Tasek Gelugor Development Sdn Bhd v LIM Yit Kian (WA-22NCC-742-10/2024)

This is an appeal by the Defendant against the decision of the learned Deputy Registrar dated 1 July 2025 dismissing the Defendant’s application in Enclosure 21. Enclosure 21 sought, inter alia, abridgement of time and the setting aside of the Judgment in Default of Appearance dated 16 January 2025.

The appeal before me does not turn on disputed facts. The central question is whether, in the circumstances of this case, the learned S/N Lp8Ym74ef0y2zN7EgSdcdQ Deputy Registrar exercised her discretion judicially, bearing in mind the governing principles relating to default judgments, delay, and prejudice. It is against this settled framework that the impugned decision must be examined.

Having considered the affidavits, the submissions, and the reply submissions of both parties, I am satisfied that the discretion was not correctly exercised. I therefore found that appellate intervention was warranted, wherefore I set aside the judgment in default and granted leave to defend. The Plaintiff has now filed an appeal against this decision to the Court of Appeal. Notwithstanding the propriety of the appeal filed against my decision, given Section 68

(1)(g) of the Courts of Judicature Act 1964, I now give my reasons for allowing the Defendant’s appeal. THE FACTS

The parties have set out the undisputed facts in their written submissions, and I gratefully adopt the same.

The Plaintiff applied, and the Court entered a Judgment in Default of Appearance (“JIDA”) against the Defendant on 16 January 2025. The Defendant was only informed of the existence of the legal action on or about 25 March 2025, when his solicitors conducted a file search subsequent to the Defendant receiving a call from his bank pertaining to the Garnishee Proceedings.

The Defendant then filed an application to set aside the JIDA on 16 April 2025 on the grounds of irregular service of cause papers and S/N Lp8Ym74ef0y2zN7EgSdcdQ the existence of a meritorious defence. The application was dismissed by the learned Deputy Registrar on 1 July 2025 on the ground that the Defendant had improperly combined three (3) distinct forms of relief into a single Notice of Application.

The Defendant then filed the present appeal to the Judge in Chambers.

The principles governing the setting aside of judgments in default are well settled. The discretion conferred by the Rules of Court 2012 (“Rules”) is wide but not unfettered and must be exercised judicially, guided by: i. the length and character of the delay; ii. the explanation proffered; iii. whether the defendant has disclosed an arguable defence; and iv. the presence or absence of prejudice to the plaintiff.

These considerations are not to be applied mechanically or in isolation. The court’s task is a balancing exercise, directed towards preventing injustice rather than punishing procedural default. S/N Lp8Ym74ef0y2zN7EgSdcdQ PROCEDURAL OBJECTIONS AND THE NATURE OF THE

The Plaintiff’s opposition was founded primarily on procedural objections: that the Defendant impermissibly combined prayers for abridgement of time and setting aside of the JIDA in a single application, and that the application was therefore incompetent.

I take the view that this approach places procedural form above substantive justice. The application before the Court must be examined not in isolation of its prayers, but in light of its substance and effect. The prayer for abridgement of time is not an independent or unrelated relief; it is a procedural incident necessary to enable the Court to consider whether the JIDA should be set aside.

There is no express rule prohibiting such an application from being brought in a single notice. More importantly, no prejudice has been demonstrated to have arisen from the manner in which the reliefs were framed. The Plaintiff was fully apprised of the case it had to meet and responded substantively on all issues.

Procedural objections of this nature do not, without more, justify shutting out a litigant from being heard, particularly where the Rules are to be applied purposively and not punitively.

The Learned Deputy Registrar gave much weight to the procedural objection. I think that tends to cloud the real issues from being ventilated. Procedural rules, as often said, are handmaidens, not S/N Lp8Ym74ef0y2zN7EgSdcdQ masters of justice. A rigid insistence on form does little to advance that noble cause of justice.

In support of the objections, the Plaintiff relied on the case of Jacy Tintang & Anor v Mayan Ak Nayang [2022] 6 MLJ 153 to support the proposition that different applications governed by different considerations ought not to be “lumped” together.

In Jacy, the Court of Appeal found that the appellants had filed one application seeking to be made co-defendant pursuant to Order 89 Rule 5 of the Rules of Court 2012 and at the same time made an application to intervene under Order 15 Rule 6 of the Rules of Court

The requirements for each application were different. Given the different legal considerations that underlay each application, the Court of Appeal held that it was undesirable for two separate applications to be lumped into one notice of application.

The decision in Jacy is clearly distinguishable. It concerned the improper conflation of two conceptually distinct procedural regimes, each with its own statutory thresholds.

