Compliance with unless orders is mandatory and non-compliance leads to automatic dismissal of actions without the opportunity for reinstatement unless valid reasons are shown.

SM Komathy Suppiah J:

The Application

[1] This is an application by Lim Goh Eng Holdings Sdn Bhd, the plaintiff, under O 92 r 4 of the Rules of 2012 to reinstate its action that was struck out for non compliance of an "Unless Order" made on 1 April 2017.

Background Facts

[2] The circumstances that led to the filing of the application can be shortly stated. The plaintiff commenced this action against the defendant on 22 December 2017 for arrears of rental and other reliefs. The action was then set down for trial.

[3] Before the commencement of the trial, the defendant applied via encl 33 for security for costs in the sum of RM70,000.00. On 1 April 2019 the Court granted an "Unless Order" which required the plaintiff to deposit a sum of RM50,000.00 as security for costs within 14 days from the date of the Order. By the terms of the said Unless Order, the action would be struck out if the plaintiff failed to comply with the Court order by 15 April 2019.

[4] Immediately thereafter, the defendant's solicitors drew up the draft Unless Order and sent it to the plaintiff's solicitors, who on 4 April 2019 returned it without any comment. The sealed Unless Order was extracted and served on the plaintiff's solicitors on 15 April 2019.

[5] On 16 April 2019, the defendant's solicitors wrote to the plaintiff's solicitors to inform them that the Unless Order had not been complied with and the plaintiff's case had been struck out and enclosed a draft Striking Out Order. The next day, the plaintiff's solicitors delivered to the defendant's solicitors a cheque in the sum of RM50,000.00. Whereupon, the defendant's solicitors intimated to the plaintiff's solicitors that there was no pending suit and that the RM50,000.00 would be retained for assessment of costs.

[6] On 9 May 2019, the plaintiff filed the present application upon obtaining confirmation from the Court that the action had been struck out automatically for non compliance with the terms of the Unless Order. In support of the reinstatement application, the plaintiff relied substantially on two grounds, first, that the striking out of the action upon the expiration of the 14 days given was invalid as the defendant had not taken out an application to do so. Secondly, the plaintiff's action should not have been struck out without the plaintiff being accorded the opportunity to explain the breach.

[7] The defendant opposed the application on these grounds:

a. The Court was functus officio as the Order striking out the action had been perfected;

b. That the Unless Order was a self executing order and no application was required; and

c. No explanation was given by the plaintiff for breach of the Unless Order.

[9] The Unless Order in the instant case expressly set out the penalty for non-compliance in the event of non payment within the prescribed period, ie that the action would be dismissed. The plaintiff was aware of the terms of the Unless Order and would have known that arrangements were needed to be made within 14 days of the Unless Order to deposit RM50,000.00 with the defendant as security for costs. The plaintiff deposited the sum with the defendant two days after the time fixed for doing so without obtaining an extension of time to do so. It was rather lax in not taking immediate steps to comply with the order or to apply for extension of time. It was undisputable that the plaintiff did not comply with the Unless Or