Maersk Malaysia Sdn Bhd v Conceptline Industry Sdn Bhd (JA-27NCC-1-03/2023)

XIN ZHOU SDN BHD

GAIN COBBER PLASTIC HARDWARE SDN BHD

VS TOTAL LOGISTICS SDN BHD

CHIN CHI MING

WONG LEE CHEN

OH SIN YEE

TEO MUN YEE

TOK LEE PENG

CHUA MING TERK (NO. K/P: 841025-01-5193) …PIHAK-PIHAK KETIGA GROUNDS OF JUDGMENT [Enclosure 126 – Defendant's Notice of Application seeking leave to amend its Third-Party Statement of Claim pursuant to Order 20 rule 5 of the Rules of Court 2012]

This is the Defendant's Notice of Application (Enclosure 126) seeking leave to amend its Third Party Statement of Claim pursuant to Order 20 rule 5 of the Rules of Court 2012.

The proposed amendments are set out in Appendix A annexed to the Defendant's supporting affidavit. The amendments span approximately seventeen pages and introduce numerous additional pleadings, factual allegations and reliefs against the Third Parties.

The Defendant contends that the proposed amendments merely clarify and particularise its existing claim against the Third Parties without altering the nature or character of the Third Party Proceedings. It further submits that the amendments are necessary to enable the Court to determine the real issues in controversy between the parties.

The Third Parties oppose the application. They contend that the amendments sought go far beyond the permissible scope of Order 20 rule 5 of the Rules of Court 2012. According to the Third Parties, the proposed amendments introduce entirely new factual foundations, new causes of action, new tortious claims and substantially different reliefs which fundamentally transform the nature of the existing Third Party Proceedings.

Having carefully considered the affidavits filed by the parties, the proposed amended Third Party Statement of Claim, the written submissions, the authorities relied upon by all parties and the applicable provisions of the Rules of Court 2012, this Court is not persuaded that the present application falls within the permissible scope of Order 20 rule 5.

For the reasons which follow, the Defendant's application is dismissed.

The Plaintiff commenced the present action against the Defendant in respect of the matters pleaded in the Statement of Claim.

Following the commencement of the action, the Defendant issued Third Party Proceedings against the Third Parties seeking, inter alia, indemnity and/or contribution in the event that the Defendant is found liable to the Plaintiff.

Pleadings between the Defendant and the Third Parties were duly exchanged and closed. Thereafter, the litigation proceeded upon the issues disclosed in those pleadings.

Subsequently, the Defendant filed the present application seeking leave to amend its Third Party Statement of Claim.

The proposed amendments are extensive. As appears from Appendix A, the Defendant seeks not merely to supplement its existing pleadings but to introduce substantial additional factual averments together with several new legal allegations and additional reliefs against the Third Parties.

Among the proposed amendments are pleadings relating to:

alleged fraudulent impersonation;

passing off of the Defendant's corporate identity;

conspiracy by unlawful means;

fraudulent trading;

alter ego and controlling mind allegations;

lifting of the corporate veil;

claims for exemplary damages; and

various declaratory reliefs which did not previously form part of the Third Party Proceedings.

It is the Defendant's position that these amendments merely elaborate upon matters already in issue.

The Third Parties dispute that contention. They maintain that the amendments fundamentally reconstruct the Defendant's case and require them to meet an entirely different claim from that originally pleaded.

Having considered the parties' respective submissions, this Court is of the view that the present application gives rise to the following issues: Issue (i) : Whether the proposed amendments fall within the permissible scope of Order 20 rule 5 of the Rules of Court 2012. Issue (ii) : Whether the proposed amendments fundamentally alter the nature and character of the existing Third Party Proceedings. Issue (iii) : Whether the Court ought to exercise its discretion to grant leave to amend. ANAYLISIS AND FINDINGS OF COURT Issue (i) : Whether the proposed amendments fall within the permissible scope of Order 20 rule 5 of the Rules of Court 2012 16. The present application raises an anterior question which, in the judgment of this Court, must first be answered before issues of prejudice or delay arise. That question is whether the proposed amendments remain within the contemplation of Order 20 rule 5 of the Rules of Court 2012. Order 20 rule 5 of the Rules of Court 2012, confers upon the Court a wide discretionary power to permit amendments to pleadings at any stage of the proceedings. The underlying purpose of the Rule is to enable the Court to determine the real questions in controversy between the parties and to ensure that litigation is decided on its true merits rather than on technical deficiencies in pleadings.

