Pemilik-Pemilik Kapal "Awana Salvage" (No. Imo 8662737) dan Pihak-Pihak yang Berkepentingan v Rei Management Sdn Bhd (WA-27NCC-51-06/2020)

This judgment is in respect of the Plaintiff’s application in encl. 61 to strike out the Defendant’s Memorandum of Appearance and Defence and Counterclaim and also the Defendant’s application in encl. 69 for an extension of time to file the Defendant’s Defence and Counterclaim filed on 28.12.2020 and for the same to be admitted as the Defendant’s Defence and Counterclaim in these proceedings. I heard both these applications together and on 21.6.2021, I allowed encl. 61 and dismissed encl. 69. 2

These are my grounds in respect of of both decisions.

On 13.3.2013 and 13.9.2013 the Plaintiff entered into 2 commercial agreements (“the Commercial Agreements”) with Fujian Heli Industry Trade Co (“Fujian Heli”), a company incorporated in China. The arrangement between the Plaintiff and Fujian Heli was for Fujian Heli to salvage sunken ships along the Straits of Malacca (“the Works”). In performing this, Fujian Heli would provide and use a vessel called “Inaimerak Super” (“the Vessel”) to perform the Works. The Vessel was previously named “Zhong Run 26”, and was registered at the Xiamen Maritime Bureau, China since 16.11.2012. The Vessel, which is the res in this dispute, is now presently named “Awana Salvage”. Fujian Heli was represented by a Chinese national named Chen Dijie.

Fujian Heli breached the terms of the Commercial Agreements and the Plaintiff demanded repayment of monies advanced at the sum of RM1,882,552.47 which Fujian Heli did not pay. The Plaintiff then commenced Admiralty In Rem Suit No. WA-27-NCC-23-03/2016 in the High Court of Malaya at Kuala Lumpur on 7.3.2016 (“Suit 23”) to claim for damages due to contractual breach of obligations by Fujian Heli. 3

Fujian Heli did not enter an appearance for Suit 23 but instead, an Indonesian company named PT Jatim Perkasa Lines, which is the Defendant in the present action, entered appearance on 21.3.2016, claiming to be the owner of the Vessel. It was in evidence in Suit 23 that on or about 1.8.2015, Chen Dijie and Zhong Xiang Run Shipping (Xiamen) Co Ltd. (“Xiamen Zhong Xian Run Shipping”), a company incorporated in China had executed a Memorandum of Agreement dated 1.8.2015 with the Defendant as the buyer of the Vessel for a sum of USD1,000,000.00. Sierra Leone registry documents also showed the Defendant to be the owner of the Vessel.

The Defendant applied to strike out Suit 23 and this was allowed by the court on 28.6.2016 (“the Striking Out Decision”). This was on the ground that the Plaintiff had no legal standing to invoke an in rem action of the High Court’s admiralty jurisdiction as at the commencement of the suit, the Defendant was the owner of the Vessel, and not Fujian Heli. The Plaintiff in the application was not able to establish that Fujian Heli were common partners with Chen Dijie and that the Defendant was the agent of Chen Dijie. There was also no evidence to demonstrate collusion of the various parties to present the Defendant as the new owner of the Vessel.

The Plaintiff appealed against the Striking Out Decision on 29.6.2016 to the Court of Appeal, but a settlement was eventually reached between the Plaintiff and the Defendant 4 on 13.1.2017. According to the Plaintiff, a settlement was agreed in writing between the Plaintiff and the Defendant in a Settlement Agreement dated 13.1.2017 (“the Settlement Agreement”), signed by Lin Qi Qiang on behalf of the Defendant and Chee Teck Fah on behalf of the Plaintiff, where it was agreed that: a) The Defendant acknowledged there was a debt due and owing of RM5,919,427.30 to the Plaintiff which would no longer be disputed and would be repaid in full; b) To repay the debt, the Vessel would operate in the waters of Malaysia, and thus, revenue generated therefrom would be used to set-off the debt in favour of the Plaintiff; and c) It is only after the debt is repaid in full, that the Vessel would be released and returned to the Defendant.

A demised charter was subsequently registered at the Mongolian Ship Registry, where the Plaintiff became the bareboat charterer of the Vessel from around 12.1.2018 onwards (“the Bareboat Charter”). According to the terms of the Bareboat Charter, the charter would continue to be effective and valid until full and final settlement of the debt as stipulated in the Settlement Agreement. 5

Sometime in late 2017 or early 2018 the Defendant instructed Chen Dijie to sail the Vessel out of Malaysian waters and bring the Vessel to Indonesia. In January 2018 the Defendant appointed one Hamzah Manjong Shipping Sdn Bhd to make preparations to bring the Vessel to [10] On 25.1.2018 the Plaintiff commenced Civil Suit No. BA- 22NCVC-38-01/2018 (“Suit 38”) in the High Court of Malaya at Shah Alam for injunctive relief to restrain and prohibit wrongful trespass, heist and seizure of the Vessel.

The Plaintiff took possession of the Vessel and on or around 1.2.2018, Chen Dijie then retrieved the Vessel and attempted to sail the Vessel to Indonesia but while the vessel was on its way to Indonesia, it was detained by the Malaysian Maritime Enforcement Agency (“MMEA”) upon a report made by the Plaintiff. On 12.4.2018, an injunction was granted (“the Injunction”) in Suit 38. The detention of the Vessel by MMEA was from 3.2.2018 to 4.6.2018 and the crew was later sent back to their country of origin. The Vessel was then handed over to the Plaintiff.

