Perbadanan Pengurusan PD2 v SCP Assets (BA-22NCVC-617-10/2017)

SCP ASSETS SDN. BHD. (No. Syarikat : 1058403-K)

PDII CORPORATE PARKING SDN BHD (No. Syarikat : 523677-P)

AFFINITY LAND SDN BHD (No. Syarikat : 315864-P) … DEFENDAN-DEFENDAN (TUNTUTAN BALAS) GROUNDS OF JUDGMENT (Decision dated 27 May 2021 on Enclosure 1) 2

This final decision is a sequel to this Court’s decision dated 19 February February 2021 can be found in [2021] MLJU 623.

The disputes in our present case, though being litigated between the Plaintiff-purchaser and the Defendant-management corporation, are inherited from the developer who sold the majority of the carparking bays in a high-rise strata commercial development separately to another legal entity who in turn sold the carparking bays to the Plaintiff-purchaser.

In our present case, the developer sold all except one of the strata parcels in the high-rise commercial development without any car parking bay accessorised to the strata parcels and sold the great majority of the carparking bays separately as different parcels. The Plaintiff, who eventually bought the car parking bays from the developer’s associate or affiliate company, is now embroiled in several litigations, including the present case, with the management corporation who took over the management and maintenance of common properties and the stratified development from the developer.

The Defendant is the Management Corporation of Phileo Damansara 2 Commercial Development (“PD2 Commercial Development”) and 3 was incorporated pursuant to the Strata Management Act 2013 (“SMA 2013”).

PD2 Commercial Development is a mixed commercial development consisting of ground floor shop units, office units, Menara Star and carparks.

A car park space consisting of, (a) three (3) levels of basement car park space at Levels B1, B2 and B3; (b) part of the car park space at Level B4; and (c) part of the surface car park space (“Car Park Parcels”) was acquired by PD II Corporate Parking Sdn Bhd from the developer of PD2 Commercial Development, Affinity Land Sdn Bhd (“Developer”)

On or about sometime in December 2013, the Plaintiff (pursuant to an internal restructuring exercise) acquired the Car Park Parcels from PDII Corporate Parking Sdn Bhd.

The Joint Management Body of the PD2 Commercial Development was established on or about 17.12.2012 and following the issuance of the strata titles, the Management Corporation (“the Defendant”) was established on or about 21.1.2014.

