Teng Ah Kiong v Lam Chee Seong (AA-22NCC-4-02/2023)

26.868 billion (about RM 9.008 million) remaining unpaid as at 15 March 2018. As a result, the Plaintiff has initiated this action against the Defendant for the remaining sum unpaid for breach of contract including interest and costs. The dispute originated in Malaysia, with 40 Malaysian law governing the agreement. Commence of Action and service of process [3] The Plaintiff served the Writ and Statement of Claim to the Defendant's wife via AR Registered Post on 2.3.2023. At that time, the Defendant was in Jakarta, Indonesia, where he has allegedly 45 been living since 2003. Nonetheless, there is no indication that the Defendant is domiciled in Indonesia. Hence, for all intents and purposes, the Defendant is considered a domicile of Malaysia. [4] Despite service of the Writ and Statement of Claim to the 50 Defendant's wife, on 9 March 2023, the Defendant through his solicitors filed a memorandum of appearance, indicating his intention to contest the case. Following this, the Defendant's solicitors sought and received two extensions of time, approximately one and a half months from the court to file the Statement of 55 Defence. The extension was allowed by the court without any objection from the Plaintiff. This sequence of actions led both the Court and the Plaintiff expecting Defendant to be filing Statement of Defence. 60 [5] The extensions were as follows: a) The first extension was for 2 weeks, granted during the case management on 13 March 2023, with a deadline to file defence on 27 March 2023; and b) 2nd extension was during the case management on 27 march 65 2023, the Defendant was granted an additional 3 weeks extension. [6] However, despite the extensions of time granted to file the defence, the Defendant instead filed Enclosure 6 on 4 April 2023, to challenge 70 the service of the Writ and Statement of Claim on the basis that the Defendant had never been affected proper service of the Writ and Statement of Claim. The Defendant contends that the Plaintiff ought to have obtained leave of the court to serve the writ and the statement of claim out of jurisdiction, as the action, begun by writ, 75 sought relief against the Defendant, who is resident outside the jurisdiction. [7] The Defendant's challenge in Enclosure 13, pertains solely to the service, asserting that the Plaintiff failed to obtain leave to serve the 80 Writ and Statement of Claim out of jurisdiction. The Defendant does not dispute that the High Court of Malaya in Ipoh is appropriate forum having jurisdiction over this matter to determine the dispute. Plaintiff’s 1st Challenge to the Defendant’s Application [8] The crux of the Plaintiff's argument in this respect hinges on the 85 procedural irregularity i.e. the Defendant's failure to comply with Order 12 rule 10(1) of the Rules of Court (ROC) 2012. This Court recognizes the importance of strict compliance with procedural rules to ensure fairness and preserving the structured conduct of legal proceedings. Such strict compliance is essential not only for the 90 administration of justice but also for upholding the principles of equity and due process within the judicial system. [9] Order 12 rule 10(1) of the Rules of Court (ROC) 2012, provides the timeline for filing the application to set aside the service, within 95 the same time limited for serving the Statement of Defence. Ordinarily defence is filed 14 days from the date of entry of appearance, which would fall on 23 March 2023. Therefore, procedurally, Enclosure 6 should have been filed on or before 23 March 2023. In the absence of consent from the Plaintiff or a 100 direction by the court to file out of time, Enclosure 6 thus stands procedurally defective due to its delay. This lapse of time renders the Defendant's application in Enclosure 6, defective to contest the service of process. 105 [10] The Defendant's failure to properly file an application challenging the service as per Order 12 rule 10 of the ROC gives rise to a presumption under Order 12 rule 10(6) that the Defendant has acquiesced to the jurisdiction of this Court. 110 [11] I append below the relevant provision from Order 12 rule 10 of ROC: “10. Dispute as to jurisdiction (O. 12 r. 10)

A defendant who intends to dispute the jurisdiction of the Court in 115 the proceedings by reason of any irregularity as is mentioned in rule 9 or on any other ground shall enter an appearance and, within the time limited for serving a defence, apply to the Court for-

an order setting aside the writ or service of the writ on him;

an order declaring that the writ has not been duly served on him;

the discharge of any order giving leave to serve a notice of the the writ on him out of the jurisdiction;

the discharge of any order extending the validity of the writ for the purpose of service;

the protection or release of any property of the defendant seized 125 or threatened with seizure in the proceedings;

the discharge of any order made to prevent any dealing with any property of the defendant;

a declaration that in the circumstances of the case the Court has no jurisdiction over the defendant in respect of the subject matter 130 of the claim or the relief or remedy sought in the action; or

such other relief as may be appropriate.