A statutory declaration was attested on 11.3.2019 by Merina Liem (“Statutory Declaration”), the director of the Defendant, stating that the Defendant in fact never had any proprietary interest over the Vessel and in Suit 23 the Defendant only entered appearance on behalf of Chen Dijie as the owner of the Vessel. Premised on this, on 16.1.2020 6 Chen Dijie and his local representative, Ong Eng Poh commenced legal proceedings vide Admiralty In Rem Suit No. BA-27NCC-1-01/2020 Shah Alam High Court against the Defendant seeking, inter alia, the following declarations: a) A declaration that the Chen Dijie and Xiamen Zhong Xiang Run Shipping is still the original owner of the Vessel and not the Defendant; and b) A declaration that the Defendant never owned the Vessel and any agreement entered into by the Defendant as the owner of the Vessel with any third party as long as the Vessel was in Defendant's custody is null and void.

This suit was transferred to Kuala Lumpur High Court under Suit No. WA-27NCC-6-01/2020 (“Suit 06”)

In Suit 06, parties entered into a Consent Judgment on 26.2.2020 (“the Consent Judgment”), which effectively and amongst others conferred ownership of the Vessel back to Chen Dijie and Xiamen Zhong Xiang Run Shipping. Chen Dijie, Ong Eng Poh and Xiamen Zhong Xiang Run Shipping then attempted to enforce the Consent Judgment on 5.6.2020 and 9.6.2020, by attempting to again take possession of the Vessel but was prevented from doing so by the Injunction earlier obtained from Suit 38. 7

The Plaintiff then commenced the present action on 15.6.2020 to set aside the Consent Judgment. The arrest of the Vessel was made on 23.6.2020. The Defendant did not initially enter an appearance but instead, Chen Dijie and Xiamen Zhong Xiang Run Shipping entered appearance on 29.6.2020. In the Plaintiff’s application in encl. 17, Chen Dijie and Xiamen Zhong Xiang Run Shipping were struck-off as defendants from this suit as they could not establish that they were the lawful owners of the Vessel. The records showed that the Defendant is still the registered owner according to records from the Mongolian Shipping Registry.

On 28.12.2020, the Defendant entered appearance and concurrently filed its Defence and Counterclaim. On 9.1.2021 the Plaintiff filed an application in encl. 61 to strike out the Defendant’s Memorandum of Appearance and Defence and Counterclaim. As the Memorandum of Appearance and Defence was filed out of time, the Defendant on 25.1.2021 filed an application in encl. 69 for extension of time to file the Memorandum of Appearance and the Defence and Counterclaim. Prior to that, the Plaintiff filed an application to amend its Statement of Claim on 10.12.2020 in encl. 52.

In encl. 61 which was made pursuant to O.18 r. 19 (a), (b),

and/or (d) and/or O. 92 r. 4 of the Rules of Court 20212 (“ROC 2012”), the Plaintiff prays for the following: 8 a) That the Memorandum of Appearance and the Defence and Counterclaim dated 28.12.2020 filed by the Defendant to be struck out; and b) That costs of the application be paid by the Defendant. [18] In encl. 69 which was made pursuant to O. 3 r. 5 and O. r. 4 ROC 2012 and/or subsection 25(2) read together with Item 8 of the Schedule to the Courts of Judicature Act 1964 (“CJA”), the Defendant prays for the following: a) An order for an extension of time to be given to the Defendant to file its Memorandum of Appearance and Defence and Counterclaim filed on 28.12.2020 and for the same to be admitted; and b) Costs. [19] Both encl. 61 and encl. 69 were heard together with the Plaintiff’s application to amend its Statement of Claim in encl. 52. As no appeal was filed in respect of encl. 52 which was allowed, I shall address the grounds for my decisions in encl. 61 and encl. 69 only. However, I shall briefly refer to encl. 52 in one of the preliminary objections raised by the Plaintiff. 9 The law on striking out pleadings and granting extension of time [20] The rules on striking out pleadings are provided in O. 18 r. 19(1) ROC 2012 which is reproduced below for convenience: “19. Striking out pleadings and endorsements (O. r. 19)

The Court may at any stage of the proceedings order to be struck out or amended any pleading or the endorsement, of any writ in the action, or anything in any pleading or in the endorsement, on the ground that-

it discloses no reasonable cause of action or defence, as the case may be;

it is scandalous, frivolous or vexatious;

it may prejudice, embarrass or delay the fair trial of the action; or

it is otherwise an abuse of the process of the Court, and may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be.” [21] The Federal Court in Tan Wei Hong (A Minor Suing Through Guardian Ad Litem And Next Friend Chuang Yin E) & Ors v. Malaysia Airlines Bhd And Other Appeals [2018] 9 CLJ 425 has succinctly laid out the test for striking out pleadings, referring to the locus classicus Bandar Builders Sdn Bhd. v. United Malayan Banking Corporation Bhd [1993] 4 CLJ 7. Ramly Ali FCJ delivering the judgment of the court, stated as follows: 10 “The tests for striking out application under O. 18 r. 19 of the ROC, as adopted by the Supreme Court in Bandar Builders are, inter alia, as follows :

it is only in plain and obvious cases that recourse should be had to the summary process under the rule;

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;

it cannot be exercised by a minute examination of the documents and facts of the case in order to see whether the party has a cause of action or a defence;

if there is a point of law which requires serious discussion, an objection should be taken on the pleadings and the point set down for argument under O. 33 r. 3 of the ROC; and

the court must be satisfied that there is no reasonable cause of action or that the claims are frivolous or vexatious or that the defences raised are not arguable.” [22] The Court of Appeal, in Sivarasa Rasiah & Ors v. Che Hamzah Che Ismail & Ors [2012] 1 CLJ 75 adopted the well-settled principle of striking out in the following passage: “A striking out order should not be made summarily by the court if there is issue of law that requires lengthy argument and mature consideration. It should also not be made if there is issue of fact that is capable of resolution only after taking viva voce evidence during trial (see: Lai Yoke Ngan & Anor v. Chin Teck Kwee & Anor [1997] 3 CLJ 305; [1997] 2 MLJ 565 (FC)).” [23] In considering the exercise of the court’s discretion to grant the extension of time to the Defendant to file its Memorandum of Appearance and Defence and 11 Counterclaim, the court refers to O. 3 r. 5 of the ROC 2012 and s. 25(2) read together with Item 8 of the Schedule to the CJA 1964. [24] O. 3 r. 5 of the ROC 2012 provides: “(1) The Court may, on such terms as it thinks just, by order extend or abridge the period within which a person is required or authorized by these Rules or by any judgment, order or direction, to do any act in any proceedings.