In contrast, the present application involves a single continuum of relief: abridgement of time as a threshold issue and setting aside of the JIDA as the substantive relief. The considerations overlap and arise from the same factual matrix. Treating such an application as fatally defective is, in my view, an unduly rigid reading of procedural discipline.

The Plaintiff also cited the case of Hong Kwi Seong v Ganad Media Sdn Bhd & Anor Appeal [2013] 6 MLJ 765. In Hong Kwi Seong, the respondent had obtained a money judgment against the Appellant. When the respondent failed to pay, an order was obtained to examine the judgment debtor pursuant to a judgment debtor summons. A payment order was obtained and served on the Appellant. The Appellant failed to pay. A committal order was subsequently obtained. All these orders were regularly obtained and served. Any application to set aside those orders must then be made within 30 days from the date of service as provided under Order 42 Rule 13 of the then Rules of the High Court 1980 (in pari materia with Order 42 Rule 13 of the Rules). The Appellant then applied to set aside the payment order and the committal order.

The Federal Court found that despite a delay of at least one year, there was no application before the Court for any enlargement of time for the setting aside applications. Absent such application and the attendant explanation for the delay, the setting aside applications were held to be incompetent. The Federal Court held that the failure to adhere to the preliminary requirement to extend time in the circumstances of the case must be dealt with strictly, as otherwise the rules requiring an extension of time will end up as a dead letter. They, prima facie, must be obeyed for otherwise the party in breach of the rules will defeat the very purpose and object of the need to observe the timeline.

The reliance on Hong Kwi Seong by the Plaintiff, to my mind, is also misplaced. That case stands for the uncontroversial proposition that an application filed out of time, without any application for S/N Lp8Ym74ef0y2zN7EgSdcdQ enlargement and without explanation for a prolonged delay, is incompetent. It does not lay down an inflexible rule mandating dismissal where an extension is sought but disputed.

Crucially, the Federal Court in Hong Kwi Seong reaffirmed that enlargement of time is a discretionary exercise, dependent on the facts and circumstances of each case. That discretion must be exercised judicially, not mechanistically.

I find the case of Percon Corp Sdn Bhd v Yap Choon Loy [1998] 3 MLJ 867 cited by the Defendant supportive of the position I have taken in dealing with the present appeal. In Percon, the High Court had dismissed the appellant’s originating motion on the ground that the prayers for extension of time and to set aside an arbitral award could not be sought within the same application. On appeal, the Court of Appeal held that the learned trial judge had misdirected himself, affirming that Order 3 Rule 5(1) of the Rules of the High Court 1980 made no such stipulation and that it was desirable and permissible for both forms of relief to be sought together in one motion. The Court of Appeal accordingly granted the extension of time and remitted the matter so that the substantive application to set aside the award could be heard on its merits.

In applications to set aside a judgment in default, the Court’s discretion is guided by three interrelated considerations:

the length and nature of the delay;

the explanation for the delay; and

whether the Defendant has disclosed an arguable defence on the merits.

These factors are not to be applied as rigid hurdles. They are balancing considerations, to be weighed against the overarching objective of ensuring that justice is done without occasioning undue prejudice to the opposing party.

In the present appeal, the Defendant does not dispute the regularity of the service of the Writ and Statement of Claim. The appeal turns on whether there has been undue delay in the application to set aside and whether there is a defence on the merits.

Let us look at the undisputed facts in the present case. The JIDA was served on the Defendant on 28 January 2025. The statutory 30- day period expired on 27 February 2025. The Defendant’s application was filed approximately one and a half months thereafter.

This delay, while not insignificant, cannot be characterised as inordinate or contumelious. It does not disclose a pattern of disregard for court process, nor does it suggest a deliberate attempt to obstruct or frustrate the Plaintiff’s enforcement of its rights. While courts do not trivialise delays, they do not overstate them either. Between these two broad spectrums, the balance is to find that equilibrium where delay is neither willful nor contumelious.

Delay, by itself, is never determinative. The critical question is whether the delay has occasioned irreversible or irremediable prejudice. On the evidence before me, no such prejudice has been demonstrated to a conviction by the Plaintiff. The Plaintiff has not demonstrated that the setting aside of the JIDA would place it in a position materially worse than if the Defendant had entered appearance in time. The dispute would simply be returned to the procedural position it ought to have occupied in the first place, which is the adjudication of the dispute on the merits.

Any inconvenience suffered by the Plaintiff is compensable in costs. This is not a case where evidence has been lost, witnesses rendered unavailable, or the Plaintiff’s position irreversibly altered by the passage of time.