The Defendant, on 12.10.2017 issued a Notice of the 1st Annual General Meeting of the said Defendant (scheduled for 27.10.2017) with a view to inviting the proprietors of the various parcels in the said PD2 Commercial Development to resolve on, among others, the Proposed Ordinary Resolution No. 4 (“Resolution No. 4”). 4 for intended implementation by the Defendant is, according to the Plaintiff’s argument, ultra vires the SMA 2013 and/or the Strata Titles Act 1985 (“STA 1985”) since Resolution No. 4 runs foul of the concept of share units as envisaged by SMA 2013 and/or STA 1985. Park Parcels) has never changed from the original purpose and remain the same at present. Defendant was also aware of the following: - Court Originating Summons No. 24–1173–09/2015 commenced by the Plaintiff) (“Summons No. 1173”), service charges on the Car Park Parcels must be calculated based on the allocated share units thereof and cannot be imposed on the basis of floor area or on any other discriminatory basis; and 5 Summons No. 1173, unlawful and/or discriminatory charges on the Car Park Parcels could not be used as the basis to exclude the Plaintiff from participating and voting at statutory meetings (as had happened at the 3rd Annual General Meeting of the Joint Management Body held previously on 18.6.2015); No. 1173, the Joint Management Body then purported to levy fire insurance premiums and quit rent charges on the Plaintiff based on the floor area which levy is argued by the Plaintiff to be in breach of, among others, the said Order of Court dated 20.4.2016 in Summons No. 1173 culminating in a subsequent action (Shah Alam High Court Civil Suit No. BA-22NCVC-427-07/2016 commenced by the Plaintiff) (“Suit No. 427”). Management Body would cease its levy of fire insurance premium and quit rent charges based on the floor area and cease further discriminatory acts when levying charges on the Car Park Parcels. No. 1173, according to the Plaintiff, the Joint Management Body was then thereby obliged to recognise, among others, that service charges on the Car Park Parcels were not to be discriminatory in nature but instead imposed on the basis of single rate of charges being levied in 6 proportion to the allocated share units reflected in the strata titles (including that in the Car Park Strata Titles). Management Body thereafter continued to to impose service charges by charging only the Plaintiff on the allocated share unit basis (without charging such basis for the owners for the other parcels comprised in the PD2 Commercial Development). This resulted in the Plaintiff having to pay to the Defendant a sum of RM113,049.43 (which included the late payment interest charged by the Defendant) under protest in order for the Plaintiff to be allowed to exercise its right to vote at the 3rd AGM of the Defendant. Park Parcels a significant increase of charges, that is to say, that the Plaintiff was being made to bear charges disproportionate to its voting rights or for that matter the separate charges otherwise intended to be imposed on the other proprietors of the other parcels within the PD2 Commercial Development. Writ and Statement of Claim to among others challenge the legality of Resolution No. 4. Simultaneously, the Plaintiff filed an application for an injunction seeking among others, an order to restrain the then Joint Management Body and the Defendant from tabling Resolution No. 4 at the 1st AGM as well as an order to restrain the then Joint Management Body and the Defendant from giving effect to Resolution No. 4 (“Enclosure 3”). 7 Resolution No. 4 is subject to the outcome of the Injunction Application. & Co (“BH Lawrence”) wrote to inform this Honourable Court of a mutual agreement achieved by the Plaintiff and Defendant to preserve the status quo in respect of Resolution No. 4 until the conclusion and/or disposal of full trial (“Undertaking vis-à-vis the Status Quo Agreement”). In the light of the Undertaking vis-à-vis the Status Quo Agreement, the Plaintiff did not proceed with the Injunction Application and/or had abandoned the same. Proprietors of PD2 Commercial Development to inform them of the 2nd Annual General Meeting of the Defendant to be held on 13.12.2018 (“2nd AGM”). The letter enclosed among others, the Notice and Agenda of the 2nd Annual General Meeting (“2nd AGM Notice”) which contains all the resolutions to be discussed and voted on at the 2nd AGM. Despite the Undertaking vis-à-vis the Status Quo Agreement, the Defendant nevertheless allowed a resolution similar in effect to Resolution No. 4 to be tabled under the heading of ‘Private Motion No. 2’ of the Agenda. contains different rates of service charges from those set out in Resolution No. 4, it has the same effect and purpose as Resolution No. 8

The 2nd AGM proceeded as scheduled on 13.12.2018. Notwithstanding the Undertaking vis-à-vis the Status Quo Agreement, Private Motion No. 2 was tabled at the 2nd AGM for discussion and carried after the same was put to a vote. vis the Status Quo Agreement. Defendant’s undertaking and undertook to maintain the status quo and not implement any new or multiple rates in respect of service charges and sinking fund contribution for the PD 2 Development Complex pending the disposal of the trial of the main proceedings by this Honourable Court. Defendants without order as to cost and without liberty to file afresh and the Plaintiff’s counsel informed this Honourable Court that it would seek leave to amend its Writ and Amended Statement of Claim. Claim on 17.07.2010. The Defendant proceeded with filing its Re-Re-Amended Defence and Re-Re-Amended Counterclaim on 21.07.2020 and Re-Amended Reply and Re-Amended Defence to Re-Re-Amended Counterclaim was filed on 25.08.2020. 9 Jew is in the midst of being cross-examined. Rules of Court 2012 directing parties to submit on the following questions of law:- 1) Whether the developer Affinity Land Sdn Bhd (the Developer) had, as at or about 1 August 2006, any power or capacity under the laws to grant a lease of part of the common property in the strata development project in favour of PDII Corporate Parking Sdn Bhd (the predecessor-in-title of the Plaintiff)? 2) If the answer to question (1) is in the affirmative, whether a lease on part of the common property which was granted on or about 1 August 2006 by the Developer in favour the Plaintiff’s predecessor-in-title is invalidated by any subsequent amendment or change to the laws? 3) Whether under the laws the management corporation of a strata development is allowed to impose or levy service charges or sinking fund contributions in a manner or formula which is not proportionate to the shares units of the parcels in the strata development? 4) If the answer to question (2) [should be question (3)] is in the affirmative, (i) whether the management corporation is allowed to impose or levy different rates of service charges or sinking fund contributions in respect of different parcel owners for the same type 10 of use of the parcels? (ii) what are the criteria and factors to be used for computing rates for imposing or levying service charges or sinking fund contributions for different types of use of parcels and/or for different parcel owners for the same type of use of the parcels? Question 1 Whether the developer Affinity Land Sdn Bhd (the Developer) had, as at or about 1 August 2006, any power or capacity under the laws to grant a lease of part of the common property in the strata development project in favour of PDII Corporate Parking Sdn Bhd (the predecessor-in-title of the Plaintiff)? Answer : Yes, in the affirmative. It is to be noted that in answering this Question 1, this Court accepted the common position of both parties on Question 1. Question 2 If the answer to question (1) is in the affirmative, whether a lease on part of the common property which was granted on or about 1 August 2006 by the Developer in favour the Plaintiff’s predecessor-in-title is invalidated by any subsequent amendment or change to the laws? Answer : In the negative. The lease is not invalidated by subsequent amendment or change to the law, and therefore the lease remains valid 11 as at to-date. It is to be noted that in answering this Question 2, this Court accepted the common position of both parties on Question