The Court may extend any such period as referred to in paragraph (1) although the application for extension is not made until after the expiration of that period.

The period within which a person is required by these Rules, or by any order or direction, to serve, file or amend any pleading or other document may be extended by consent in writing without an order of the Court being made for that purpose.” [25] Item 8 of the Schedule to the CJA 1964 provides: “Power to enlarge or abridge the time prescribed by any written law for doing any act or taking any proceeding, although any application therefor be not made until after the expiration of the time prescribed; Provided that this provision shall be without prejudice to any written law relating to limitation.” [26] The application could be made even after the relevant period of time has expired, as in the instant case (See Thiruchelvasegaran a/l Manickavasegar v. Mahadevi a/p Nadchatiram [1998] 4 CLJ 883; [1998] 4 MLJ 297.) 12 [27] The factors the court shall consider in determining an application for extension of time are: a) The length of delay in making the application; b) Whether or not there are cogent reasons for the litigant not to have made the application within the prescribed time; c) The likelihood and degree of prejudice, as well as injustice to the other side should the court exercise its discretion. (See: Nadarajan s/o Verayan v. Hong Tuan Teck (Part 2) [2008] 1 CLJ 798; [2007] 7 MLJ 640; Saeed U Khan v. Lee Kok Hooi [2000] 7 CLJ 454; [2001] 5 MLJ 416; Ananda Kumar Ganesan & Ors v. Tokio Marine Life Insurance Bhd & Anor [2019] 1 LNS 825). [28] Having these legal principles in mind, I now turn to the respective submissions by learned counsels who represented the parties in this case. Preliminary Objections [29] Before moving to the substantive submissions of the Plaintiff and the Defendant, I shall first address preliminary objections raised by the Plaintiff. The Plaintiff raised 3 objections. 13 [30] The first objection is that the Defendant’s affidavit in support of encl. 69 (the Defendant’s extension of time application) and the Defendant’s affidavit in reply to the Plaintiff’s affidavit in support in encl. 52, supporting encl. 51 (the Plaintiff’s amendment application) are combined in one single affidavit of Merina Liem, the director of the Defendant, in encl. 72. [31] The second objection is that Ong Eng Poh in his affidavit in reply (encl. 75) to encl. 62 failed to state the source and grounds of the information and belief, amongst others, in paragraph 5(ii) of his affidavit, Ong Eng Poh failed to state the source of information of the allegation that Merina Liem was purportedly informed by her counter-part in China of the decision of this Honourable Court on 27.10.202. Apart from that, he was purportedly advised by the Defendant’s solicitors as if the Defendant’s solicitors is affirming an affidavit, deposing facts not within his knowledge. The Plaintiff submits that, relying on the authority of Dynacast