(2)…..

(3)….

….

….

Except where the defendant makes an application in accordance with paragraph (1) or paragraph (2), the appearance by a defendant shall, unless the appearance is withdrawn by leave of the Court under Order 21, rule 1, be treated as a submission by the defendant to the 140 jurisdiction of the Court in the proceedings.” [12] In conclusion, given the Defendant's procedural missteps, specifically the failure to conform to the stipulated requirements under Order 12 rule 10(1), and the consequence of such failure, 145 this Court finds in favour of the Plaintiff. In that the Defendant is deemed to have submitted to the jurisdiction of this Court, and as such, the challenge on service is dismissed on procedural grounds and the deeming provision Order 12 rule 10(6), is applicable. Plaintiff’s 2nd Challenge to the Defendant’s Application 150 [13] This challenge by the Plaintiff emerged from the court's initiative when it requested further submissions from the parties regarding the "consequences of the Defendant taking steps in the proceedings and then seeking to strike out the case summarily" as what the Defendant in this case intends to do by Enclosure 6. 155 [14] Suffices at this juncture for me to refer to authoritative book by Zuckerman on Civil Procedure: Principles of Practice 4th Ed, which I shall reproduce here: “6.48. An application for an order declaring that the court has no 160 jurisdiction must be made within 14 days of filing an acknowledgement of service (CPR 11(4)(a)). The application must be supported by evidence (CPR 11(4)(b)). No defence needs to be served before the hearing of the application (CPR 11(9)). CPR 11(4) is mandatory: thus, a defendant who wishes 165 to challenge jurisdiction but has failed to file an acknowledgement of service must apply for an extension of time; such an application will be governed by the principles of relief from sanction. A defendant who files an acknowledgement of service but does not make an application to contest jurisdiction 170 within the 14-day period is to be treated as having accepted that the court has jurisdiction to try the claim (CPR 11(5)). Moreover, taking any step in the proceedings, other than acknowledging service for the purpose of objecting to the jurisdiction, may be considered as a voluntary submission to the jurisdiction of the 175 court. Consequently, a request by a defendant for an extension of time for service of a defence cannot be construed as also being a request for an extension of time for making an application to contest the jurisdiction; and may even be capable of amounting to a submission to the jurisdiction. In these 180 circumstances, it is unsurprising that an extension of the time to serve a defence does not of itself extend the period for objecting to jurisdiction” (underline is emphasised) 185 [15] The submission of the Plaintiff discusses the implications of "steps in proceedings" within the context of the Rules of Court 2012 and the Arbitration Act 1952, particularly Section 6 Arbitration Act

