A defendant must demonstrate a bona fide defence supported by evidence to set aside a Judgment in Default of Appearance; mere denials are insufficient.

JUDGMENT

Jamhirah Ali J:

Introduction

[1] This is the Defendant's application in encl 11 to set aside the Judgment in Default of Appearance (JID) dated 4 March 2024. The Plaintiff obtained the JID for the sum of RM1,530,984.66, interest, and costs.

[2] The Defendant contended that the JID was irregularly obtained due to improper service, that there was no privity of contract between the Plaintiff and the Defendant, and that it had a defence with merits.

[3] After considering the submissions, affidavits, and authorities cited by both parties, I dismissed the Defendant's application. My findings and reasons are detailed below.

Background Facts

[4] The Plaintiff filed a Writ and Statement of Claim on 18 January 2024, alleging that the Defendant failed to pay sums due under an oral agreement for the supply of manpower services. The Plaintiff claimed RM1,530,984.66, which were payments due for services provided between 2021 and 2023.

[5] Service of the Writ and Statement of Claim was effected at the Defendant's registered address in Selangor and its business address in Terengganu on 19 January 2024. The Plaintiff filed Affidavit of Service on 16 February 2024 to confirm compliance with O 62 r 4 of the Rules of 2012 ( ROC 2012).

[6] The Defendant failed to enter an appearance or file a defence, and the Plaintiff obtained the JID on 4 March 2024.

[7] The Defendant filed its application to set aside the JID on 30 April 2024, contending that:

a. the service was irregular and the JID was therefore invalid.

b. there was no privity of contract between the Plaintiff and Defendant.

c. the Defendant had a bona fide defence and raised triable issues.

[8] The Plaintiff claimed that:

a. the service was proper and compliant with the ROC 2012.

b. the Defendant failed to file its application within the prescribed time and failed to provide a reasonable explanation for the delay.

c. the Defendant had admitted liability through correspondence, which undermined its claim of having a defence.

The Law

[9] Order 13 r 8 and O 42 r 13 of the ROC 2012 govern applications to set aside JID.

[10] A JID may be set aside if it was irregularly obtained or if the Defendant demonstrates a defence on the merits.

[11] The case of Yap Ke Huat & Ors v. Pembangunan Warisan Murni Sejahtera Sdn Bhd & Anor; [2008] 5 MLJ 112; [2008] 4 CLJ 175 provides guidance on this matter. It holds that the first task is to determine whether the JID is regular or irregular. If it is irregular, it must be set aside as of right. However, if it is regular, the Defendant must demonstrate a defence on the merits and explain any delay in filing the application.

[12] Applications to set aside JID must be filed within 30 days of receipt of the judgment unless an extension is granted by the Court .

[13] The Federal Court in Lai Yoke Ngan & Anor v. Chin Teck Kwee & Anor; [1997] 2 MLJ 565; [1997] 3 CLJ 305; [1997] 3 AMR 2458 clarified that where a JID is regular, the Defendant must disclose a defence on the merits supported by affidavit evidence. A defence must not be a mere denial but raise serious and bona fide issues.

[14] In Hasil Bumi Perumahan Sdn Bhd & Ors v. United Malayan Banking Bhd; [1994] 1 MLJ 312; [1994] 1 CLJ 328; [1994] 1 AMR 297, the Court emphasised that an applicant must show that its defence is not a sham and merits judicial consideration.

The Defendant's Arguments

[15] The Defendant argued that:

a. The Writ and Statement of Claim were not properly served, as they were delivered to outdated addresses. The individual who acknowledged service was not an employee of the Defendant.

b. It had no contractual relationship with the Plaintiff. The sums claimed were related to a separate entity, Stallion Empire Sdn Bhd, which the Defendant contended was responsible for the transactions.

c. The Defendant's email and letter dated 19 March 2024, relied upon by the Plaintiff, did not constitute an admission of liability. These communications were issued to resolve complications in a factoring arrangement with