Ramasundramoorthy a/l Permalu v Gregory Yusran & Associates (B-03(IM)(NCVC)-21-03/2019)

The appellant, a lawyer was sued in the High Court of Shah Alam by the respondent (his former employer) which is a legal firm, for 2 RM1,646,000.00 being loans given to him to facilitate the latter’s foray into the motor insurance industry. This was the specific reason for the appellant’s engagement by the respondent based on an understanding that the appellant had a vast experience in the said area. However, the respondent claimed that the appellant’s failure to perform the tasks assigned to him caused it to suffer losses in the amount as claimed. Thus, the filing of the writ and statement of claim on 6/10/2015 for the said sum as well as general damages, interests thereon and costs.

That writ and statement of claim were served on the appellant by way of AR registered post on 1/12/2015. The appellant failed to enter appearance within the requisite time stipulated by Order 12 r 4 (a) of the Rules of Court 2012 (“ROC”) and a memorandum of non-appearance was accordingly filed on 18/1/2016. Pursuant thereto, a judgment in default dated 18/1/2016 was entered against the appellant. The appellant applied by way of a notice of application dated 23/2/2018 to set aside the said judgment before the learned Senior Assistant Registrar but failed, and the same result was repeated in his appeal to the Judge in chambers. Premised on the said judgment the appellant was made a bankrupt on 7/4/2017 by the Shah Alam High Court in case No. BA-29NCC-4273-05/2016. Subsequently, he also obtained a sanction from the Director General of Insolvency on 3/5/2019 to 3 proceed with his appeal before us against the decision of the learned Judicial Commissioner (“JC”). The appellant succeeded in his appeal but it was by a majority decision for I dissented. My reasons for doing so are simply these. The Law On Setting Aside A Judgment In Default [3] It is trite that the law on this is determined firstly by the type of the judgment in default. If it is an irregular judgment such as when service of the writ and statement of claim have not been properly effected as required by Order 10 of the ROC, then it must be set aside as of right, that is ex debito justititae. On the other hand in order to set aside a judgment regularly obtained, a defendant must show that he has a defence on the merits. This is the law as laid out in Kwong Yik Bank Bhd v Sa’Adiah Bte Mastan [1994] 2 MLJ 830, following the principle in Evans v Bartlam [1937] BC 473. This substantive requirement of law is preceded by a procedural one as provided in Order 42 rule 13 of ROC which prescribes a time limit of thirty days from the receipt of the judgment for the application to set aside the said judgment be made.

In other words, this time line is the first hurdle a defendant must overcome. It is an undisputed fact that the appellant only filed his application to set aside the judgment about two years one month and 4 twenty-two days after it was entered. It was obvious from the relevant dates I had given earlier that this application of the appellant was only filed after the receiving and adjudication order had been made against him and that too after a lapse of about ten months from the said order. With respect, I am of the view that the appellant did not act with the promptitude demanded of the situation for even if I were to accept his allegation (which I do not) that he never received the writ and statement of claim, there was just no given, let alone an acceptable explanation, deposed in his affidavit why he waited so long to act even after being made a bankrupt for the judgment debt. Given that the time line stipulated under the said Order 43 rule 13 is mandatory since the word used is ‘shall’ as decided by this court in Perbadanan National Insurans Sdn Bhd v Pua Lai Ong [1996] 3 CLJ 321, the court has no discretion to excuse its non-compliance unless the appellant files an application for extension or abridgment of time. Since there was no such application filed, the indolence of the appellant is in my view, fatal to his application.

Furthermore, I am of the like mind with the learned JC that the appellant had not satisfied the court that he had not received the writ and statement of claim. The learned JC, as did the respondent’s counsel before us, have rightly highlighted that the place where the 5 service was effected was the appellant’s last known address. The appellant did not dispute that. His only complaint as verbalised by his counsel was that it was not personally acknowledged receipt by him but by one Pemalu a/l Kerishnan. However, I noted that in his affidavit in support of the application affirmed on 4/5/2017 at paragraph 5 thereof, all that the defendant said was that the service was not in accordance with the ROC. The said paragraph 5 reads: “5. Saya mengatakan bahawa, Writ Saman Plaintif tidak diserahkan kepada saya mengikut Kaedah-kaedah Mahkamah 2012. Maka penghakiman ingkar adalah cacat dan wajar diketepikan dan juga bahawa perintah kebankrapan bertarikh 6.4.2017 adalah cacat juga.”

This court in Yap Ke Huat & Ors v Pembangunan Warisan Murni Sejahtera Sdn Bhd & Anor [2008] 5 MLJ 112 has held that it was not necessary for the defendant to personally received the writ and statement of claim in order for the service of the said documents to be proper. Paragraph 20 of the said judgment reads: “[20] In this instance, the plaintiffs had elected to serve the writ and statement of claim on this defendant by way of sending it by prepaid AR registered post. This defendant did not challenge that such process was never undertaken. Once this process was carried out, it is our view that there is no provision in law to say that the plaintiffs must also prove that the person so named in the post had received it. This opinion is 6 shared by Suriyadi Halim J (as he then was) when he said in Pengkalan Concrete Sdn Bhd v Chow Mooi (guarantor of Kin Hup Sent Construction Sdn Bhd) & Anor [2003] 3 MLJ 67, at p 73: In fact under sub-r 1(1) of the O 10, nothing is indicated that the plaintiff must evidentially prove that the named person in the writ must be the very person who had received it ie, if it was sent by prepaid AR registered post. I therefore was satisfied that as in this case, if all the prerequisites were fulfilled, as the plaintiff had done so, the recipient being “Yanti” (not the name of the defendants) did not vitiate that service.”

