A counterclaim should not be struck out unless it is obviously unsustainable, emphasizing the importance of allowing both parties to present their cases at trial.

JUDGMENT

Kenneth St James JC:

Prelusion

[1] The Respondent-Plaintiff (P) applied to strike out the Appellant-First Defendant's (D1's) Counterclaim under all four limbs of O 18 r 19(1) of the Rules Of 2012 (ROC). Limb (a) is the ground that D1's Counterclaim discloses no reasonable cause of action. Limb (b) is the ground that D1's Counterclaim is scandalous, frivolous or vexatious. Limb (c) is where D1's Counterclaim may prejudice, delay or embarrass the fair trial of the suit. And limb (d) is that D1's Counterclaim is an abuse of the process of the Court.

[2] The Magistrates Court granted P's application and struck out D1's Counterclaim. D1 appeals to the High Court. This proceeding is the appeal proceeding.

The Law On Striking Out

[3] It is well established that so long as the pleadings (here: D1's Counterclaim) disclose a reasonable cause of action, the matter should proceed to trial: (1) Bandar Builders Sdn Bhd & Ors v. United Malayan Banking Corporation Bhd, [1993] 3 MLJ 36; (2) Seruan Gemilang Makmur Sdn Bhd v. Kerajaan Negeri Pahang Darul Makmur & Anor; [2016] 3 MLJ 1; [2016] 3 CLJ 1; [2016] 2 AMR 795.

[4] A review of the law on striking out is found in Tan Wei Hong (a minor suing through guardian ad litem and next friend Chuang Yin E) & Ors v. Malaysian Airlines Bhd & Other Appeals, [2018] 9 CLJ 425; [2018] AMR 529.

[5] In Tan Wei Hong (supra), the Federal Court, through the written judgment of Justice Ramly Ali FCJ, sets out as follows:

[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, [1993] 3 MLJ 36; 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: [2019] 1 MLJ 59 (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 adopted when it can be clearly seen that a claim or answer is on the face of it obviously unsustainable;

(c) it cannot be exercised by a minute examination of the documents and facts of the case in order to see whether the party has a cause of action or a defence;

(d) if there is a point of law which requires serious discussion, an objection should be taken on the pleadings and the point set down for argument under O 33 r 3 of the ROC; and

(e) the Court must be satisfied that there is no reasonable cause of action or that the claims are frivolous or vexatious or that the defences raised are not arguable.

[18] The Court of Appeal, in Sivarasa Rasiah & Ors v. Che Hamzah Che Ismail & Ors, [2012] 1 MLJ 473, had adopted the well-settled principle of striking out in the following passage:

A striking out order should not be made summarily by the Court if there is issue of law that requires lengthy argument and mature consideration. It should also not be made if there is issue of fact that is capable of resolution only after taking viva voce evidence during trial (see: Lai Yoke Ngan & Anor v. Chin Teck Kwee & Anor, [1997] 2 MLJ 565 (FC)).

[19] The basic test for striking out as laid down by the Supreme Court in Bandar Builder is that the claim on the face of it must be 'obviously unsustainable'. The stress is not only on the word 'unsustainable' but also on the word 'obviously', ie, the degree of unsustainability must appear on the face of the statement of claim without having to go into a lengthy and mature consideration in detail. If one has to go into a lengthy detailed argument and mature consideration of the issues of law and/or fact, then the matter is not appropriate to be struck out summarily.