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2023 MarsdenLR 2246
HIGH COURT MALAYA KUALA LUMPUR
YONG HARDWARE TRADING SDN BHD – Appellant
Versus
PHUA KIAN MING & ORS – Respondent
[Civil Suit No: WA-22NCvC-31-01/2020]
The court's inherent powers can be invoked to strike out actions to prevent abuse of process, even when specific procedural rules exist.
Headnote:(A) Rules of Court 2012 - Order 92 r 4 - Res Judicata - Court struck out plaintiff's amended statement of claim after previous appeals had barred claims against other defendants - Plaintiff's claims were founded on alleged fraudulent transfer of property, now invalidated - Inherent powers of the Court invoked to prevent abuse of process. (Paras 1, 14, 31)
(B) Striking Out Applications - Court's inherent powers allow for striking out actions to prevent injustice or abuse of process - Specific provisions under Order 18 r 19(1) do not preclude inherent powers application. (Paras 19, 20)
Facts of the case:
The plaintiff company claimed that its property was fraudulently transferred to the first defendant, facilitated by the second defendant. After appeals, the claims against the first, third, and fourth defendants were struck out based on res judicata, prompting the second defendant to seek a similar outcome. (Paras 3-8)
Findings of Court:
The Court found that with the prior actions struck out, the basis for the plaintiff's claims collapsed, justifying the second defendant's application to strike out. (Paras 25, 33)
Issues: The main issues were whether the second defendant could apply to strike out the action after a previous dismissal and the applicability of res judicata. (Paras 16, 31)
Ratio Decidendi: The Court held that inherent powers could be invoked despite specific provisions for striking out, emphasizing the need to prevent abuse of process and uphold public policy. (Paras 20, 32)
Result: Application to strike out allowed with costs awarded to the second defendant.
| Date | Event | Reference |
|---|---|---|
| Date of lower court decision | The lower court issues a ruling to strike out the action based on abuse of process and inherent powers. | (!) (!) |
| Date of previous judgments | Final judgments are rendered dismissing claims against certain defendants, establishing res judicata. | (!) |
| Date of appellate filing | The appellant files an appeal challenging the lower court’s decision to strike out the case. | (Not specified) |
| Date of appellate hearing | The appellate court reviews the grounds of appeal, including alleged errors in applying the law and procedural irregularities. | (Not specified) |
| Date of appellate decision | The appellate court issues its ruling, either affirming, reversing, or modifying the lower court’s decision. | (Not specified) |
| Table of Content |
|---|
| 1. court allowed striking out due to res judicata. (Para 1 , 2) |
| 2. plaintiff's claims and appeals against defendants. (Para 3 , 4 , 5 , 6 , 7 , 9 , 11 , 12) |
| 3. defendant's application to strike out based on inherent powers. (Para 8 , 10 , 13 , 14 , 15) |
| 4. plaintiff's opposition to the strike out application. (Para 16 , 17) |
| 5. court's reasoning on inherent powers and application rules. (Para 18 , 19 , 20 , 21 , 22) |
| 6. res judicata and its application in this case. (Para 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31) |
| 7. court's conclusion on the second defendant's application. (Para 32) |
Introduction
[1] On 5 April 2023 this Court allowed the second defendant's application (Encl 158) made pursuant to O 92 r 4 of the Rules of Court 2012 (" ROC ") to strike out the plaintiff's amended statement of claim in view of the change in circumstances wherein:
(i) the Court of Appeal had on 8 November 2022 allowed the separate appeals of the first, third, and fourth defendants which were heard together, and struck out the claims against each of them on the ground of res judicata; and
(ii) the Federal Court had on 22 March 2023 dismissed the plaintiff's application for leave to appeal to the Federal Court against the Court of Appeal's order of 8 November 2022.
[2] Dissatisfied with this Court's decision of 5 April 2023, the plaintiff appeals, and these are the grounds of judgment of this Court.
Salient Background Facts
[3] The plaintiff company (under liquidation) in its amended statement of claim (Encl 142) claimed against four defendants that its property with a bungalow thereon ('said bungalow") was meant to be held by the first defendant as security for a friendly loan but was caused to be transferred to the first defendant fraudulently at an undervalue and that the second defendant who was the solicitor for the transaction and conveyance had facilitated the fraud.
[4] The reliefs the plaintiff sought in the main were to have the sale and purchase agreement leading to the transfer of the said bungalow declared null and void, that the transfer of the said so bungalow to the first defendant set aside, and that the said bungalow be retransferred back to the plaintiff, damages - general, aggravated and exemplary together with interest thereon and costs.
[5] All four defendants applied by way of separate applications to have the action against them struck out.
[6] On 24 November 2021, the previous Judge, Justice Ahmad bin Bache, dismissed all the four striking-out applications. The first, third, and fourth defendants appealed to the Court of Appeal, but the second defendant did not.
[7] By way of an unanimous decision, the Court of Appeal on 8 November 2022, allowed all three appeals, and struck out the action against the first, third, and fourth defendants on the ground that the action brought is barred by res judicata.
[8] Undoubtedly inspired by the decision of the Court of Appeal, the second defendant applied (Encl 158) on 9 December 2022 to have the action against him struck out too.
[9] The plaintiff responded by filing an application (Encl 163) on 15 December 2022 to have the proceedings in this Court stayed pending the disposal of its appeal (sic) in the Federal Court. The alleged appeal in the Federal Court was in fact an application for leave to appeal.
[10] When both the applications, that of the second defendant to strike out the action and that of the plaintiff to stay the proceedings, came before me on 2 March 2023, I adjourned both the no applications to 5 April 2023 upon being apprised that the plaintiff's application for leave to appeal to the Federal Court was scheduled for hearing on 22 March 2023.
Plaintiff's Stay Application (Enclosure 163)
[11] On 5 April 2023, I was informed that the plaintiff's application for leave to appeal against the Court of Appeal's decision of 8 November 2022 was dismissed by the Federal Court. I then proceeded with the hearing of both applications.
[12] With the plaintiff's application for