This provision allows for legal proceedings to be stayed in favour of arbitration if a party to the proceedings applies to the court 190 before taking any further steps in the court proceeding. It emphasizes that a litigant who engages in the court proceeding by taking steps in the proceedings, he is effectively taken to have submitted to the court's jurisdiction, thus precluding the attempt to stay the court proceeding pending arbitration. 195 [16] In this respect the Plaintiff has referred to number of cases: a) the case of Sanwell Corporation v Trans Resources Corporation Sdn Bhd & Anor [2002] 2 MLJ 625, which highlight actions deemed as taking steps in proceedings. Just 200 like in present case, in Sanwell’s case (supra) the Defendant had sought, and the Plaintiff had consented to, a one-week extension for filing the Statement of Defence. It was held that by requesting an extension of time to file the defence, the Defendant unequivocally engaged in the court proceedings as 205 per Section 6 of the Arbitration Act, signifying a clear intent to submit to the jurisdiction of the court. This act is said to have effectively waived the right of the Defendant to pursue arbitration. His Lordship Mokhtar Abdullah FCJ delivering the judgment of the Federal Court said at page 631: 210 “At this juncture, we note the existence of one salient fact in Usahabina which was mentioned in passing by the learned JC, but unfortunately not properly appreciated by him. It is this fact. In that case, the defendant who had entered an unconditional appearance failed to file his defence within the 215 time limited for doing so. He had requested for, and the plaintiff had agreed to, an extension of one week to file the defence. Pausing here for a moment, what the defendant did was proceedings within the meaning of s 6 of the Act by requesting an extension of time to file the defence, clearly 220 indicating an intention to deliver a statement of defence, thus abandoning the right to arbitration” b) The Court of Appeal case of IFCI Ltd v Archipelago Insurance Ltd [2022] 2 MLJ 971; [2022] 2 CLJ 535; 225 [2022] 1 AMR 825, which states as follows: - “[25] Reverting to the present case, the second defendant had requested twice for an extension of time to file its statement of defence. This request for an extension of time 230 to file the defence, as was held by the Federal Court in Sanwell Corp, is a step in the proceedings indicating an intention to deliver a statement of defence, thus abandoning the right to arbitration.” 235 c) The High Court case of Mun Seng Fook v AIG Malaysia Insurance Berhad (formerly known as Chartis Malaysia) [2019] 7 MLJ 59; [2018] 3 MLRH 203; [2018] 8 CLJ 394, which held as follows: “Held, allowing the appeal:

(1)The respondent had submitted to the jurisdiction of the court on the first case management date when it did not attend court but requested the appellant’s solicitors to mention on its behalf to ask for an extension of time to file the statement of defence …” 245 [16] The next two (2) cases referred to below are not relating arbitration matter and which is in similar circumstances as in our present case. They are: a) In Burns-Anderson Independent Network plc v Wheeler 250 [2005] All ER (D) 331(Feb), a decision from High Court, Queen’s Bench Division, the Plaintiff filed a lawsuit against a defendant in December 2003, and provided an address in France for the defendant. Despite not attempting to serve the claim until April 2004, when faced with a nearing deadline, the 255 Plaintiff sent the claim form by registered post to the French address, which was returned unopened as the defendant had moved. Later, the defendant's solicitors agreed to accept service, but by then, all service was considered late. The Plaintiff argued that service was valid in France based on the 260 defendant's last known residence and also claimed that the defendant waived any irregularity by not challenging jurisdiction timely. The court decided if a defendant asks for more time to submit their defence, it does not mean they are also asking for more time to challenge the service on 265 jurisdictional point. Therefore, the defendant is taken to be out of time to challenge it. Asking for extra time to defend themselves does not give them extra time to challenge the court's authority. So, by not challenging the court's authority on time, it's as if the defendant agreed that the court could 270 decide on the case, waiving their right to challenge it. This is what Judge Havelock-Allan QC, sitting as a judge of the High Court said: “(2) Under the wording of the rules, a request made by a defendant for an extension of time for service of a defence 275 could not be construed as also being a request for an extension of time for making an application to contest the jurisdiction. It followed that the defendant was out of time to make an application under CPR 11(4), since - the extension of time for 280 service of the defence did not have the effect of extending the time for making an application under CPR 11(4). In the circumstances, the defendant did submit to the jurisdiction and waived the right to contest the jurisdiction under CPR 11.” 285 b) In AELF MSN 242 LLC v Surinaamse Luchtvaart Maatschappij NV (trading as Surinam Airways) [2022] 1 WLR 2181, the court in refusing the similar application as in our present case, states: “Held, refusing the application, (1) that the defendant had 290 submitted to the jurisdiction by way of a common law waiver by reason of (i) its application for an extension of time for the service of its defence, (ii) its earlier indication in its acknowledgment of service that it intended to defend the claim, rather than to dispute jurisdiction, and (iii) its failure to indicate 295 that it intended to dispute jurisdiction prior to its application pursuant to CPR Pt 11; that, in particular, the court had traditionally considered an application for an extension of time in which to serve a defence to be inconsistent with an intention to dispute jurisdiction; that, further, since CPR r 11(9) expressly 300 provided that a defendant did not have to file a defence before making an application under CPR Pt 11 and since the service of a defence was a n answer to the claim made against the defendant on the merits, it followed that an application to extend time in which to serve a defence was a step in the 305 proceedings whose object was to determine the merits of a claim; and that, moreover, on the facts of the present case, there was no explanation underlying the defendant’s application for an extension of time in which to serve its defence which was consistent with an intention to dispute jurisdiction and there had 310 been no hint of an attempt by the defendant to reserve its rights, or to make the application without prejudice to, any intention to dispute jurisdiction (post, A paras 73—79).” [17] On the issue of service of the Writ and Statement of Claim via AR 315 Registered post, accepted by the Defendant's wife, the Federal court in the case of Goh Teng Whoo & Anor v Ample Objectives Sdn Bhd [2021] 3 MLJ 159; [2021] 4 CLJ 348; [2021] 2 MLRA 682, has ruled such service is invalid. Nevertheless, the subsequent filing of a Memorandum of Appearance by the Defendant's Solicitor 320 deems service. This is because the essence of serving the Writ and Statement of Claim is to notify the Defendant of the proceedings, and the act of filing an appearance is considered as acknowledgment of such notice. Therefore, with the appearance filed, the notice is deemed to have been given, and service is 325 considered effected. This perspective is supported by the Malaysian Civil Procedure 2013: “10/1/15: Entry of appearance before writ is duly served-Order 12 r 9 provides that the entry of appearance by a defendant shall not be treated as a waiver by him of irregularity in the writ or 330 service thereof or in any order giving leave to serve the notice of the writ out of jurisdiction or extending the validity of the writ for the purpose of service. However, the case law suggests that service is deemed to have occurred when appearance is duly entered (See Pike v Michael Nairn & Co Ltd [1960] 2 All ER 184; 335 [1960] Ch 553). It was held in the case of Supreme Finance (M) Bhd v Wing Hong How [1999] 3 AMR 2789; [1999] 3 MLJ 114, CA, that under RHC 1980 Order 10 r 1(3), a defendant who enters unconditional appearance without the writ being duly served on him is deemed to have been duly served the writ. It 340 should be noted that under the RC 2012, there is no longer an option of a defendant entering conditional appearance. (underlined emphasis added) Conclusion [18] In the present case, the Defendant's application is procedurally 345 irregular as they failed to comply with the procedural requirement under Order 12 rule 10 of the Rules of Court 2012, which pursuant to Order 12 rule 10(6), the Defendant is deemed to have submitted to the jurisdiction of the court. Further, the conduct of entering an appearance and requesting extensions of time to file the statement 350 of defence constituted "steps in proceedings," thereby implying Defendant submitting to the court's jurisdiction. [19] In the upshot, I dismissed Enclosure 6, with costs in cause of RM5000. 355 [20] Defendant to file Defence within 2 weeks from today and the case be reverted to Deputy Registrar for Pre-trial Case Management (“PTCM”). 360 365 Date : 14 June 2024 Moses Susayan 370 MOSES SUSAYAN Judicial Commissioner High Court in Malaya at Ipoh, Perak 375 Counsel: For the Plaintiff : Joel Chua Advocates and Solicitors 380 Messrs Daljit Singh Partnership Petaling Jaya For the Defendant : Gurbachan Singh Advocates and Solicitors 385 Messrs Sandeep Gobindeep & Co Ipoh, Perak (Notice: This Grounds of Decision is subject to official editorial revision) 390 Headnotes: CIVIL PROCEDURE ─ set aside the service ─ Whether the application to set aside service complied with Order 12 rule 10(1) ROC 2012 ─ Whether Defendant's failure to challenge service as per Order 12 rule 10(1) gives rise to a presumption under Order 12 rule 10(6) ─ Whether 395 the conduct of entering an appearance and requesting extensions of time to file the statement of defence constituted "steps in proceedings," resulting in submitting to the court's jurisdiction.