Question 3 Whether under the laws the management corporation of a strata development is allowed to impose or levy service charges or sinking fund contribution in a manner or formula which is not proportionate to the shares units of the parcels in the strata development? Answer : In the negative. Imposition and levy of service charges and sinking fund contribution must be in proportion to the shares units of the parcels. It is to be noted that in answering this Question 3, this Court accepted the common position of both parties on Question 3. Question 4 Arising from the answer to question (3): 4(i) whether the management corporation is allowed to impose or levy different rates of service charges or sinking fund contributions in respect of different parcel owners for the same type of use of the parcels? Answer : In the negative. The management corporation is not allowed to impose or levy different rates of service charges or sinking fund contributions in respect of different parcel owners for the same type of use of the parcels. It is to be noted that in answering this Question 4(i), this Court accepted the common position of both parties on Question 4(i). 12 4(ii) what are the criteria and factors to be used for computing rates for imposing or levying services charges or sinking fund contributions for different types of use of parcels? Answer : This is a question of mixed law and fact. However, this question 4(ii) is academic and irrelevant to PDII Project as this Court rejects the Defendant’s wide interpretation of section 60(3) of the Strata Management Act 2013. Adopting the Defendant’s interpretation of section 60 (3) would be contrary to principles of statutory interpretation, inconsistent with the core concept of share units and social policy of the relevant statutes. Further or alternatively, this question 4(ii) would be academic and irrelevant for this PDII Project between the parties herein asf it is impossible to split Star’s share units into apportionment between Star’s carparking bays and Star’s Office areas so that the quantity of share units for the Star’s carpark bays can be clearly ascertained and identified so as to enable the PDII management corporation to comply with statutory requirement of levying service charges in proportion to share units for the Plaintiff and the Star who are owners for the same type of use of properties, i.e. carparking bays. In any event, the Plaintiff has not used the car parking bays for a different purpose from what was originally intended in the design. The Plaintiff’s use of the car parking bays has always been for the same purpose, namely, for the purpose of parking cars. It is to be noted the parties took different positions regarding this Question 4(ii). The Grounds of Judgment for this Court’s decision dated 19 February 2021 can be found in [2021] MLJU 623. 13 PROCEEDINGS SUBSEQUENT TO 19 FEBRUARY 2021 Court’s answers to the questions of law on 19 February 2021 – 14 counsel in the items of the Witness Statements which they considered as still necessary or relevant to be heard viva voce by this Court. After hearing both sides, this Court accepted the overwhelming majority of the points submitted by the Defendant’s counsel regarding the ambit of the balance oral evidence. Accordingly, this Court ordered that the following items of the Witnesss Statements fixed by the Defendant should be heard viva voce by the Court :

Q&A 10 of the Witness Statement of Ang Kim Jhew;

Q&A 8 of the Witness Statement of Koh Ching Nee; and

Q&A 3 to Q&A 5 of Ahmad Naufal bin Sohaimi By mutual consent of the parties, the continued trial for the balance oral evidence was fixed for 26 March 2021. At this juncture, the parties’ respective counsel have come to the same understanding that only the Plaintiff’s claims for refund of service charges and for monetary damages needed to be dealt with in the balance oral evidence as all the other prayers in the Plaintiff’s claims and the Defendant’s Counterclaims would follow the consequences of the answers to Questions 1 to 4(ii).

