Gasing Potensi Construction Sdn Bhd v Gccp Gridland Sdn Bhd (A-02(IM)(NCvC)-931-05/2022)

Court of Appeal of Malaysia2 Nov 2022A-02(IM)(NCvC)-931-05/2022

The written judgment as the court issued it, with the coram, case number, and source links. Every paragraph has its own anchor.

Open official source PDF Report an issue

Content

1 DALAM MAHKAMAH RAYUAN MALAYSIA DI (PUTRAJAYA) DALAM WILAYAH PERSEKUTUAN PUTRAJAYA RAYUAN SIVIL NO. A-02(IM)(NCVC)-927-05/2022 ANTARA GASING POTENSI CONSTRUCTION SDN BHD … PERAYU (NO SYARIKAT :715397-K) DAN HYPER ACT MARKETING SDN BHD … RESPONDEN (NO SYARIKAT: 875644-M) (Dalam Perkara Mengenai Mahkamah Tinggi di Ipoh) Rayuan Sivil No : AA-22NCVC-103-08/2018 Antara Gasing Potensi Construction Sdn Bhd … Plaintif (No Syarikat :715397-K) Dan Hyper Act Marketing Sdn Bhd … Defendan (No Syarikat: 875644-M) Didengar Bersama dengan DALAM MAHKAMAH RAYUAN MALAYSIA DI (PUTRAJAYA) DALAM WILAYAH PERSEKUTUAN PUTRAJAYA RAYUAN SIVIL NO. A-02(IM)(NCVC)-931-05/2022 ANTARA GASING POTENSI CONSTRUCTION SDN BHD … PERAYU (NO SYARIKAT :715397-K) DAN GCCP GRIDLAND SDN BHD … RESPONDEN (NO SYARIKAT: 845675-T) 08/02/2023 09:30:03 A-02(IM)(NCvC)-931-05/2022 Kand. 23 (Dalam Perkara Mengenai Mahkamah Tinggi di Ipoh) Rayuan Sivil No : AA-22NCVC-104-08/2018 Antara Gasing Potensi Construction Sdn Bhd … Plaintif (No Syarikat :715397-K) Dan GCCP Gridland Sdn Bhd … Defendan (No Syarikat: 845675-T) CORAM HAS ZANAH BINTI MEHAT, JCA CHE MOHD RUZIMA BIN GHAZALI, JCA SEE MEE CHUN, JCA JUDGMENT OF THE COURT Introduction [1] There are 2 appeals heard before the Court. Both appeals involve the same Appellant as the Plaintiff, similar applications, similar issues and the same set of solicitors. It is also agreed that appeal 927 will be heard first and the outcome will bind appeal 931. [2] The appeals relate to the dismissal of the Appellant’s striking out applications of the Respondent’s counterclaims. We allowed the appeals and we now give our reasons. Background facts [3] The Respondent as the Defendant had appointed the Appellant to carry out work at a quarry site in Keramat Pulai, Mukim Sungai Raya, Kinta District, Perak. The work was done but full payment was not made. By letter dated 30-11-2017, the Respondent admitted it owed the Appellant RM2,419,873.61 for the work done and proposed to pay by 60 installments of RM40,331.22 from November 2017. The Appellant agreed to this proposal by letter dated 12-12-2017. From November 2017 to February 2018, 4 payments were made. The Appellant subsequently filed proceedings to recover the outstanding sum of RM2,258,548.72. [4] The claim was resisted by the Respondent and its defence (paragraph 10) was that the request for payment by the Appellant was mala fide for the reasons set out. The reasons are that the Appellant had purposely demolished the access road (paragraphs 11-14), that the Appellant had breached the terms of appointment when it failed to construct Platform D which delayed the Respondent’s operation and production of the quarry (paragraph 15) and in the alternative that the agreement to pay is void where the Respondent was not aware the Appellant had demolished the access road and that the damages suffered by the Respondent would be more than that claimed by the Appellant (paragraphs 20-21). [5] There was also a counterclaim by the Respondent which forms the subject matter of this appeal. [6] In the meanwhile, the Appellant had filed an application for summary judgment which was dismissed by the High Court but allowed by this Court on 27-7-2021. There was no appeal by the Respondent. [7] Following from its claim for summary judgment being allowed, the Appellant filed its application to strike out the Respondent’s counterclaim primarily on the ground of res judicata and issue estoppel. Decision of the High Court [8] In the grounds of judgment (GOJ, enclosure 3/25-55), the High Court (HC) was of the view that if, in allowing summary judgment in favour of the Appellant, the Court of Appeal had decided that the demolition of the access road and the non-construction of Platform D are issues that do not merit a trial, then it would be obliged to allow the striking out of the counterclaim, premised upon res judicata and stare decisis (paragraph 33). [9] The HC ultimately found it unclear whether the Court of Appeal had indeed considered and dismissed the above 2 issues. The HC therefore stated it was not bound by res judicata or stare decisis to hold that the 2 issues are no longer live issues. These were triable issues which were the foundation for the Respondent’s counterclaim (paragraph 60). [10] It was also stated that the Appellant had sought to take a different position in the striking out of the counterclaim where the premise is that the counterclaim is part and parcel of the main claim. In the summary judgment application, its position was that the counterclaim is separate and distinct from the main claim. The Appellant cannot be allowed to approbate and reprobate. Submissions of the Appellant [11] The Appellant submitted that the issues raised by the Respondent in its counterclaim cannot be litigated anymore because they were exactly the same issues pleaded in its defence which had been rejected by the Court of Appeal when it allowed its application for summary judgment. The counterclaim is thus caught by res judicata and issue estoppel. There are also no new issues in the counterclaim that are not already in the statement of defence. [12] It was further submitted that the Respondent in its affidavits had raised and relied on the same issues in resisting the Appellant’s application for summary judgment and the application to strike out the counterclaim. The Respondent had also in its written submission before the Court of Appeal on the summary judgment appeal submitted on the issues raised in its defence which are similar to the issues in the counterclaim. The issues in the defence and the counterclaim being the same, they would have been considered and rejected by the Court of Appeal when it allowed the summary judgment appeal. The same issues cannot thus be re-litigated. [13] There was no appeal by the Respondent against the decision to allow the summary application. This decision of the Court of Appeal thus stands and binds both parties. Submissions of the Respondent [14] The Respondent submitted that the Court of Appeal in allowing the Appellant’s appeal on summary judgment had only rejected the Respondent’s defence and not the counterclaim. This was because the counterclaim was not part of the application for summary judgment. There was no evidence to the effect that in allowing summary judgment, the counterclaim was dismissed or struck off. The summary judgment appeal was argued on the basis that the agreement to pay was achieved without the Respondent’s knowledge that the Appellant had intentionally caused the