Universiti Sains Malaysia v 1. ) Mokhtar Bin Awang [No. K/P: A1937673 (lama)/710710-11-5547 (Baru)] (2-611-2010)

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Page 1 of 23 DALAM MAHKAMAH TINGGI MALAYA DI PULAU PINANG DALAM NEGERI PULAU PINANG GUAMAN SIVIL NO. 22-610-2010 ANTARA UNIVERSITI SAINS MALAYSIA …PLAINTIF

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(1) By email of 24.1.2021: “Kami menerima dokumen dari firma Ghazi & Lim baru-baru ini” (Ghazi & Lim are USM’s solicitors. They were tasked with serving the relevant cause papers.) and “…kami merayu kepada pihak USM agar menarik balik notis kebankraban [sic] dan menawarkan penyelesaian one-off yang mampu kami bayar”. Page 10 of 23

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(2) By email of 25.1.2021: “Kami memohon sekali lagi supaya pihak USM dapat menawarkan rebet yang mampu kami bayar secara one-off”.

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(3) By email of 31.1.2021: “Ingin dijelaskan bahawa kami berdua berhasrat hendak menyelesaikan kes ini secepat mungkin”.

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(4) By email of 15.2.2021: “Dilampirkan bukti pembayaran (Mokhtar Awang) untuk tindakan dan rujukan pihak Puan. Untuk Ku Zilati, kami akan buat pembayan [sic] esok”.

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(5) By email of 16.2.2021: “Bukti pembayaran Ku Zilati disertakan dalam attachment untuk tindakan dan rujukan pihak USM”. [39] On 24.2.2021, USM discontinued the 2nd bankruptcy proceeding against the 1st Defendant. [40] On 2.3.2021, both the 1st Defendants filed their respective Applications to set aside the default Judgments. THE APPLICABLE PRINCIPLES [41] The principles governing an Application to set aside a default Judgment are well settled. If the default Judgment was obtained irregularly, the irregularity is enough to set aside it aside. The default Judgment should be set aside “as of right” or “as a matter of right”. The Latin expression is ex debito justiciae. Page 11 of 23 [42] But if the default Judgment was obtained regularly, then the 1st Defendant must file an affidavit of merits, which must disclose a defence on the merits, and that the 1st Defendant has an arguable or triable issue on the merits: Lai Yoke Ngan & Anor v Chin Teck Kwee & Anor [1997] 2 MLJ 565 (FC); [1997] 3 CLJ 305; [1997] 3 AMR 2458. [43] The Federal Court in Lai Yoke Ngan (supra) propounded it this way (at MLJ page 573-574)— The principle of setting aside a default judgment under O 13 r 8 has been well established and needs no detailed repetition. What is important to observe is that a default judgment is not a judgment on the merits. Accordingly, when such judgment is obtained irregularly, such irregularity would be a sufficient ground by itself for setting it aside. But where the default judgment has been obtained regularly, in order to succeed, the defendant must file an affidavit of merits, ie the defendant must disclose by affidavit evidence that prima facie he has a defence on the merits. Put in another way, the affidavit must disclose that he has an arguable or triable issue on the merits (see Evans v Bartlam [1937] AC 473)… [emphasis added] [44] A defence on the merits means raising “an arguable or triable issue”: Fira Development Sdn Bhd v Goldwin Sdn Bhd [1989] 1 MLJ 40 (SC); [1989] 1 CLJ 1. [45] And to disclose a Defence with merits, a draft Defence should be filed: Pengkalen Concrete Sdn Bhd v Chow Mooi & Anor [2003] 3 MLJ 67 (HC); [2003] 6 CLJ 326; [2003] AMEJ 0063. Page 12 of 23 [46] In Pengkalen Concrete (supra), His Lordship Justice Suriyadi Halim Omar puts it like this (at MLJ page 74-75)— The next ingredient to be established by the defendants was whether there was a defense of merit before me for consideration, ie. by at least filing their draft defences… . In the current case, it was indisputable that the defendants had failed to produce that all important draft statements of defence. Without them, I was thus without any option but to find again for the plaintiff… Common sense would convince anyone that to allow the appeal, and set aside a default judgment when no prima facie defence worthy of consideration was before the court, would portray the court as a lame duck prolonging the agony of all parties. Without them before me, I could only conclude that the defendants were definitely not serious in their attempts to challenge the plaintiff… WAS THE DEFAULT JUDGMENT REGULARLY OBTAINED? [47] The first issue to determine is whether the default Judgment was regularly obtained. Put differently, on the facts of these two suits—was the Writ and Statement Of Claim properly served on the 1st Defendant? [48] The 1st Defendant avers (swears on oath) that—

