Zamri Bin Mohamad v 1. ) Perintis Amanah Berhad (WA-22NCC-102-03/2023)

PERINTIS AMANAH BERHAD [Business Reg. No.: 201601006823 (1177751-V)]

THE RAIN MAKER MGMT SDN BHD [Business Reg. No.: 201801009854 (1271868-U)] … DEFENDANT JUDGMENT (Enclosure 116 – to set aside judgment dated 29.1.2024) (Enclosure 131 – to adduce further documents) Background Facts [1] By Enclosure 116, the 1st Defendant applied under Order 35 Rule 2 of the Rules of Court 2012 (“ROC”) for the judgment dated 29.1.2024 granted after trial to be set aside. The Court had ordered the 1st and 2nd Defendants to jointly and severally pay the Plaintiff the sum of RM887,500.00, interest, damages (which has not been assessed by the Plaintiff to date), and costs in the sum of RM80,000.00 subject to payment of the allocator (“the Judgment”). [2] The Judgment was made against the 1st Defendant at a trial before this Court in the Defendant’s absence. [3] The 1st Defendant’s former solicitors had discharged themselves as solicitors for the 1st Defendant vide the Court Order dated 19.06.2023. [4] The 1st Defendant contended that it was not aware of the trial date, until the receipt of the Judgment on 04.04.2024, which it contended came as a surprise to the 1st Defendant. [5] According to the 1st Defendant, the interest of justice lies in favour of allowing the Judgment to be set aside because: a) there are serious issues to be tried which were not adequately addressed and tried by this Court during the trial. These issues are crucial for a fair determination of the case and warrant a thorough examination in the interest of justice; b) granting the application would not entail a complete retrial on the facts which have already been investigated by this Court; c) dismissing the application would significantly harm the 1st Defendant who would be prevented the opportunity to address untried issues, potentially resulting in an unjust judgment, and thereby putting the 1st Defendant in a disadvantageous position; d) conversely, allowing the application would not unduly disadvantage the Plaintiff, as it merely ensures that all relevant issues are fairly adjudicated; e) the 1st Defendant’s chance of success in this case is said to be exceptionally high because the 1st Defendant had transferred the Plaintiff’s money to the 2nd Defendant upon the request or instruction of the Asia Cornerstone Asset Management Co Ltd who was the appointed advisor for the Plaintiff. By the aforesaid, the 1st Defendant had complied with their obligations under the Master Deed of Trust and should not be held liable for subsequent losses claimed by the Plaintiff. [6] The 1st Defendant also submitted that there has been no delay in filing this application especially when this Court is empowered to extend the 14-day time limit pursuant to Order 35 Rule 2(2) and Order 1A of the ROC. Furthermore, any prejudice arising from this application which may be caused to the Plaintiff can be compensated by an order of costs as the Judgment is a pure monetary judgment. Court’s Deliberations [7] Order 35 Rule 2 of the ROC states thus: “2. Judgment given in absence of party may be set aside (O. 35 r. 2)

Any judgment or order obtained where one party does not appear at the trial may be set aside by the Court, on the application of that party, on such terms as it thinks just.

An application under this rule shall be made within fourteen days after the date of the judgment or order sought to be set aside without prejudice, however, to the power of the Court to extend the period.

In considering an application made under this rule, the Court shall have regard to the following matters:

the interest of justice;

whether the absence of the applicant or counsel was deliberate, or due to an accident or mistake;

the prospects of success of the applicant at trial;

whether there is any delay in making the application;

whether the conduct of the applicant has caused prejudice to the other party which cannot be compensated by an order of costs.” (emphasis added) [8] The factors in setting aside a judgment entered in the absence of the defendant after trial are set out in the English Court of Appeal case of Shocked & Anor v. Goldschmidt & Ors [1988] 1 All ER 375, of which was adopted by our Court of Appeal in Lembaga Kemajuan Tanah Persekutuan (FELDA) & Anor. v. Awang Soh Mamat & Ors. [2009] 5 CLJ 1: “[18] […]when a judgment is entered after a trial has proceeded a different set of rules applies. In the English Court of Appeal case of Shocked & Anor v. Goldschmidt & Ors [1998] 1 All ER 375, the major factors to be considered to set aside such default judgment differ from that in Evans v. Bartlam in the order of priority and prominence. The reason for the absence of the party at the trial has become the "predominant consideration" over that of a defence on merit. This can be observed from the judgment of Leggatt LJ when he said:

Where a party with notice of proceedings has disregarded the opportunity of appearing at and participating in the trial, he will normally be bound by the decision.

Where judgment has been given after a trial it is the explanation for the absence of the absent party that is most important: unless the absence was not deliberate but was due to accident or mistake, the court will be unlikely to allow a rehearing.

Where the setting aside would entail a complete retrial on matters of fact which have already been investigated by the court the application will not be granted unless there are strong reasons for doing so. 4) The court will not consider setting aside judgment regularly obtained unless the party applying enjoys real prospects of success. 5) Delaying in applying to set aside is relevant, particularly if during the period of delay the successful party has acted on the judgment, or third parties have acquired rights by reference to it. 6) In considering justice between parties, the conduct of the person applying to set aside the judgment has to be considered: where he has failed to comply with orders of the court, the court will be less ready to exercise its discretion his favour. 7) A material consideration is whether the successful party would be prejudiced by the judgment being set aside, especially if he cannot be protected against the financial consequences.

