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2020 MarsdenLR 1640
HIGH COURT MALAYA JOHOR BAHRU
GLOBAL INTERTRADE (FAR EAST) SDN BHD – Appellant
Versus
CEL CONSTRUCTION SDN BHD (ENCL 7) – Respondent
[Civil Suit No: JA-22NCC-63-12/2018]
A judgment in default may only be set aside if a valid defense is presented and the application is made timely; otherwise, it remains in effect.
Headnote:(A) Companies Act 2016 – Sections 465(1)(e) and 466(1)(a) – Writ of Summons – Judgment in default – Application to set aside judgment – Defendant failed to enter appearance leading to judgment – Criteria for setting aside judgment discussed – Delay in application for setting aside considered – Application dismissed with costs. (Paras 21, 24, 26)
(B)
Rules of Court 2012 – Order 10 – Order 12 – Order 62 – Proper service of documents and requirements for a valid judgment examined. (Pars 6, 12)
(C)
Sale of Goods Act 1957 – Section 42 – Acceptance of goods and the impact on disputes regarding quality addressed. (Paras 17, 18)
Facts of the case:
The Plaintiff supplied stones to the Defendant for construction but did not receive payment of over MYR1 million, leading to a judgment in default entered against the Defendant. The Defendant's application to set aside the judgment was based on claims of not receiving necessary documents.
Findings of Court:
The Defendant did not successfully demonstrate a valid defence to merit setting aside the judgment; the JID was regularly obtained.
Issues
: Whether the judgment was regularly obtained and if the Defendant provided a defence on the merits; whether the delay in applying to set aside was justified.
Ratio Decidendi:
The court determined that the judgment was validly entered as the Defendant had received the necessary documents and failed to respond timely; the Defendant did not provide sufficient grounds for its defence that could sway the court.
Result:
Application was dismissed with costs.
JUDGMENT
Introduction
[1] This is the Defendant's application in Enclosure 7 ("this Application") dated 18 December 2019, to set aside the judgment in default of appearance ("JID") dated 23 January 2019, which was dismissed by this Court for the following reasons.
The Background Facts
[2] The Plaintiff company, at the material time, was in the business of distribution of stone and marble products, whilst the Defendant company was in the business of engineering and construction works. On 13 November 2013, the parties entered into an agreement where the Plaintiff had agreed to supply to the Defendant, marble and granite stones for a construction project of two apartment blocks. Although the Plaintiff had delivered two supplies of stones, and had issued the delivery notes, the Defendant had failed to make outstanding payments amounting to a total sum of over MYR1 million ("the Outstanding Sum").
[3] Due to the Defendant's failure to settle the Outstanding Sum, the Plaintiff filed the Writ of Summons and Statement of Claim on 19 December 2018, and since the Defendant had failed to enter appearance, judgment in default of appearance ("JID") was entered against the Defendant. Pursuant to the JID, the Plaintiff issued a statutory notice dated 18 June 2019, according to ss 465(1)(e) and 466(1)(a) of the Companies Act 2016 for the Outstanding Sum.
[4] Since the Defendant had also failed to comply with the statutory notice, the Plaintiff filed a winding-up petition dated 20 November 2019 ("the Petition") against the Defendant. The Petition was served on the Defendant on 14 January 2020, and as a result, the Defendant filed a notice of intention to appear and oppose the Petition, and also an application to stay the Petition.
[5] In the meantime on 18 December 2019, the Defendant filed this Application.
Contentions, Evaluation, And Findings
Whether The JID Was Regularly Obtained
[6] It is trite law that if a judgment in default is a regular judgment then the party intending to set aside the said judgment in default must establish a defence on merits; but where the judgment in default is an irregular judgment then the said judgment in default can be set aside ex debito justitiae. This was explained by Edgar Joseph Jr. FCJ in the Federal Court case of Tuan Haji Ahmed Abdul Rahman v. Arab-Malaysian Finance Bhd , , in the following passage:
The general rule is that when it is clearly demonstrated to the satisfaction of the Court that a judgment has not been regularly obtained, the defendant is entitled to have it set aside ex debito justitiae, that is to say, irrespective of the merits and without terms. Having said that it should be added that the application to set aside such a judgment should be made (a) with reasonable promptitude, in other words within a reasonable time and (b) before the defendant has taken any fresh step after becoming aware of the irregularity. (See O 2, r 2(i) of the Rules of the High , 1980.).
[7] In applying to set aside the JID, the Defendant first submitted that it had not received the Writ of Summons and Statement of Claim, and, therefore, there was non-compliance with O 10 of the Rules of 2012 ("Rules of Court"). I am unable to agree with this submission as the proper provision is O 62 r 4 of the Rules Of 2012, which reads:
Order 62 - Service of documents
Rule 4 - Service on corporation
1) where an action against a corporation, the writ may be served:-
a) by leaving a copy of it at the registered office (if any) of the corporation;
b) by sending a copy of it by registered post addressed to the corporation at the office, or if there are more offices than one at the principal office of the corporation, whether such office is situated within Malaysia or elsewhere;
c) by handling a copy of it to the secretary or to any director or other officer of the corporation; or
d) in the case of a foreign company registered under Part XI of the Companies Act 1965 [Act 125] by handling a copy of it to, or sending the sa