collapse of the access road. The appeal on summary judgment was decided on there being no triable issues to the Appellant’s claim. [15] There was no res judicata or issue estoppel as the Appellant had argued on the summary judgment appeal that the Appellant’s claim and the Respondent’s counterclaim were separate claims. The Court of Appeal had only decided on the Appellant’s cause of action and the defence of mistake and not on the Respondent’s counterclaim. Our decision Issue [16] The primary issue in this appeal relates to whether res judicata and issue estoppel applies to the Respondent’s counterclaim, in that the issues in the counterclaim are exactly the same as in the defence. Hence the argument is that when this Court allowed the summary application appeal, it would accordingly have considered and rejected the issues in the defence. It follows as the issues in the counterclaim are the same as that of the defence, res judicata and issue estoppel would accordingly apply. Defence [17] We start by perusing the defence of the Respondent, which we had referred to earlier under the background facts. Essentially, the defence is that no payment is due as the Appellant had purposely demolished the access road (enclosure 3/67-69, paragraphs 11-14), the Appellant had breached the terms of appointment when it failed to construct Platform D which delayed the Respondent’s operation and production of the quarry (enclosure 3/69-70, paragraph 15) and in the alternative that the agreement to pay is void where the Respondent was not aware the Appellant had demolished the access road and that the damages suffered by the Respondent would be more than that claimed by the Appellant (enclosure 3/71-72, paragraphs 20-21). Counterclaim [18] The counterclaim of the Respondent is set forth in paragraphs 24 to 29 of the defence and counterclaim (enclosure 3/73-75). Paragraph 24 states “Defendan mengulangi perenggan-perenggan 1-23 Pembelaan di sini”. The subsequent paragraphs, in the main, relate to the Appellant having purposely demolished the access road and breaching the terms of appointment when it failed to construct Platform D which delayed the Respondent’s operation and production of the quarry. Similarity of issues [19] From the defence and counterclaim, it would appear that the issues are the same pertaining to the intentional demolition of the access road and the failure to construct Platform D. This ties in with the alternative defence of the agreement to pay being void where the Respondent was not aware the Appellant had demolished the access road. [20] We next consider the Appellant’s submission in the appeal on summary judgment in enclosure 7/84-105. The submissions were premised on the agreement to pay (paragraphs 31-40) and that the triable issues were not bona fide and an afterthought. On the issue of the access road, the Respondent had said it had since July 2017 repeatedly asked the Appellant for an explanation on the demolition. Despite being aware of it, the Respondent nevertheless issued the letter to pay. What was raised in the counterclaim had never been raised until the filing of the Appellant’s claim. They were not genuine and an afterthought, considering that 4 payments had already been made. Paragraphs 64-72 dealt with the issue of mistake where it was submitted there could have been no mistake as the Respondent was already aware of the demolition since July 2017 and yet had issued the letter dated 30-11-2017 agreeing to pay. [21] Next, we turn to the Respondent’s submission in the appeal on summary judgment in enclosure 7/106-118. It raised the triable issue that the agreement to pay is void pursuant to section 21 or 23 of the Contracts Act 1950. This was because at the point of agreement, it was not discovered that the Appellant had intentionally caused the access road to collapse. [22] Viewed in the light of the defence and counterclaim, we are of the considered opinion that the counterclaim arose and was a consequence of the defence pleaded against the Appellant’s claim. The issues raised are the same and consequently those issues were considered and rejected by this Court when it earlier allowed the summary judgment appeal. [23] We are fortified in arriving at this finding, when the submissions of parties at the summary application appeal as outlined above, are taken into account. In particular, the Appellant had submitted on the admission, the issues raised in the counterclaim being not genuine and an afterthought and that there was no mistake that could have vitiated the agreement as the Respondent was already aware of the demolition of the access road. [24] Further, the Respondent in its affidavits in the summary judgment application and the striking out of the counterclaim application had raised similar issues on the demolition of the access road. Refer to the Respondent’s affidavit in reply (paragraphs 6-8) (enclosure 6/99-100) and paragraphs 4-6 of supplementary affidavit (enclosure 6/103-104), both in relation to summary judgment and paragraphs 4-7 of affidavit in reply (enclosure 3/95-98) and paragraph 4(b) of supplementary affidavit (enclosure 3/106), both in relation to the counterclaim. [25] With the issues and the defence and the counterclaim being the same, it stands to reason that the issues in the defence were considered by this Court when it allowed the summary judgment appeal. This is because an application for summary judgment can only be allowed where there is no defence on merits or triable issues. This has been the position all along as embodied in Bank Negara Malaysia v Mohd Ismail & Ors [1992] 1 MLJ 400. As a corollary to that principle, when this Court accepted the Appellant’s submission and allowed the summary judgment appeal, it would have necessarily rejected the defence and issues raised by the Respondent. [26] In the light of the above, it cannot be said, as did the HC, that it was unclear whether this Court had considered the issues of the demolition of the access road and the failure to construct Platform D. [27] It has to be borne in mind too that there was no appeal by the Respondent against the decision to allow the summary judgment. This decision still stands and binds the parties. [28] Similarity of issues also arose in Residence Hotels and Resorts Sdn Bhd v Seri Pacific Corp Sdn Bhd [2016] 2 MLJ 640. We find it necessary to reproduce the relevant paragraph 26 of that case as we adopt in toto the principles stated therein. At page 651 this was stated: “Whether res judicata/estoppel applicable [26] The trial judge fell into error when Her Ladyship concluded that estoppel/res judicata did not apply and that Singham J’s decision in encl 7 is obiter on the basis that the counterclaim is a separate action with different issues as compared to the main claim. On the facts and circumstances of this case, it is our view that:

(a) res judicata is a substantive rule of law. It means a decision on the ‘merits’ which disposes once and for all of the matters decided and the same becomes the truth between the parties, so that, except on appeal or other exceptional circumstances such as fraud, it cannot be re-litigated between persons bound by the judgment. The doctrine of res judicata has developed over the years to extend to issue estoppel as well, the requirements of which are (i) that the same question has been decided; (ii) that the judicial decision which is said to create the estoppel was final; and (iii) that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised. We are also mindful of the fact that it must be shown that the earlier judgment necessarily and with precision determined the point in issues to constitute res judicata;

(b) the parties cannot raise a second time in the same suit issues that have already been determined earlier expressly or by necessary implication. Additionally, where res judicata is not strictly established or where estoppel res judicatum is not made out but nevertheless, the circumstances are such as to render any re-agitation of the questions formerly adjudicated upon, a scandal and an abuse, the court would not hesitate to dismiss the action;

(c) the trial judge ought to have appreciated that the counterclaim arose and was as a direct consequence/result of the defence pleaded against the plaintiff’s claim and therefore, the issues in both are one and the same …

(d) the issues in the counterclaim are identical with those that arose in the main claim. As such, the doctrine of estoppel/res judicata ought to be applied in dealing with the counterclaim;

(e) we now turn to encl 7. In the course of deciding whether or not the plaintiff was entitled to the balance settlement sum via encl 7, it is evident that Singham J considered the defendant’s counterclaim vis a vis the breaches (which also constituted the counterclaim). Singham J also considered the plaintiff’s response to the breaches, namely whether the same had been compromised by the MSSA. Indisputably, His Lordship’s decision in respect of encl 7 necessarily and with precision determined the issue that formed the crux of the counterclaim. To illustrate the point, the issues and the findings of Singham J in his grounds of judgment for encl 7 are set out in the table hereunder: …

(f) the table above clearly establishes that there are findings of fact (which have become the truth between the parties) in relation to all issues raised in the counterclaim. The findings in Singham J’s judgment are not obiter because those findings went to the crux of the dispute and were not made in passing or incidentally. The term obiter has been defined as ‘a mere chance remark by the court and is used in contradistinction to ratio decidendi — the rule of law for which a case is authority’. Clearly, the findings in encl 7 were ratio as opposed to obiter, …

(h) … when res judicata is operational, the correctness of the said decision is not a relevant consideration. Even if the decision is not correct in law or fact, res judicata gives effect to the policy that the parties to a judicial decision cannot challenge the correctness of a previous decision, except on appeal. The previous decision, whether a determination of law, fact or mixed fact and law, will also form an issue estoppel;

(i) the parties also cannot adduce any new evidence or advance any new arguments to contradict the previous decision. In Asia Commercial Finance (M) Bhd, the Supreme Court held that: …

(j) the trial judge ought to have disregarded all evidence by the defendant at trial because in the absence of any appeal in respect of the decision in encl 7, the decision of Singham J remained ‘the truth’ between the parties. The correctness of it is wholly immaterial and the defendant is not entitled to challenge the same via the counterclaim. The rule is very simply that until and unless that finding has been appealed against, the findings of the court via a judgment is the truth and remains the truth. The rule does not distinguish between findings made based on affidavit evidence and findings made based on oral evidence.” [29] Since we find that the issues raised in the defence and the counterclaim are the same, as outlined above, this will bring the principle of res judicata and issue estoppel to the fore. This has been succinctly stated in paragraph 26(a) of Residence Hotels (page 650) and it bears reiterating that res judicata means the matter cannot be re-litigated and it extends to issue estoppel as well. [30] To drive home the point on this, we need only refer to Asia Commercial Finance (M) Berhad v Kawal Teliti Sdn Bhd [1995] 3 CLJ 783, it was said at pages 791 and 793: “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 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. … On the other hand, the