Roger Bogne v Istana Securities Limited (NO.02(IM)(NCVC)-1740-08/2017)

1 IN THE COURT OF APPEAL, MALAYSIA 5 (APPELLATE JURISDICTION) CIVIL APPEAL NO. S-02(IM)(NCVC)-1740-08/2017 BETWEEN 10 ROGER BOGNE … APPELLANT (CAMEROON PASPORT NO. 0004248) 15 AND ISTANA SECURITIES LIMITED … RESPONDENT 20 (L03672) [Dalam Mahkamah Tinggi Sabah & Sarawak Dalam Wilayah Persekutuan Labuan Suit No: LBN-22NCVC-8/12-2014] 25 Antara Istana Securities Limited … Plaintif (L03672) 30 Dan Roger Bogne … Defendant (Cameroon Pasport No. 0004248) 35 CORAM ABDUL RAHMAN SEBLI, JCA KAMARDIN HASHIM, JCA KAMALUDIN MD SAID, JCA 40 2 GROUNDS OF JUDGMENT 5 INTRODUCTION [1] This is the appellant’s (defendant) appeal against the decision of the High Court of Sabah and Sarawak at Federal Territory of Labuan who dismissed his appeal on 5.7.2017 and affirmed the 10 decision of the Deputy Registrar given on 20.3.2017 dismissing the application of the appellant to set aside a Judgment in Default (JID) that was entered against him on 1.12.2015. BRIEF FACTS 15 [2] The respondent (plaintiff) had filed an action against the appellant (defendant) for failure to repay a short term loan in the sum of AUD 300,000 (Australian Dollar Three Hundred Thousand only). The parties entered into an agreement on 11.10.2011. The loan was to 20 be repaid with a monthly interest of 3.5% or A$10,500 per month. The repayment period was four months with an option to extend for a period of not more than two months on the same terms and conditions. The plaintiff averred that no payment was received from the defendant. 25 [3] The plaintiff is an offshore company that is registered in Labuan, the defendant is a Cameroon passport holder who resides in South Africa. The plaintiff pleaded that the money was lent to the defendant because of the request of its beneficial owner, one 30 3 David Porter who had developed “a father and son” relationship 5 with the defendant. The collateral for the loan was the house of the defendant at No, 61, Herbert Road, Bryanston, South Africa, 5116. [4] The plaintiff pleaded that the demands for repayment addressed to the defendant since 2012 had been in vain. They commenced this 10 action in December of 2014 and applied to serve process out of jurisdiction on 22.1.2015 at the address of the defendant in South Africa. Subsequently, the plaintiff’s solicitors were notified by the court registrar that the defendant was served with the writ and summons on 3.7.2015. 15 [5] Upon the failure of the defendant to enter appearance and defence, the plaintiff entered JID on 1.12.2015. The Plaintiff also sent a sealed copy of the JID order to the address of the defendant in South Africa although there was no requirement to do so as the 20 defendant did not enter appearance. Thereafter, the plaintiff instructed solicitors in South Africa to commence execution proceedings via what is known as the “Provisional Sentence Summons” (PSS). 25 [6] The defendant sent an email to the beneficial owner (David Porter) and appealed for more time to make payment. On 18.8.2016, the Sheriff of the South African Court attached the movable properties of the defendant. Finally, on 19.8.2016, the defendant filed an application at the South African Court to set aside the PSS. On 30 4

