Meru Valley Resort Berhad v Hu Wen Shiong (AA-12A-1-01/2024)

TAN YOON YOKE [NO. K/P: 4764037] …RESPONDENTS 20 [IN THE SESSIONS COURT AT IPOH IN THE STATE OF PERAK DARUL RIDZUAN SUIT NO. AA-A52NCvC-61-07/2022 25 BETWEEN MERU VALLEY RESORT BERHAD (COMPANY NO.: 137970-D) …PLAINTIFF 30

HU WEN SHION [NO. K/P: 550814-07-5199/4834292] 35

TAN YOON YOKE [NO. K/P: 4764037] …DEFENDANTS GROUNDS OF JUDGMENT Introduction 40 [1]. The appellant’s appeal arises from the Sessions Court's dismissal of its application to determine three legal questions under Order 33 Rule 2 and 5 of the Rules of Court 2012. Following the filing of the appeal, the respondents raised preliminary objections, asserting that the appeal was incompetent and non-appealable under 45 Sections 28(1)(a) and (c) of the Courts of Judicature Act 1964 (CJA). The appellant, however, argued that the case involves legal questions, falling within the exception of Section 28(1)(a). After reviewing the preliminary objections, I concluded that the substantial appeal indeed raises questions of law and therefore qualifies as an 50 exception under Section 28(1)(a) of the CJA, making the appeal valid and competent. I dismissed the preliminary objections with costs in the cause and allowed the appeal to proceed on its merits. Background facts [2]. Meru Valley Resort Berhad (appellant), a housing developer, filed a 55 claim against respondents the bungalow owners, over unpaid maintenance and security charges for services provided within the appellant’s resort. Under the Sale and Purchase Agreement, the respondents were contractually obligated to contribute to the costs of common services, including infrastructure maintenance, 60 landscaping, and security services. [3]. The appellant alleges that, despite enjoying these facilities, the respondents stopped making full payments after 19 May 2017, resulting in an outstanding amount of RM5,735.89 as of 13 May 2022, along with accrued late payment interest. They argue that the 65 non-payment constitutes a clear breach of contract, as the resort's facilities, such as roads, street lighting, and security at main entrances, benefit all residents. [4]. In response, the respondents claim that the appellant failed to meet their contractual obligations, particularly in providing adequate 70 security services. They contend that, as of 1 March 2016, the appellant ceased providing security guards for the bungalows, forcing residents to hire private security services. The respondents also counterclaimed, seeking a declaration that the appellant breached the Sale and Purchase Agreement, as well as exemplary 75 and aggravated damages for libel and slander stemming from accusations made by the appellant. Additionally, they claim damages for mental distress caused by the appellant’s alleged malicious and baseless legal actions. [5]. As a result of these disputes, the appellant filed suit to recover the 80 outstanding maintenance charges, while the respondents filed counterclaims for declarations and damages related to defamation and malicious prosecution. At the first-instance court, the appellant applied to summarily determine the respondents’ counterclaim by inviting the court to determine three (3) legal questions under Order 85 33 Rule 2 and 5 of the Rules of Court 2012 and if answered affirmatively would result in the striking out of the defendants' counterclaims. The Sessions Court dismissed the application prompting this appeal. [6]. After careful consideration of the submissions from both parties, this 90 court finds in favour of the appellant and allows the appeal on all three questions forming the issues in the substantive appeal. Question 1: Whether the respondents' defamation counterclaim is valid despite procedural and substantive deficiencies. [7]. The respondents' counterclaim for defamation was predicated on 95 alleged defamatory statements made in a letter issued by the appellant. The appellant argued that the counterclaim is unsustainable on three grounds: a. Defamatory words were not pleaded in Bahasa Melayu [8]. The respondents did not translate the alleged defamatory words into 100 the national language, as required by the Court of Appeal in Rekha d/o Munisamy v Ortus Expert White Sdn Bhd & Anor [2021] 5 MLJ 836; [2021] 7 CLJ 353 (refd); [2021] AMEJ 0681; [2021] 5 MLRA 189. The Court of Appeal ruled that failure to translate alleged defamatory statements into Bahasa Melayu with a certified 105 translation is fatal to a defamation claim as it is a strict procedural requirement in pleadings. This procedural deficiency was deemed fatal. These were the words of Justice Abu Bakar Jais JCA (as he then was), in Rekha’s case (supra): “[50] The statutory provisions and case law authorities as 110 narrated above, relied upon by the defendant on this point are quite clear in requiring such translation to be made by the plaintiffs. These are cogent authorities supporting the defendant’s contention that the alleged defamatory statements must be translated into Bahasa Melayu. 