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2025 MarsdenLR 6160
HIGH COURT MALAYA GEORGETOWN
SARASWATHI NADARAJAN – Appellant
Versus
KH KHOON CONSTRUCTION SDN BHD – Respondent
[Civil Appeal No: PA-12A-45-12/2022]
The court affirmed that striking out a defence and counterclaim is justified when no reasonable cause of action is disclosed, and that claims must be substantiated.
Headnote:(A) Rules of Court 2012 - Order 18 Rule 19 - Striking out pleadings - Defendant's defence and counterclaim struck out as it disclosed no reasonable cause of action - Court upheld Sessions Court's decision - Defendant's arguments found untenable and unsubstantiated - Appeal dismissed with costs. (Paras 7, 10, 36, 39)
(B) Striking out principles - Applicable only in plain and obvious cases - Summary procedure should not involve minute examination of documents or facts - Court must be satisfied that claims are frivolous or vexatious. (Paras 12, 16)
Facts of the case:
Defendant hired Plaintiff to construct a house for RM1.65 million, but disputes arose regarding progress bills and payments made. Plaintiff's application to strike out Defendant's counterclaim was upheld by the Sessions Court.
Findings of Court:
Sessions Court's judgment to strike out the counterclaim was not fundamentally erroneous and was affirmed. Defendant's defence was found to be unsustainable.
Issues: Whether the Defendant had a reasonable defence to the Plaintiff's claim and whether the counterclaim disclosed a reasonable cause of action.
Ratio Decidendi: The court ruled that the striking out of pleadings is warranted when no reasonable cause of action is disclosed, and that the Defendant's arguments lacked substantiation.
Result: Appeal dismissed with costs.
JUDGMENT
(Appeal Against Decision To Strike Out Defence And Counterclaim, And Enter Judgment Against Defendant)
Prelusion
[1] The Appellant is the Defendant in a 2022 Sessions Court Suit No. PA-A52-11-06/2022 (Suit 11). The Respondent is the Plaintiff. I will refer to the parties as "P" and "D".
[2] P is a construction contractor. D owns a property known as Lot 10010, Seksyen 6, Georgetown, Penang (Property). D hired P to build a three-storey house on the Property for the price of RM1.65 million. The contract between the parties is a letter of award dated 28 December 2020 (LOA).
[3] Between January 2021 and August 2021, P issued to D six progress bills, for a total of RM809,500.00. These first six progress bills were the subject of an earlier 2021 Sessions Court Suit No. PA-B52-11-12/2021 (the earlier suit).
[4] The earlier suit concerning the first six progress bills was pending and will be determined on its merits.
[5] On 17 March 2022, P issued another progress bill: its 8th progress bill, for RM190,000.00 (Progress Bill No. 8). Progress Bill No. 8 is the subject of Suit 11. P's claim in Suit 11 includes a claim for RM190,000.00. D filed a Defence And Counterclaim (DACC).
[6] P applied to strike out D's DACC under O 18 r 19(1) of the Rules Of 2012, and to enter judgment against D. The Sessions Court allowed P's application and accordingly entered judgment against D. D appealed to the High Court.
Preliminaries
[7] I dismissed D's appeal i.e. I upheld the Sessions Court's decision to strike out the DACC and enter judgment against D. The hearing was held and my decision was made on 7 August 2024.
[8] D applied for leave to appeal to the Court Of Appeal. From the Court records, I found that on 6 November 2024, P consented to D's application for leave. D was accordingly given leave to appeal to the Court Of Appeal. D filed her Notice Of Appeal.
[9] This judgment is written for D's appeal. These are the grounds for the arguments made and the decision I gave on 7 August 2024.
The Law On Striking Out Pleadings
[10] It was essential to review the principles in our procedural law on the striking out of pleadings under O 18 r 19(1).
[11] A review of the law on striking out is found in the Federal Court case of Tan Wei Hong & Ors v. Malaysia Airlines Berhad, .
[12] In Tan Wei Hong (supra), the Federal Court propounded that —
[15] Order 18 r 19 of the ROC provides:
19. Striking out pleadings and endorsements (O 18 r 19)
(1) The Court may at any stage of the proceedings order to be stuck out or amended any pleading or the endorsement, of any writ in the action, or anything in any pleading or in the endorsement, on the ground that —
(a) it discloses no reasonable cause of action or defence, as the case may be;
(b) it is scandalous, frivolous or vexatious;
(c) it may prejudice, embarrass or delay the fair trial of the action; or
(d) it is otherwise an abuse of the process of the Court,
and may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be.
(2) No evidence shall be admissible on an application under paragraph (1)(a).
(3) This rule shall, as far as applicable, apply to an originating summons as if it were a pleading.
[16] The principle for striking out of pleadings pursuant to O 18 r 19 of the ROC is well settled. It is applicable only in a plain and obvious case or where a claim is, on the face of it, obviously unsustainable (see: Bandar Builder Sdn Bhd & Ors v. United Malayan Banking Corporation Bhd, ; Hubbuck & Sons, Limited v. Wilkinson, Heywood & Clark, Limited [1899] 1 QB 86 ; Attorney-General of the Duchy of Lancaster v. London and North Western Railway Company [1892] 3 Ch 274 ).
[17] The tests for a striking out application under O 18 r 19 of the ROC , as adopted by the Supreme Court in Bandar Builder are, inter alia, as follows: (SC) at 68
(a) it is only in plain and obvious cases that recourse should be had to the summary process under the rule;
(b) this summary procedure can only be adop