25.10.2016, the defendant filed the application in the Labuan High 5 Court to set aside the JID entered on 1.12.2015. The Defendant also sought leave to file the application out of time as he was late by 10 months by quoting Order 3 rule 5 in the Notice of Application. However, in the body of the Notice of Application, the Defendant did not include a prayer to extend time. 10 [7] The learned Deputy Registrar (DR) refused the application of the defendant to extend time. She did not accept the reasons advanced by the defendant for the delay. 15 [8] She also found that service was properly effected in South Africa and that the judgment is regular. She also found that the defendant did not have a prima facie defence. She rejected the argument that the loan agreement was money lending transaction that is void and unenforceable. 20 [9] Aggrieved by the decision of the DR, the defendant via Notice of Appeal to a Judge in Chambers dated 20.3.2017 appealed against the decision of the DR. 25 [10] The defendant’s appeal was heard by the High Court judge (the learned judge) on 5.7.2017. Having read the defendant’s application dated 13.9.2016 and the affidavit in support of the application dated 3.10.2016, plaintiff’s affidavit in reply dated 25.11.2016, defendant’s affidavit in reply dated 13.12.2016 and 30 5 plaintiff’s second affidavit in reply dated 6.1.2017, defendant’s 5 submission and the plaintiff’s submission, the learned judge dismissed the defendant’s appeal with Costs of RM7,000.00 subject to payment of allocator fees to be paid to the government. [11] The Grounds of Judgment of the learned judge is at pages 2 to 22 10 of the Rekod Rayuan Tambahan (RRT). The learned judge in his grounds of judgment had concluded his finding that the defendant had disclosed a defence on the merits that the loan agreement was in reality a money lending transaction that offended the Moneylenders Act 1951. In other words, the learned judge 15 disagreed with the finding of the DR that the defendant did not have a prima facie defence. However, he was of the same view with the DR that the application should be dismissed because the defendant had failed to explain the delay in making this application. The defendant only filed the application some 10 months later i.e. 20 in October 2016 and the reasons given by the defendant are frivolous. He also agreed with the DR and found as a fact that service was properly affected in South Africa in July 2015 and the JID was entered in December of 2015. The learned judge found the JID to be regular. 25 THE APPEAL [12] The defendant advanced several grounds of appeal as stated in his Amended Memorandum of Appeal. The defendant’s main 30 6 ground is that that the JID obtained by the plaintiff on 1.12.2015 5 was alleged to be irregular Judgment. [13] The learned judge had found the service of the Writ of Summons on the defendant in South Africa had been properly affected under the Rules of Court 2012 therefore, the JID obtained by the plaintiff 10 against the defendant on 1.12.2015 was regular Judgment. [14] The appellate Court normally intervene and correct the decision of the lower Court if the decision is perverse or can be shown that the decision can be proved or otherwise to have gone plainly wrong. 15 The jurisdiction of the Court of Appeal to intervene against a decision of the High Court has to rest on settled principles; the court should only upset a decision of the High Court where there is a clear error leading to a perverse finding or resulting in miscarriage of justice, particularly where the lower court has 20 decided on the basis of discretion. (See: Merbok Hilir Bhd v Sheikh Khaled Jassem Mohammad Jassem Al-Thani & Other Appeals [2013] 8 CLJ 309: Sivalingam A/L Periasamy V Periasamy & Anor [1995] 3 MLJ 395). 25 [15] In this regard, we also wish to echo the statement by the Privy Council in Ratnam v Cumarasamy & Anor [1965] 1 MLJ 228 at p 229 : 30 7 “The principles upon which a court will act in reviewing 5 the discretion exercise by a lower court are well settled. There is a presumption that the judge has rightly exercised his discretion (Charles Osenton & Co v Johnston [1942] AC 130 per Lord Wright at p 148). The court will not interfere unless it is clearly satisfied that the 10 discretion has been exercised on a wrong principle and should have been exercised in a contrary way or that there has been a miscarriage of justice (Evans v Bartlam [1937] AC 473). Upon question of procedure the Board is slow to interfere with the discretion exercised by a 15 lower court (Mayor of Montreal v Brown & Anor (1876) 2 App Cases 168)”. OUR DECISION 20 [16] We heard this appeal on 20.7.2018. The counsel for the defendant and counsel for the plaintiff had made oral submissions and also relying on their written submissions filed herein. [17] After reading the learned judge’s ground of judgment and the 25 record of appeal, we were satisfied that the learned judge’s decision contains appealable error for us to intervene. We agreed with the defendant that JID obtained by the plaintiff against him on 1.12.2015 was an irregular Judgment. The defendant is entitled as a matter of right to set aside the JID. We allowed the appeal with 30 8 Cost of RM 15,000.00 here and below subject to allocator fee. The 5 deposit is refunded to the defendant. [18] We had read the learned judge’s grounds of judgment. At paragraph 20 to 30, the learned judge dealt with the issue of whether the JID is regular judgment. It is not disputed that in the 10 defendant’s case, the service of the cause papers was left at his residence in South Africa. The defendant’s case is that the service of the cause papers on him was irregular as they were not served on him personally. The defendant relied on Order 10 rule 1 of the Rules of Court 2012. The learned judge agreed with the plaintiff 15 that cause papers need not be served personally in the case where an order to serve out of jurisdiction has been granted. The learned judge referred to Order 11 rule 5(1) which says that Order 10 rule 1 applies where notice is served out of jurisdiction. However, Order 10 rule 1 is subject to the provisions of Order 11 rule 5 and sub- 20 rule (3) does not require a notice of a writ to serve personally. [19] The learned judge had referred to sub-rule (5) which says that “official certificate” stating that a notice of a writ has been served on a person personally, or in accordance with the law of the 25 country in which service was affected shall be evidence of the facts so stated. Sub-rule (6) says that an “official certificate” by the Minister stating that the notice of the writ has been duly served on a specified date in accordance with a request made under rule 7 shall be evidence of that fact. 30 9 5 [20] In the instant case, the learned judge found that the plaintiff had relied on an email sent by the 3rd Secretary at the Malaysian High Commission in Pretoria, South Africa. It says that service was affected at the residence of the defendant and that a member of his family accepted the Notice of Writ. Counsel for the plaintiff 10 submitted that the said email is “document” within the meaning of Order 11 rule 5 (7) and is deemed to be such certificate. The defendant argued otherwise and that the said email clearly shows that the cause papers were not personally served on the defendant as he was not at home at the material time. He was not in South 15 Africa between 1.7.2015 and 26.7.2015. He also submitted that there was no proof of service of document furnished by the Sheriff or the process server. He said the “email” of the 3rd Secretary is vague with no acknowledgment. 20 [21] Having considered the argument, the learned judge held that the service was regular and rejected the defendant’s argument that service must be affected personally on the defendant. The learned judge gave his reason as follows - 25