It is well established that the discretion to permit amendments is ordinarily exercised liberally. Nevertheless, such discretion is not unfettered. The Court must be satisfied that the proposed amendment genuinely serves the purpose of determining the real dispute between the parties, is made bona fide and does not occasion injustice to the opposing party.

The governing authority remains the decision of the Federal Court in Yamaha Motor Co Ltd v Yamaha (Malaysia) Sdn Bhd & Ors [1983] 1 MLJ 213; [1983] CLJ (Rep) 428, where Mohamed Azmi FJ held that although amendments should generally be allowed, the Court must consider, amongst others, whether the application is made bona fide, whether any prejudice occasioned can adequately be compensated by costs, and whether the proposed amendment would transform the litigation from one character into another and inconsistent character.

The Federal Court reaffirmed the same approach in Hong Leong Finance Bhd v Low Thiam Hoe & Another Appeal [2016] 1 MLJ 301; [2015] 8 CLJ 1, where the Court emphasized that whilst the modern approach favours the determination of disputes on their merits, leave to amend is never automatic. The discretion must always be exercised according to the justice of the particular case, having regard to factors such as the explanation for the amendment, the stage of the proceedings, the prejudice likely to be occasioned and whether such prejudice can adequately be compensated by costs.

This principle is deeply entrenched in our jurisprudence. In Hock Hua Bank Bhd v. Leong Yew Chin [1986] 1 MLRA 225, the Supreme Court (now Federal Court) emphasized that the cardinal purpose of amendments is to determine the 'real controversy' between the parties and to correct defects or errors, rather than to punish parties for procedural mistakes. This judicial philosophy was further affirmed by the Court of Appeal in Suhaili Ismail v. Syarikat Sribima Sdn Bhd [2015] MLRAU 293, where the court held that amendments should ordinarily be allowed if they facilitate the determination of all questions in controversy, provided no irreparable prejudice is caused to the opposing party. These authorities underscore the court's primary duty to ensure that the real dispute is adjudicated on its merits.

I respectfully agree with those principles. However, none of those authorities establishes that every amendment must invariably be allowed. On the contrary, all recognise that the Court retains the ultimate responsibility of determining whether the proposed amendment falls within the legitimate purpose of Order 20 rule 5 or whether it goes beyond what the Rule was intended to achieve.

Applying those principles to the present case, I am unable to agree with the Defendant's submission that the proposed amendments merely clarify or particularise its existing Third Party Statement of Claim.

Having carefully compared the original Third Party Statement of Claim with the Proposed Amended Third Party Statement of Claim contained in Appendix A, I find that the proposed amendments extend well beyond the correction of errors, the clarification of existing averments or the provision of better particulars. Instead, they substantially enlarge the factual foundation upon which the Defendant's Third Party claim is premised.

More significantly, the Defendant now introduces, for the first time, detailed allegations concerning fraudulent impersonation, passing off, conspiracy by unlawful means, fraudulent trading, alter ego, controlling mind and the lifting of the corporate veil. These are not merely additional particulars supporting the original pleadings. They constitute distinct legal allegations founded upon substantially different factual matrices, each of which would require separate proof at trial.

The proposed amendments further seek declaratory reliefs in respect of those alleged tortious acts, together with claims for exemplary damages and other consequential reliefs which were absent from the original Third Party Statement of Claim. The expansion of the reliefs sought mirrors the expansion of the factual and legal basis of the Defendant's case.

In my judgment, the cumulative effect of these amendments represents a radical departure from the original pleaded case. To characterize such extensive changes as a mere 'clarification' is to ignore the reality that the Defendant is attempting to re-engineer the entire factual and legal landscape of the Third Party Proceedings. These are not supplementary details; they are new, distinct, and substantive causes of action that require an entirely different set of evidence and legal scrutiny.