115 [52] In the ‘penyataan tuntutan terpinda’ the plaintiffs did not translate the alleged defamatory statements into Bahasa Melayu. Considering the statutory provisions and case law authorities alluded to earlier, this would be fatal against the plaintiffs. As a consequence, the submission of the 120 defendant on this point should be accepted” [9]. Justice Abu Bakar Jais, JCA, in the same case, emphasised the necessity of translating alleged defamatory statements into Bahasa Melayu in compliance with Malaysian legal requirements. His 125 Lordship also stated that failure to translate the statements contravened Order 92 Rule 1 of the Rules of Court 2012, which mandates pleadings to be in the national language. This rule aligns with Article 152 of the Federal Constitution, Section 8 of the National Language Act 1963/67, and Section 3 of the 130 Interpretation Acts 1948 and 1967, all of which underscore Bahasa Melayu as the required language for court proceedings. His Lordship referred to Dato’ Seri Anwar bin Ibrahim v Tun Dr Mahathir Mohamad [2010] 2 MLJ 41; [2010] 1 CLJ 444 (refd); [2010] 1 AMR 578; [2012] 5 MLRA 275, where the court highlighted 135 the imperative nature of using Bahasa Melayu and also to the case of Lim Kit Siang v Datuk Dr Ling Liong Sik [1997] 5 MLJ 523; [1996] CLJU 106; [1996] 3 MLRH 820, where the court held that defamatory words must be reproduced in their original language and accompanied by a certified translation into Bahasa Melayu, failing 140 which the claim would be invalid. [10]. Justice Abu Bakar Jais in Rekha (supra) concluded that the appellant’s failure to translate the statements into Bahasa Melayu was a fatal defect, as exhibits in English are not a substitute for pleadings. 145 [11]. In the recent High Court judgment of Mabel Sheelaa/p Victor Muttiah v Clare Louise Brown [2024] 9 CLJ 884 (refd); [2024] 6 MLRH 816; [2024] MLJU 1667; [2024] AMEJ 1603, Justice Raja Ahmad Mohzanuddin Shah upheld the doctrine of stare decisis by giving weight to the Court of Appeal's decision in Rekha (supra). 150 Although the court acknowledged that the plaintiff had translated the meaning and wording of the alleged defamatory article into Bahasa Melayu, thereby avoiding any confusion or prejudice, the absence of a certified translation rendered the pleadings non-compliant. Justice Raja Ahmad emphasised that the mandatory requirement 155 for certified translations, as established in Rekha (supra) and Dato’ Seri Anwar bin Ibrahim (supra), must be adhered to. The failure to provide such a translation was deemed a fundamental defect, resulting in the dismissal of the appellant’s claim. [12]. The respondents argue that the alleged defamatory words were 160 originally published in English, requiring only the original words, not a translation, to be pleaded. Referring to Mohd Nasir bin Mustafa v Mohd Hanafiah bin Hanafi & Ors [2013] 9 MLJ 811, [2014] 1 MLRH 41, they emphasise the court’s reliance on the original words and context in defamation cases. The respondents submit that the 165 issue of translation into Bahasa Melayu is trivial, lacks merit, and causes no prejudice, as the appellant has not disputed the accuracy of the statements. [13]. While the respondents’ argument appears reasonable and causes no prejudice, strict procedural requirements in pleadings must be 170 followed regardless of prejudice. The respondents could have applied for an amendment to rectify the issue earlier instead of proving a point. [14]. Therefore, on this basis alone, the appeal should be allowed, the respondents' counterclaims struck out, and the appellant's claim in 175 the Magistrates Court permitted to proceed. However, for completeness, I shall address the remaining grounds and legal questions. Failed to plead essential elements of defamation [15]. The respondents argue that they properly pleaded the defamatory 180 words in compliance with Order 78 Rule 3(3) of the Rules of Court 2012, in that the respondent is not required to provide details of malice unless the defendant pleads a defence of fair comment or privilege. They assert that the appellant’s claim of non-compliance is baseless, as their counterclaim fulfils the required procedural 185 elements. “Obligations to give particulars (O 78 r 3) of ROC 2012