There is a public interest in there being an end to litigation and in not having the time of the court occupied by two trials, particularly if neither is short.” (emphasis added) [9] The above Court of Appeal case of Lembaga Kemajuan Tanah Persekutuan (FELDA) & Anor was followed in Mah Siew Seng & Anor (both as administrators of the estate of Mah Khin Kee (the deceased)) v Seema Development Sdn Bhd [2013] 8 CLJ 1058. [10] Thus, in determining the 1st Defendant’s application herein, the main consideration as to whether the Judgment obtained after trial ought to be set aside is not whether there is a defence on the merits, but rather there are cogent reasons for the 1st Defendant’s absence. [11] The 1st Defendant claimed that the reasons for its absence are as follows: a) the 1st Defendant was not informed by its former solicitors regarding the status of the Suit. More specifically, it was contended that the 1st Defendant’s former solicitors had informed the 1st Defendant that the Suit had been ‘suspended’ pending investigation by the police and or authorities on complaints made against the Defendants; b) the 1st Defendant was not informed about the dates of the full trial although the 1st Defendant acknowledged that notice of the trial dates was in fact served on its company secretary at its registered address; and c) The 1st Defendant was not informed with regard to the filing of the pre-trial documents [12] However, the 1st Defendant did not procure its former solicitors to affirm any affidavits in support of the application. Neither did the 1st Defendant procure its company secretary to affirm any affidavit in support of its oral contention that the company secretary had failed to notify it of the trial dates. Also, no documents or correspondences from the 1st Defendant’s former solicitors and or the 1st Defendant’s company secretary was adduced in support of the application. [13] Before the 1st Defendant’s former solicitors had formally discharged themselves, the Plaintiff’s solicitors had served all the documents and had also informed the 1st Defendant’s former solicitors of all the development in the action, including the original trial dates. [14] Even after the 1st Defendant became unrepresented (after its former solicitors formally discharged on 19.6.2023), the Plaintiff had ensured that 1st Defendant was served with all the relevant documents in the Suit and had updated the 1st Defendant on the developments of the Suit. This can be shown by the Plaintiff’s service of notices and documents in the Suit to the 1st Defendant across multiple addresses, despite the 1st Defendant changing its registered address multiple times and not taking any steps to update its business address with the SSM. [15] In fact, before the 1st Defendant’s former solicitors were discharged, the Court had fixed trial dates on 6.11.2023, 9.11.2023, and 14.11.2023. The 1st Defendant’s former solicitors were well informed of this as they were still representing the 1st Defendants at the time the Court’s directions were given and they would definitely have informed the 1st Defendant of the same. [16] The trial dates were subsequently postponed to 29.1.2024,

30.1.2024 and 2.2.2024 due to health issues suffered by the Plaintiff. The Plaintiff had informed the 1st Defendant of the change to the trial dates on 2.11.2023, over 2 months before the actual trial date. The letter informing the new trial dates were acknowledged by the 1st Defendant through its company secretary. [17] Notwithstanding the aforesaid, both the 1st and 2nd Defendants had failed to attend the trial on 29.1.2024. As a result, after the Court was informed that the Defendants were duly notified of the trial dates, the Court proceeded to hear evidence from the Plaintiff’s witnesses. Having perused the documents filed and after hearing oral submissions from Plaintiff’s counsel, the Court then granted the Judgment in favour of the Plaintiff against both Defendants. [18] As regards the 1st Defendant’s claim that it was not informed about the trial dates, the Plaintiff has provided evidence that all the documents and notices, including the notices regarding the trial dates were served to either the 1st Defendant’s registered address or its last known address, where the 1st Defendant’s company secretary and or employee had duly acknowledged receipt of the documents. The service of the documents and notices were all in accordance with Order 62 Rule 4 and or Order 64 Rule 6 of the ROC

More specifically, the date of services of the relevant documents to the 1st Defendants were as follows: Date of Letter / Notification Reason of Notification Address served Acknowledged by 22.6.2023 Notification of P’s interlocutory applications Registered Address Company Secretary 13.7.2023 Service of Zoom link for Hearing Registered Address Company Secretary 3.8.2023 Notification of the case management on 23.8.2023 Last known address D1 14.8.2023 Service of Amended Writ and Amended Statement of Claim Last known address

17.8.2023 Service of Zoom Link for case management Last known address D1 22.8.2023 Service of Draft Issues, Facts and Documents Last known address D1 7.9.2023 Amended Reply to Defence served on D1 Last known address D1 5.10.2023 Service of Bundle of Pleadings Last known address D1 6.10.2023 Service of Amended Draft Issues, Facts, and Documents Last known address D1 6.10.2023 Notification of the case management on 11.10.2023 Last known address D1 17.10.2023 Agreed Facts and Issues to be Tried are served onto D1 Last known address Left at the last known address (see: AIR(P) para 18.4)

