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DALAM MAHKAMAH RAYUAN MALAYSIA DI PUTRAJAYA

[BIDANGKUASA RAYUAN]

RAYUAN SIVIL NO: W-02(NCVC)(W)-2041-12/2015

ANTARA

NEWLAKE DEVELOPMENT SDN BHD

(NO SYARIKAT: 262536-M) ….PERAYU

DAN

1. ZENITH DELIGHT SDN BHD

2. KUMAR JASPAL QUAH & AISHAH (SEBUAH FIRMA)

3. HOW CHEE HONG (STEVEN)

4. THIAN MUNG CHING

5. HABANOS DIVAN SDN BHD

6. HABANOS CLUB SDN BHD

7. HCG MARKETING SDN BHD

8. PEARL VANTAGE SDN BHD

9. PYRAMID PRESTIGE SDN BHD

10. SUCCESS FOUNTAIN SDN BHD

11. DYNAMIC CODE SDN BHD ….RESPONDEN-RESPONDEN

-----------------------------------------------------

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[Dalam Mahkamah Tinggi Malaya Di Kuala Lumpur

(Bahagian Sivil)

Guaman Sivil No: 22NCVC-279-2014

Antara

Newlake Development Sdn Bhd

(No Syarikat: 262536-M) ……Plaintif

Dan

1. Zenith Delight Sdn Bhd

2. Kumar Jaspal Quah & Aishah (sebuah Firma)

3. How Chee Hong (Steven)

4.Thian Mung Ching

5. Habanos Divan Sdn Bhd

6. Habanos Club Sdn Bhd

7. HCG Marketing Sdn Bhd

8. Pearl Vantage Sdn Bhd

9. Pyramid Prestige Sdn Bhd

10. Success Fountain Sdn Bhd

11.Dynamic Code Sdn Bhd …..Defendan-Defendan]

______________________________________________________

CORUM:

ROHANA BINTI YUSUF, JCA

MARY LIM THIAM SUAN, JCA ZABARIAH BINTI MOHD YUSOF, JCA

JUDGMENT 1. This is an appeal by the appellant (Plaintiff in the High Court)

against the order made by the learned Judicial Commissioner

(JC) of the High Court in striking out suit 22NCVC-279-2014

(“Suit”) with no liberty to file afresh.

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2. After hearing submission from counsel and perusing through

the Appeal Records, unanimously, we are of the view that

there are merits in the appeal. We therefore allowed the

appeal, set aside the order of the learned JC and remitted the

Suit back to the High Court for the same to proceed with

further case management in preparation for full trial.

3. Herein below are our grounds. Parties will be referred to, as

they were, in the High Court.

BACKGROUND:

4. The claim by the Plaintiff against the Defendants was

premised on, inter alia, breach of trust and conspiracy over a

non existent land deal.

5. The Plaintiff claimed that it had paid RM9 million in deposit for

a land transaction to the 2nd Defendant, a law firm.

6. The 3rd Defendant is the Managing Partner of the 2nd

Defendant.

7. During case management on 4.12.2015, the Plaintiff’s newly

appointed counsel made an oral application to withdraw the

Suit “with liberty to file afresh”. The Defendants’ counsel had

no objections to the withdrawal of the suit but insisted that

the withdrawal shall be “with no liberty to file afresh”.

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8. After hearing submissions, the learned JC ordered that the

Suit to be struck out with no liberty to file afresh. Hence the

present appeal before us.

9. The Suit has been discontinued against the 5th to the 11th

Defendants on 28.11.2014; therefore the appeal herein is

only concerned with the claim against the 1st to the 4th

Defendants.

Submission by the Plaintiff:

10. The application by counsel for the Plaintiff before the learned

JC was for the Suit to be withdrawn with liberty to file afresh.

It was the submission of the Plaintiff that when the learned JC

allowed the application for the withdrawal of the same but

with no liberty to file afresh, he was acting in excess of

jurisdiction. Pursuant to O 21 r 3 of the Rules of Court 2012,

the Court may either allow the Plaintiff’s application to

withdraw the Suit with liberty to file afresh or to dismiss the

application by the Plaintiff entirely. The Court has no power to

substitute the Plaintiff’s application with another Order which

was never prayed for, i.e. to allow the withdrawal of the Suit

without liberty to file afresh.

11. It was also argued that, that was not the only alternative order

available to the Court. The Court could have made an order

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dismissing the application to withdraw with liberty to file

afresh and ordered for the Suit to proceed with trial.