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(1) USM failed to serve the Writ and Statement Of Claim on her;

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(2) the Taman Kempas address was not her residential address, nor was it her address for service. She swore that the Taman Kempas address “bukan alamat kediaman dan/atau alamat penyampaian saya”; Page 13 of 23

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(3) she did not enter an Appearance because she did not receive the Writ and Statement Of Claim. [49] Testing the 1st Defendant’s averments against the documentary evidence and USM’s averments, I find that the 1st Defendant’s averments are unconvincing. [50] Unfavourable to the 1st Defendant, I find, on the balance of probabilities, that USM’s Writ and Statement Of Claim were properly served on the 1st Defendant, for the following reasons—

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(1) The Taman Kempas address was the address stated in the Fellowship Agreement as the 1st Defendant’s address.

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(2) USM produced the Pos Malaysia Statement and Receipt to prove that the Writ and Statement Of Claim were sent by A.R. Registered Post to the 1st Defendant’s Taman Kempas address, under the cover of USM’s Writ service letter (dated 6.9.2010).

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(3) By her letter of 21.9.2010, the 1st Defendant responded to USM’s Writ service letter, which proves that the 1st Defendant received the Writ and Statement Of Claim. In this letter of 21.9.2010, the 1st Defendant wrote the Taman Kempas address as her address.

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(4) USM replied to the 1st Defendant’s letter of 21.9.2010, by their solicitor’s letter of 11.10.2010. The 1st Defendant in turn Page 14 of 23 responded to USM’s solicitor’s letter of 11.10.2010, by her letters of 26.10.2010 and 23.11.2010. And in both these reply-letters, the 1st Defendant similarly wrote the Taman Kempas address as her address. This reinforces my finding of fact that the 1st Defendant received the Writ and Statement Of Claim, as well as USM’s solicitor’s letter of 11.10.2010, at her Taman Kempas address. [51] Since I find that the 1st Defendant received service of the Writ and Statement Of Claim, and the 1st Defendant failed to enter Appearance as she was required to do, I hold that the default Judgment was regularly obtained. DID THE 1ST DEFENDANT DISCLOSE A DEFENCE ON THE MERITS TO WARRANT THE SETTING ASIDE OF THE DEFAULT JUDGMENT? [52] Since the default Judgment was regularly obtained, the next issue to determine is whether the 1st Defendant disclosed a defence on the merits to warrant the default Judgment to be set aside. [53] On this issue of a defence on the merits, the 1st Defendant does not produce a draft Defence for the Court to consider. Instead, she makes these averments—

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(1) Since 2019, she has been in communication with the USM legal counsel Puan Hanum Muhamad Shkir about the arrears due in the Fellowship Agreement. She had on several occasions discussed the arrears due with USM, but USM in mala fide proceeded to take legal action against her. Page 15 of 23

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(2) She moved from USM to the Universiti Teknologi Petronas (UTP). The Ministry of Higher Education can extinguish the balance of her loan (scholarship) by transferring her service contract to UTP as a reciprocal action between Petronas and the Government Of Malaysia. (I find, however, that she does not disclose any evidence to support this assertion, not even any evidential material that infers that she could rely on this alleged arrangement between USM and UTP, as her defence to USM’s claim.)

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(3) She has a defence on the merits which has a good prospect of succeeding: “saya mempunyai pembelaan yang bermerit dengan prospek kejayaan yang tinggi”. (But I find that it remains a bare statement. She does not condescend to any particulars to substantiate this statement.) [54] I find that these averments do not tantamount to a defence on the merits. The 1st Defendant has not produced an “arguable or triable issue” that warrants setting aside the default Judgment. WAS THERE A DELAY BY USM, OR BY THE 1ST DEFENDANT? [55] Another issue that is relevant to the Application to set aside is the issue of delay. The 1st Defendant asserts that USM, in bad faith, committed an inordinate delay of 156 months before executing on the Judgment, and that USM did this in order to recover a higher interest Page 16 of 23 amount from the 1st Defendant, even though she was still discussing a settlement with USM. [56] In reply to this assertion, USM avers that—

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(1) It was the 1st Defendant who asked to pay the amount due by instalments. After some payments, the 1st Defendant stopped paying and went into default in 2014. That was when USM took out the 1st bankruptcy proceeding against her. In 2016, the 1st bankruptcy proceeding was withdrawn on the 1st Defendant’s promise to resume paying.