This Court is therefore unable to accept that the proposed amendments merely facilitate the determination of the real issues already in dispute between the parties. Instead, they seek to introduce a substantially expanded dispute which did not previously form part of the existing Third Party Proceedings.

Accordingly, I find that the proposed amendments fall outside the proper scope of Order 20 rule 5 of the Rules of Court 2012. Issue (i) is therefore answered in the negative. Issue (ii) : Whether the proposed amendments fundamentally alter the nature and character of the existing Third Party Proceedings 29. Having concluded that the proposed amendments extend well beyond the proper scope of Order 20 rule 5 of the Rules of Court 2012, I now turn to consider whether the cumulative effect of those amendments fundamentally alters the nature and character of the existing Third Party Proceedings.

In determining this issue, the Court must examine the proposed amendments as a whole and not in isolation. Whilst any individual amendment may, viewed separately, appear unobjectionable, the Court must ultimately consider the cumulative effect of all the proposed amendments upon the existing pleaded case.

This approach is entirely consistent with the authorities relied upon by the Defendant itself, particularly Yamaha Motor (supra), which recognises that the Court must consider whether the proposed amendment merely facilitates the determination of the real controversy or whether it introduces a substantially different case.

The same approach was adopted in ASM Development Sdn Bhd v Hijjas Kasturi Associates Sdn Bhd [2009] 3 CLJ 1, where the Court recognised that whilst amendments should ordinarily be permitted, the Court should not allow amendments which substantially alter the basis upon which the litigation has proceeded.

Likewise, in Raphael Pura v Insas Bhd & Ors [2000] 4 CLJ 830, the Court recognised that amendments cease to be merely procedural where they introduce a substantially different controversy requiring the opposing party to answer an altogether different case. I respectfully adopt those principles.

Having undertaken a comparison between the original Third Party Statement of Claim and the Proposed Amended Third Party Statement of Claim, I am unable to accept the Defendant's submission that the nature of its claim remains unchanged.

(A) The Original Character of the Third Party Proceedings 35. The original Third Party Proceedings were relatively straightforward in nature. As established by the Federal Court in United Merchant Finance Bhd v. Majlis Agama Islam Negeri Johor [1999] 1 MLRA 98, while third party proceedings are technically independent actions, they are intrinsically and closely linked to the liability in the main action. The Defendant's claim against the Third Parties in this case was essentially one seeking indemnity and/or contribution should the Defendant ultimately be found liable to the Plaintiff in the principal action.

The factual inquiry was therefore directed towards determining whether any liability established against the Defendant ought, in whole or in part, to be borne by one or more of the Third Parties. In substance, the Third Party Proceedings remained ancillary to the principal action.

(B) The Proposed Amendments Transform the Proceedings 37. The proposed amendments fundamentally change that position. The Defendant now seeks to introduce an entirely new body of allegations relating to fraudulent impersonation and passing off.

Those allegations are not pleaded merely as background facts. They constitute an independent factual foundation supporting separate tortious liability against the Third Parties.

Likewise, the Defendant now pleads conspiracy by unlawful means, together with allegations concerning common design, concerted action, fraudulent trading, alter ego, controlling mind and lifting the corporate veil. These allegations require proof of legal elements and factual matrices entirely different from those originally pleaded.

The Court would necessarily be required to determine issues concerning fraudulent conduct, concerted action between multiple parties, misuse of corporate identity, corporate control and the legal requirements governing the lifting of the corporate veil. None of those issues formed part of the original Third Party Proceedings.

(C) The Reliefs Illustrate the Transformation 41. The transformation of the proceedings is perhaps most clearly demonstrated by the reliefs now sought.

42.

Their inclusion significantly broadens both the factual inquiry and the legal questions which the Court would ultimately be required to determine.

(D) The Proceedings cease to be true Third Party Proceedings 44. In my respectful judgment, this is the aspect which ultimately distinguishes the present case from the authorities relied upon by the Defendant.