DW1 Ang Kim Jhew;

DW2 Koh Ching Nee; and

DW3 Ahmad Naufal bin Sohaimi. 15 The parties’ respective counsel were allowed to, and did in fact, carry out examination-in-chief, cross-examination and re-examination in the usual way in connection with the aforesaid necessary or relevant items of evidence. The viva voce trial of those three witnesses’ oral evidence took 2 hours. By mutual consent of the parties, the dates were fixed for closing submissions and closing replies and the decision was fixed for 27 May 2021. Plaintiff: 16 High Court Originating Summons No. 24-1173-09/2015; Plaintiff and also pay the Plaintiff interest thereon at the rate of 5% per annum from 27.9.2019 until the date of full repayment. This is no an appropriate case for awarding any exemplary damages or other general damages to the Plaintiff. DEFENDANT’S COUNTER CLAIMS Developer and PDII Corporate Parking Sdn. Bhd. and/or the Plaintiff is attached as an Attachment in Form 15A with the presentation number 1863/2008 dated 21.6.2007 is invalid and/or void; 17 Land Code 1965 dated 21.6.2007 is cancelled in accordance with Section 313 of the National Land Code 1965 and such cancellation is registered on the issue document of title; Property in trust of the Defendant; Property to the Defendant;

An order that the account in prayer (e) above be provided by the Plaintiff by way of affidavit sworn within 7 days from the date of the Order herein; 18 Management Body) is entitled to charge and collect from the Plaintiff the outstanding service charges and sinking fund together with the late payment interest in the sum of RM113,049.43 (which the Plaintiff had paid on 30.9.2019);

(ii) Maintenance charges be reviewed for the car park parcels owned by the Plaintiff held under the master title Geran Mukim 592, Lot 79, Seksyen 39, Bandar Petaling Jaya, Daerah Petaling, Negeri Selangor.

General damages to be assessed agains the Plaintiff and / or PDII Corporate Parking Sdn. Bhd. dan / atau Affinity Land Sdn. Bhd.;

(i)(i), (i)(ii) and (i) above from the date of payment until full settlement; 19 the registered Lease of the Plaintiff are valid, prayers (a), (b), (c), (d),

(e), (f), (g) and (h) of the Defendant’s Re-Amended Counterclaim are unsustainable and therefore are dismissed by this Court. Defendant’s Re-Amended Counterclaim are unsustainable and therefore are dismissed. PLAINTIFF’S CLAIMS Court dated 20 April 2016 (Shah Alam High Court Originating Summons No. 24-1173-09/2015) (“Summons No. 1173”); Plaintiff’s proxies at the Annual General Meeting of the Defendant held on 27 October 2017 was unjustified, discriminatory and / or unlawful; 20 Annual General Meeting of the Defendant held on 27 October 2017;

Injunction restraining the Defendant upon terms determined by Court on the continued discrimination of the Plaintiff including and not limited to the Plaintiff’s ownership, rights and enjoyment had by the Plaintiff over the Car Park Parcels;