12. Further, in view of the nature of the claim by the Plaintiff

against the Defendants, the Plaintiff stood to be gravely

prejudiced by the Order of the learned JC, in that Plaintiff

stand to incur a loss of over RM9 million. It was submitted

that this loss was disproportionate to any prejudice that would

have been incurred by the Defendants as compared to the

case being rescheduled for trial and the Defendants being

compensated with costs.

13. It was submitted that at the very least, the Judge should have

informed the Plaintiff’s counsel that he was not minded to

grant what was prayed for and then left an option to counsel

as to what would be the next course of action. The Plaintiff

should not have been left with an order which he had never

sought for, in the first place.

14. The newly appointed counsel for the Plaintiff, Mr. Edwin Navis

took over the suit from the previous solicitors on 26.11.2015,

which was 5 days before the deadline to file the witness

statements. The trial dates; 14, 15 and 16.12.2015 were fixed

by the earlier Court. This Suit was transferred to the present

Court on 20.11.2015 following an administrative transfer of

files. Given the complexity and the seriousness of the Suit, it

would have been an uphill task for the Plaintiff to be able to

comply with the directions of the court within the deadline.

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The Plaintiff had a total of 14 witnesses, 8 of whom are

subpoenaed witnesses. Between the 4 Defendants, they were

calling 2 witnesses. It was not in dispute that little had been

done by the previous solicitors of the Plaintiff in preparing the

Suit for trial. It was submitted by the Plaintiff’s counsel that

the Plaintiff should not be penalized for the mistakes of his

previous solicitors.

Submission by the Defendants:

15. The Order given by the learned JC was an exercise of

discretion. Hence appellate intervention should be

discouraged unless it can be shown that the exercise of the

discretion was premised on a wrong principle of law.

16. Counsel for the Defendants submitted that the Appellant’s

attempt to withdraw the Suit with liberty to file afresh would

deprive the 1st and the 4th Defendants of a procedural

advantage which are now in the Defendants’ favour and this

could not be compensated with costs. The 1st and the 4th

Defendants have amended their Defence to plead that the

Plaintiff has no locus standi since it had assigned the

agreement. As at the date of the application to withdraw the

Suit, the Plaintiff had not filed a Reply to the Amended

Defence, and the Suit was scheduled for hearing in 10 days’

time. The Defendants’ counsel submitted that the Suit was

already at an “advanced stage”.

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17. Therefore, it was submitted that, if the application by the

Plaintiff to withdraw the Suit with liberty to file afresh was

allowed by the learned JC, the Plaintiff would file a similar suit

against the 1st to the 4th Defendants and this would expose

the 1st and the 4th Defendants to extreme prejudice.

18. The Defendants referred to the Federal Court case of Syed

Omar bin Syed Mohamed v Perbadanan Nasional Bhd

[2013] 1 MLJ 461 whereby the following paragraph was cited:

“[17] We shall now deal with the second issue. It should be noted

that even in the case of Birkett v James it was conceded that a

second suit filed after the first suit was dismissed for breach of a

peremptory order would be an abuse of the court’s process and

liable to be dismissed. This point was discussed fully by the

English Court of Appeal in Janov v Morris [1981] 3 AER 780, where

the relevant principles to consider were set out in the head-notes

as follows:

Where an action had been struck out on the ground

of the plaintiff’s disobedience of a peremptory order

of the court and the plaintiff commenced a second

action within the limitation period raising the same

cause of action, the court had a discretion under RSC

O 18 r 19(1)(d) to strike out the second action on the

ground that it was an abuse of the court’s process. In

exercising that discretion the court would have regard

to the principle that court orders were made to be

complied with. Accordingly, because there had been

no explanation by the plaintiff for his failure to comply

with the peremptory order made in the first action and

there was no indication that he was likely to comply

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with orders made in the second action, the

commencement of the second action was an abuse of

the process of the court and the court would exercise

its discretion under O 18 r 19 (1) (d) to strike it

out…(Emphasis added).”

19. It was submitted that the Plaintiff failed to comply with the

order given by the High Court to file and serve the witness

statements by 20.11.2015 and exchange the same with the

Defendants. As far as the Defendants are concerned, they

have informed the Court that their witnesses’ statements were

ready.

20. Further, when the Plaintiff’s counsel informed the Court that

it wished to withdraw the Suit with liberty to file afresh,

counsel for the Plaintiff never informed the Court that the

Plaintiff would only do so, if liberty to file afresh was granted.

Nowhere in the Notes of Proceedings was this recorded. What

was stated was that the Plaintiff was withdrawing as the

Plaintiff was not ready to proceed with the trial. The Plaintiff

never requested for further time to comply with the directions

issued by the court earlier, nor requested for an adjournment

of the trial dates before the learned JC. Hence counsel for the

Defendants submitted that the JC did not err when he allowed

the withdrawal but with no liberty to file afresh.