(S) Pte Ltd v. Lim Meng Siang & Ors [1989] 3 MLJ 456, an affidavit of information and belief, which does not state the source of the information or belief, was irregular and therefore inadmissible as evidence. [32] The third objection is that there will be a conflict of interest for Ong Eng Poh to represent both the Defendant and Chen Dijie. Earlier Ong Eng Poh was the representative of Chen Dijie who purportedly claimed to be the owner of the Vessel 14 whose appearance was struck off by the court. Now Ong Eng Poh is representing the Defendant being the legal owner of the Vessel. [33] I dismissed the prelimary objections. My reasons are as stated below. [34] The single affidavit (encl. 72) affirmed by Merina Liem does not cause any confusion. Each part of the affidavits clearly refer to which application they relate to. Para.s 4 to 8 relate to encl. 69 and para.s 9 to 16 relate to encl. 51. [35] Ong Eng Poh, the deponent of encl. 75 stated the source and grounds of the information and belief to be from the documents he has access to or from those in the Defendant’s solicitors’ possession and also from the advice of the Defendant’s solicitors. Given that Oh Eng Poh is an associate of Chen Dijie who was involved in the proceedings from the start and also from previous litigation involving the Plaintiff, the court accepts that he has sufficient knowledge to depose the affidavit. [36] There is no conflict of interest for Ong Eng Poh in affirming encl. 75 although he represents both Chen Dijie and the Defendant. Oh Eng Poh, Chen Dijie and the Defendant all generally take the same position that the Vessel is owned by Chen Dijie. 15 Plaintiff’s submissions [37] In respect of the Defendant’s delay in filing the Memorandum of Appearance and the Defence and Counterclaim, the Plaintiff submits that the Defendant failed to provide a clear and cogent explanation to justify the inordinate delay in filing its Memorandum of Appearance and Defence and Counterclaim on 28.12.2020, a period of 6 months after the filing of this suit despite having the knowledge or imputed knowledge of this suit as early as in June 2020. In relation to this, the Plaintiff further contends that: a) A Memorandum of Appearance was entered earlier by Chen Dijie and Xiamen Zhong Xiang Run Shipping as early as on 29.6.2020 but was subsequently struck off; b) The Defendant in paragraph 9(a) of the Defence and Counterclaim pleads that Chen Dijie (and his representative, Ong Eng Poh) is the only representative of the Defendant; c) This shows that the Defendant’s purported representative, i.e. Chen Dijie always had knowledge of this suit, which would thus impute knowledge on the Defendant; 16 d) Although being perfectly aware of this suit, the Defendant only filed the Memorandum of Appearance and the Defence and Counterclaim on 28.12.2020, 6 months after the filing of this suit without showing any good grounds for the delay; e) As Chen Dijie was the sole representative of the Defendant, the Defendant has admitted that it should have the knowledge of this suit as early as in June 2020; f) As early as 4.6.2020, the Defendant would have known that the Plaintiff disputed the Consent Judgment from Suit 38, as the Defendant’s then solicitor, Messrs Muhammad Zahir, had received a letter from the Plaintiff’s solicitors asserting possessory interest over the Vessel; and g) The Plaintiff did not have to enquire with the Defendant’s solicitors, Messrs Muhammad Zahir on whether they had instructions to accept service of the Writ and Statement of Claim [38] The Plaintiff maintains that it is unlikely for the Defendant to have only found out about the present action around 27.10.2021 as the service of the Writ and Statement of Claim was properly effected on the Vessel in as early as 23.6.2020. There was no obligation for the Plaintiff, the charterer, to personally notify the Defendant as the 17 charteree in this present legal suit or enquire with the Defendant’s solicitors, Messrs Muhammad Zahir, on whether they had instructions to accept service of the Writ and Statement of Claim as the service of the Writ and Statement of Claim on the res is deemed good service to the world at large pursuant to O.70 r.7 ROC 2012. [39] The Plaintiff contends that the Defendant was in fact 175 days out of time to enter its appearance, and 161 days late towards filling its Defence. The Writ and Statement of Claim was served on the Vessel on 23.6.2020, thus the date to enter appearance, 14 days after the service of the Writ and Statement of Claim, was 7.7.2020. The last date to file the Defence was 21.7.2020, 14 days after the last date to file the appearance. the Defendant entered its appearance and Defence on 28.12.2020, 175 days after 23.6.2020, the last date to enter appearance and 161 days after 21.7.2020, the last date to file the Defence. [40] The Plaintiff also submits that the Defendant’s purported representative Ong Eng Poh was given the authority to act for the Defendant since 27.10.2020, thus the filing of the Memorandum of Appearance on 28.12.2020 was still unexplained. [41] The Plaintiff maintains that the reason provided by the Defendant that Merina Liem was only informed by her counterparts in China on 27.10.2020 about proceedings in this suit should not be accepted as who those random 18 counterparts were are not disclosed. This does not satisfy the requirement that a deponent can only make averments either from his personal knowledge or if not so, then to the best of his beliefs, where the sources and grounds substantiating that belief must be cited referring to O. 41 r.5 Rules of Court 2012. [42] The Plaintiff submits that the inordinate delay of 6 months has not been credibly explained to the court despite the requirement for an applicant for an extension of time to first provide a satisfactory explanation for the delay, relying on the cases of Ong Guan Teck & Ors v. Hijjas [1982] 1 MLJ 105 (High Court), Tang Kwor Ham & Ors v. Pengurusan Danaharta Nasional Bhd & Ors [2006] 5 MLJ 50 (Court of Appeal), Soh Keng Hian v. American International Assurance Co Ltd [1996] 1 MLJ 191 (Court of Appeal), Trustees of Leong San Tong Khoo Kongsi (Penang) Registered & Anor v. Lee Boon Tin [1998] 4 MLJ 373 (Court of Appeal) and Dato’ Mohamad Salim Fateh bin Fateh Din v. Nadeswaran al Rajah (No. 2) [2012] 10 MLJ 513 (High Court). [43] Quite apart from the unexplained delay which would defeat the Defendant’s application for an extension of time to file the Memorandum of Appearance and Defence, the Plaintiff submits that the Defendant’s deliberate and inordinate delay reflects total contempt and contumelious conduct towards court proceedings and process which is a gross abuse of court process warranting the striking out of the Defendant’s 19 Memorandum of Appearance and Defence and Counterclaim. [44] In respect of the striking out application, the Plaintiff submits that inconsistent allegations of the Defendant and contradictory evidence show the appearance and the Defence and Counterclaim of the Defendant in this suit to be an abuse of process of the court which ought to be struck off. In relation to this, the Plaintiff maintains that: a) The Consent Judgment records that Chen Dijie and Xiamen Zhong Xiang Run Shipping Service are the owners of the Vessel but the Statutory Declaration confirmed that the sale transaction of the Vessel was revoked; b) In the Defence, the Defendant now alleges that the Statutory Declaration has been withdrawn without any instrument of the revocation being adduced as evidence to substantiate the revocation; and c) The allegation of the Defendant that the Settlement Agreement was not entered with the consent of the Defendant or was fraudulently entered, and hence, purportedly invalid, null or void is without merit as a letter of authorisation dated 11.1.2017 (“the Letter of Authorisation”) by Merina Liem gave Lin Qi Qiang the authority to act for the Defendant to carry out or discuss for settlement with regards to the Vessel. 20 [45] The Plaintiff submits that the inconsistent statements and documents show clear abuse of court process. The Plaintiff relies on the case of Er Ngee & Ors v. Lim Choon Hiok & Ors [2017] MLRHU 1757 (High Court) for the proposition that a party’s conduct in approbating and reprobating by taking positions which are diametrically opposed and inconsistent on important matters to secure benefits renders the pleaded case obviously unsustainable and also frivolous and vexatious and an abuse of the process of the court. Defendant’s submissions [46] In explaining the reason for the delay in filing the Meroandum of Appearance and the Defence and Counterclaim, the Defendant says that it was not aware of this action for the following reasons: a) No copy of the Writ In Rem and relevant cause papers was served on Messrs Muhammad Zahir although the Plaintiff knew about the existence of Messrs Muhammad Zahir as the legal counsel for the Defendant. However the Plaintiff served a copy of the Writ In Rem and relevant cause papers on 24.6.2020 on Messrs Nadim & Associates, which at the time was representing Chen Dijie and Xiamen Zhong Xiang Rung Shipping. b) The Vessel was at all times within the custody of the Plaintiff with no access by the Defendant and as 21 such any document served on the Vessel was actually served on the Plaintiff themselves. c) Having entered into the Consent Judgement in Suit 06 on 26.2.2020, the Defendant was of the view