Myfactor Sdn. Bhd. v Mutual Empire Sdn. Bhd. (WA-22NCC-456-07/2025)

MUTUAL EMPIRE SDN BHD [Company No.: 199801010961 (467089-A)]

NOORWIZAM BIN ABDULLAH (NRIC No.: 680531-10-6667)

MD EUSOOF BIN MOHAMED HAROON (NRIC No.: 720706-71-5039) …DEFENDANTS GROUNDS OF JUDGMENT (Enclosure 18)

In a civil claim, a plaintiff brings the action. It is his claim. Ordinarily he may choose whether to pursue it or abandon it. The defendant cannot insist that the plaintiff continue a battle which he no longer wishes to fight, unless some real injustice would thereby be done.

Given the plaintiff’s control, he is said to be the master of the suit. The Latin term for it is dominus litis.

The Plaintiff in the present action has filed an application pursuant to Order 21 Rule 3 of the Rules of Court 2012 for leave to withdraw and/or discontinue the Amended Writ and Statement of Claim with liberty to file afresh.

The Defendants did not seriously oppose the withdrawal of the action itself. Their objection was directed principally at the Plaintiff’s request for liberty to file afresh.

The sole issue for determination is whether the Plaintiff ought to be granted liberty to file a fresh suit.

The Plaintiff commenced the present action against the Defendants arising from a commercial transaction which the Plaintiff characterised as a factoring arrangement.

After the close of pleadings, disputes emerged as to the true nature of the underlying transaction. The Defendants contended, among other things, that the transaction was in substance an unlicensed moneylending arrangement disguised as a factoring agreement. They further alleged that certain invoices relied upon by the Plaintiff were manufactured and that additional parties were involved in the impugned transactions.

The Plaintiff took the position that matters raised in the Defence disclosed issues and parties which were not adequately reflected in the existing action. The Plaintiff was of the view that a fresh proceeding involving additional causes of action and additional parties was required. This would better enable all disputes between the parties to be comprehensively determined. The Plaintiff therefore sought leave to discontinue the present action with liberty to file afresh.

The Defendants opposed the grant of liberty to file afresh. They contended that the application was not bona fide. It was also alleged that the Plaintiff was attempting to avoid the consequences of the Defence already filed. The Defendants contended that they had acquired an advantage in the proceedings which ought not to be lost.

The application falls to be considered under Order 21 Rule 3(1) of the Rules of Court 2012. The rule provides that where leave of Court is required, the Court may order an action to be discontinued “on such terms as to costs, the bringing of a subsequent action or otherwise as it thinks just.” The language employed by the rule is broad and expressly vests the Court with a discretionary jurisdiction to determine whether a fresh action ought to be permitted.

The primary consideration here is whether justice requires the discontinuance to be permitted and, if so, upon what terms.

I start with the principle that a plaintiff is ordinarily dominus litis. Subject to the Court’s supervisory jurisdiction and the avoidance of injustice to the opposing party, a plaintiff is generally entitled to decide how, when and against whom his cause of action should be pursued.

The Court’s concern is not whether the defendant wishes the action to continue. The question is whether the defendant has acquired such a substantive advantage in the litigation that it would be unjust to deprive him of that advantage.

The decision of Raja Azlan Shah J (as His Late Majesty then was) in Overseas Union Finance Ltd v Lim Joo Chong [1971] 2 MLJ 124 is frequently cited for the proposition that leave may be refused where the plaintiff is no longer wholly dominus litis or where the defendant has, through the proceedings, obtained an advantage of which it would be unjust to deprive him.

My assessment of the Plaintiff’s application therefore focuses not on the Defendant’s preference. The consideration is centred on whether any legally recognisable prejudice or accrued advantage would be lost if discontinuance is permitted.

In the present case, I was not persuaded that the Defendants had demonstrated any accrued advantage of the nature contemplated by authorities.

The Defendants argued that they had already raised substantive defences concerning illegality, alleged moneylending and the authenticity of certain invoices. However, the mere existence of pleaded defences does not, without more, constitute the type of litigation advantage that would justify compelling the Plaintiff to continue prosecuting an action which it no longer wishes to pursue in the manner it presently exists.