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FINDINGS:

21. In an action begun by writ, a Plaintiff may, without leave of

the court, discontinue the action not later than 14 days after

service of the defence (see O 21 r 2 (1) of the Rules of Court

2012). Once the 14 days for service of the defence has

passed, discontinuance may be done only with leave. The

court in granting such leave may impose such terms as it

thinks just, inter alia, in respect of costs and in respect of

bringing a further subsequent actions (see O 21 r 3 (1) of the

Rules of Court 2012).

22. The Plaintiff herein applied to discontinue the Suit under O 21

r 3 (1) of the Rules of Court 2012. In the exercise of its

discretion when granting leave, the court has a wide

discretion, based on judicial principles. Practical

considerations do come into play when exercising the

discretion. (see Majlis Peguam Malaysia & Ors v Raja

Segaran a/l S. Krishnan [2002] 3 MLJ 155). The court

may/can impose terms (Chamberlain & Hookham, Ld v

Huddersfield Corporation [1901] 18 Rep. Pat Cas 454;

United Asian Bank Bhd v Balakrishnan [1992] 1 CLJ 522;

Wah Bee Construction Engineering v Pembenaan

Fungsi Baik Sdn Bhd [1996] 2 AMR 2412).

23. Before granting the order for discontinuance of an action, the

court must be satisfied that:

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i) if a defendant is dominus litis, the general rule is to

refuse leave to discontinue (see Overseas Union

Finance Ltd v Lim Joo Chong [1971] 2 MLJ 124);

ii) the case is not at an advanced stage; if so, care must

be taken not to permit discontinuance. What constitutes

an advanced stage depends on the facts and

circumstances of the case (see Fox v Star Newspaper

Company [1898] 1 QB 636;

iii) the plaintiff may have gained an interim interlocutory

advantage between the date of issue of the writ and the

point of time he seeks to discontinue (O’Neal v Mann

[2000] FCA 1680);

iv) there is no miscarriage of justice occasioned by its

refusal to permit the discontinuance;

v) it will not prejudice the opponent to the application or

take away from him any advantage to which he is fairly

and reasonably entitled.

24. In summary, the discretion to allow the application to

discontinue an action and the discretion to impose the terms

accompanying it, depends very much on the facts and

circumstances of each case.

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Whether the Plaintiff (Applicant) is dominus litis:

25. In Overseas Union Finance Ltd v Lim Joo Chong [1971]

2 MLJ 124, Justice Raja Azlan Shah (as His Lordship then was)

had the occasion to deal with the issue of when to allow

discontinuance of an Originating Summons filed by the

chargee bank, whereby his lordship held as follows:

“However, it is at my discretion whether I should allow

discontinuance. Guidelines to the discretion can be found in the

Annual Practice 1963 at page 593 under the heading Before

Judgment which reads –

“Leave may be refused to a plaintiff to discontinue the

action if the plaintiff is not wholly dominus litis or if

the defendant has by the proceedings obtained an

advantage of which it does not seem just to deprive

him.”

If the applicant is dominus litis, then leave to discontinue may be

granted. If he is not then it is unlikely that I would grant him

leave to discontinue. I do not think that the applicant is wholly

dominus litis. He cannot dispose of the case as he thinks fit or

allow it to be dismissed or let judgment go by default. The parties

have come to a stage where the respondent chargor has gained

an upper hand by an advantage in that he could find flaws in the

applicant/chargee’s allegation namely the wrong dates in the

memorandum etc and the fact that the reason for wanting a

discontinuance is not a very strong one. The respondent/chargor

is not to be deprived of these advantages which have made him

a well matched adversary in the arena.

Having considered all the points, I am of the opinion that the

application to discontinue should be dismissed.” (emphasis

added)

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26. In Ng Hee Thong & Anor v Public Bank Bhd [2000] 2

MLJ 29, the notice of demand was not properly issued to the

guarantor. However, the bank did not discontinue the action

after discovering the improper issuance of the notice of

demand. The bank instead sought summary judgment after

the Defendant guarantor successfully set aside the default

judgment obtained against him. In the High Court, the bank

was successful in obtaining the summary judgment but was

reversed on appeal. The Court of Appeal ordered the matter

to be set down for trial. At the High Court, instead of

proceeding with the full trial as ordered by the Court of

Appeal, the bank applied to discontinue the action with liberty

to file afresh. The High Court allowed the application. The

Court of Appeal allowed the appeal in part. The Court of

Appeal granted leave to discontinue on the following term:

“...gave leave to the respondent to discontinue on the terms that

no fresh action should be brought on the same cause of action

based on the same or substantially the same factual situation...”

