Counterclaims under O 15 r 2(1) need not relate to the original claim, but must exhibit some degree of connection.

[1] This appeal raises the question of whether O 15 r 2(1) of the Rules of 2012 (" ROC ") permits a defendant to raise a counterclaim that is not connected with or related to the subject matter of the claim.

The Facts

[2] The facts in so far as this appeal is concerned are not in dispute. The plaintiff (the respondent here) and the second defendant (the second appellant here) are siblings and the first defendant (the first appellant here) is the husband of the second defendant.

[3] The plaintiff owned and operated a kindergarten called Tadika Idamanku. She sought the assistance of the second defendant to run it for her. Sometime in January 2014, the second defendant quit her position in the kindergarten due to a misunderstanding between the sisters. The second defendant then started a kindergarten of her own.

[4] In April 2014, the plaintiff commenced this action in the Ipoh Magistrate's Court against the first and second defendants to recover a friendly loan of RM 43, 000.00 that was allegedly advanced to them. It was alleged that the said sum has not been repaid despite numerous reminders to do so.

[5] By a defence and counterclaim dated 10 July 2014, the first and second defendants denied liability for the sum claimed. By his counterclaim, the first defendant sought a declaration that he was the rightful owner of a motorcar bearing registration number WGE 6813 registered in the plaintiff's name and for an order that the plaintiff transfers the said vehicle to him. It was alleged that the motorcar had been purchased in the plaintiff's name as the first defendant could not obtain hire purchase facilities in his own name. He paid the monthly instalments and the car remained in his possession. The plaintiff, however, refused to transfer the vehicle to him after all payments due under the hire purchase agreement had been settled.

[6] The counterclaim of the second defendant, on the other hand, was for unpaid salary for the month of December 2013 amounting to RM 2,500.00. It was alleged that the plaintiff had refused to pay her December salary when she refused to continue helping her run Tadika Idamanku.

[7] That counterclaim of the first and second defendants prompted an application on the part of the plaintiff to strike it out under O 18 r 19(1) of the ROC on two grounds. The first, that the counterclaim was unmaintainable as it was not connected to the claim and had no bearing on it. Secondly, that the magistrate had no power to grant the declaratory relief sought by the first defendant in his counterclaim.

[8] The magistrate ruled that under O 15 r 2(1), a counterclaim can only be maintained if it was the same nature as the original action and allowed the application to strike out the counterclaim, and hence this appeal.

Discussion And Decision

[9] I shall first dispose of the objection that the counterclaim brought by the defendants was in contravention of O 15 r 2(1) of the ROC . O 15, so far as is material, reads as follows :

2 (1) Subject to r 5(2), a defendant in any action who alleges that he has any claim or is entitled to any relief or remedy against a plaintiff in the action in respect of any matter (whenever and however arising) may, instead of bringing a separate action, make a counterclaim in respect of that matter: and where he does so he shall add the counterclaim to his defence.

5 (2) If it appears on the application of any party against whom a counterclaim is made that the subject matter of the counterclaim ought for any reason to be disposed of by a separate action, the it to be tried separately or make such other order as may be expedient.

[10] A counterclaim is in substance a separate action. A reading of r 2(1) shows that it permits a defendant to bring a counterclaim against any