the witness statements. The Defendant’s third party proceedings are still at a preliminary stage where the Defendant’s Statement of Claim against the Third Party has still not been served upon the Third Party. Any joinder of trials of the Plaintiffs-purchasers’ main action with the Defendant-developer’s action in the Third Party Notice would delay the full trial because the subsequent procedural steps in the third party proceedings would derail the full trial dates already set down here. This especially so where it is likely that the voluminous documents would be filed and exchanged in the building contract disputes between the Defendant-developer and the Third Party and the much longer time would be needed to carry out pre-trial case management and pre-trial preparations in the building contract disputes. It is also inconsistent with the policy of O.34 (just, expeditious and economical disposal of action) for the Plaintiffs-purchasers’ action herein to be joined with or tried together with the 9 Defendant/developer’s claims against its building contractor.

In the Plaintiffs-purchasers’ main suit, the main complaints of the purchasers are that the developer’s purported termination of their Sale and Purchase Agreements are null and void and that their respective Sale and Purchase Agreements stipulated the time period for completion of property units and the delivery of vacant possession to be 3 years from the date of the Sale and Purchase Agreement but despite the lapse of about 5 years, the developer still has failed or neglected to complete the same. The main document relied upon by each Plaintiff would be his/her Sale and Purchase Agreement, the contract terms thereof and several short documents to prove the purported termination and the non-completion of the property units as at the trial date. In the main suit, the defences available to the Defendant-developer would be those stipulated in the Sale and Purchase Agreement or permitted by the laws. The full trial of the main action is unlikely to involve many factual disputes or much oral evidence. However, in the Defendant-developer’s claims against the Third Party – building contractor, the developer’s claims are likely to be different from those of the Plaintiffs-purchasers’ claims in the main action. The documents and witnesses would be very different, and there will be extensive oral evidence to be adduced in the attempt and effort to the building contract claims and disputes. The full trial of the issues in the Plaintiffs’ main suit is expected to be very, very much shorter than the full trial of the Defendant-developer’s issues vis-à-vis the main contractor All Ways Builder. As the Defendant-developer’s allegation against the Third Party – contractor is the alleged non-payment to subcontractors, the subcontractors would likely be called as witnesses in the third party proceedings with the result that numerous allegations and counter-allegations between the Third Party-contractor and its subcontractors would also be brought into issue in the joint trials, thereby further complicating and prolonging the joint trials .

In the circumstances, it appears to this Court that the joint trials of the Plaintiffs-purchasers’ main action and the Defendant’s third party action would be inconvenient, and therefore this Court finds that separate trials should be carried out for the Plaintiffs/purchasers’ main suit and the Defendant/developer’s third party action against the main contractor.

Further or alternatively, this Court also finds that it would be unjust or rather oppressive to the purchasers of housing projects if their 10 simple and short claims against the developers under the terms of the statutory sale and purchase agreements were allowed to be entangled with and bogged down by the complicated and lengthy claims and disputes between the developers and their main contractors in the housing projects. The policy and objective of the Housing Development (Control and Licensing) Act in protecting the rights and interests of house buyers would be frustrated or defeated if the claims by the house buyers in the courts were to be intertwined with and bogged down through third party proceedings by the much more complicated and lengthy claims and disputes between the developers and their contractors. Joint trial of a house buyer’s simple and short claims under the statutory sale and purchase agreement jointly together with the developer’s complicated and lengthy claims and disputes vis-à-vis its contractors would also compel a house buyer to take part in a complicated and lengthy trial involving extensive time and great expenses for the purchaser’s participation in the joint trial. Apart from unduly delaying the purchaser’s recovery of his/her contractual entitlements, the house buyer is likely to be out of pocket by substantial amount even if he/she eventually obtains the judgment after the joint trial because the party-to-party costs awarded to the house buyer will not be able to fully cover his/her expenses of legal fees and disbursements on solicitor-and-client basis of costs. For an individual purchaser of a housing unit, such financial burden of shouldering the additional costs and expenses of a lengthy and complication joint trial would be unjust or uneconomical. If the Courts were to allow such joint trials as a matter of common practice, many an individual purchaser of housing unit would not have the ability and courage in future to file any suit against a developer for damages under the statutory Sale and Purchase Agreement due to the fear of being dragged into and bogged down by the lengthy, complicated and expensive joint trial together with the developer’s third party proceedings against the building contractor. This would either defeat, or be contrary to, the social objectives of the Housing Development (Control and Licensing) Act,

In the premises, any joint trial of the main action and the third party proceeding in the circumstances of our present case would not be consistent with the main policy of “just, expeditious and economical disposal” of cases laid down in O.34 r.1(1) of ROC 2012 and also would be contrary to the policy and objective of the Housing Development (Control and Licensing) Act. 11

As it is in the interest of justice and also consistent with the O.34 r.1(1) policy that separate trials should be carried out for the Plaintiffs/purchasers’ main suit and the Defendant/developer’s third party action against the contractor, it is improper or inappropriate for this Court building to allow the application for extension of time to serve the Defendant’s Statement of Claim in Enclosure 29. Therefore, the Defendant’s application in Enclosure 29 was dismissed.

In conclusion this Court held on 16 June 2022 that the Defendant-developer’s application in Enclosure 29 for extension of time to serve the Statement of Claim on the Third Party shall be dismissed.

As this Court has come to the conclusion that the joint trial of the Plaintiffs-purchasers’ main action and the Defendant-developer’s third party action in our present case would be inconvenient and/or would be contrary to the policy and objective of just, expeditious and economical disposal of civil proceedings, this Court pursuant to O.34 r.191) read with O.16 r.4 has also terminated the third party proceedings by striking out the Third Party Notice with liberty for the Defendant-developer to file a new and separate suit against the building contractor and/or its directors. Dated this : 12th July 2022. Signed ….............................................................. TEE GEOK HOCK JUDICIAL COMMISSIONER HIGH COURT OF MALAYA AT SHAH ALAM (NCVC 10) 12 To the parties’ solicitors:

For the Plaintiffs : Shelbie Diana Anak Jotem Messrs Lui & Bhullar (Kuala Lumpur)

For the Defendant : Johan Taing Chee Fae Tetuan Shu Yin, Teh & Taing (Subang Jaya)

For the Third Party : Lee Jing Yao Messrs Kevin & Co. (Kuala Lumpur)