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(2) Then in 2018, the 1st Defendant went into default again. In 2020, USM obtained the leave of Court to execute after 6 years have passed from the date of the Judgment. And in 2020, USM took out the 2nd bankruptcy proceeding against the 1st Defendant. After further negotiations, resulting in the 1st Defendant paying up the amount in arrears, USM withdrew the 2nd bankruptcy proceeding.

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(3) In other words, the alleged delay of 156 months was a result of the 1st Defendant’s own doing. [57] In any event, since USM obtained the Court’s leave to execute after 6 years have lapsed, and since the prolonged lapse of time was USM’s forbearance from executing the Judgment because of the 1st Defendant’s own default and request—I find that there was no inordinate delay on USM’s part. Page 17 of 23 [58] Conversely, USM asserts that there is an unexplained delay by the 1st Defendant in filing her Application to set aside the default Judgment. [59] In this context, the 1st Defendant first alleges that USM kept the fact of the Judgment from her for 156 months. In other words, USM did not inform the 1st Defendant about the Judgment for 156 months. The 1st Defendant also alleges that she got to know about the Judgment only when the 2nd BN was served on her, which was in January 2021. She alleges that as soon as she knew about the Judgment through the 2nd BN—“sebaik saja saya mendapat tahu berkenaan dengan Penghakiman tersebut melalui Notis Kebankrapan”—she filed the Application to set aside the Judgment. I am, however, compelled to note here that the 1st Defendant filed the setting aside Application only in March 2021. [60] USM substantiates their assertion that the 1st Defendant had inordinately delayed filing her Application to set aside the Judgment, by making these averments—

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(1) By USM’s Judgment service letter (dated 21.7.2011), USM sent the sealed Judgment to the 1st Defendant’s Taman Kempas address in 2011. I note here that this was about 10 years before the service of the 2nd BN in 2021.

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(2) The Pos Malaysia Berhad Statement and Receipt dated 22.7.2011, proves that USM’s Judgment service letter was sent by Registered Post and Certificate Of Posting to the Taman Kempas address. Page 18 of 23