Specific Order for the cancellation of all invoices issued by the Joint Management Body to the Plaintiff for the period from June 2014 to September 2016 which does not accord with equality of treatment as envisaged by the said Oreder of Court dated 20 April 2016 in Summons No. 1173; Alam High Court Originating Summons No. 24-1173-09/2015 which contains inter alia the following items: 21 “UPON THE COURT NOTING the following undisputed facts :- referred to and described in Borang 15A dated 20.6.2007 registered through Presentation No. 1863/2008 (“Subject Lease”); Strata Titles GM 592/M1/B3/2, GM 592/M1/B2/3, GM 592/M1/B1/5 and GM 592/M1-D/1/237, all under Master Title GM 592, Lot 79, Seksyen 39, Bandar Petaling Jaya, Daerah Petaling, Negeri Selangor (“Subject Partcels”). IT IS HEREBY DECLARED that the increase in service charges and sinking fund as imposed by the Defendant for the Subject Parcels with effect from 1.6.2014 is contrary to the then Building And Common Property (Maintenance And Management) Act, 2007, and the present Strata Management Act, 2013. IT IS HEREBY DIRECTED that the Defendant cancel all previous invoices issued on such increase and to immediately re-issue fresh invoices for service charges and sinking fund for the Subject Parcels on the basis of the previous rates with such reasonable adjustments as possible but without exceeding the shared units formula prescribed by the then Building And Common Property (Maintenance And Management) Act, 2007 and the present Strata Management Act, 2013. IT IS HEREBY ORDERED that the Defendant shall on or before 1.8.2016 bill and collect service charges and sinking fund for all the 22 other parcels in Pusat Dagangan Phileo Damansara II on the basis of the shared units formula prescribed by the then Building And Common Property (Maintenance And Management) Act, 2007 and the present Strata Management Act, 2013. IT IS HEREBY FURTHER DECLARED that the Defendant was consequently unjustified in preventing the 1st Plaintiff’s representative from voting at the 3rd Annual General Meeting of the Defendant held on 18.6.2015. IT IS HEREBY ALSO DECLARED that the Subject Lease, unless invalidated and/or cancelled by a court of competent jurisdiction, is presently binding on and enforceable against the Defendant. IT IS HEREBY CONSEQUENTLY ORDERED that the Defendant, whether by itself, its agents or servants or otherwise, be restrained and an injunction is hereby granted restraining the Defendant from interfering with the rights had by the 1st Plaintiff under the Subject Lease including and not limited to dismantling, relocating and/or removing any boom-gates, concrete pavements, security cameras, overhead canopies and/or any other parking equipments erected and/or installed by the 1st Plaintiff and/or 2nd Plaintiff on or over the Leased Area.”

It was also an undisputed fact the Defendant’s representative denied the participation and / or voting by the Plaintiff’s proxies at the Annual General Meeting of the Defendant held on 27 October 2017.

The Defendant in our present case did not deny that there is a Proposed Ordinary Resolution No. 4 passed at the Annual General Meeting of the 23 Defendant held on 27 October 2017 [B5/63 – 68] which contains inter alia the following resolution items : “3. Ordinary Resolution 2 : To determine the number of members of the Management Committee which shall consist of not less than three (3) and not more than fourteen (14) proprietors entitled to vote and to elect the Management Committee pursuant to Section 58 and the 2nd Schedule of the Act 757.

Ordinary Resolution 4 : To consider and approve the following proposed Charges to the Maintenance Account and the sinking fund contributions to the Sinking Fund Account effective 1 November 2017 pursuant to Sections 58, 59, 60 and 61 of Act 757:- Parcel Type Charges Ground Floor RM0.29 per share unit Office Unit RM0.56 per share unit Menara Star RM0.44 per share unit Carpark RM4.38 per share unit The sinking fund contributions to the Sinking Fund Account of the Management Corporation will be at a sum equivalent to ten percent (10%) of the Charges with effect from 1 Novemver 2017 pursuant to section 61(3) of the Act 757. The Charges and sinking fund contributions will be paid in full by every parcel proprietor without any deduction unless approved in writing by the Management Committee.” 24

It was also undisputed that the Defendant has issued invoices against the Plaintiff for service charges and sinking fund contributions at revised and higher rates per share unit as compared with the rate per share unit of other parcel owners in the same PD2 Commercial Development Project. The Defendant paid under protest the amount of RM113,049 as the diffrential increase in the service charges and sinking fund in order to be allowed to participate and vote in Annual General Meetings in subsequent years.

It is undisputed that prior to the issuance of the strata titles for the parcels, the allocated share units as determined by the licensed surveyor of the Developer of the PD2 Commercial Development had been approved by the relevant authorities. The usage of all parcels comprised in the PD2 Commercial Development (inclusive of the Car Park Parcels) has never changed from the original purpose and remain the same at present.

