Trupro Consult Sdn Bhd v Blueseal (M) Sdn Bhd (WA-12AC-3-01/2021)

TRUE PRO CONSULT SDN BHD DEFENDANTS 2 GROUNDS OF DECISION Introduction [1] This is an appeal against the decision of the Sessions Court to strike out a party to the suit. [2] The Appellant/Second Defendant is a private limited company involved in the construction consultancy services business. [3] The Respondent/Plaintiff is similarly a private limited company involved in the construction business. [4] The First Defendant is also a private limited company involved in the construction business. Background and Preliminary [5] By a letter of award dated 6 May 2019 (“Contract”), the First Defendant as main contractor appointed the Respondent as its sub-contractor to carry out and complete certain works in respect of the project described as “Cadangan Membina Sebuah Kilang di Atas Lot 158490 (HSD 135860), Jalan Sungai Pinang 4/10, Kawasan Perindustrian Pulau 3 Indah, Mukim Klang, Daerah Klang, Selangor Darul Ehsan (“Project”) for Tech Food Ingredients Sdn Bhd (“Employer”). [6] The Appellant is the superintending officer of the Project appointed by the Employer. [7] During the course of the carrying out of the Project works, there were disputes which have arisen between the Respondent and the First Defendant by reason of non-payment of the Respondent’s claim for work done because of cross claims by the First Defendant for unsatisfactory work carried out by the Respondent. The Contract was subsequently terminated. [8] Consequently, the Respondent commenced the suit in the sessions court against the First Defendant and Appellant praying for as follows:

satu deklarasi bahawa Sijil Bayaran Kemajuan no. 4A bertarikh 27hb November 2019 adalah tidak sah dan terbatal;

satu deklarasi bahawa Sijil Bayaran Kemajuan no. 5A bertarikh 25hb Disember 2019 adalah tidak sah dan terbatal;

penghakiman terhadap Defendan Pertama untuk jumlah sebanyak RM90,000.00; 4

penghakiman terhadap Defendan Pertama untuk jumlah sebanyak RM167,639.70;

gantirugi am terhadap Defendan Pertama bagi kerja-kerja yang telah dilakukan oleh Plaintif tetapi belum dibayar oleh Defendan Pertama dan belum dipersijilkan oleh Defendan Kedua atau di mana sijil bayaran kemajuan gagal dikeluarkan oleh Defendan kedua;

gantirugi am terhadap Defendan Pertama untuk kehilangan keuntungan;

faedah pada kadar 5% setahun ke atas jumlah di perenggan 24 (c),

(d), (e) and (f) di atas dari tarikh penghakiman sehingga tarikh penyelesaian penuh terhadap Defendan Pertama;

kos tindakan ini dibayar oleh Defendan Pertama dan Defendan Kedua kepada Plaintif; dan

lain-lain relif yang difikirkan sesuai dan manfaat oleh Mahkamah yang Mulia ini. [9] After the close of the pleadings in the suit, the Appellant filed its notice of application to strike out the Respondents writ and statement of claim against it (“Application”). 5 [10] The learned sessions court judge on 23 December 2020 dismissed the Application with costs of RM3,000.00. [11] The Appellant was dissatisfied and has on 5 January 2021 filed its appeal to the high court. [12] The appeal was fixed before me on 6 May 2021. After having read the record of appeal and written submissions of the parties as well as oral argument of counsel, I allowed the appeal on condition that the First Defendant must call the Appellant, Truepro Consult Sdn Bhd as its witness during the trial of Suit. The Respondent shall pay the Appellant costs of RM4,000.00 subject to the usual allocator. [13] The Respondent is dissatisfied with my decision and has on 31 May 2021 filed its appeal to the court of appeal. [14] In the premises, I hence furnish grounds in support of my decision. Contentions and Findings [15] In the appeal before me, the parties narrowed down their contentions to a singular issue on whether the Appellant has been necessarily made a party in the suit by the Respondent. 6 [16] The law on striking out under O. 18 r. 19 of the Rules of Court 2012 is trite. It is provided as follows in Order 18 rule 19: “19. Striking out pleadings and endorsements (O. 18 r. 19)

The Court may at any stage of the proceedings order to be struck out or amended any pleading or the endorsement, of any writ in the action, or anything in any pleading or in the endorsement, on the ground that-

it discloses no reasonable cause of action or defence, as the case may be;

it is scandalous, frivolous or vexatious;

it may prejudice, embarrass or delay the fair trial of the action; or

it is otherwise an abuse of the process of the Court, and may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be.

No evidence shall be admissible on an application under subparagraph (1)(a).