In doing so, NH Chan, JCA said:

“A perusal of the learned judge’s grounds of judgment would show

that the learned judge had failed to consider the prejudice and

the disadvantage contended to have been suffered by the

appellants and the fact that the appellants would be deprived of

a defence which was available to them if an order in terms of the

said application was granted. The learned judge had thereby, in

the words of Goulding J in Re Reed (a debtor) [1979] 2 All ER 22

(referred to above) “excluded matters that it ought to have taken

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into account”. Consequently, we have allowed the appeal with

costs and set aside the order of the High Court...”

(emphasis added)

27. It has not been shown in the present appeal that the

discontinuance was not made bona fide by the Plaintiff but

was made so as to obtain an advantage to which he has no

right to retain since he has become dominis litis as the

Defendant has a good defence. In Overseas Union Finance

Ltd v Lim Joo Chong (supra) , where it was an Originating

Summons case where the Chargee Bank was proceeding to

apply for an order for sale on a property upon default by the

lender. There was a memorandum of agreement for the loan

drawn up pursuant to the Moneylenders Ordinance 1951 and

signed by the parties on January 21, 1969. A memorandum of

charge was also signed by parties. The chargor opposed the

application for sale stating that the contract was

unenforceable as the memorandum of agreement did not

comply with section 16 of the Moneylenders Ordinance 1951

in that the date of the loan was not correctly stated and the

terms of the loan was not correctly set out. The

applicant/bank (Chargee) sought to discontinue the action on

grounds that, even if the court were to grant an order for sale

they, the applicant would find difficulty in selling the property,

it being a residence and in an area where the value had fallen.

It was held that the flaws in the memorandum of agreement

were material errors which tended to mislead and hence

rendered the contract unenforceable. It was also held that the

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applicant/bank failed to discharge the burden to show that the

requirements of section 16 of the Moneylenders Ordinance

1951 had been complied with. Clearly, the chargor had a good

defence. Further the reason given by the applicant/bank to

discontinue was said by the court to be “not a very strong

one”.

28. Similarly in Ng Hee Thoong & Anor v Public Bank

(supra), the defence of the appellant was that there was

improper issuance of demand by the respondent. The

appellant would be deprived of a defence which was available

to them if an order in terms of the application to discontinue

was granted.

29. The facts in our present case are not at all close or similar to

the facts as in Overseas Union Finance Ltd v Lim Joo

Chong (supra) or Ng Hee Thong & Anor v Public Bank

Bhd (supra).

30. The Court in Overseas Union Finance Ltd v Lim Joo

Chong (supra) did not discontinue the action with no liberty

to file afresh (unlike our present case). Instead, the court

dismissed the application to discontinue by the

applicant/bank. Hence no party was prejudiced by the order

of the court.

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Whether the case is at an advanced stage:

31. What constitutes as “an advanced stage” again depends very

much on the facts and circumstances of the case. The learned

JC did not address this aspect in his grounds. Here the

pleadings were closed and on the case management date of

20.11.2015, parties were given directions to file witness

statements in preparation of trial. At this point in time the new

counsel of the Plaintiff was not engaged yet. He was only

engaged on 26.11.2015. The date 4.12.2015 was only a case

management date, the trial had not started when the

application for the discontinuance on 4.12.2015 was made.

32. Both parties submitted on the case of Punj Lloyd Oil & Gas

(M) Sdn Bhd v Etiqa Insurance Bhd & Ors [2016] 2 MLJ

676 before us. There, the trial was ongoing and the decision

to strike off the suit without liberty to file afresh upon

withdrawal of the suit was considered to be justified by the

Court of Appeal as the facts shows that the trial court “had

already indulged the appellant with one adjournment to

secure the attendance of the second witness. Nowhere in the

submission or the judgment of the court was the reason why

the second witness could not attend court stated. Thus, the

court could only inferred that no such reason or explanation

was advanced or proferred to by the appellant”. Rightly so,

the Court struck out the Suit without liberty to file afresh.

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Compared to the facts in our present case where the trial has

not commenced, but only at the case management stage.

33. Similarly in Rajasundari v Gowri AIR 2006 Mad 156, which

was cited by the Plaintiff herein, involved a civil revision

petition directed against an order of the trial Court in Madras

which allowed the leave filed under O 23 rule 1 (3) of the

Indian CPC to withdraw the suit but declined to grant leave to

file a fresh suit as the case was already at a part heard stage.