Comparing the terms of the Court Order dated 20 April 2016 and the terms of the Proposed Resolution No. 4, this Court finds that the terms of the Proposed Resolution No. 4 are inconsistent with the provisions of the Strata Management Act (Act 757) and the Strata Titles Act (Act 318) and contrary to the terms of the Court Order dated 20 April 2016 in Shah Alam High Court Originating Summons No. 24-1173-09/2015.

This Court also finds that the invoices issued by the Defendant-management corporation against the Plaintiff in respect of the service charges and sinking fund contributions for the period between June 25 2014 and September 2016 (‘”the Impugned Invoices”) purported to impose a new and different rate of service charges and sinking fund contribution which the Defendant did not impose upon Star Media (who also owns carparking bays similarly to the Plaintiff) nor upon the other parcel owners on the same basis and at the same rate per share unit. In light of the answers to Questions 3 and 4(ii), this Court holds that the Impugned Invoices were contrary to the provisions of law and/or the terms of the Court Order dated 20 April 2016 in Shah Alam High Court Originating Summons No. 24-1173-09/2015.

In our present case, the Defendant paid the service charges and sinking fund contributions based on the pre-exising rates per share unit which was imposed of all parcel owners prior to the Defendant’s revised higher rates in the Impugned Invoices. The differential increase of RM113,049.43 was not paid by the Defendant at that time and on such ground the Defendant denied the Plaintiff’s the right to participate and vote at the Annual General Meeting held on 27 October 2017. Flowing from the answers to Questions 3 and 4(i), the Defendant’s denial of the Plaintiff’s right to attend and vote at the 12th Annual General Meeting of the Defendant-management corporation held on 27th October 2017 was wrong and/or in contravention of the law.

Nevertheless, in issuing the Impugned Invoices and in acting upon the Impugned Invoices to deny the Plaintiff right to attend and vote at the 12th Annual General Meeting of the Defendant-management corporation held on 27th October 2017, the Defendant-management corporation did not act maliciously or mala fide but acted on a wrong or erroneous interpretation of the terms of the Court Order dated 20 April 26 2016 in Shah Alam High Court Originating Summons No. 24- 1173- 09/2015.

There is an amount of RM113,049.43 which has been improperly or wrongly collected by the Defendant-management corporation from the Plaintiff in connection with the Impugned Invoices. This amount of RM113,049.43 should be refunded to the Plaintiff with interest thereon.

The lease vide presentation number 1863/2008 was made on 1 August 2006 and presented on 21 June 2007 was created and registered at a time when there was no law to prohibit a developer of strata development from creating or granting lease or rights over common property to a purchaser in the development or to another person. Hence, flowing from the answers to Questions 1 and 2, the Lease Agreement and the registered lease of the Plaintiff over the relevant parts of the common property is valid and binding upon the parties herein.

Under the laws, it is impossible to split Star Media’s share units into apportionment between Star Media’s carparking bays and Star’s Office areas so that the quantity of share units for the Star Media’s carpark bays can be clearly ascertained and identified so as to enable the PDII management corporation to comply with statutory requirement of levying service charges in proportion to share units for the Plaintiff and Star Media who are owners for the same type of use of properties, i.e. carparking bays. As such, the Defendant’s arguments regarding its attempt to justify its purported rationale for revising higher the rates of service charges and sinking fund contribution against the Defendant only without making the same higher revised rate via-a-vis the other 27 parcel owners and also in a manner which is not proportional to the share units are irrelevant and of no assistance to the Defendant’s case here.

Accordingly, this Court on 27 May 2021 made the orders as summarised in paragraph 36 above to dismiss the Defendant’s counterclaims with costs and to allow with costs the Plaintiff’s claims with amendment.

After having heard both parties’ counsel on the quantum of costs, this Court assessed the costs of this action at RM40,000/= subject to allocator.

From the outcome of this action, it can be seen that all the four (4) questions of law were answered without any need to try any factual dispute relevant to the said four (4) questions of law. After the said four

questions of law were answered, the trial of balance claim or issue took only 2 hours. If not for the procedure by disposal of the questions of law under O.14A, the full trial of this action in response to all the other irrelevant or unnecessary issues raised in the Defendant’s Witness Statements would probably take ten (10) days or even longer.

