Pua Kok Hong v Puah Choon Wei (AA-22NCvC-105-12/2023)

Having considered the written submissions, affidavits, and authorities filed by both parties, this Court is satisfied that the Defendant’s Counterclaim is devoid of 25 merit and constitutes an abuse of the process of this Honourable Court. The application to strike out is accordingly allowed for the following reasons. 10/07/2025 15:28:49 AA-22NCvC-105-12/2023 Kand. 66 [2]. At the core of this dispute lies a Friendly Loan Agreement dated 9 May 2023, entered into between the Plaintiff and 30 the Defendant. The agreement expressly records that the Plaintiff extended a sum of RM1,950,000.00 to the Defendant, to be repaid over 24 months in monthly instalments commencing 15 July 2023, without interest. In partial discharge of his obligation, the Defendant made 35 several payments totalling RM78,100.00, including via his bank account. These payments, made shortly after the execution of the agreement, affirmatively demonstrate acknowledgment of indebtedness and the Defendant's intention to comply with the terms of the loan. This conduct 40 is wholly inconsistent with the Defendant’s assertion that the agreement is invalid or that the funds were not loans, but part of a third-party investment scheme. [3]. This Court notes that on 20 December 2024, it had granted summary judgment in favour of the Plaintiff against the 45 Defendant for the outstanding loan sum payable by the Defendant. That judgment was entered after full consideration of the affidavits and written submissions filed in respect of the Plaintiff’s application under Enclosure 15. The Defendant did not appeal that decision. The legal 50 implications are twofold: a) firstly, the validity and enforceability of the agreement have been determined by this court, and it is no longer open to challenge; and b) secondly, the issues raised in the counterclaim, 55 namely, misrepresentation, the alleged sham nature of the agreement, and the source of the funds, were matters already ventilated and dismissed during the summary judgment application. Thus, the doctrine of res judicata 60 squarely applies and bars the Defendant from re-litigating the same issues under the guise of a counterclaim. [4]. The Plaintiff rightly relies on authoritative decisions such as 65 Modalku Ventures Sdn Bhd v E-Tech IT Sdn Bhd [2024] 8 MLJ 447; [2023] 10 CLJ 592; [2023] AMEJ 1888, Gan Seng Biang v Priyamas Export Corporation Sdn Bhd [2011] 3 CLJ 567; [2011] 1 AMR 628, and Lonpac Insurance Bhd v Koridor Padu Sdn Bhd [2021] MLJU 70 1084; [2021] CLJU 982, where the courts have consistently held that once summary judgment is entered dismissing a defence, a related counterclaim that hinges on the same allegations or issues must also be struck out as it becomes untenable. The rationale is grounded in the finality of 75 litigation and the avoidance of inconsistent judgments. This is what Justice Atan Mustaffa observed in Modalku Ventures (supra): “As the defendant’s counterclaim is based on the allegations made in its defence to the plaintiff’s claim and the court has determined in the 80 summary judgment application that it does not have a meritable defence, it is warranted that this counterclaim be struck out as it is frivolous, vexatious, and/or an abuse of the court process. Reinforcing this stance, several precedents can be highlighted. For instance, in Kuwait Finance House (Malaysia) Berhad v Cheong Hooi Lin & Anor 85 [2015] 1 LNS 605 (HC), the counterclaim was struck out on identical grounds upon which summary judgment was granted. Similarly Choo Jih Seang v Ramachandren a/l Narianasamy [2016] MLJU 1609; [2016] 1 LNS 579 (HC) affirmed that if summary judgment favours the plaintiff, an intertwined counterclaim is consequently untenable. The 90 High Court in Nakano (M’sia) Sdn Bhd v Oriental Wealth (M) Sdn Bhd [2002] MLJU 379; [2002] 1 LNS 152 reiterated this by holding that a counterclaim, already addressed in a summary judgment application, cannot be revived at a later stage...” 95 [5]. In a similar vein, the Court in Gan Seng Biang v Priyamas Export Corporation Sdn Bhd (supra) also stated as follows: “Plaintiff's counsel submitted that all the issues contained in the Defendants' Defence and Counterclaim were raised by the 100 Defendants in the affidavits filed to oppose the Plaintiff's application for summary judgment... to allow the Defendants to re-litigate the matter would be to fly in the face of the doctrine of res judicata... The Defendants' Counterclaim is unsustainable, scandalous, frivolous and vexatious and to allow it to continue would prejudice, embarrass or 105 delay the fair trial of this action.” [6]. In the present case, the Defendant’s counterclaim seeks a declaration that the Friendly Loan Agreement is invalid, precisely the same contention this Court had considered 110 and rejected when granting summary judgment. [7]. The Defendant’s argument that the counterclaim was filed prior to the summary judgment application is immaterial. The test is not when the Counterclaim was filed, but whether the issues therein had already been adjudicated. 