Melbourne Sunrise Sdn Bhd v How Nam Hui (BA-22NCvC-103-03/2025)

Enclosure 10 is an application by the Plaintiff to strike out the Defendant’s counterclaim pursuant to Order 18 rule 19(1)(a),

and (d) of the Rules of Court 2012 (ROC).

The Plaintiff contended that the Defendant’s counterclaim discloses no reasonable cause of action, is legally unsustainable, and amounts to an abuse of the process of the Court. 08/01/2026 12:45:48

After hearing the submissions of both parties and perusing the affidavits and pleadings filed, I allowed Enclosure 10 with costs and struck out the Defendant’s counterclaim. The Defendant has now appealed against my decision.

These are my grounds of judgment.

According to the Statement of Claim, the Plaintiff’s claim arises from a construction-related arrangement in which the Plaintiff engaged Yicon International Sdn. Bhd. and/or Yicon Bina Sdn. Bhd. for subcontract works.

The Plaintiff alleged that payments were made in respect of the works carried out, but disputes later arose concerning the Defendant’s conduct and the manner in which the affairs of the Yicon companies were handled.

The Plaintiff contended that the Defendant, who was at all material times a director and the controlling mind of the said companies, acted in a manner that caused loss to the Plaintiff, thereby giving rise to the filing of this action.

The Defendant filed a Defence and Counterclaim. In the counterclaim, the Defendant did not seek any substantive relief arising from the underlying transaction between the parties. Instead, the Defendant’s counterclaim was confined to claims S/N 7HJdyeodgEyaVuJt/vBl7A for recovery of legal fees allegedly incurred in defending this action, together with other damages which were not clearly identified or particularised.

The Plaintiff thereafter filed this application in Enclosure 10 to strike out the Defendant’s counterclaim on the ground that the reliefs sought were legally untenable and did not disclose a reasonable cause of action.

The application was supported by affidavits and written submissions filed by both parties, which I have considered in arriving at my decision.

A perusal of the Defendant’s counterclaim shows that the reliefs sought were limited in scope. The Defendant did not plead any independent cause of action arising from the underlying facts of the dispute between the parties.

The only substantive prayers sought by the Defendant in the counterclaim were for the recovery of legal fees allegedly incurred in this action, together with references to other damages which were not explicitly identified or particularised.

The Defendant did not plead any contractual or statutory basis entitling the recovery of such legal fees as damages. There was also no plea that such legal fees were recoverable on an S/N 7HJdyeodgEyaVuJt/vBl7A indemnity basis, nor was any specific order for indemnity costs sought.

In substance, the Defendant’s counterclaim was founded entirely on the legal costs incurred in defending the present suit.

The central issue for determination in this application is whether the Defendant’s counterclaim discloses a reasonable cause of action.

Arising from this, the Court must determine whether a claim for legal fees incurred in the same proceedings between the same parties can constitute a valid claim in damages, and whether the counterclaim is legally sustainable in light of the applicable principles governing costs.

In considering an application under Order 18 Rule 19 of the ROC, the Court must examine the pleadings as they stand. Where a pleading discloses no reasonable cause of action, or is legally unsustainable, the Court is entitled to strike it out at an early stage. The law is trite, and I find it unnecessary to discuss the well-known requirements further.

In the present case, it is clear from the Defendant’s counterclaim that the only substantive reliefs sought are the recovery of legal fees incurred in defending this action and references to other damages which were particularised. No independent factual basis was pleaded to support any separate cause of action.

I agree with the Plaintiff’s submission that a claim for legal fees cannot, in law, constitute a valid claim in damages. The position has been settled by the Federal Court in Golden Star & Ors v Ling Peek Hoe & Anor [2024] 6 CLJ 487, where it was held that costs, including legal fees and litigation expenses, are distinct from damages and are governed by a separate statutory and procedural regime. Legal fees incurred in the same proceedings between the same parties are recoverable, if at all, through the costs regime and not as damages.

The Federal Court further made it clear that costs incurred in prosecuting or defending an action cannot, by themselves, give rise to a cause of action. To allow such claims would undermine the costs regime under Order 59 of the ROC and open the door to satellite litigation.

Applying these principles, the Defendant’s counterclaim is plainly unsustainable in law. Since the counterclaim is founded entirely on a claim for legal fees, and no other viable head of claim is disclosed, it does not disclose a reasonable cause of action and cannot be cured by amendment.

Accordingly, the Defendant’s counterclaim falls squarely within the grounds for striking out under Order 18 rule 19(1)(a) of the

In any event, the Defendant’s attempt to recover legal fees as damages in the same proceedings, when such fees are governed by the costs regime, also bears the hallmarks of an improper use of the Court’s process.

For the reasons stated above, I find that the Defendant’s counterclaim discloses no reasonable cause of action and is legally unsustainable.

Accordingly, Enclosure 10 is allowed with costs of RM3,000.00, subject to the allocator, and the Defendant’s counterclaim is hereby struck out. Dated this: 6 January 2026 ~signed~ (NOOR HAYATI BINTI HAJI MAT) JUDGE HIGH COURT OF MALAYA SHAH ALAM, SELANGOR S/N 7HJdyeodgEyaVuJt/vBl7A For the Plaintiff : Muhammad Al-Hazim bin Idris Messrs Tetuan Azam Malek & Soh For the Defendants : Ong Swee Long together with