that it has have nothing to do with the said Vessel anymore from that date forward. d) After the court held on 27.10.2020, in respect of encl. 17, that the Defendant was held to still be the Owner of the Vessel, the Defendant was informed by its Chinese counterpart (which according to counsel for the Defendant was Chen Dijie and Xiamen Zhong Xiang Run Shipping Limited) of the decision and having sought legal advice immediately prepared and file its Memorandum of Appearance as well as the Defence and Counterclaim, on the basis that the relevant defendant is the Defendant. [47] The Defendant thus maintains that there is no inordinate delay as the Defendant herein only found out about this action after 27.10.2020. Further, the Defendant being an overseas party is also accorded by the Rules of Court 2012 a period of 21 days where normally it would be 14 days for local parties, thus the delay is slightly above one month. [48] Relying on the case of Ananda Kumar Ganesan & Ors v. Tokio Marine Life Insurance Bhd & Anor [supra] the Defendant submits that in considering the Defendant’s 22 application for an extension of time, the Court shall also consider delay in making the application, cogent reasons for the delay and prejudice or injustice to the other side. The Defendant invited the court to consider the following: a) The delay in filling this application if any is because the failure to execute proper service on the Defendant as they did with Chen Dijie and Xiamen Zhong Xiang Run Shipping; b) Service on the Vessel is only self-serving on the Plaintiffs behalf as the vessel is within the Plaintiffs custody at the time prior to the filling of this suit, and that the persons on board the Vessel are all employed by the Plaintiff as admitted by their claim for the wages of the Vessel workers as reflected in their Statement of Claim; c) As this suit is still yet to be decided with no trial dates fixed there is no prejudice occasioned to the Plaintiff; d) The Plaintiff also filed an application to amend their Statement of Claim hence this matter is still far from being decided; and e) The Plaintiff still needs to prove their case in order to obtain a judgement in the event the Defence and Counterclaim herein is struck out. 23 [49] The Defendant submits that as there is no prejudice to the Plaintiff and on the balance of convenience, it would be more convenient for the Defendant’s application for extension of time in encl. 69 to be allowed so as to enable this Court to have full appreciation of all facts before ultimately deciding this suit. However should this extension of time be disallowed, the prejudice lies with the Defendant as the loss of the Vessel would be more than the value of the Plaintiff’s claims. [50] The Defendant referred the court to the case of Ali Jeman v. Indranika Jaya Sdn Bhd & Ors [2016] 1 LNS 1795 (High Court) to demonstrate that the court when deciding on whether an extension of time to file an application to set aside a judgment in default, the court to ought to consider when the defendant had knowledge of the action. In this case, an application to set aside a judgement in default was made almost 3 years later but the court allowed an extension of time to file the application and the setting aside as the applicant only knew about the proceedings one month earlier. [51] In regard to the merits of the Defendant’s Defence and Counterclaim, the Defendant’s position is that the Settlement Agreement was not signed by Lin Qi Qiang. However, even if that were so, the Defendant submits that Lin Qi Qiang’s signing of the Settlement Agreement pursuant to the Letter of Authorisation which was actually a power of attorney was not valid, having not been deposited 24 in the High Court as required by s. 4 of the Power of Attorney Act 1949. Thus the Settlement Agreement executed in pursuant to the Letter of Authorisation is null and void. [52] The Defendant maintains that the Letter of Authorisation, although not described as “Surat Kuasa Wakil” as a Power of Attorney is called in Bahasa Malaysia, is worded as an instrument purporting to create a power of attorney as: a) It is a written formal instrument; b) The terms used to defined the parties are “Pemberi Kuasa” (Merina Liem for the Defendant) and “Penerima Kuasa” (Qiqiang Lin /Lin Qi Qiang) in Bahasa Malaysia which are analogous or synonymous to Donor and Donee respectively, in English; c) It provides power to act on behalf of the donor in the performance of a specific act or classes of act or generally to the donee, as would a power of attorney; and d) It was executed before a Notary Public as per the requirement for a valid Power of Attorney. 25 [53] The Defendant also contends that there is a discrepancy between what the Plaintiff refers to as the “Settlement Agreement” dated 13.1.2017 in its pleadings and a Memorandum of Understanding referred to in a letter dated 18.1.2017 filed by the Plaintiff in encl. 96 of Suit 23 on 18.1.2017. the Defendant submits that a memorandum of understanding is not enforceable by law, unlike a settlement agreement, relying on Lim Hong Liang & Anor v. Tan Kim Lan & Anor [1997] 4 CLJ 1752. [54] The Defendant submits that the provisions of the document, i.e. Clause 1, Clause 2 and Clause 6 demonstrate that an agreement has not been reached yet between the parties. Thus the parties intended for the Memorandum of Understanding to be subject to a formal contract to be executed by both parties after the finalisation of the terms and conditions and until such time the Memorandum of Understanding is not intended to be legally binding on the parties, relying on Lim Hong Liang & Anor v. Tan Kim Lan & Anor (supra). Analysis and findings of the court The Defendant’s delay in entering appearance and filing Defence [55] The Defendant’s delay in entering appearance and filing Defence are issues to be considered both in determining 26 encl. 61 (the Plaintiff’s striking out application) and encl. (the Defendant’s extension of time application). [56] I accept that the Defendant only became aware of this suit when they were informed of the decision of encl. 17 on 27.10.2020. Although the Plaintiff complied with the requirements of O.70 r. 7(1) Rules of Court 2012 by serving the Writ on the Vessel in question, I accept that because the Vessel was in the possession of the Plaintiff, the Defendant did not immediately become aware of the service. In normal circumstances, the owner of the Vessel or charterer would be prompted to take action when the Writ is served on the Vessel, particularly when she is arrested, as the Master who serves the owner or charterer would inform the owner of charterer. This is not so in this case. [57] Also, even if the Defendant knew about the service of the Writ on the Vessel on 23.6.2020, as it took the position that it was not the owner of the Vessel, it would go against their position if they entered appearance as the owner. It was only after the decision of encl. 17 on 27.10.2020 where the court found the Defendant is the owner that the Defendant filed the appearance. [58] However, given that the Defendant admitted that they became aware of this suit and the decision of encl. 17 on 27.10.2020, there is no explanation forthcoming from the Defendant as to why it did not enter appearance by 17.11.2020, 3 weeks from 27.10.2020. The Memorandum of 27 Appearance was filed on 28.12.2020, beyond the required date for entering appearance. In fact, according to the Defendant, it appointed its representative Ong Eng Poh to act for the Defendant since 27.10.2020. Why wait until 28.12.2020? Even if the delay was only 42 days (from 17.11.2020 to 28.12.2020), no explanation is given for this and the court regards the delay as wilful and inexcusable. On this ground alone the Memorandum of Appearance and the Defence and Counterclaim should be struck out. However, in the interest of justice I will consider the other grounds for striking out the Memorandum of Appearance and the Defence and Counterclaim to evaluate whether the same should be accepted despite the unexplained delay. Abuse of Process [59] The plaintiffs in Suit 06, Chen Dijie and Oh Eng Poh, in their Statement of Claim of Suit 06 pleaded at para 8 as follows: “8. Pada 11.03.2019 pihak Defendan (PT Jatim Perkasa Lines) telah melalui Pengarahnya Merina Liem (No. Passport Indonesia: A9411366) mengikrarkan satu surat Akuan Bersumpah yang menyatakan antara lainnya bahawa:- a. Transaksi perjanjian dan/atau bill penjualan tersebut dibatalkan tanpa sebarang terma lanjut antara pihak-pihak; b. Defendan tiada membuat apa-apa pembayaran kepada pemilik Vessel tersebut (iaitu Plaintif Pertama dan Xiamen Zhong Xiang Run Shipping Service Co. Ltd.); c. Defendan tiada hak ke atas Vessel tersebut dari permulaan lagi; dan 28 d. Defendan memberi aku janji untuk berkerjasama bagi memulangkan Vessel tersebut kepada pemilik iaitu pihak Plaintif Pertama (Chen Dijie).” [60] Having examined the whole of the Statement of Claim of Suit 06, there is no doubt that the cause of action of the Chen Dijie and Oh Eng Poh’s claim in the action leading to the Consent Judgment was based on Merina Liem’s Statutory Declaration dated 11.3.2019 which was pleaded by the Defendant in the Statement of Claim of Suit 06. In this suit, this was averred by the Plaintiff in para 16(e) of encl. 62 which is the affidavit in support to encl. 61. The Plaintiff’s deponent stated: “(e) Saya selanjutnya menyatakan bahawa:

Dasar kausa tindakan dalam Admiralti In Rem No. WA-27NCC-6- 01/2020 yang membawa kepada Penghakiman Persetujuan tersebut adalah berpandukan surat akuan bertarikh 11.03.2019 yang diikrarkan oleh pengarah PT Jatim, iaitu Merina Liem (“Surat Akuan tersebut”), yang secara khususnya membaca seperti berikut: “8. Pada 11.03.2019, pihak Defendan telah melalui Pengarahnya Merina Liem (No. Passport Indonesia: A9411366) mengikrarkan satu surat Akuan Bersumpah yang menyatakan antara lain bahawa:- a. Transaksi perjanjian dan/atau bill penjualan tersebut dibatalkan tanpa sebarang terma lanjut antara pihak-pihak; b. Defendan tiada membuat apa-apa pembayaran kepada pemilik Vessel tersebut (iaitu Plaintif Pertama dan Xiamen Zhong Xiang Run Shipping Service Co. Ltd.); c. Defendan tiada hak ke atas Vessel tersebut dari permulaan lagi; dan 29 d. Defendan memberi aku janji untuk bekerjasama bagi memulangkan Vessel tersebut kepada pemilik atau pihak Plaintif Pertama.” Sesalinan Pernyataan Tuntutan bertarikh 13.01.2019 dan Penyataan Pembelaan bertarikh 11.02.2020 dalam guaman Admiralti In Rem No. WA-27NCC-6- 01/2020 (sebelum ini Admiralti In Rem No. BA- 27NCC-1-01/2020) adalah dikemukakan kepada saya disini dan dikenali secara kolektif sebagai Ekshibit CTF-2. Sesalinan Surat Akuan bertarikh 11.03.2019 adalah dikemukakan kepada saya disini dan dikenali sebagai Ekshibit CTF-3.