34. As far as our present case is concerned, it cannot be said that

the case is at an advanced stage as presented from the

abovementioned cases. Furthermore, on the date when the

striking out was ordered, the age of the Suit was 18 months.

Although we are minded that in the current trend of case

management, cases have to be disposed off within a limited

time from its filing date, nevertheless, practical considerations

do come into play when confronted with ending a suit before

it has the opportunity to be ventilated at full trial on its merits.

Whether the Court can issue out an order not prayed for:

35. In granting the application by the Plaintiff herein, whether the

court could in the circumstances allow the application in part

i.e. allowed the discontinuance but with no liberty to file

afresh. The appellant cited Indian authorities as in

Rajasundari v Gowri AIR 2006 Mad 156, which allowed the

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leave filed under O 23 rule 1 (3) of the Indian CPC to withdraw

the suit but declined to grant leave to file a fresh suit. The trial

court found that the application was filed late as the case was

at the part heard stage and the Judge was of the view that it

would not be appropriate to grant leave to file a fresh suit.

The case went on appeal and it was argued on behalf of the

petitioner that the trial court erred in partly allowing the

application to withdraw without liberty to file afresh on the

same cause of action. It was argued on behalf of the petitioner

that the trial court could have dismissed the application

entirely and the petitioner would have proceeded with the

suit. The petitioner relied on reported decisions of

Marudachala Nadar v Chinna Muthu Nadar AIR 1932

Madras 155, as well as T.W. Ranganathan v T.K.

Subramaniam, and submitted that the impugned order of

the trial court was in violation of O 23 r 1(3) CPC as the court

cannot split the order to cause serious prejudice to the

plaintiff. Counsel for the respondent therein submitted that

the suit was already in a part heard stage and in consideration

of the facts and circumstances of the case, the trial Judge

rightly declined to grant leave to file afresh since the 3rd

defendant was aged 73 years old and the suit was filed only

to harass the 3rd defendant.

It was subsequently held that:

“ 12. An application to withdraw a suit with liberty to file afresh

must either be allowed or refused in toto. It is not open to

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the Court to grant a prayer for withdrawal and refuse the

leave. If liberty is refused, the suit should not be dismissed,

but must be retained in the file for trial/continuation of trial.

If an application is made for withdrawal of the suit with liberty

to file a fresh suit, it is not open to the Court to grant only

permission for withdrawal, without liberty to file afresh suit.

If the Court simply allows withdrawal but refuses liberty, the

Court would be acting without jurisdiction in dividing the

Petition into two parts. It is to be noted that the application

under the Order 23 rule 1 (3) of C.P.C. is indivisible whole.

The Trial Court was not right in separating the prayer for

withdrawal and the leave to file a fresh suit. When the Court

has declined to grant leave to file a fresh suit, the Trial Court

ought to have dismissed the application in toto.”

36. We are not in agreement with the decision of the

abovementioned Indian cases in this respect, as we are not

deplete of local authorities that have established that the

courts generally has wide discretion in granting an application

to discontinue an action subject to terms that befit the facts

and circumstances of the case. Hence, even if the application

by the Plaintiff is for a discontinuance of the Suit with liberty

to file afresh, the Court may very well be empowered to grant

the discontinuance but with no liberty to file afresh. What is

pertinent is the prejudice suffered by imposing such

conditions to the Plaintiff who is now left without any remedy.

This issue will be addressed in the later part of this judgment.

37. In considering this appeal, we are mindful of the fact that

under the new Rules of Court 2012, the Court plays a

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proactive role in moving the pace for litigation. The Courts no

longer leave it to the litigants to decide the same.

38. Counsel for the Defendants referred to the case of Syed

Omar bin Syed Mohamed v Perbandaran Nasional Bhd

[2013] 1 MLJ 461 and to the part of the judgment which states

that “where an action had been struck out on ground of the

plaintiff’s disobedience of a peremptory order of the court and

the plaintiff commenced a second action within the limitation

period raising the same cause of action, the court had a

discretion under RSC O 18 r 19 (1) (d) to strike the second

action on the ground that it was an abuse of the court’s

process. In exercising that discretion the court would have

regard to the principle that court orders were made to be

complied with. Accordingly, because there had been no

explanation by the Plaintiff for his failure to comply with the

peremptory order made in the first action and there was no

indication that he was likely to comply with orders made in

the second action, the commencement of the second action

was an abuse of the process of the court and the court would

exercise its discretion under O 18 r 19 (1) (d) to strike out.”

39. However such reference was not the context under which our

present case was struck out. The learned JC made it clear at

paragraph 52 of his grounds that “this is not a case where the

suit was struck out for non compliance of Pre Trial Case

Management directions”. Rather, the learned JC stated in his

grounds that, it was the Plaintiff who sought leave of the Court

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to withdraw the suit but had asked that they be given liberty

to file afresh. Hence the reliance by the Defendants’ counsel

on this case to discontinue the Suit without liberty to file

afresh, is misconceived.

40. It was submitted by counsel for the Defendants that the

Plaintiff had failed to provide a valid reason to justify the

withdrawal of the suit with liberty to file afresh. This was

echoed by the learned JC at paragraph 53 of his judgment.

The reason that was given by the Plaintiff is that, the new

solicitors took over the conduct of the case from the previous

solicitors who failed to do anything towards preparation of the

trial. By the time the new solicitors took over the case there

was barely 11 days to the trial date. Given that the learned JC

had intimated to parties that no adjournment of the trial would

be entertained, and that no witness would be allowed to

testify without their witness statements filed, the new

solicitors were left with limited choice but to apply for a

withdrawal of the suit with liberty to file afresh. Is that not a

valid reason to go by? Compare to the reason given by the

applicant/bank in Overseas Union Finance Ltd v Lim Joo

Chong (supra) which Raja Azlan Shah J (as His Majesty

then was) said that the reason was not a strong one for the

action to be discontinued. There, the chargee bank said that

even if the court is to grant the order for sale which they

sought for, they would not be able to sell due to the falling

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price of the property. Hence the applicant/bank sought to

discontinue the action.

41. Further, it was never shown by the Defendants that the

change of solicitors by the Plaintiff at that stage was a mala

fide act on the part of the Plaintiff. Neither was it suggested

that it was a tactical manouevre on the part of the Plaintiff

when the change in solicitors was made, that it was to delay

the matter. It was just unfortunate that the Plaintiff had earlier

chosen less industrious solicitors to represent him in such a

serious matter. Hence it was not an invalid reason to be totally

dismissed outright by the learned JC.

42. It was also not shown that the application for discontinuance

was made with an ulterior motive to obtain a collateral

advantage as illustrated in the facts of Castanho v Brown

& Root (U.K.) Ltd & Ors [1981] 1 Lloyd’s Report 113. In

that case, the appellant had been rendered quadriplegic in an

accident while working on the respondent’s vessel in the North

Sea. He instituted an action in England and interim payments

had been made to the appellant. Subsequently, Texan lawyers

had persuaded the appellant to sign a power of attorney so as

they could bring an action (on a contingency fee basis) in

Texas, given that the respondents being a multinational

company based in Texas. Consequently, a Notice of

Discontinuance of the English action under RSC O 21 r 2 was

served within the time limit laid down by that order.

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43. It was also submitted on behalf of the Defendants that when

counsel of the Plaintiff applied for the withdrawal of the Suit

before the learned JC, it was never stated that the Plaintiff

would only do so if liberty to file afresh was granted. This, in

our view is irrelevant.

Whether there is a miscarriage of justice occasioned by its refusal

to permit the discontinuance with liberty to file afresh:

44. When the learned JC allowed the application by the Plaintiff

for the withdrawal of the suit but with no liberty to file afresh,

it has the effect of shutting the Plaintiff entirely of any remedy

available to them. The Plaintiff had parted with

RM9,056,124.00 towards the purchase of the subject land. He

had lost his monies and ended up with no land. There were

serious allegations of impropriety on the part of Defendants

and all the more reason for it to be ventilated at full trial rather

than ending the life of the case before it has the chance to

start.

45. Although the Defendants submitted that, to allow the Plaintiff

the liberty to file afresh would cause prejudice to the

Defendants, in that they would be exposed to a similar suit by

the Plaintiff, we are of the view that, such prejudice (if any) is

disproportionate to the loss and prejudice suffered by the

Plaintiff. The learned JC said that the Defendants are also

entitled to a fair share of justice. However, a balancing act

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ought to be struck between both of the prejudices caused to

the parties and see where the justice lies. In this case the

prejudice to the Plaintiff is more grave as compared to the

Defendants. In any event the prejudice suffered by the

Defendants in the rescheduling of the dates could be

compensated by costs. This was never considered by the

learned JC. Both parties would have their day in court to

ventilate the merits of the case.

Whether the Order will prejudice the opponent to the application or

take away from him any advantage to which he is fairly and

reasonably entitled:

46. It was submitted on behalf of the Defendants and also

reflected in the grounds of judgment of the learned JC at

paragraph 41 that, in granting liberty to file afresh and

thereby erasing the procedural advantages gained by the

Defendants constituted grave prejudice to the Defendants

which could not be compensated by costs. This procedural

advantage referred to by the Defendants is the fact that the

Defendants would be able to seek for a dismissal of the Suit

on the basis of “no case to answer” due to the failure of the

Plaintiff to file the witness statements on or before 1.12.2015.