issue estoppel literally means simply an issue which a party is estopped from raising in a subsequent proceeding. However, the issue estoppel, in a nutshell, from a consideration of case law, means in law a lot more, ie that neither of the same parties or their privies in a subsequent proceeding is entitled to challenge the correctness of the decision of a previous final judgment in which they, or their privies, were parties. This sounds like explaining a truism, but it is the corollary from that statement that is all important and that could have given birth to the controversies alluded to above; the corollary being that neither of such parties will be allowed to adduce evidence or advance any argument to contradict such decision. In this respect, we respectfully agree with Peter Gibson J in Lawlor v Gray [1984] 3 All ER 345 at p 350, who said: 'Issue estoppel … prevents contradiction of a previous determination, whereas cause of action estoppel prevents reassertion of the cause of action.” [31] It is also not relevant that the matter giving rise to res judicata arose from an interlocutory application. As was said in YKL Engineering Sdn Bhd v Sungei Kahang Palm Oil Sdn Bhd & Anor [2022] 8 CLJ 32 at page 55: “[49] … The principle of res judicata is based on the need of giving a finality to judicial decisions. Once a res is judicata, it shall be not adjudged again (see Government Of Malaysia v. Dato Chong Kok Lim [1973] 1 LNS 35; [1973] 2 MLJ 74 HC; Venu Nair & Anor v. Public Bank Bhd [2017] 6 CLJ 211; [2017] 5 MLJ 529 CA; and CIMB Bank Bhd v. Sebang Gemilang Sdn Bhd & Anor [2015] 7 CLJ 870; [2015] MLJU 2148; CA). It does not matter that the earlier decision was made at the interlocutory stage; it is nevertheless binding on the parties and the Court of Appeal. A decision given by a court at one stage on a particular matter or issue is binding on it at a later stage in the same suit or in a subsequent suit…” Claim and counterclaim being separate claims [32] An issue was raised that the Appellant had had taken a different stance with regard to the claim and counterclaim being separate claims in the summary judgment application and the counterclaim being part and parcel of the main claim in the striking out application. We find that this has to be seen in the context of the Appellant’s submission on the summary judgment appeal (enclosure 7/104) as follows: “[73] Plaintif selanjutnya berhujah bahawa Defendan di dalam tindakan ini mempunyai Tuntutan Balas terhadap Plaintif. [74] Oleh Yang demikian, Defendan adalah bebas untuk membuktikan Tuntutan Balas Defendan terhadap Plaintif di dalam tindakan ini … [75] Ini adalah kerana adalah “trite law” bahawa Tuntutan Balas adalah tuntutan yang berbeza dari tuntutan asal di dalam sesuatu tindakan. [76] Oleh itu adalah tidak adil dan tidak wajar sekiranya permohonan Plaintif tersebut ditolak hanya kerana Defendan mempunyai Tuntutan Balas terhadap Plaintif seperti mana yang dihujahkan oleh Defendan.” [33] It is not disputed that a claim and counterclaim are separate claims. However, the Appellant’s contention was only that its summary judgment application should not be dismissed merely because of the counterclaim. It is in this sense that the Respondent could still proceed with its counterclaim. The Appellant was entitled to subsequently apply to strike out the counterclaim. This is not akin to approbation and reprobation. Striking out allowed [34] Premised on our finding of similarity of issues and the operation of res judicata and issue estoppel, it follows that the striking out of the Respondent’s counterclaim should be allowed, as being obviously unsustainable. As per Bandar Builder Sdn Bhd & Ors v United Malayan Banking Corporation Bhd [1993] 3 MLJ 36 at page 43: “The principles upon which the Court acts in exercising its power under any of the four limbs of O. 18 r. 19(1) Rules of the High Court are well settled. It is only in plain and obvious cases that recourse should be had to the summary process under this rule (per Lindley M.R. in Hubbuck & Sons Ltd v Wilkinson, Heywood & Clark Ltd), and this summary procedure can only be adopted when it can be clearly seen that a claim or answer is on the face of it ‘obviously unsustainable’…” Conclusion [35] For the above reasons, we allow appeal 927. The order of the HC is set aside and the application to strike out the Respondent’s counterclaim is allowed. This decision also binds appeal 931. We award costs of RM10,000.00 here and below for each appeal, subject to allocatur. (SEE MEE CHUN) Judge Court of Appeal Malaysia Dated: 8-2-2023 Counsel for the Appellant in Appeals 927 and 931: Norazli bin Nordin (Mohamad Nizam bin Mohamed Salleh with him) Messrs. Maxwell Kenion Cowdy & Jones Advocates & Solicitors Ipoh, Perak Counsel for the Respondent in Appeals 927 and 931: Chin Yin Choi Messrs. The Law Office of Wong & Ang Petaling Jaya, Selangor