(ii) Namun, PT Jatim pada masa ini pula dalam perenggan 31 Pembelaan tersebut mendakwa bahawa Surat Akuan tersebut kononnya telah ditarik balik.

(iii) Pembelaan utama yang dibangkitkan PT Jatim dalam perenggan-perenggan 9 sehingga 12 Pembelaan tersebut adalah berpandukan dakwaan bahawa suatu Perjanjian Penyelesaian bertarikh 13.01.2017 kononnya telah dipalsukan ataupun dimasukkan oleh Lin Qi Qiang tanpa kuasa yang sewajarnya. Ini jelas merupakan suatu penipuan yang tidak benar sama sekali, di mana Lin Qi Qiang telah diberikan kuasa dan mandat untuk membuat keputusan yang mengikat PT Jatim.” [61] In summary, Chen Dijie and Oh Eng Poh’s narrative in Suit 06 is that around 2013, Chen Dijie sold the Vessel to the Defendant and six years later the Defendant failed to pay the purchase price of the Vessel to Chen Dijie. This led to the Statutory Declaration in English by the director of the Defendant, Merina Liem on 11.3.2019. In full, she stated: “STATUTORY DECLARATION I, MERINA LIEM (Indonesian Passport No. A 911366) of Jl. Darmo Permai III, Ruko Bavarian 30 Village Kav. N. Subaraya Jawa Timur. Indonesia do swear, and affirm as follows: 1) I am a Director of PT Jatim Perkasa Lines (“the Company”) and duly authorized to make this Declaration on behalf of the Company. 2) I aver and confirm that the Company has entered into an agreement / Bill of Sale to purchase the vessel with the name of ZHONG RUN 26 with Certificate of Registration No. 180012000018 (VESSEL NO. CN20116746144) (“the vessel”) from XIAMEN ZHONG XIANG RUN SHIPPING SERVICE CO, LTD, and CHEN DIJIE (“vessel owner) and the Company hereby confirm to revoke cancel terminate the sale and purchase transaction without any further terms. 3) I affirm that the Company has not made any payment to the vessel owner for the purchase of the vessel. 4) I also affirm and confirm that the Company did not make any úbimission to Xiamen Maritime Safety Administration to change ownership of the vessel by deleting the names of the vessel owner. 5) I affirm that the Company has entered appearance in the High Court of Malaya in Kuala Lumpur, Malaysia (Admirati in Rem No. WA-27-NCC- 23-03/2016) on behalf of CHEN DIJIE as the owner of the vessel. At that material time, the vesel was chartered to Heli Ocean Engineering Limited by the vessel owner and obtained Bareboat Charter-In Registrafion Certificate of Registry from Mongolia Maritime Administrellon with IMO No. B862737 and INAIMERAK SUPER as vessel name. 6) I hereby aver that any consent terms / Judgement / Order agreed by the Company with REI Management Sdn Bhd are void as the Company had no rights on the vessel from the very beginning. 7) I aver that from the dale of this declaration, The Company has no legal rights of possession or control over the vessel). 8) I do hereby confirm that 'the Company has no further claims against the vessel owner upon sürrender the right over the vessel, The Company 31 undertakes to fully Cooperate and to provide/execute any documents tor the purpose, of surrendering the vessel to the vessel owner. 9) I hereby confirm that the Company has seek independent legal opinion and fully aware and conscious of the legal Issues contained herein.” [62] In summary, what was averred by Merina Liem was: a) The sale transaction is revoked without any further terms between the parties; b) The Defendant did not make any payment to Chen Dijie and Xiamen Zhong Xiang Run Shipping Service Co., the owners of the Vessel; c) The Defendant has no rights to the Vessel from the outset; and d) The Defendant undertook to cooperate in returning the Vessel to the owner, Chen Dijie. [63] It was on the basis that Chen Dijie still owned the Vessel that Chen Dijie and Oh Eng Poh purportedly took out the action in Suit 06 to seek, inter alia, the following declarations: a) A declaration that the Chen Dijie and Xiamen Zhong Xiang Run Shipping Service is still the original owner of the Vessel and not the Defendant; and 32 b) A declaration that the Defendant never owned the Vessel and any agreement entered into by the Defendant as the owner of the Vessel with any third party as long as the Vessel was in Defendant's custody is null and void. [64] It is very significant to note that the Defendant in its Defence in Suit 06, the Defendant admitted to para 8 of the Statement of Claim to Suit 06, simply stating “Perenggan 8 Penyataan Tuntutan adalah diakui.” In fact, in the Defendant’s Defence in Suit 06, all Chen Dijie and Oh Eng Poh’s pleadings were admitted to and in para 8 of the Defence in Suit 06 the Defendant immediately stated that it wanted to enter into a consent Judgment on all that were prayed for by Chen Dijie and Oh Eng Poh. [65] Now in this suit, the Defendant made an about turn. The Plaintiff pleaded in para 52 of the Statement of Claim that the statements in the Statutory Declaration are suspicious, based on fraud and was a false declaration as these have never been raised before and directly contrary to what was said in an affidavit affirmed on 2.6.2016 by the said Merina Liem in Suit 03. In the Defendant’s Defence the Defendant stated in reply at para 31 that the Statutory Declaration has been revoked by its maker and admitted that the Statutory Declaration is invalid under the laws of Malaysia and therefore does not apply under any proceedings in Malaysia. 33 [66] Para 52 of the Statement of Claim is as follows: “52. Pernyataan-pernyataan dalam Surat Akuan tersebut adalah mencurigakan, disediakan dibawah dasar frod dan/atau merupakan pengikraran palsu, di mana: Pernyataan-pernyataan dalam Surat Akuan tersebut langsung tidak pernah dibangkitkan pada mana-mana masa sebelum itu, malah adalah bertentangan langsung dengan pengikraran yang terkandung dalam suatu afidavit yang diikrarkan pada 02.06.2016 oleh Merina Liem tersebut dalam Tindakan Pertama; dan b) Surat Akuan tersebut adalah tidak sah berdasarkan undang-undang Malaysia.” [67] Para 31 of the Defendant’s Defence is as follows: “31. Berkenaan Perenggan 52 Penyataan Tuntutan Defendan menyatakan bahawa:- a. Surat Akuan tersebut dibuat sebagai sebahagian dari perbincangan telah disediakan atas dasar perbincangan diantara Defendan, Chen Dijie dan Zong Xiang Run Shipping (Xiamen) Co. Ltd.; b. Surat Akuan tersebut telah ditarik balik oleh pembuatnya; dan c. Defendan mengakui pliding Plaintif bahawa Surat Akuan tersebut adalah tidaksah dibawah undang-undang Malaysia dan oleh yang demikian tidak terpakai dibawah mana-mana prosiding di Malaysia, termasuk prosiding ini. d. Plaintif adalah melalui penyataannya di dalam Penyataan Tuntutan adalah diestopped dari merujuk lanjut kepada Surat Akuan ini.” [68] If the Defendant now says that Merina Liem’s Statutory Declaration is revoked and invalid, what was the basis of the Chen Dijie and Oh Eng Poh’s action in Suit 06 which 34 was readily acceded to by the Defendant? The Plaintiff’s case here is that the Defendant, Chen Dijie, Ong Eng Poh and/or Zhong Xiang Run Shipping have conspired or acted fraudulently in denying the rights and interest in the Vessel in seeking the Consent Judgment in Suit 06. Without the Statutory Declaration, there is no basis to enter into the Consent Judgment in Suit 06 and the Defendant’s Defence will fall. So will the Defendant’s Counterclaim. [69] The Defendant did not address the issue of the revoked Statutory Declaration satisfactorily in the Defendant’s affidavit in reply. At para 15 of the Defendant’s affidavit in reply the Defendant merely averred “Sebagai jawapan kepada perenggan 16(e) Afidavit Sokongan Plaintif tersebut, saya telah dinasihati oleh peguamcara Defendan dan sesungguhnya percaya bahawa kenyataan Plaintif tidak berasas.” There is no explanation as to how the Defendant intends to establish the basis of the Consent Judgment now that the Statutory Declaration in no longer in play. Also, the Defendant did not put forward any submissions on this issue. It is thus clear to this court that the Defendant has thus approbated and reprobated and additionally, has effectively removed its justification for entering into the Consent Judgment. [70] I agree with the Plaintiff’ submissions that approbating and reprobating in this manner is a ground for striking out the Defendant’s pleadings, particularly when the Defendant has taken diametrically opposed and inconsistent positions on 35 two important matters in regard to this suit and other related suits in order to secure benefits to itself on both occasions. The Defendant has abandoned its prior position and picked a position that is most advantageous when faced with the difficulty of dealing with Merina Liem’s averments in the Statutory Decalaration. In offending the principle of law against approbating and reprobating, the Defendant’s pleaded case is rendered obviously unsustainable. Not only does it demonstrate an abuse of the process of the court, the Defendant’s Defence and Counterclaim is frivolous and vexatious when there is no more justification for entering into the Consent Judgment. This was the reason for the plaintiff’s action in the case of Er Ngee & Ors v. Lim Choon Hiok & Ors [supra] to be struck out by the High Court. In my view the same principle is to be applied equally to the Defendant’s Defence, and also the Defendant’s Counterclaim which is premised on what is pleaded in the Defence, which clearly demonstrates approbating and reprobating by the defendant. Su Geok Yiam J stated: “On this issue, I also noted that Mr Amrit Pal Singh conceded that the plaintiffs have taken inconsistent positions in regard to this suit and other related suits. However, he contended that the plaintiffs are not bound by the previous positions taken by them in the other related suits, which are inconsistent in regard to this suit as the plaintiffs' cause of action only arose after the demise of LTH, and hence, the doctrines of estoppel, laches and acquiescence are inapplicable to the plaintiffs' suit. It is a well-accepted principle of law that a party cannot both approbate and reprobate. What this principle means is that a party cannot at the same 36 time blow hot and cold. He cannot at one time say that a transaction is valid thereby obtaining some benefit to which he could only be entitled on the basis that it is valid and at another time say it is void in order to obtain some other benefit. The decision of the Judicial Committee of the Privy Council in Kodoth Ambu Nair's case, succinctly explains the applicability of this principle of law as follows: “It is a well-accepted principle that a party cannot both approbate and reprobate. He cannot, to use the words of Honeyman, J., in Smith v. Baker, “at the same time blow hot and cold. He cannot say at one time that the transaction is valid and thereby obtain some advantage to which he could only be entitled on the footing that it is valid, and at another say it is void for the purpose of securing some other further advantage.” Reverting back to the instant case, I found that based on the affidavit evidence before this Court, the plaintiffs have taken diametrically opposed and inconsistent positions on two important matters in regard to this suit and other related suits in order to secure benefits to them on both occasions. Hence, the plaintiffs have offended the principle of law against approbating and reprobating, which renders the plaintiffs’ pleaded case “obviously unsustainable”. The plaintiffs’ breach of this principle also renders their claim to be frivolous and vexatious and an abuse of the process of the court.” (Emphasis added) [71] Coming back to the unexplained delay in filing the Memorandum of Appearance, this combined with the abuse of the process of the court and the Defence and Counterclaim being frivolous and vexatious, moves the court to strike out both the Memorandum of Appearance and Defence and Counterclaim as prayed for in encl. 51. 37 The Defendant’s application to extend time for filing the Defence and Counterclaim in encl. 69 is also dismissed. [72] While I recognise that O. 18 r. 19 of the ROC 2012 only empowers the court to strike out pleadings and endorsements to a writ, I am of the view that the Defendant’s Memorandum of Appearance can be struck out by the court pursuant to the court’s inherent powers to make an order as may be necessary to prevent an abuse of the process of the court. In the instant case, there is a serious abuse of the process of court leading the court to strike out the Defendant’s Defence and Counterclaim. By the same token, and to be consistent with the position that the Defendant cannot now defend the action, the Memorandum of Appearance is similarly struck out. 27 September 2021 ATAN MUSTAFFA YUSSOF AHMAD Judicial Commissioner Kuala Lumpur High Court (Commercial Division) 38 Counsel: For the Plaintiff: Khong Zhi Jian & Yow Chor Huey (Messrs. Tan & Khong Chambers) For the Defendant: Nadim Gulam Rasul (Messrs Nadim & Associates)