I am in agreement with the view expressed above and with the learned JC that the service of the said writ and statement in this case was proper. Therefore the judgment in default was a regular judgment and in order to set it aside the appellant must show that he has a defence on the merits in the affidavit that he filed in support of his application to set aside the said judgment. Having said that I must acknowledge the fact that there is a contrary decision of this court in Chung Wei Meng v Perbadanan Nasional Berhad (Civil Appeal No. W-02(IM)-1216-07/2016 and W-02(IM)1217-07/2016) which held that since our Order 10 r 1(1) of the ROC is silent on whether the person served must acknowledged the service of the writ and statement of claim on the receipt card as decided in Teskey v Paz [1999] OJ No. 4977, then the named recipient must acknowledge receipt of the service of the said documents in order for the service to be proper. In coming 7 to the said decision, Yeoh Wee Siam J (delivering judgment of the court) considered not just the said Canadian case but that of the Singapore High Court in Ho Miaw Ling v Singapore Island Country Club [1997] 1 SLR (R) 276 which held that the AR card must be produced as proof that service was effected but which was not done in the said case. The Singapore court held that: “... The evidence shows that whether the notice was delivered or otherwise, the AR card would be returned to the sender. If it was delivered the card would bear the signature of the recipient or someone at the address; if not the card would indicate why it was not delivered.” (emphasis added) Thus, it is clear that from the statement above that an acknowledgement of the service by one other than the defendant at his address is allowed.

In respect of the Canadian case, I noted that the relevant Ontario Rules of Civil Procedure that is Rule 16.03(4) as reproduced in Her Ladyship’s judgment specifically provides for the acknowledgement of service by the intended recipient as highlight below: “16.03(4) Service of document may be made by sending a copy of the document together with an acknowledgement of receipt card (Form 16A) by mail to the last known address of the 8 person to be served, but service by mail under this subrule is effective;

only if the acknowledgement of receipt card or a post office receipt bearing a signature that purports to be the signature of the person to be served is received by the sender; and

on the date on which the sender first receives either receipt, signed as provided by clause...” (emphasis added). [9] Thus, with respect, given that specific provision in the said Rules and the absence of it in our ROC as well as the omission to exhibit the AR card in the said Singapore case and its production in this case before us, I am more inclined to agree with the earlier decision of this court in Yap Kee Huat’s case (supra). Defence On Merits [10] In his affidavit in support affirmed on the 4/5/2017 and 16/5/2017 the appellant at paragraphs 6, 7 and paragraph 12 thereof respectively, deposed the reasons why he believed the judgment in default should be set aside which in summary is that the claim for the said sum was fraudulent and there was concealment of material facts. Given my earlier decision to hold the issue of delay in filing the application against 9 the appellant, I propose not to delve into the merits of the proposed defence and this decision I make is compounded by another omission of the appellant, which was his failure to exhibit his proposed defence to his affidavit. [11] I am fully aware that the ROC did not expressly provide that such a document be produced but from my experience on the Bench, it always had been in an application such as this. That, in my view is a salutary practice for sighting the document breeds certainty on what the proposed defence would be – not just guesswork from the complaints levelled against the claim deposed in the affidavit in support of the application. I do believe that now is an opportune time to make the said practice mandatory. [12] For all the reasons stated above I have decided to dismiss the appeal and affirm the decision of the learned JC. Signed. (RHODZARIAH BINTI BUJANG) Judge Court of Appeal Malaysia Putrajaya Date: 19 May 2020 10 Parties Appearing: For The Appellant: Dzaki Ezhar Bahar (Tetuan Krish & Kiew Shah Alam) For The Respondent: Dato’ Shamesh (Tetuan Jeeva Partnership

Perbadanan National Insurans Sdn Bhd v Pua Lai Ong [1996] 3 CLJ 321;

Yap Ke Huat & Ors v Pembangunan Warisan Murni Sejahtera Sdn Bhd & Anor [2008] 5 MLJ 112;

Kwong Yik Bank Bhd v Sa’Adiah Bte Mastan [1994] 2 MLJ 830;

Evans v Bartlam [1937] BC 473;

Chung Wei Meng v Perbadanan Nasional Berhad (Civil Appeal No. W-02(IM)-1216-07/2016 and W-02(IM)1217-07/2016);

Ontario Rules of Civil Procedure as decided in Teskey v Paz [1999] OJ No. 4977;

Ho Miaw Ling v Singapore Island Country Club [1997] 1 SLR (R)

276.