Magna Prima Berhad&2lagi V Top Green Entity Sdn Bhd&14lagi

  

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IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR (COMMERCIAL DIVISION)

 

SUMMON NO: D6-22-2039-2000

 

BETWEEN

 

1. MAGNA PRIMA BERHAD

 

(NO. SYARIKAT: 369519-P)

 

2. MAGNA PRIMA CONSTRUCTION SDN BHD

 

(NO. SYARIKAT: 184897-V)

 

3. DUNIA EPIK SDN BHD

 

(NO. SYARIKAT: 95974-K) …

 

AND

 

1. TOP GREEN ENTITY SDN BHD

 

(NO. SYARIKAT: 523152-X)

 

2. LIM KEE PENG

 

(NO. K/P: 651106-10-5097)

 

3. CHIANG YEE HONG

 

(NO. K/P: 651203-06-5373)

 

4. TANG CHEE MENG

 

(NO. K/P: 680421-10-6359)

 

5. GOH HOCK CHOY

 

(NO. K/P: 621010-05-5331)

 

6. SER CHENG CHONG

 

(NO. K/P: 610718-05-5579)

 

PLAINTIFFS

 

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7. GOH CHIANG FEIN

 

(NO. K/P: 670906-05-5431)

 

8. AMSTEEL EQUITY CAPITAL SDN BHD

 

(DAHULUNYA DIKENALI SEBAGAI AMSTEEL SECURITIES (M) SDN BHD)

 

(NO. SYARIKAT: 051253-A)

 

9. KONASAGARAN A/L KOOTHAYAN

 

(NO. SYARIKAT: 550912-08-5331)

 

10. EE BENG GUAN

 

(NO. K/P: 550813-04-5377)

 

11. BUMIPUTRA-COMMERCE BANK BERHAD

 

(NO. SYARIKAT: 13491-A)

 

12. TAN CHOW POO

 

(NO. K/P: 500720-10-5611)

 

13. CHOK CHEW LAN

 

(NO. K/P: 620929-05-5674)

 

14. SCHWAB & CO SDN BHD

 

(NO. SYARIKAT: 492277-U)

 

15. TSUNAMI CAPITAL SDN BHD … DEFENDANTS

 

(NO. SYARIKAT: 476860-D)

 

GROUNDS OF DECISION

 

This present suit involves 3 Plaintiffs and 15 Defendants. The fifth Defendant applied in Enclosure 282 to strike out the suit under Order 18 rule 19 and/or the inherent jurisdiction of this Court. As the enclosure number will indicate, the suit has had a fairly long and chequered history. This application by the 1st Defendant, being filed on 24th March

 

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2010, was initiated after the trial of the suit had commenced. Indeed on 5.2.2010 counsel for the Plaintiffs had even submitted his opening statement and the court had marked as Exhibits the numerous Bundles of Documents, the Bundle of Pleadings, the Agreed Facts and Issues to be tried, and had even received the witness statements of the Plaintiffs.

 

To place matters in the proper perspective, this striking out application was filed more than nine years after the defence of the 5th Defendant was filed. The Defendant’s defence was subsequently amended, and if calculated from the date of the amended defence, Enclosure 282 was filed four years after the amended defence was filed. It was argued for the 5th Defendant that the striking out application was made necessary after the Plaintiff had withdrawn its claim against all the other remaining Defendants except the 5th Defendant and the 12th Defendant. It has to be noted that this withdrawal of the claim against the other Defendants (except the 11th Defendant) happened on 29.6.2009. If calculated from this date, the delay in filing Enclosure 282 was 8 months 24 days from this date. The claim against the 11th Defendant was discontinued with no order as to costs on 5.2.2010.

 

In my considered view that there was clearly an inordinate delay by the 5th Defendant in filing the application to strike out which would accord reason for this Court to dismiss the application of this ground alone. See e g. Razshah Enterprise Sdn Bhd v Arab Malaysian Finance [2010] 2 CLJ 457:

 

“… the Plaintiff argued that an application to strike out the Defendants Guarantors counterclaim may be made according to Order 18 rule 19 of the RHC “at any stage of

 

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the proceedings” that would, according to the Plaintiff, stifle the issue of delay raised by the Defendant Guarantor. Zakaria Yatim J (later FCJ) dealt with the issue of delay in an Order 18 application in the case of Bank Bumiputra Malaysia Berhad & Another v Lorrain Esme Osman & Others [1987] 1 CLJ 572 … and this was what his Lordship said of the report:

 

The rule does not specify a time limit during which the party may apply to the court to strike out a pleading. But the application should be made promptly and as a rule before the close of the pleadings. The court, however, may allow an application to be made after the pleadings are closed. But such an application must be refused after the action has been set down for trial. See the Supreme Court practice, 1985, Volume 1, page 304.”

 

(At pages 474 and 475 of the report. Emphasis added)

 

Nevertheless I proceeded to hear the substance of application by the 5th Defendant so as to give the fullest opportunity to the litigant to present his case.