The Defendants have not obtained judgment. The Defence remains untested. The claim is still in its infancy in that it has not proceeded beyond the pleadings stage. There has been neither assessment nor findings made on the law and the facts. There is nothing in favour of the Defendants presently that would be lost if discontinuance is allowed with liberty to file afresh.

The Defendants remain fully entitled to raise the very same defences in any fresh action commenced by the Plaintiff. Their substantive position is therefore preserved.

In my judgment, the Defendants’ objection was founded substantially upon a desire that the present action proceed to a determination on the existing pleadings. With respect, that is not the relevant test.

A defendant does not become dominus litis merely because he prefers the litigation to continue or because he has a Defence on record. The conduct and control of the cause of action remain matters primarily for the plaintiff, subject always to the Court’s power to prevent injustice.

I will add that a defendant does not acquire the status of dominus litis merely by filing a defence. If that were the law, discontinuance with liberty to file afresh would seldom be available once pleadings had closed. That is plainly inconsistent with Order 21 Rule 3, which expressly contemplates that the Court may permit a subsequent action where justice so requires.

I was also unable to conclude that the Plaintiff’s application was mala fide. The explanation advanced by the Plaintiff was that matters raised in the Defence disclosed issues, causes of action and parties which were not adequately encompassed within the existing proceedings. Hence, it is said that a fresh action would enable all relevant disputes to be determined comprehensively. Whether that assessment ultimately proves correct is not the issue before this Court. The question is whether the explanation is bona fide. I take the view that it was.

Significantly, the Rules themselves contemplate the possibility of a subsequent action following discontinuance. Order 21 Rule 3 expressly empowers the Court to grant leave on terms relating to “the bringing of a subsequent action”. That statutory language would be rendered largely otiose if liberty to file afresh were to be refused merely because a defendant prefers that the action to continue.

I also derived assistance from the reasoning of the Court of Appeal in Newlake Development Sdn Bhd v Zenith Delight Sdn Bhd & Ors [2017] MLJU 671. In that case, the Court emphasised that the exercise of discretion under Order 21 depends upon the facts of each case, including whether the proceedings are at an advanced stage, whether any litigation advantage has accrued to the defendant, and whether any injustice or prejudice would result from permitting the discontinuance.

On the whole, I was satisfied that any inconvenience suffered by the Defendants could be adequately compensated by an appropriate order as to costs. On the other hand, refusing liberty to file afresh would substantially impede the Plaintiff's ability to restructure and pursue its claim in the manner it considers appropriate. That would be a far more serious and prejudicial consequence.

Most importantly, I was not satisfied that the Defendants had crossed the threshold required to show that they had acquired an advantage in the litigation of which it would be unjust to deprive them. In the absence of such prejudice, there was therefore no principled basis upon which this Court should refuse the Plaintiff's application.

For these reasons, I exercised my discretion under Order 21 Rule 3 in favour of the Plaintiff. The Plaintiff was granted leave to discontinue the Amended Writ and Statement of Claim with liberty to file afresh.

Given that the discontinuance was made after the Defence was filed, I ordered costs against the Plaintiff. Dated the 2nd day of June 2026 -sgd- ……………………………………………………………………… MUHAMMAD ADAM BIN ABDULLAH Judicial Commissioner (Commercial Division NCC 4) High Court of Malaya In the Federal Territory of Kuala Lumpur, Malaysia Counsel for the Plaintiff : Nicholas Lai together with Ling Ru Xin Messrs. Jason Teoh & Partners Counsel for the Defendants : Muguthan s/o Vadiveloo Messrs. Mugu & Sufyan & Co

Overseas Union Finance Ltd v Lim Joo Chong [1971] 2 MLJ 124 2. Newlake Development Sdn Bhd v Zenith Delight Sdn Bhd & Ors [2017] MLJU 671

Order 21 Rule 3 of the Rules of Court 2012