24.10.2023 Notification of P’s request to postpone the trial dates and witness statement dates Registered Address Company Secretary 2.11.2023 Notification of new trial dates

15.1.2024 Service of Witness Statements and Plaintiff’s Additional Bundle of Documents Registered Address Company Secretary 19.1.2024 Service of Plaintiff’s Additional Bundle of Documents 2 Registered Address Company Secretary [19] The aforesaid put paid to the 1st Defendant’s submission that its former solicitors had informed it that the Plaintiff’s action had been put in ‘suspension’ pending investigations. With the receipts of the trial documents and the notices from the Plaintiff, it must have been clear to the 1st Defendant that the Suit was still on-going and had been set down for trial. Yet, no steps were taken by the 1st Defendant to appoint a new firm of solicitors to represent it. Neither did the 1st Defendant take the trouble of attending before this Court throughout the period post the discharge of its former solicitors. No explanation was proffered by the 1st Defendant on its absence and or non-participation in the Suit. [20] Accordingly, I accept the contention by learned counsel for the Plaintiff that the 1st Defendant‘s non-attendance at the trial of this action cannot be treated as ‘accidental’ or ‘mistake’ at all. [21] In Mah Siew Seng & Anor (both as administrators of the estate of Mah Khin Kee (the deceased)) v Seema Development Sdn Bhd [2013] 8 CLJ 1058, Lee Swee Seng J (as His Lordship then was) dismissed an application to set aside a judgment after trial because the defendant in that case has failed to give any valid reason to explain why its solicitors was absent (at pp 1070-1071): “[17] … What happened here is not without precedent and in fact such a lackadaisical attitude is most lamentable and had received a stern rebuke in Lembaga Kemajuan Tanah Persekutuan (FELDA) & Anor v Awang Soh Bin Mamat & Ors [2009] 4 MLJ 610 at pp 631–632 in the Court of Appeal from His Lordship James Foong FCJ as follows: [23] Aside from the above, the plaintiffs have also adduced evidence, which is not rebutted by the defendants, that they have sent by letter of reminder to the defendants’ lawyer of the hearing date. Though Encik Munir may have been careless in not entering this date into the diary such notification would have alerted other members in the defendants’ solicitors’ firm of the forthcoming event. And if they chose to ignore it then their reason for the absence of the defendants is inexcusable. [24] We would like also to mention that against the present judicial policy of strict adherence to hearing dates once set this excuse of the defendants attracts minimum tolerance from the court. Waste of judicial time and resources undermines the efforts of the judiciary’s to eradicate the backlog of cases faced by the courts. [18] The reason given in this case is no reason at all in explaining the absence of the defendant’s solicitors. It is a lame excuse that is simply unacceptable. (emphasis added) [22] In fact, as alluded to above, the 1st Defendant had expressly acknowledged that notice of the trial date was indeed served on its company secretary at its registered address. This means that strictly speaking, the 1st Defendant is deemed in law to have notice of the trial date. [23] However, the 1st Defendant averred in its affidavit filed in support of this application that it was not informed of the trial date. This, however, is a bare averment. As stated earlier, the 1st Defendant did not procure the company secretary to affirm an affidavit stating that it did not inform the 1st Defendant of the trial date despite acknowledging service of the notice on the same. Neither did the 1st Defendant adduce any correspondence with the company secretary concerned holding them responsible for their failure to notify the 1st Defendant of the trial date, if in fact this was the case. [24] To my mind, it is simply insufficient for the 1st Defendant to rely merely on its bare averment that it was not notified of the trial date and expect the Court to unquestionably accept the same. [25] Accordingly, I can see no justifiable ground to allow the Judgment to be set aside at all. The 1st Defendant has failed to provide satisfactory explanation for its absence from the trial and in accordance with the decision of the Court of Appeal in Lembaga Kemajuan Tanah Persekutuan (FELDA) & Anor, this Court finds the 1st Defendant’s absence at the trial to be deliberate and not accidental or due to mistake. [26] In any case, to my mind, there is also no merits to the defence that the 1st Defendant intends to raise to set aside the Judgment. [27] In brief, the Plaintiff’s claim arose based on representations made by the 2nd Defendant and its agent which induced the Plaintiff to enter into an investment agreement offered by the Defendants.

Nicholas Hor Sien Pin together with Chua Shuhui for Plaintiff

Tan Eng Keat together with Tan Ze Xin for Defendant Messrs. Gan, Lee & Tan (Kuala Lumpur)

Shocked & Anor v. Goldschmidt & Ors [1988] 1 All ER 375 2. Lembaga Kemajuan Tanah Persekutuan (FELDA) & Anor. v. Awang

Lembaga Kemajuan Tanah Persekutuan (FELDA) & Anor was followed in Mah Siew Seng & Anor (both as administrators of the estate of Mah Khin Kee (the deceased)) v Seema Development Sdn Bhd [2013] 8 CLJ 1058 4. Mah Siew Seng & Anor (both as administrators of the estate of Mah Khin Kee (the deceased)) v Seema Development Sdn Bhd [2013] 8

Order 35 Rule 2; Order 62 Rule 4 and Order 64 Rule 6 of the Rules of Court 2012