Where in an action for libel or slander the plaintiff alleges that the defendant maliciously published the words or matters complained of, he need not in his statement of claim 190 give particulars of the facts on which he relies in support of the allegation of malice, but if the defendant pleads that any of those words or matters are fair comment on a matter of public interest or were published upon a privileged occasion and the plaintiff intends to allege that the defendant was 195 actuated by express malice, he must serve a reply giving particulars of the facts and matters from which the malice is to be inferred” [16]. The appellant submits that the respondents failed to plead essential 200 elements of defamation, including how the alleged defamatory words were published and known to third parties. Citing S. Pakianathan v Jenni Ibrahim [1988] 2 MLJ 173; [1988] 1 CLJ 771; [1988] 1 MLRA 110 the appellant highlights that failure to specify publication details disadvantages the defence and renders 205 the claim procedurally defective. The appellant argues that such defects are fatal to the respondents’ counterclaim, making it unnecessary for the court to proceed with a full trial, and asserts that the Sessions Court erred in its findings. [17]. I am of the view that the respondents’ counterclaim for defamation 210 is procedurally defective as it fails to plead essential elements, including how the alleged defamatory words were published and known to third parties. While the respondents argue that they complied with Order 78 Rule 3(3) of the Rules of Court 2012, the rule does not exempt them from pleading material facts such as 215 publication details, which are fundamental to a defamation claim. In S. Pakianathan’s case (supra), the court emphasised the importance of specifying publication to avoid procedural unfairness to the defence. [18]. The respondents’ omission to provide these critical details 220 disadvantages the appellant and renders the counterclaim fatally flawed. Consequently, the Sessions Court erred in allowing the counterclaim to proceed, and it must be struck out. Counterclaim for defamation cannot be maintained because it is sufficiently connected to the Original Claim for monetary. 225 [19]. The respondents’ counterclaim for defamation is materially different from the appellant’s original claim, which is for RM5,735.89 in outstanding maintenance charges arising from the alleged non-payment of fees for common property maintenance at Meru Valley Resort. The appellant’s claim is contractual and monetary in nature, 230 focusing solely on recovering arrears owed under the Sale and Purchase Agreement. In contrast, the respondents’ defamation counterclaim, rooted in alleged defamatory statements made by the appellant, introduces a separate tortious cause of action. The Sessions Court erred in allowing the counterclaim, as the 235 respondents failed to produce the alleged defamatory document in their affidavit, offering no evidence to demonstrate that the defamation arose directly from or was sufficiently connected to the appellant’s monetary claim. This lack of connection underscores the distinct and unrelated nature of the two claims. 240 [20]. In Esso Standard Malaya Bhd v Southern Cross Airways (Malaysia) Bhd [1972] CLJU 31; [1972] 1 MLJ 168; [1972] 1 MLRH 417, Justice Azlan Shah emphasised the requirement for a counterclaim to be closely connected to the principal claim: "It is settled law that a counterclaim cannot be maintained 245 unless it is shown that the relief claimed is sufficiently connected with or allied to the subject matter of the principal claim as to make it necessary in the interest of justice that it should be dealt with along with the claim." 250 [21]. Similarly, in Tetuan LM Ong & Co v Chia Kah Gek [2009] 4 MLRA 318; [2010] 6 CLJ 268; [2009] MLJU 1093, Justice Sulong Matjeraie reaffirmed: "As a rule, a counterclaim must be sufficiently connected with the claim. Material affinity with the subject matter of the claim 255 must be present in the counterclaim in order for it to survive. A counterclaim for defamation cannot be maintained in action for a claim for a declaration that the clause is the sale and purchase agreement providing for the retention of the sale proceeds“ 260 [22]. Further, in Karunamoorthy Ramasamy v Hariharan Subramaniam [2020] CLJU 1398; [2020] MLJU 1750; [2020] MLRHU 2235, Justice Amarjeet Singh stated: [19] In the final analysis, based on the material placed before 265 me, that there is no material affinity of the matter in the counterclaim with the claim in the original action. In my considered view, of the present claim is allowed to stand, there will be two claims against the defendants in the counterclaim which has no connection with the original 270 action. The area of dispute between the parties would be therefore unnecessarily be enlarged which in turn would make things complicated and unduly protracted and increase the length of the hearing due to the multiplicity of claims. In my mind, the enlargement of the scope of the 275 proceedings is therefore clearly undesirable and a valid objection in the circumstances. “ [23]. The respondents argued that their counterclaim for defamation and malicious prosecution arose from the same transaction as the 280 appellant's claim for service charges under the Sale and Purchase Agreement. They contended that the defamatory statements were directly linked to their dispute over excessive charges. In support, they cited Alloy Consolidated Sdn Bhd & Anor v Anjaria Properties Sdn Bhd & Anor [2009] 4 MLJ 833; [2011] 5 CLJ 720 285 (refd); [2009] 3 AMR 377; [2009] 5 MLRA 63, where the Court of Appeal held that: "So, clearly, the counterclaim added by application