 

The Basis of Application

 

Although it did not appear clearly on the face of application which particularly limb or limbs of Order 18 rule 19(1) the 5th Defendant relied on, the substance of application appeared to be based on the absence of a reasonable cause of action. And this absence, it was argued, resulted from the withdrawal and discontinuance of the suit as against the 4th, 8th, 9th, 10th, 11th, 13th and 15th Defendants. The effect was, according to the 5th Defendant, to destroy the Plaintiffs’ claim which was essentially a conspiracy by all the Defendants against the Plaintiffs. The

 

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5th Defendant also raised in this connection the doctrine of release. It was further claimed as follows:

 

“1.4 Isu tunggal untuk diputuskan di antara Plaintif-Plaintif dan Defndan Kelima iaitu:-

 

“Samada Defendan Kelima menipu jumlah aggreget RM 22.1 juta atau sebarang daripadanya Plainitf-Plaintif di mana Plaintif-Plaintif dengannya telah mengalami kerugian dalam jumlah RM22.1 juta,”

 

Tidak lagi timbul oleh kerana sebarang isu untuk diputuskan oleh Mahkamah atas pemberhentian ini terhadap Defendan-Defendan Pertama, Kedua, Ketiga, Keempat, Keenam,

 

Ketujuh, Kelapan, Kesembilan, Kesepuluh, Kesebelas,

 

Ketiga Belas, Keempat belas dan Kelima belas.”

 

It thus appeared from the SIC the 5th Defendant was arguing that the discontinuance against the other Defendants mentioned led to a position where there was no longer any issue to be decided by this Court.

 

The record however also disclosed the following:

 

1. Judgments were recorded against the 1st and 3rd Defendants.

 

2. The discontinuance of the action against the 8th, 9th and 10th Defendants was entered with liberty to file afresh.

 

It was unclear whether the basis for striking out was absence of a reasonable cause of action or any of the other specified grounds under

 

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Order 18, r.19(1)(a),(b),(c) or (d), i.e. frivolous, scandalous or vexatious action, embarrassment, delay, prejudice or abuse of process. It is necessary for a striking out application to be specific. Otherwise the application would become flawed (Razshah, supra).

 

On this basis, Enclosure 282 was procedurally flawed, and could be dismissed on this ground alone.

 

The Plaintiffs’ Existing Claim

 

The Plaintiffs’ claim against the 5th Defendant is for conspiracy and deceit. The 5th Defendant is alleged to be the person instrumental in devising a scheme whereby the Plaintiffs were defrauded of a sum of RM22.1 Million. Although discontinuing the claims against some of the Defendants, the Plaintiffs’ did not accept the doctrine of release applied on the facts of this case. Plaintiffs’ counsel placed heavy emphasis on the issues of delay in application and the non-specificity of the striking out grounds.

 

Evaluation and Decision

 

The rules relating to striking out under Order 18, r. 19(1) are clear and well-established. The Applicant must establish an obviously unsustainable case and the court’s discretion is to be sparingly exercised. See Bandar Builders Sdn Bhd v UMBC Bhd [1993] 2 AMR 1969:

 

“This Court… is not concerned at this stage with the respective merits of the claims. But what we have to consider is whether the counterclaim discloses some cause

 

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of action and, likewise, whether the counterclaim raises a reasonable defence. It has been said that so long as the pleadings disclose some cause of action or raise some question fit to be decided by the Judge, the mere fact that the case is weak and not likely to succeed at the trial is no ground for the pleadings to be struck out.”

 

The 5th Defendant, to my mind, failed to establish that threshold requirement. Conspiracy and/or deceit are obviously reasonable causes of action on the facts. It is equally obvious it is arguable whether the doctrine of release applies on the facts. As indicated earlier, as against some of the Defendants, the Plaintiffs had discontinued with liberty. A discontinuance with liberty is not necessarily an abandonment of a claim: Hong Leong Finance Bhd v Maxdouble Construction (M) Sdn Bhd & Ors [2009] 7 CLJ 38. It is not a certainty there is a release of the obligations. The 5th Defendant will be at liberty to argue this issue further at the trial. At this stage the Plaintiffs cannot be shut out from the seat of judgment, unless their case is obviously unsustainable, which, with respect, it is not.

 

For these reasons, I dismissed the 5th Defendant’s application in Enclosure 282. Costs to be in the cause.

 

Sgd.

 

( MOHAMAD ARIFF BIN MD. YUSOF ) HAKIM MAHKAMAH TINGGI DAGANG NCC 3 KUALA LUMPUR

 

5th July 2010.

 

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COUNSELS

 

For the plaintiffs

 

For the 5th defendant

 

Karen Lee Foong Voon (Shirin Devi Pathmananthan with her)

 

Messrs. Wong Kian Kheong.

 

Jagjit Singh (Akberdin bin Hj. Abdul Kader, Siti Natasha Dato’ Basheer Hassan & Harjinder Singh with him)

 

Messrs. Jagjit Singh & Co.

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