The raison d'être of Third Party Proceedings under Order 16 is to resolve issues of indemnity, contribution, or related reliefs that are ancillary to the main action. In Majlis Bandaraya Petaling Jaya v. Digital Viva Sdn Bhd & Anor [2020] 2 MLRA 553, the Court of Appeal reaffirmed that third party proceedings should be confined to claims for contribution or indemnity and must not be allowed to unnecessarily complicate or delay the Plaintiff’s primary action. They are not intended to be a procedural vehicle for a defendant to launch an independent and substantially enlarged tortious offensive against the third parties, which is precisely the consequence if the present amendments were permitted. In other words, is not a procedural 'backdoor' for a defendant to launch an independent, full-scale tortious offensive against third parties. By introducing complex allegations of conspiracy, fraudulent trading, and the lifting of the corporate veil, the Defendant is effectively attempting to hijack the ancillary nature of these proceedings and transform them into a separate, primary litigation, which would inevitably embarrass and delay the Plaintiff's main suit.

The proposed pleading no longer confines itself to issues of indemnity or contribution. Instead, it introduces multiple new causes of action founded upon distinct legal principles, each requiring separate findings of fact and law.

The inevitable consequence is that the Third Party Proceedings would cease to remain ancillary to the principal action and would instead assume the character of an independent and considerably expanded civil action.

The Court's power to permit amendments under Order 20 rule 5 is intended to facilitate the just determination of the dispute which the parties have already brought before the Court. It is not a mechanism by which an existing cause of action may be re-engineered into a substantially different litigation. To permit such an exercise would not merely amend the pleadings; it would effectively authorize the commencement of a different case under the guise of an amendment.

In my judgment, that is not the purpose for which Order 20 rule 5 exists. Nor is it consistent with the purpose of Third Party Proceedings themselves. Accordingly, I am satisfied that the proposed amendments fundamentally alter both the nature and the character of the existing Third Party Proceedings. Issue (ii) is therefore answered in the negative. Issue (iii) : Whether the Court ought to exercise its discretion to grant leave to amend 50. Having concluded that the proposed amendments fall outside the proper scope of Order 20 rule 5 of the Rules of Court 2012 and that they fundamentally alter the nature and character of the existing Third Party Proceedings, the remaining question is whether this Court should nevertheless exercise its discretion in favour of allowing the amendments.

In my judgment, the answer must be in the negative. It is beyond dispute that the jurisdiction conferred upon the Court under Order 20 rule 5 is discretionary in nature. Although that discretion is ordinarily exercised liberally, it must nevertheless be exercised judicially, having regard to the justice of the particular case and the purpose for which the power to amend exists.

As the Federal Court explained in Hong Leong Finance (supra), the Court is required to consider all the surrounding circumstances, including the explanation for the amendment, the stage of the proceedings, the prejudice likely to be occasioned to the opposing party and whether such prejudice can adequately be compensated by costs. The exercise is therefore not mechanical but one directed towards achieving justice between the parties.

Likewise, MGG Pillai v Tan Sri Dato' Vincent Tan Chee Yioun & Other Appeals [2002] 3 CLJ 577 recognizes that procedural discretions must ultimately be exercised to advance the interests of justice rather than to permit procedural mechanisms to be employed in a manner that occasions unfairness to the opposing party.

Applying those principles, I am unable to conclude that the present application represents a bona fide attempt merely to clarify or particularise the Defendant's existing Third Party Statement of Claim. As already explained under Issues (i) and

(ii), the proposed amendments introduce numerous new material facts, several distinct tortious causes of action and substantially expanded declaratory and monetary reliefs. Their cumulative effect is to reconstruct, rather than merely refine, the Defendant's existing pleaded case.

The practical consequence of permitting those amendments cannot be ignored. The Third Parties would inevitably be required to reconsider and substantially reconstruct their respective defences. New issues of fact and law would arise. The scope of discovery would necessarily expand. Additional documentary evidence and witness testimony would likely become necessary. Correspondingly, the trial itself would become considerably broader and materially different from that originally contemplated by the existing pleadings.

In these circumstances, the prejudice occasioned to the Third Parties extends beyond mere inconvenience or additional expense. It affects the very manner in which the litigation has been prepared and conducted since the close of pleadings. They would be required to meet what is, in substance, a materially different case from that which they were originally called upon to answer.