in encl 38 was based on the same facts as pleaded in the original statement of defence of the first respondent. In this 290 connection, reference must be made again to O 15 r 1(2) of the RHC which allows a Respondent in any action who alleges that he has any claim or is entitled to any relief or remedy against a Plaintiff in the action in respect of any matter (whenever and howsoever arising), instead of 295 bringing a separate action, to make a counterclaim in respect of that matter and where he does so he must add the counterclaim to his defence. However, it is settled law that a counterclaim cannot be maintained unless it is shown that the relief claimed is sufficiently connected with or allied to the 300 subject matter of the principle claim as to make it necessary in the interest of justice that it should be dealt with along with the claim." 305 [24]. However, in the present case, the respondents failed to establish a clear connection between the defamatory statements and the appellant’s monetary claim. Allowing such a counterclaim would unnecessarily enlarge the area of dispute, complicate proceedings, and prolong the trial. This disconnect renders the counterclaim in 310 violation of Order 15 Rule 5(2) and Order 28 Rule 7(3) of the Rules of Court 2012, which allow courts to strike out counterclaims that lack sufficient connection to the principal claim. “Court may order separate trials (O 15 r 5)

If it appears on the application of any party against whom 315 a counterclaim is made that the subject matter of the counterclaim ought for any reason to be disposed of by a separate action, the Court may order the counterclaim to be struck out or may order it to be tried separately or make such other order as may be expedient. 320 Counterclaim by defendant (O 28, r 7)

If it appears on the application of a plaintiff against whom a counterclaim is made under this rule that the subject matter of the counterclaim ought for any reason to be disposed of by a separate action, the court may order the counterclaim to 325 be struck out or may order it to be tried separately or make such other order as may be expedient.” 330 [25]. Therefore, the counterclaim is fundamentally flawed and must be struck out. The appellant’s claim for monetary charges should proceed without unnecessary complications or delays. 335 Question 2: Whether the Respondents' malicious prosecution counterclaim is valid without pleading essential legal elements. [26]. The appellant argued that the respondents failed to plead essential elements of malicious prosecution, specifically malice, lack of reasonable cause, and termination of proceedings in the 340 respondents’ favour. These omissions rendered the counterclaim defective. In the case of Gasing Heights Sdn Bhd v Aloyah Bte Abd Rahman & Ors [1996] 3 MLJ 259; [1996] 2 MLRH 631; [1996] 3 CLJ 695; [1996] 3 AMR 3001 it is provided that pleadings for malicious prosecution must explicitly state malice, lack of 345 reasonable cause, and damages, failing which the claim is unsustainable and ought to be stuck out. Also, Shefali Shenoy Choo Suat Chin & Ors v Potential Excelerate Group Limited & Ors [2022] 4 AMR 583; [2022] 10 MLJ 800; [2022] CLJU 775 provide for the necessity of pleading all elements must be with 350 specifics. [27]. The respondents on the other hand submit that malice could be inferred from the circumstances and that technical deficiencies could be addressed during the trial. However, the court finds that the respondents’ failure to plead malice is fatal. Malicious 355 prosecution is a tort with strict elements, and the absence of a specific pleading deprives the opposing party of a fair opportunity to respond. [28]. Again, I agree with the appellant. The respondents’ counterclaim for malicious prosecution is untenable in law due to glaring procedural 360 and substantive deficiencies. Question 3: Whether the Sessions Court is bound by the High Court's decision on Meru Valley Resort [29]. The third question concerns whether the Sessions Court is bound by the High Court's decision in Dr. Christian Jurgen Kaul & Anor 365 v Meru Valley Resort Bhd [2013] 6 CLJ 597; [2013] 4 AMR 367; [2014] 9 MLJ 539; [2013] 5 MLRH 173, which established that Meru Valley Resort is a gated and guarded community. This finding establishes a factual precedent that binds subordinate courts under the doctrine of stare decisis. It reinforces that purchasers within the 370 resort are bound by community living terms, including shared facilities and obligations to pay maintenance. The ruling prevents the re-litigation of this issue in subsequent cases. The precedent is binding and renders the respondents’ counterclaim on this issue unsustainable. 375 [30]. The respondents on the other hand sought to distinguish the case, arguing that the High Court’s findings were context-specific and should not apply broadly to subsequent cases. They also submit that the decision was of another High Court of concurrent jurisdiction of which this court is not bound to follow. 