That may not be entirely correct, as it had been intimated by

the Plaintiff’s counsel on 20.11.2015 case management date

that he would also be calling 8 subpoenaed witnesses.

Subpoenaed witnesses do not require witness statements.

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Hence the case could proceed with the evidence of such

witnesses without witness statements, given that the earlier

set of trial dates were only for 3 days i.e 14, 15 December

2015. This was never considered by the parties nor the

learned JC before granting the order of discontinuance.

47. The other procedural advantage submitted by the Defendants

is that the Defendants have filed in their Defence stating that

the Plaintiff does not have the locus standi to proceed with

the action as the Plaintiff had assigned the agreement and

there has not been any reply on the part of the Plaintiff. Since

the case has been fixed for trial, the Defendants claimed that

it had the upper hand in terms of procedural advantage.

However, even if the case had proceeded with the trial, there

is nothing to prevent the Plaintiff from making an application

to amend its pleadings at any stage of the trial before

judgment. In any event, if it is true that the Plaintiff lacks the

locus standi to institute the Suit, the facts still remain and

there is nothing to prevent the Defendants from using the

same Defence.

48. These “procedural advantage” are actually “technical

advantage” and they are not advantages derived from the

facts of the case or the acts of parties that constitute the facts

of the case as can be seen from the facts in Overseas Union

Finance Ltd v Lim Joo Chong (supra), Ng Hee Thong &

25

Anor v Public Bank, Punj Lloyd Oil & Gas (M) Sdn Bhd

v Etiqa Insurance Bhd & Ors. (supra).

49. Apart from these 2 “procedural advantages” claimed by the

Defendants, there is no other interim or interlocutory

advantage to which the Defendants are fairly and reasonably

entitled.

50. Neither can it be said that the facts in our case is anything

similar to or anything near to the facts as in Robertson v

Purdey [1906] 2 Ch 615 which was a situation where

discontinuance of a suit was granted upon an application by

the plaintiff, with terms that the plaintiff was not allowed the

liberty to file a fresh suit against the defendant pertaining to

the same infringement of a patent in question. The

discontinuance of the suit was ordered without liberty to file

afresh even though the trial had not started.

The defendant in Roberson v Purdey (supra), insisted that

the application for leave to discontinue the suit by the plaintiff

should only be on terms that no fresh action should be

instituted.

The plaintiff therein instituted an action for an injunction to

restrain infringement of his letters of patent for an invention.

The defendant delivered his defence wherein he stated his

particulars of objection. The defendant alleged that “he had

not infringed the patent or threatened to infringe it, and that

26

the patent was invalid by reason of the matters in the

accompanying particulars of objection appearing. In his

particulars of objections, the defendant alleged that the

plaintiff was not the first and true inventor of the alleged

invention; that the alleged invention was not new, but had

been on several occasions anticipated; that the alleged

invention was not the proper subject-matter of valid letters

patent.” The plaintiff then delivered his reply. Subsequently,

the defendant gave notice of an application to amend his

particulars by stating certain alleged defects in the

specifications. However, the defendant abandoned the said

application. Be that as it may, the said notice of application by

the defendant had disclosed to the plaintiff that he could not

succeed in the action unless he corrected his patent. Hence

with a view to doing just that, the plaintiff applied for leave to

discontinue the action against the defendant. It was held by

Buckley J, that leave should only be granted on terms that the

plaintiff should not be given the liberty to file afresh against

the defendant in respect of any infringement alleged in the

present action. The learned Judge agreed with the submission

by the defendant, and in his judgment explained the reasons

as to why he imposed such a term. He pointed out that due

to the terms of section 19 of the Patents, Designs and Trade

Marks Act 1883, he has to impose such terms. Otherwise the

Court will in effect enable the plaintiff to get round the

statutory impediment imposed by the said section 19. This

was what Buckley J said:

27

“……..it seems to me that, if I were to give leave to

discontinue this action without imposing this term, I

should be, so to speak, repealing the Act of Parliament; I

should be enlarging s. 19 so as in substance, although not

in form, to allow the plaintiff in the action to correct his

patent pending the action. That is the very thing which

the statute, as construed, says I ought not to do.”