In the circumstances, the procedure by disposal of the said four questions of law as adopted in this action has in fact served the purpose or objective of saving substantial time and costs of trial of this action as intended by O. 14A of the ROC 2012. 28

O. 14A of ROC 2012 does not require that the determination of the suitable questions of law must finally determine the entire cause or matter. This is explicit in the wording of O. 14A r. 1(1) which provides as follows: “O.14A DISPOSAL OF CASE ON POINT OF LAW Determination of questions of law or construction (O.14A r.1) 1(1) The Court may, upon the application of a party or of its own motion, determine any question of law or construction of any document arising in any cause or matter at any stage of the proceedings where it appears to the Court that –

such question is suitable for determination without the full trial of the action; and

such determination will finally determine the entire cause or matter or any claim or issue therein.

As the wording in O.14A. r.1 (a) and r.1(b) suggests, the primary objective of O.14A is to confer upon the Court a discretionary power to finally dispose of the action by way of determination on the suitable question(s) of law without a full trial. Read with O.34 r. 1(1) of Rules of Court 2012, which also lays down the policy and/or fundamental feature of managing civil cases towards just, expeditious and economical disposal, the Court in the first stage of an O.14A application which has fulfilled the three prerequisites will also have to consider the degree of likelihood that the determination of the question(s) of law would avoid the necessity of a lengthy and protracted full trial. The phrase “or any 29 claim or issue” in subrule 1(b) of O.14A cannot be interpreted in isolation and out of context. In other words, the determination of a question of law is to be resorted only where it would or is likely to result in substantial saving in time and costs of full trial.

If the determination of a question of law will finally determine a selected ”claim or issue” in the action, the Court still has to consider the effect of the final determination on the selected claim or issue on the remaining claims and issues pleaded in the same action. Where the final determination of the selected claim or issued would render unnecessary the full voce viva trial of all or a subtantial majority of the other pleaded claims and issues, the Court should order an O.14A disposal of the action in line with the primary objective of their expeditious and economical disposal of civil proceedings.

At the time of making the order to adopt the procedure of disposal by determination of questions of law, the Court was considering the likelihood of such expeditious and economical disposal of the action. It is comforting to note that at the end of this action culminating in the final decision dated 27 May 2021, this objective of substantial saving in costs and time through such O. 14A procedure of expeditious and economical disposal of this action has indeed been achieved in fact.

The expediency of resorting to O. 14A procedure in such a scenario is also recognised by our appellate courts in various decided cases including:

Court of Appeal In Petroleum Nasional Bhd v. Kerajaan Negeri Terengganu [2003] 4 CLJ 337 at p. 352 which held inter alia as follows: “In a nutshell, the Order enables the court to determine any question of law or construction of document where it appears to the court that such question is suitable for determination without the full trial of the action and such determination will finally determine the entire cause or matter or any claim or issue therein. The Order is new to our civil procedure and hence, the few local decisions of the High Court on the ambit of O. 14A are not instructive. For that reason, we are inclined to refer to foreign cases decided on the equivalent of our O.14A. In Korso Finance Establishment Anstalt v. John Wedge (unreported, 15 Feb 1994, CA Transcript No. 14/387), the English Court of Appeal laid down the following principles on the ambit of O. 14A:

An issue is "a disputed point of fact or law relied on by way of claim or defence".

A question of construction is well capable of constituting an issue.

If a question of construction will finally determine whether an important issue is suitable for determination under O. 14A and where it is a dominant feature of the case a court ought to proceed to so determine such issue.

Respondents to an application under O. 14A are not entitled to contend they should be allowed to hunt around for evidence or 31 something that might turn up on discovery which could be relied upon to explain or modify the meaning of the relevant document. If these were material circumstances of which the court should take account in construing the document, they must be taken to have been known, and could only be such as were known, to the parties when the agreement was made. In the absence of such evidence the court should not refrain from dealing with the application. (see The Supreme Court Practice 1999 Vol 1 para. 14A/2/5). In the same case it was held: In my judgment the question of construction is well capable of constituting an issue in the cause or matter. An issue may be said to be a disputed point of fact or law relied on by way of claim or defence. In the present case the determination of the question of construction one way or the other will finally determine an important issue, namely whether the respondents are primarily liable under the agreement. If the determination is in favour of the appellant it will finally determine the entire matter... The whole case does not have to be disposed of. It is sufficient if substantial matters can be disposed of. The real question in this case at the end and really crucial one it seems to me is: will the court be able to dispose of the case or the major part of the case or the most significant issue in the case under O. 14A dealing with the matter today. (@ 17C of the Transcript). 32 Clearly one would prefer the facts to have been simpler, but the fact that they are complicated does not rule out the use of the Order. (@ 7 of the Transcript). In my judgment, having rightly decided that the issue could properly be disposed of without evidence and discovery, if he decided on the side of the plaintiffs, it would determine the action. In any event the question of construction was a dominant feature of the case, and the Judge ought to have proceeded to determine that issue. The postscript to his judgment, which refers to the desirability of the parties, as the Judge put it, 'having their day in Court,' should have been tempered by the reflection that Order 14 A has lately been provided to avoid that expense and to assist parties in the efficient disposal of their actions. (@ 8 of the Transcript).(Emphasis added). This position was followed by the Singapore Court of Appeal and the High Court when dealing with O. 14 r. 12 of the Rules of Court, our equivalent of O. 14A, which recognized that resort to the procedure can be made to even where it does not dispose of the entire cause or matter (re Payna Chettiar v. Maimoon Ismail & Ors [1997] 3 SLR 387; Microsoft Corporation & Ors Summit Holdings Ltd & Anor And Other Appeal [1999] 4 SLR 529 and Kamla Lal Hiranand v. Harilela Padma Hari & Ors [2000] 3 SLR 696). Order 14A should be read, inter alia, with O. (summary judgment) and O. 18 r. 19 (striking out pleadings and endorsements) (re The Supreme Court Practice 1999 vol 1, para 14A/0/2) and O. 14A r. 1(5) of both our Order and the English Order provide that nothing in the Order shall limit the powers of the court under O. 18 r. 19. 33 The principles established in the cases cited are of great persuasive force as they deal with similar provision of the civil procedure. Hence, we are inclined to follow them.” [emphasis added]

In Daud Arshad & Ors v. FELCRA Bhd [2019] 9 CLJ 443 the Court of Appeal, in a judgment delivered by Tengku Maimun JCA (now CJ), quoted and approved the statement of principle in Karen Isabel Wilfed v. Dyana Shila Vasanthan [2014] AME J0185; [2014] 4 CLJ 737 that notwithstanding a delay in application for trial of preliminary issue under O. 33 r. 2 the pertinent and crucial factor to consider is whether the preliminary issue will result in a substantial saving of time and expenditure: see paragraphs [4] and [23]. In the considered opinion of this Court, similar principle should also be applied to an application under O. 14A, both O. 33 r. 2 and O. 14A are procedure for expediting the disposal of cases without full trial. In Petroleum Nasional Bhd v. Kerajaan Negeri Terengganu the Court of Appeal quoted with approval the four observations made by Lim Beng Choon J. in S.I. Rajah & Anor v. Dato’ Mak Hon Kam & Ors (No. 1) [1994] 1 CLJ 207, and held that: “Those are the applicable principles to an O. 14A application and to the alternative application made pursuant to O. 33 r. 2. However, the outcome of their applications will depend very much on the facts of each case.” In Daud Arshad & Ors v. FELCRA Bhd the application for trial of preliminary issue was made after the close of the Plaintiff’s case in 34 the part-heard trial. Likewise, the recourse to O. 14A in our present case was made after the close of the Plaintiff’s case and at a time when the Defendant proposed to call many witnesses with lengthy oral evidence on other issues which turned out to be irrelevant and/or unnecessary after the determination of the four questions of law.

In the circumstances, this Court has thereby disposed of the entire action by the determination of the four questions of law followed by a very short continued trial of the remaining relevant factual issue. Dated : 29th July 2021. Signed ....................................................... TEE GEOK HOCK JUDICIAL COMMISIONER HIGH COURT OF MALAYA AT SHAH ALAM (NCVC 10) 35 To the parties’ solicitors:

For The Plaintiffs : Ashok Kandiah, Ling Chee Wei, Novindran

For The Defendants :