115 The Court is also mindful that during the summary judgment application, the Defendant’s Counterclaim was before the Court and no triable issue was discerned. There is no basis to revive the same factual and legal issues by counterclaim. To allow such would effectively permit a collateral attack on 120 a final and binding judgment of this Court, which the Defendant has not appealed. [8]. Furthermore, the Court finds that the Defendant’s reliance on authorities such as Titanwood Industries Sdn Bhd & Anor v NCS Wood Products Sdn Bhd [2021] MLJU 125 1320; [2021] CLJU 1180; [2021] AMEJ 1094 and MRCB Builders Sdn Bhd (formerly known as Gelanggang Harapan Construction Sdn Bhd) v Liang United Engineering Studio [2023] 2 AMR 820; [2023] 3 CLJ 258; [2022] MLJU 3359 is misconceived. Both cases involved 130 entirely different factual contexts and procedural postures. In Titanwood (supra), the issue revolved around disputed ownership in interpleader proceedings where no prior determination had been made on the substantive facts, thereby warranting a full trial. Similarly, in MRCB Builders 135 (supra), the Court dealt with an application to strike out a primary claim at a preliminary stage, absent any prior adjudication. In contrast, the present case stands on a materially different footing, where summary judgment has already been granted against the Defendant, thereby 140 conclusively resolving the factual allegations underlying both the defence and the counterclaim. Therefore, these cases offer no assistance to the Defendant’s position. [9]. Further, the Defendant contends that his counterclaim should proceed because the execution of the summary 145 judgment was stayed. However, the Court had only stayed execution to preserve procedural fairness pending disposal of the counterclaim; it did not imply that the counterclaim had merit. The substance of the Defendant’s defence has been adjudicated; allowing the counterclaim to proceed 150 would amount to Defendant having a second bite at the cherry. [10]. It is worth reiterating that the High Court cannot set aside its own decision. The Defendant’s counterclaim effectively seeks a declaration of invalidity of the very agreement, 155 which this Court has judicially declared valid and enforceable at the instance of summary judgment. This is a direct affront to the finality of the summary judgment. The appropriate course for the Defendant, was to appeal against the summary judgment decision. His failure to do 160 so renders the matter concluded, and any attempt to revive it through a counterclaim is improper and an abuse of process. [11]. On the totality of the evidence and legal arguments presented, this Court finds that the Defendant’s 165 counterclaim: a) discloses no reasonable cause of action under Order 18 Rule 19(1)(a); b) is frivolous, vexatious, and a clear abuse of court process under Rule 19(1)(b) and (d); and 170 c) the fact that it seeks to re-litigate matters already adjudicated is in breach of the principle of res judicata. [12]. Such conduct is a clear case of an abuse of process, and this Court cannot condone the same. 175 Conclusion [13]. For all the reasons stated above, the Plaintiff’s application to strike out the Defendant’s Counterclaim is allowed with costs of RM5000. Dated : 10th July 2025 180 MOSES SUSAYAN JUDICIAL COMMISSIONER HIGH COURT IN MALAYA 185 AT IPOH, PERAK Counsel: 190 For the Plaintiff : Elyse Ng Advocates and Solicitors Messrs Law Chambers of Han & Zi Kuala Lumpur 195 For the Defendant : LA Gomes (together with Danielle Andrea Gomes) Advocates and Solicitors Messrs The Law Offices of L.A Gomes, 200 Meor Shaazizi & Associates Ipoh, Perak (Notice: This Grounds of Decision is subject to official editorial revision) 205 Headnotes Civil Procedure — Whether plaintiff’s application to strike out defendant’s counterclaim under O 18 r 19 of the Rules of Court 2012 had to be allowed — Whether counterclaim merely repeated same issues 210 defendant had raised to oppose summary judgment application which court found were devoid of merit and entered summary judgement— Whether defendant’s counterclaim was an abuse of process and barred by res judicata — Whether counterclaim was an improper attempt to revive issues already determined in favour of the plaintiff — Whether 215 failure to appeal summary judgment precluded further challenge by counterclaim — Whether counterclaim disclosed no reasonable cause of action and was frivolous or vexatious — Whether court entitled to strike out counterclaim and dismiss action to preserve finality of litigation and avoid inconsistent judgments 220