51. Such is not the situation in our case to warrant the

discontinuance without liberty to file afresh. Nothing was

shown that the Defendants were deprived of an advantage

which they have already gained in the litigation. (See also

Covell Matthews & Partners v French Wools Ltd [1977]

1 WLR 876).

Whether the Plaintiff should be punished for the mistakes

committed by his previous solicitors:

52. Although the Plaintiff in this case is not entirely without fault

due to the lackadaisical attitude of his previous counsel,

however he should not be punished for the absence/lack of

actions on the part of his counsel. Lord Denning in Doyle v

Olby (Ironmongers) Ltd [1969] 2 All ER 119 said at page

1214 that:

“ We never allow a client to suffer for the mistakes of his counsel if

we can possibly help it. We will always seek to rectify it so far as

we can. We will correct it whenever we are able to do so without

prejudice to the other side.”

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Similar principle was adopted by the Court of Appeal in

Tenaga Nasional Bhd v Porak Sdn Bhd [2000] 1 MLJ 479

at page 483 when Gopal Sri Ram JCA in delivering the

judgment of the Court said:

“This case demonstrates the terrible harm that may be visited

upon the litigant’s head because of his solicitor’s mistake. We

hasten to add that the solicitor concerned is no longer on record

in the proceedings before us.

Whenever possible, where there is no risk of sacrifice of principle

in the name of justice or at the alter of convenience, we do our

best to ensure that a lay client does not suffer because of the

mistake of his legal advisers. We do so in the interest of justice.

When we act, we always bear in mind what Lord Denning said in

Doyle v Olby (Ironmongers) Ltd [1969] 1 All ER 119 at page 121:

“We never allow a client to suffer for the mistake of his

counsel if we can possibly help it. We will always seek to

rectify it as far as we can. We will correct it whenever we

are able to do so without injustice to the other side.

Sometimes the error has seriously affected the course of

the evidence, in which case we can at best order a new

trial.”

53. Obviously, the previous counsel failed to do the necessary

preparations for the full trial as directed by the JC, however

such lack of action by his counsel and in failing to abide to the

directions of the learned JC would deprive him of the

opportunity of ventilating the merits of his case at trial. It is

rather unwise to deprive a Plaintiff of whatever remedy that

29

is available to him by the mere failure of his previous counsel

to do what was directed before trial.

54. The 1st and 4th Defendants cited the case of Mazni Ibrahim

v Rosaidy Effandy [2013] 4 CLJ 453 where Abdul Wahab

Patail JCA said in his judgment that “the general principle that

a client should not suffer from the negligence or mistake of

his solicitor is confined to a limited application where the

injustice is one that cannot be remedied by an action against

the errant solicitors.” As far as the facts of our present case

is concerned, it can safely be said that the injustice or

prejudice caused to the Plaintiff cannot be remedied even if

an action against the errant previous counsel is to be

instituted.

Conclusion:

55. There was nothing that was before the court to suggest that

the discontinuance applied for by the Plaintiff had caused an

injustice to the Defendant. In fact the Plaintiff stands to be

gravely prejudiced by the order of the learned JC.

56. It is true that serious allegations of impropriety were levelled

against the Defendants and it is in the best interest of parties

that the case be tried and disposed off at the earliest

opportunity. On the facts and circumstances of the case and

given that the case was filed 18 months from the decision of

30

the striking out was made, justice is best served if the case is

allowed to remain for trial. The Defendants’ concern that this

is no ordinary case and that the Defendants, especially the 3rd

Defendant (who is a senior member of the Malaysian Bar) has

been accused of fraudulent conspiracy to siphon trust monies

belonging to the Plaintiff, gives it all the more reason that the

Suit should be ventilated at trial on its merits, rather than have

it struck out on mere technicalities.

57. In addition, the multiple trial dates (5 & 6.2.2015, 22 &

23.6.2015, 18, 19 & 20.8.2015, 4 & 5.12.2015 and 14, 15 &

16.12.2015) confirm the complexity and seriousness of the

Suit; and that in all likelihood the Suit would not have been

completed in these first set of dates. Hence, discretion

should have been to dismiss the application and direct the Suit

to proceed to trial.

58. Therefore, the order of the learned JC is set aside. The case

is remitted back to the High Court for further case

management in preparation for full trial.

59. Appeal is allowed with no order as to costs.

Signed by:

Zabariah Mohd Yusof

Judge

Court of Appeal Malaysia

Dated: 5.5.2017

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COUNSEL:

WSW Davidson, Wong Hin Loong, Edwin Navis, Rajesvaran

Nagarajan for the Appellant

[Messrs. Edwin Navis & Associates]

Vijay Kumar Natarajan & N. Nathan for 1st and 4th Respondent

[Messrs. Natarajan]

C.K. Yeoh & Villie Nethi for the 2nd and 3rd Respondent.

[Messrs. Ranjit Singh & Yeoh]