Something wrong on this page?

Wrong text, a broken link, out-of-date content, or a removal request — tell us and we'll check it against the official source.

Report an issue Request removal

Malaysian judgment

Case metadata

Court: Court of Appeal of Malaysia
Decision date: 2 Nov 2022
Case number: A-02(IM)(NCvC)-931-05/2022
Coram: YA Dato' Has Zanah Binti Mehat; YA Dato' Che Mohd Ruzima Bin Ghazali; YA Datuk See Mee Chun
Practice area: Civil procedure- Application to strike out counterclaim-Summary judgment previously allowed-Similarity of issues-Whether res judicata and issue estoppel applied
Version: Alasan Penghakiman 1
Published: 8 Feb 2023
Source ID: 0eae66e5-4cb4-400c-9a65-29aa420c5ff9

Catchwords

Civil procedure- Application to strike out counterclaim-Summary judgment previously allowed-Similarity of issues-Whether res judicata and issue estoppel applied

Parties

GASING POTENSI CONSTRUCTION SDN BHD - appellant - ejudgment_parties
GCCP GRIDLAND SDN BHD - respondent - ejudgment_parties

Primary source

Compare this reader text against the official judgment source.

Open source PDF

Content

Gasing Potensi Construction Sdn Bhd v Gccp Gridland Sdn Bhd (A-02(IM)(NCvC)-931-05/2022)

How this case connects

Cited by

Authorities cited

Something wrong on this page?

Gasing Potensi Construction Sdn Bhd v Gccp Gridland Sdn Bhd (A-02(IM)(NCvC)-931-05/2022)

How this case connects

Cited by

Authorities cited

Something wrong on this page?