In contrast, the prejudice to the Defendant if relief were refused is manifest and disproportionate. The Defendant would be permanently shut out from defending a claim of substantial monetary value without the Court ever examining the merits.

The law does not favour such an outcome unless the Defendant’s conduct plainly warrants it. On the facts before me, it does not.

I must now allude to the facts of the case forming the dispute.

The Plaintiff’s claim arises from a Share Sale Agreement dated 18 August 2017 under which the Plaintiff paid RM 6,000,000 to the S/N Lp8Ym74ef0y2zN7EgSdcdQ Defendant for a 51% shareholding in Mega Building System Sdn. Bhd. The Plaintiff contends that the agreement was entered into on the premise that a construction agreement relating to a PR1MA project would subsequently be secured and executed, but as the project was later terminated and no construction agreement materialised, the Share Sale Agreement was a contingent contract whose underlying basis failed. On this footing, the Plaintiff pleads that the agreement became void, unenforceable, or impossible to perform, or alternatively was validly terminated due to the Defendant’s alleged breaches, and accordingly seeks a refund of the RM 6,000,000 paid, together with interest, damages, and costs.

The Defendant has exhibited a draft Defence in his affidavit in support of the setting aside application. The Defendant states that he sold his 51% shareholding in Mega Building System Sdn. Bhd., but the agreement was not a contingent contract. Even if the Defendant had defaulted on any of the terms of the said share sale agreement, there ought to have been a default notice seeking the Defendant to remedy such default. None were issued. Hence, the Defendant is not liable for events that occurred beyond the four corners of the share sale agreement.

At this stage, the Court is not concerned with whether the defence will ultimately succeed, but whether it is arguable and not fanciful. The fact that the share sale agreement was executed in 2017 and that the Plaintiff is seeking to impugn the agreement some 8 years later did not escape my attention.

A defence that appears weak, on the face of it, is not synonymous with a defence that is hopeless. The latter alone justifies refusal of relief. I am not satisfied that the Defendant’s defence is one that is hopeless.

Default judgments are intended as procedural sanctions, not substantive determinations of rights. They exist to prevent abuse of process, not to provide windfalls. When we look at the claim here, the Plaintiff seeks a return of RM 6,000,000.00 after 8 years and relies on the default judgment to achieve that objective. Having perused the draft Defence and having heard learned counsels’ submissions, I did not think that to be quite right.

Where a default judgment can be set aside without injustice to the Plaintiff, and where a Defendant seeks an opportunity to be heard on the merits, the Court should be slow to allow procedural default to become determinative of substantive rights.

Taking all matters into account, I find that the learned Deputy Registrar placed undue emphasis on procedural objections and insufficient weight on the discretionary principles governing delay and prejudice. In fact, the learned Deputy Registrar did not at all consider the delay or the merits of the defence.

I am satisfied that the delay is excusable in the circumstances, that no irremediable prejudice will be suffered by the Plaintiff, and that the Defendant has disclosed an arguable defence warranting a trial.

Accordingly, the appeal was allowed. The Judgment in Default of Appearance dated 16 January 2025 was set aside. I ordered the Defendant to file and serve his Defence within fourteen (14) days from the date of the order.

To reflect the Defendant’s delay and to compensate the Plaintiff, I awarded costs of RM 10,000.00 to the Plaintiff, subject to allocator, to be paid forthwith. If at all the Plaintiff was prejudiced, I was of the view that the amount of costs ordered would more than compensate the Plaintiff for it. Dated the 20th day of December 2025 -sgd- ……………………………………………………………………… MUHAMMAD ADAM @ EDWARD BIN ABDULLAH Judicial Commissioner High Court (Commercial Division NCC 4) High Court of Kuala Lumpur In the Federal Territory, Malaysia S/N Lp8Ym74ef0y2zN7EgSdcdQ Counsel for the Plaintiff : Lum Kok Kiong together with Kam Li Jie (pupil-in-chambers) Messrs. Lum Kok Kiong & Co. Counsel for the Defendant : Lavanesh Haresh Mahadevan together with Vyonna Tan Messrs. Haresh Mahadevan & Co.

Jacy Tintang & Anor v Mayan Ak Nayang [2022] 6 MLJ 153 2. Hong Kwi Seong v Ganad Media Sdn Bhd & Anor Appeal [2013] 6 MLJ 765 3. Percon Corp Sdn Bhd v Yap Choon Loy [1998] 3 MLJ 867

Section 68 (1)(g) of the Courts of Judicature Act 1964 2. Order 89 Rule 5 and Order 15 Rule 6 of the Rules of Court 2012 3.