(ii) The case cited by the defendant, the South African Court noted that one of the modes of service is by leaving a copy thereof at the place of business of the said person;

(iii) Similar to Order 62 rule 6 which states that non-personal 10 service can be affected by leaving the document at the proper address of the person to be served. Order 62 rule 6 does not require personal service unless there is an express provision to that effect; 15

(iv) There is evidence of service that on 3.11.2015, the Deputy Registrar of the High Court of Sabah and Sarawak issued a letter stating that all the cause papers were successfully served at the address of the defendant; 20

(vi) The defendant had not challenged the authenticity of the 25 said email;

(vii) The form of certificate by a consular officer is not prescribed in the Rules of Court 2012; and 30 11

(viii) The said email accepted as certificate by the consular 5 officer. [22] Based on the above reasons, the learned judge satisfied that the service was properly affected on the defendant and that the JID is regular. 10 [23] The defendant submitted that the learned judge failed to appreciate that pursuant to Order 10 rule 1 (1) read together with Order 11 rule 5 (1) and (3) of the Rules of Court 2012, in the event a Notice of Writ is not served in accordance with Order 10 rule 1 (1), the 15 plaintiff bears the burden of proving that the Notice of Writ was served on the defendant of which there was no evidence adduced by the plaintiff to prove that the Writ of Summons was served on the defendant in accordance with the law of the country in which service is affected. 20 [24] The defendant also submitted that the learned judge failed to appreciate that the email from the 3rd Secretary at the Malaysian High Commission in Pretoria, South Africa is not a document purporting to be an official certificate stating that the Notice of Writ 25 was served on the defendant personally or in accordance with the law of the country in which service is affected. [25] The Deputy Registrar of the High Court at Sabah had on 12.4.2015 requested the assistant of the Secretary General, Ministry of 30 12 Foreign Affairs Malaysia to serve the Writ of Summons with 5 Statement of Claim on the defendant at the defendant’s address in South Africa. The request was made pursuant to Order 11 rule 6

(6) of the Rules of Court 2012 (ROC). [26] Order 11 of the ROC is the governing procedure for Service of 10 Process out of Jurisdiction. Order 11 rule 6 (6) of ROC says - “The documents duly lodged under paragraph (3) shall be sent by the Register to the Secretary General of the Ministry of Foreign Affairs with a request that the Secretary General 15 arranges for the writ to be served in the manner referred to in paragraph (3) or, where an alternative manner is indicated, by any of the manner as is most convenient.” [27] Paragraph (3) of r 6 of ROC says - 20 “Where a person intends to serve notice of a writ in any country –

(ii) that the Notice of Writ was served in accordance with the 15 law of South Africa. In other words, the email confirms that the Notice of Writ was not served personally but it was left at the defendant’s address with another person because the defendant was not home. 20 However, the email does not go on to say that this form of service is in accordance with the law of South Africa. [39] In contrast, a certificate is a document as the one found at page 191 of RRT (2) certified and signed by the Sheriff Sandton South. It 25 was produced to prove that the Provisional Sentence Summons was affected under Rule 4 (1) (a) (ii) of the Uniform Rules of Court of South Africa. [40] The certificate states that the document concerned a Service 30 Provisional Sentence Summons. It says “ This is to certify that on 18 the 23 June 2016 at 14.34 at 61 Herbert Roead, Petervale, being 5 the place of residence of the defendant Roger Bogne, a copy of the Provisional Sentence Summons (paginated 1 to 7), Annexures “POC/1” (paginated 8 to 9) “POC/2” (paginated 10 to 14) and “POC/3” thereto (paginated 15 to 24), as well as the Index thereto were served “on Ms Annelle, partner of the defendant, a person not 10 less that sixteen years of age and apparently in charge residing there after the original document had been shown and the nature and contents explained to the said person. Rule 4(1)(a)(ii)”. [41] Rule 4 (1) (a) (ii) of the Uniform Rules of Court of South Africa 15 provides as follows - “4 Service

