The court upheld the dismissal of the appeal, confirming no valid cause of action against the third party as per procedural rules.

Adlin Abdul Majid J:

A. Introduction

[1] For convenience, the parties shall be referred to as they are in the Sessions Court , namely the appellants as the defendants, the respondent as the third party and D2D Bizhub Sdn Bhd as the plaintiff.

[2] This appeal arises from the defendants' dissatisfaction with the decision of the learned Sessions Court judge, in allowing the third party's application to set aside the third party notice ("Third Party Notice") and statement of claim ("Third Party Statement of Claim") against him.

[3] After considering the evidence before the Court , and hearing submissions of counsel, the Court dismissed the appeal. The reasons for the decision are set out below.

B. Background Facts

[4] By a friendly loan agreement dated 30 April 2021 ("Agreement"), the plaintiff provided a loan amounting to RM500,000 to the 1st defendant. The 2nd defendant entered into a letter of guarantee dated 30 April 2021, agreeing to indemnify the plaintiff against all losses and damages that the plaintiff may incur in the event the 1st defendant defaults on the repayment of the loan.

[5] The plaintiff commenced the action at the Sessions Court to recover the outstanding amount due and owing by the defendants.

[6] While the defendants did not deny receiving the loan, they claimed that the loan was not given by the plaintiff, but by one Low Jack @ Ah Jack ("Low Jack"), who had used different individuals and/or companies as his proxies to release the loan and/or to accept repayments from the defendants. The defendants alleged that the third party was one of Low Jack's proxies.

[7] The defendants thus issued the Third Party Notice and the Third Party Statement of Claim, to seek indemnity and/or contribution from the third party vis-à-vis the claim by the plaintiff.

[8] The third party applied to set aside the Third Party Notice and the Third Party Statement of Claim. The application was allowed by the learned Sessions Court judge. The appeal before this Court is an appeal against the decision of the learned Sessions Court judge.

[9] It must be highlighted that before the third party's application to set aside the Third Party Notice and the Third Party Statement of Claim was allowed, the plaintiff had applied and successfully obtained summary judgment against the defendants.

C. Considerations And Findings

[10] Third party proceedings are governed by O 16 of the Rules of 2012 (" ROC "). Order 16 r 1(1) provides that:

"(1) Where in any action a defendant who has entered an appearance:

(a) claims against a person not already a party to the action any contribution or indemnity;

(b) claims against such a person any relief or remedy relating to or connected with the original subject matter of the action and substantially the same as some relief or remedy claimed by the plaintiff; or

(c) requires that any question or issue relating to or connected with the original subject matter of the action should be determined not only as between the plaintiff and the defendant but also as between either or both of them and a person not already a party to the action, then, subject to paragraph (2), the defendant may issue a notice in Form 18 or 19, whichever is appropriate (which is referred to as a "third party notice" in this Order), containing a statement of the nature of the claim made against him and, as the case may be, either of the nature and grounds of the claim made by him or of the question or issue required to be determined."

[Emphasis Added]

[11] In the present case, in issuing the Third Party Notice, the defendants relied on O 16 r 1(1)(a), in that they are seeking indemnity or contribution from the third party in respect of the plaintiff's