This rule shall, as far as applicable, apply to an originating summons as if it were a pleading.” [17] In the supreme court case of Bandar Builder Sdn Bhd & Ors v United Malayan Banking Corporation Bhd [1993] 4 CLJ 7, SC Mohamed Dzaiddin SCJ (later CJ) held as follows with emphasis added by me: “The principles upon which the court acts in exercising its power under any of the four limbs of O. 18 r. 19(1) of the RHC are well settled. It is only in plain and obvious cases that recourse should be had to the summary process under this rule (per Lindley MR in Hubbuck & Sons Ltd v. Wilkinson, Heywood & Clark Ltd 7), and this summary procedure can only be adopted when it can be clearly seen that a claim or answer is on the face of it 'obviously unsustainable' (see AG of Duchy of 7 Lancaster v. L & NW Rly Co 8 ). It cannot be exercised by a minute examination of the documents and facts of the case, in order to see whether the party has a cause of action or a defence (see Wenlock v. Moloney & Ors 9 ). The authorities further show that if there is a point of law which requires serious discussion, an objection should be taken on the pleadings and the point set down for argument under O. 33 r. 3 (which is in pari materia with our O. 33 r. 2 of the RHC) (see Hubbuck & Sons Ltd v. Wilkinson, Heywood & Clark Ltd 7 ). The court must be satisfied that there is no reasonable cause of action or that the claims are frivolous or vexatious or that the defences raised are not arguable.” [18] Alternatively, in the federal court case of Raja Zainal Abidin bin Raja Haji Tachik & Ors v British-American Life & General Insurance Bhd [1993] 3 MLJ 16, Peh Swee Chin FCJ held as follows also with emphasis added by me: “However, the learned Judge in the Court below, who is very experienced and very able, and who referred very much to the same issues, appears to be much exercised by the fact that the application was made under O.18 r.19, in reversing the learned Registrar's decision, in holding: On the facts of this case I consider that O.18 r.19 is not appropriate to shut out the plaintiffs from pursuing their claims... The cautionary words are words which have been frequently employed in connection with an application under O.14. It was unfortunate that the case of Tractors Malaysia Bhd. v Tio Chee Hing [1975] 1 LNS 133[1975] 2 MLJ 1, a Privy Council case was not cited in the Court below, though it was cited to us here. In Tractors, the defendants applied to set aside the pleadings there on the grounds that they were frivolous and vexatious. The High Court allowed the application holding that the action was bound to fail. The Federal Court, on appeal, regarded themselves as precluded from examining the evidence for determining whether the action was bound to fail. The Privy Council held that the Federal Court was in error for not examining the evidence and deciding as to whether the action there was bound to fail, though the power to dismiss an action summarily was a drastic power. The Privy Council went through the evidence with a fine-tooth comb and decided to agree with the learned Judge at first instance and restored the High Court's decision. It is to be 8 remembered that the High Court always has an inherent jurisdiction to prevent abuse of its process irrespective of whether it is expressly called for or not in an application under O.18 r.19 unless such application is limited solely to the ground that any pleading does not disclose a reasonable cause of action or defence as the case may be.” [19] Since this is an interlocutory appeal from the sessions court, this appeal is by way of re-hearing de novo pursuant to Order 55 Rule 2 of the Rules of Court 2012; see also Malaysian Civil Procedure 2015 at paragraph 55/2/1. [20] The Appellant primarily pointed that there is no reasonable cause of action disclosed against the Appellant in the Respondent’s statement of claim. [21] I have scrutinised the statement of claim including the prayers prayed therein and I am satisfied that the Respondent is neither pursuing for relief against the Appellant in contract nor tort (such as negligence, fraud, conspiracy, inducement to procure breach of contract, etc). The Respondent’s complaint seems to be that the Appellant who is the agent of the Employer is functus officio and thus could have not validly issued revised payment certificates relied upon by the First Defendant after the Contract has been terminated. It is essentially a question of law. [22] However, the Respondent retorted that it is nonetheless necessary for the Appellant to testify and explain in the trial as to why the payment certificates were revised; thus the Appellant had been included as a party in the suit. Otherwise, the Respondent has to subpoena the Appellant as 9 its witness but the Appellant may turn hostile to the detriment of the Respondent. [23] It is plain in the court of appeal case of See Thong & Wong Son Yen v Saw Beng Chong [2013] 3 MLJ 235, Ramly Ali JCA (later FCJ) held as follows with emphasis added by me: “[11] The learned judge must bear in mind that striking out a claim for no reasonable cause of action under sub-para. (1)(a) is only appropriate in a plain and obvious case. The learned judge must be satisfied that the statement of claim as it stands is insufficient, even if proved, to entitle the plaintiffs to the relief which they asked for. The procedure is a summary procedure. It should only be adopted when it is conspicuously clear that the claim on the face of it is obviously unsustainable. Just look at the statement of claim. The test to be applied is whether on the face of the statement of claim, the court is prepared to conclude that the cause of action is obviously unsustainable (see: Federal Court decision in New Straits Times (Malaysia) Bhd v Kumpulan Kerta Niaga Sdn Bhd & Anor [1985] 1 LNS 1; [1985] 1 MLJ 226).” [24] Since the Respondent has obviously no cause of action against the Appellant, I am convinced that the Respondent’s statement of claim made against the Appellant must be stuck out. However, counsel for the Appellant who is also counsel for the First Defendant, nonetheless conceded and undertook to the First Defendant calling the Appellant as its witness for the Appellant to be subject to cross examination by the Respondent at trial. In my view, the stipulation of this condition upon the First Defendant to produce the Appellant as witness thus takes away the evidential/procedural dilemma faced by the Respondent. This is the just and reasonable course of action in the unique circumstances of this case. 10 [25] Subject to the stipulated condition, I am satisfied that the appeal should therefore accordingly be allowed. Conclusion [26] It is for the foregoing reasons that I allowed the appeal as so ordered. Dated this 8 June 2021 t.t. LIM CHONG FONG JUDGE CONSTRUCTION COURT 1 HIGH COURT KUALA LUMPUR 11 COUNSEL FOR THE APPELLANT: DATO’ JASBEER SINGH (RACHEL VERGHIS WITH HIM) SOLICITORS FOR THE APPELLANT: JASBEER NUR & LEE COUNSEL FOR THE RESPONDENT: K. SUREINDHREN (LEE YEOK CHOO WITH HIM) SOLICITORS FOR THE RESPONDENT: LEE YC & CO