380 [31]. Regrettably, I am unable to accede to the respondents' arguments. The doctrine of stare decisis obliges the Sessions Court to follow the binding findings of higher courts. The High Court's determination that Meru Valley Resort is a gated and guarded community is conclusive and precludes further litigation on this point. 385 Conclusion [32]. The Sessions Court erred in dismissing the appellant’s application under Order 33 Rule 2 and 5 of the Rules of Court 2012 to strike out the respondents’ counterclaims. Each of the respondents' 390 counterclaims suffers from fundamental legal and procedural flaws. [33]. I am of the view that the appellant’s original claim, concerning maintenance charges, is crucial for the upkeep of the common property and represents a collective obligation for all residents. If residents dispute management issues and refuse to pay their 395 maintenance charges, opting to file counterclaims when sued for recovery instead of fulfilling their obligations, it would create an unhealthy precedent. This approach would jeopardise the maintenance of common property, undermining the living environment and the welfare of the community. Maintenance 400 charges must be paid as a priority, while any grievances should be addressed through separate legal avenues [34]. Additionally, I must emphasise that litigation should serve as a genuine avenue for resolving valid disputes, not as a strategy to complicate straightforward claims or delay their resolution through 405 unnecessary and mischievous counterclaims. This is particularly significant when the counterclaim, although potentially valid on its own, is presented in a manner that conflicts with or detracts from the straightforward nature of the original claim for maintenance charges. In such instances, it often appears to stem from a clash of egos 410 between the respondents and those managing the corporate entity, rather than from a genuine legal dispute. Allowing this type of litigation would set a detrimental precedent, undermining the court’s focus and purpose. If the courts were to condone such misuse of the legal process, it would result in endless and unfocused litigation. 415 Therefore, I find it imperative to strike out such counterclaims to ensure that the appellant’s legitimate monetary claim is resolved efficiently and without undue interference. [35]. In light of these findings, the appeal is allowed. The respondents' counterclaims are struck out in part only. Costs in the sum of 420 RM5,000 is awarded to the appellant. Date : 28 January 2025 Moses Susayan 425 MOSES SUSAYAN Judicial Commissioner High Court in Malaya 430 at Ipoh, Perak Counsel : 435 For the Appellant : Gary Abraham Xavier Advocates and Solicitors [Messrs Kean Chye & Sivalingam] Ipoh, Perak 440 For the Respondents : Norleena Jamal Advocates and Solicitors [Messrs K.B. Tan Kumar & Partners] Ipoh, Perak (Notice: This Grounds of Decision is subject to official editorial revision) 445 Headnotes 450 Civil Procedure — Appeal — Jurisdiction of High Court — Whether Sessions Court erred in dismissing Appellant's application to strike out counterclaims under Order 33 Rules 2 and 5 of the Rules of Court 2012 — Whether appeal raises legal questions falling under exception in Section 28(1)(a) Courts of Judicature Act 1964 — Whether preliminary 455 objections by Respondents are sustainable Tort — Defamation — Procedure — Whether Respondents failed to plead essential elements of defamation — Requirement to plead publication and reference to third parties — Whether failure to provide particulars renders counterclaim procedurally defective — Rules of Court 460 2012 O 78 r 3 Tort — Defamation — Counterclaim — Translation requirement — Whether failure to translate defamatory words into Bahasa Melayu with certified translation is fatal — Compliance with Article 152 Federal Constitution, Section 8 National Language Act 1963/67, and Order 92 465 Rule 1 Rules of Court 2012 Tort — Malicious prosecution — Counterclaim — Pleadings — Whether Respondents failed to plead malice, lack of reasonable cause, and favourable termination of proceedings — Whether procedural defects render counterclaim untenable d 470 Civil Procedure — Counterclaim — Connection with principal claim — Whether Respondents' defamation and malicious prosecution counterclaims sufficiently connected to Appellant’s monetary claim — Whether counterclaims unnecessarily complicate proceedings and prolong trial 475 Civil Procedure — Precedent — Doctrine of stare decisis — Whether Sessions Court bound by High Court's decision in Dr. Christian Jurgen Kaul v Meru Valley Resort [2013] 5 MLRH 173 — Whether gated and guarded community status precludes further litigation on maintenance obligations 480 Civil Procedure — Abuse of process — Litigation strategy — Whether counterclaims were a misuse of court process to obstruct resolution of Appellant’s monetary claim — Whether counterclaims set unhealthy precedent undermining efficient legal recourse 485