Whilst an award of costs is often capable of compensating a party for prejudice occasioned by an amendment, costs cannot adequately compensate a party who is required to defend what is, in substance, a materially different case from that which it originally came to Court to answer.

I have carefully considered the Defendant's explanation for the present amendments, but find it severely lacking. The Federal Court in Hong Leong Finance (supra), established that for late-stage amendments, a heavy onus lies on the applicant to provide a cogent and reasonable explanation for the delay. This principle was further reinforced by the Court of Appeal in E & O Trading Sdn Bhd v. Americk Singh Sidhu & Ors and another appeal [2018] MLRAU 168, where it was held that filing such applications shortly before trial without reasonable justification constitutes inordinate delay. In the present case, the Defendant has failed to satisfy this requirement. Many of the matters now sought to be pleaded were already within the Defendant's knowledge well before this application was filed. Without a cogent explanation, the court is driven to the conclusion that the application is a tactical afterthought rather than a bona fide attempt to assist the court.

In my respectful judgment, to permit the amendments sought would not merely facilitate the determination of the existing controversy between the parties. Instead, it would effectively permit the Defendant to litigate a substantially different dispute under the guise of amending its existing Third Party Statement of Claim.

Such an exercise would be inconsistent with both the purpose of Order 20 rule 5 of the Rules of Court 2012 and the proper administration of justice. Accordingly, I decline to exercise my discretion in favour of granting the amendments sought. Issue

(iii) is therefore answered in the negative CONCLUSION

Having carefully considered the affidavits filed by the parties, the proposed amendments contained in Appendix A, the written submissions, the authorities cited by learned counsel and the applicable provisions of the Rules of Court 2012, I am not persuaded that the Defendant has established any proper basis for the exercise of this Court's discretion under Order 20 rule 5.

First, the proposed amendments do not merely clarify or particularise the Defendant's existing pleaded case. They introduce substantial new factual foundations, new legal theories, new tortious causes of action and significantly expanded reliefs.

Secondly, the cumulative effect of those amendments fundamentally alters the nature and character of the existing Third Party Proceedings. What was originally pleaded as proceedings principally for indemnity and contribution has now evolved into a substantially enlarged tortious action involving allegations of fraudulent impersonation, passing off, conspiracy by unlawful means, fraudulent trading, alter ego liability and the lifting of the corporate veil.

Thirdly, permitting such amendments would require the Third Parties to meet a substantially different case from that originally pleaded, thereby occasioning prejudice which cannot adequately be remedied by an award of costs alone.

Ultimately, this Court is satisfied that the Defendant is not seeking merely to amend its existing Third Party Statement of Claim. Rather, it seeks to reconstruct the very foundation of that claim. Such reconstruction falls outside the proper purpose and scope of Order 20 rule 5 of the Rules of Court 2012. For those reasons, the Defendant's application cannot succeed. The Court’s discretion to permit amendments must be exercised to advance the interests of justice, not to facilitate 'litigation by installments' or to allow a party to shift the goalposts once the match has already commenced.

Having regard to the nature of the application, the extent of the proposed amendments, the volume of the affidavits and written submissions filed, the authorities cited by the parties and the fact that the First Third Party and the Fourth to Eighth Third Parties have successfully resisted the application in its entirety, this Court considers that costs of RM8,000.00 constitute a fair and reasonable award.

Accordingly, the Court makes the following orders:

The Defendant's Notice of Application (Enclosure 126) is dismissed.

Costs of RM8,000.00 are awarded to the First Third Party and the Fourth to Eighth Third Parties, to be paid by the Defendant. DATED :24TH JULY 2026 -SIGNED-MANIRA BINTI MOHD NOR JUDICIAL COMMISSIONER CIVIL 4 HIGH COURT JOHOR BAHRU For the Plaintiff Messrs Shearn Delamore & Co Kuala Lumpur For the Defendant Messrs Dennis Nik & Wong Johor Bahru For the 3rd Party Messrs Y K Chin (First) Johor Bahru For the 3rd Party Messrs Zaleha Nadia & Partners (2nd and 3rd) Selangor For The 3rd Party Messrs Magnus & Han (4th to 8th ) Selangor For The 3rd Party Messrs Pang Yong Tong & Co (9th) Johor Bahru