(1)(a) service of any process of the court directed to the sheriff 20 and subject to the provisions of paragraph (aA) any document initiating application proceedings shall be effected by the sheriff in one or other of the following manners:

(ii) by leaving a copy thereof at the place of residence or 25 business of the said person, guardian, tutor, curator or the like with the person apparently in charge of the premises at the time of delivery, being a person apparently not less than sixteen years of age. For the purposes of this paragraph when a building, other than a hotel, boarding 30 19 house, hostel or similar residential building, is occupied by 5 more than one person or family, ‘residence’ or ‘place of business’ means that portion of the building occupied by the person upon whom service is to be effected. [42] The failure to state in the email that the service was affected was in 10 accordance with the law of South Africa in our view is fatal. We also agreed with the defendant that no expert evidence was led by the plaintiff to show that despite this absence of a certificate confirming that service was effected in accordance with the law of South Africa that the service was in fact done in accordance with 15 the law there. [43] The learned Judge erred in placing the burden on the defendant to prove that services was not done in accordance with the law in South Africa. The burden only shifts to the defendant once the 20 plaintiff complies with Order 11, rule 5(5) of the ROC and produces a document from any one of the authorities mentioned in rule 5(5)(a) to (c), stating:-

(ii) that the Notice of Writ has been served in accordance with the law if the country in which service was effected (in this case, the law of South Africa). 30 20 [44] The email provides neither one of the 2 alternative confirmations 5 required. Our view is that the email cannot be said to be a document which purports to be an Order 11 rule 5(5) certificate. The Service of the Notice of Writ was irregular. The JID ought to have never been entered by the High Court at Labuan in light of this irregular service. 10 [45] It is trite law that where a JID can be proved to be null and void on the grounds of illegality or jurisdictional error it has to be set aside ex debitio justitiae. The governing principle on the powers of the court to set aside JID can be clearly seen in the judgment of 15 the Supreme Court in the case of Badiaddin Mohd. Mahidin & Anor v. Arab Malaysian Finance Bhd. [1998] 2 CLJ 75. In Badiaddin’s case the Federal Court discussed the inherent jurisdiction of the High Court to set aside its own order where it can be proved to be null and void on the ground of illegality or lack of 20 jurisdiction: “It is settled law that one High Court cannot set aside a final order regularly obtained from another High Court of concurrent jurisdiction. The one special exception to this 25 rule is where the final judgment of the High Court can be proved to be null and void on the ground of illegality or lack of jurisdiction. Apart from the breach of natural justice, in any attempt to widen the door of the inherent and discretionary jurisdiction of the superior courts to set aside 30 21 an order of court ex debito justitiae to a category of cases 5 involving orders which contravened any written law, the contravention should be one which defies a substantive statutory prohibition so as to render the defective order null and void on the ground of illegality or lack of jurisdiction. The discretion to invoke the inherent jurisdiction should 10 also be exercised judicially in exceptional cases, where the defect is of such a serious nature that there is a real need to set aside the defective order to enable the court to do justice.” 15 [46] The Federal Court in Tuan Haji Ahmed Abdul Rahman v. Arab-Malaysian Finance Berhad [1996] 1 CLJ 241, at p. 247, held that: “It is elementary that an irregular judgment is one which has been entered otherwise than in strict compliance with 20 the rules or some statute or is entered as a result of some impropriety which is considered to be so serious as to render the proceedings a nullity. The general rule is that when it is clearly demonstrated to the satisfaction of the court that a judgment has not been regularly obtained, the 25 defendant is entitled to have it set aside ex debito justicia, that is to say, irrespective of the merits and without terms.” 22 [47] We were satisfied that the JID was irregularly obtained and the 5 defendant is entitled as a matter of right to have the JID set aside. The defendant’s appeal is allowed. We did not think it is necessary for us to deal with other grounds raised by the defendant. 10 Dated this 2nd October, 2018 Sgd 15 KAMALUDIN MD. SAID JUDGE COURT OF APPEAL MALAYSIA PUTRAJAYA 20 Parties

1. Khabir Dhillon and Bhavanash Sharma for the Appellants 25 (Messrs Bhavanash Sharma)

2. Chetan Jethwani and Pek Chin Choo for the Respondent (Messrs Govindasamy & Pek)