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(3) The 1st Defendant responded to USM’s Judgment service letter, by her letter of 20.9.2011, which shows that the 1st Defendant received USM’s Judgment service letter and the Judgment, in 2011. [61] I find USM’s assertions about the 1st Defendant’s unexplained delay to be credible. The legal principles on delay in applying to set aside a default Judgment [62] The guiding principle about delay is that delay is a factor to be considered when deciding whether to grant or refuse an Application to set aside the default Judgment: Yap Ke Huat & Ors v Pembangunan Warisan Murni Sejahtera Sdn Bhd & Anor [2008] 5 MLJ 112 (CA); [2008] 3 AMR 576; [2008] 4 CLJ 175. [63] How long was the delay in applying to set aside a default Judgment is a relevant and important factor to consider when exercising the discretion to set aside the Judgment. If the 1st Defendant does not act “with reasonable promptitude”, the Court should not favour the 1st Defendant: Mirra Sdn Bhd v The Ayer Molek Rubber Company Bhd [2008] 2 MLJ 348 (CA); [2008] 3 AMR 281; [2008] 3 CLJ 273. [64] In Mirra (supra), the Court Of Appeal held— [7] Nonetheless, I shall venture to add that the respondent was also guilty of delay in applying to set aside the default judgment. Under O 42 r 13 of the Rules of the High Court 1980 ('the RHC'), the respondent is required to apply to set aside the default judgment within 30 days from the date of Page 19 of 23 receipt of the judgment order. This, the respondent failed to do within the prescribed time. And by the time when this application was made, the appellant had taken a fresh step in filing a petition to wind up the respondent. When the respondent had failed to act '(a) with reasonable promptitude, in other words within a reasonable time; and (b) before the defendant has taken any fresh step after becoming aware of the irregularity (see O 2 r 2(i) of the Rules of the High Court 1980' — per Edgar Joseph Jr FCJ in Tuan Haji Ahmed Abdul Rahman v Arab-Malaysian Finance Bhd then the court should not come to his aid in setting aside the default judgment. [emphasis added] [65] Order 42 Rule 13 gives the 1st Defendant 30 days from the receipt of the Judgment to set it aside. It is a mandatory rule. Any delay beyond this 30-day rule must be cogently explained: Thye Ah Chai (t/a Kent Naga Enterprise) v Teraju Mercu Construction & Engineering Sdn Bhd [2014] 1 MLJ 422 (CA); [2013] 1 LNS 312. [66] In Thye Ah Chai (supra), the Court Of Appeal held— [6] There is a plethora of authorities to the effect that O 42 r 13 is mandatory and that an applicant filing an application beyond the prescribed time limit is obliged to provide cogent reasons for any delay. We need cite only one authority in support of this proposition. This court in the case of Khor Cheng Wah v Sungai Way Leasing Sdn Bhd [1996] 1 MLJ 223 opined through the judgment of Gopal Sri Ram JCA (as he then was) in a case also involving an application to set aside a default judgment that: It is a cardinal principle of law, that when a litigant seeks the intervention of the court in a matter that affects his rights, he must do so timeously. The maxim vigilantibus, non dormientibus, jura subveniunt, though having its origins in the Court of Chancery, is Page 20 of 23 of universal application. Even in cases where a right is exercisable ex debito justitiae, a court may refuse relief to an indolent litigant. In all cases in which delay in approaching the court is in issue, the burden is upon the litigant who has delayed to render a satisfactory explanation for it. Whether the explanation in a given case is satisfactory or reasonable depends upon the facts and circumstances of each case. And in a matter which involves the exercise of discretion, it is for the judge in whom the law primarily vests the discretion. [emphasis added] My finding on delay [67] The default Judgment was entered on 6.7.2011. I find, on the balance of probabilities, that the Judgment was served on the 1st Defendant in July 2011. But the 1st Defendant applied to set aside the Judgment in March 2021, which was approximately 10 years from the service of the Judgment. [68] I therefore find that 1st Defendant has gone way beyond the 30-day rule mandated by Order 41 Rule 13, and by binding authorities. More importantly, the 1st Defendant did not satisfactorily explain the reasons for waiting 10 years to apply to set aside the Judgment. THREE SWORN ASSERTIONS BY THE 1ST DEFENDANT THAT ARE INCREDIBLE [69] I am behoved to point out that there are at least three sworn assertions that were made by the 1st Defendant that are difficult to Page 21 of 23 believe. These three assertions made by the 1st Defendant are not only untenable, but are—on the balance of probabilities—false:

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(1) the 1st Defendant’s assertion that she did not receive the Writ and Statement Of Claim (in September 2010);

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(2) the 1st Defendant’s assertion that she could not enter an Appearance because USM failed to serve on her the Writ and Statement Of Claim;

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(3) the 1st Defendant’s assertion that she only got to know about the default Judgment when she was “recently” served with the 2nd BN (in January 2021). [70] Untruthful averments such as these have cast much doubt on the 1st Defendant’s probity, when I consider to exercise my discretion to, or not to, set aside the default Judgment. CONCLUSION [71] In conclusion, for the reasons alluded to above, I find that—

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(1) the default Judgment was regularly obtained, as the documentary evidence against the 1st Defendant overwhelmingly point to the fact that the Writ and Statement Of Claim were properly served on the 1st Defendant; Page 22 of 23

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(2) the 1st Defendant failed to disclose a defence on the merits in her affidavit averments, nor has she exhibited a draft defence containing a defence on the merits;

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(3) there was an unreasonably long delay in filing this Application to set aside the Judgment. And the near-decade-long delay was not acceptably explained. [72] I therefore dismiss the 1st Defendant’s Application to set aside the Judgment dated 6.7.2011 with costs of RM3,000.00 to be paid by the 1st Defendant to USM by 6.12.2022. Costs are subject to the allocatur. Dated: 5 December 2022 Signed KENNETH ST JAMES Judicial Commissioner High Court of Penang Counsel/Solicitors For the Plaintiff: S. Kartikumar [Messrs. Ghazi & Lim, Pulau Pinang] Page 23 of 23 For the First Defendant: Mustaqim Huzaini [Messrs. Ram Reza & Muhammad, Selangor] Legislation referred to: