Back
2021 MarsdenLR 2022
HIGH COURT MALAYA KUALA LUMPUR
SOO TECK LEE & ORS – Appellant
Versus
LIM GEOK KIM – Respondent
[Civil Suit No: WA-22NCVC-134-03/2019]
Plaintiffs lacked locus standi to claim under a terminated SPA as not all co-purchasers were parties to the action, rendering their claims frivolous.
Headnote:(A) Rules of Court 2012 – Order 18 Rule 19(1) – Application to strike out pleadings – Plaintiffs sought to enforce a Sale and Purchase Agreement (SPA) despite withdrawal of two co-purchasers, rendering claims unsustainable – Defendant contested plaintiffs' legal standing, claiming SPA was a sham and previously terminated – Court affirmed only all joint purchasers can maintain the action, ruling claim frivolous and vexatious, warranting strike out. (Paras 4, 20, 30, 49)
Facts of the case: The plaintiffs, joint purchasers, filed a suit after the defendant failed to deposit title with the solicitors, claiming the SPA was valid. However, the plaintiffs had previously executed a termination of the SPA, returning the title. (Paras 6, 31)
Findings of Court: The court ruled the plaintiffs lack locus standi since not all co-purchasers were part of the suit, and the SPA was terminated. No legitimate claim remained. (Paras 20, 30, 50)
Issues: The main issue was whether the remaining plaintiffs had legal standing to pursue the suit after withdrawal of two co-purchasers, and whether the SPA was valid. (Paras 20, 30)
Ratio Decidendi: The court determined that the plaintiffs couldn’t pursue claims stemming from a terminated SPA and emphasized the necessity of all co-purchasers' involvement in legal actions concerning joint transactions. (Paras 25, 30)
Result: Application to strike out allowed with costs.
JUDGMENT
Introduction
[1] This was an application by the defendant in the main action to strike out the writ and the statement of claim filed by the plaintiffs under O 18 r 19(1)(a), (b) or (d) of the Rules of 2012 ("the RC 2012").
[2] At the conclusion of the hearing which was conducted via zoom remote communication technology, I allowed the application and provided the principal grounds for the same. This judgment contains the full reasons for my decision.
Key Background Facts
[3] The present suit was originally initiated by the five plaintiffs against the sole defendant. The defendant and two others then filed a counterclaim against the five plaintiffs. However, the first and second plaintiffs have since withdrawn their claim against the defendant. This striking out application, documented in enclosure 95, is therefore made against the remaining three plaintiffs.
[4] At the heart of the dispute is a piece of (and held under Geran Mukim 102, Lot 343, Tempat Sungai Gadih, Mukim Kerling, Daerah Hulu Selangor, Negeri Selangor ("the Said Land"). Pursuant to a Sale and Purchase Agreement dated 24 February 2016 the five original plaintiffs, as purchasers, agreed to purchase the Said Land from the defendant, as the vendor, for a purchase consideration of RM1.5 million ("the SPA").
[5] The case of the plaintiffs in essence is that in accordance with the terms of the SPA, the defendant was required to deposit the original copy of the issue document of title to the Said Land with the solicitors for the purchasers (the plaintiffs), in order to enable the transfer process to be undertaken. Any failure by the vendor (the defendant) to honour this obligation would entitle the purchasers to terminate the SPA upon which the vendor must return all payments made by the purchasers under the same.
[6] The plaintiffs pleaded that despite having paid the purchase price, the defendant as the vendor failed to deposit the title document. This resulted in the plaintiffs issuing a termination letter on 19 February 2019 demanding the return from the defendant of the purchase price of RM1.5 million as well as agreed liquidated sum of another RM1.5 million. This led to the original five plaintiffs commencing this action.
[7] The defendant however in his defence and counterclaim pleaded that the SPA in respect of the Said Land was a sham since it was designed only to be a "security" and not for the purposes of any actual sale and purchase. The defendant and the two other parties in the counterclaim alleged that four other sale and purchase agreements are also similarly sham agreements and prayed for all these agreements to be declared null and void. At the same time the defendant filed the instant striking out application.
[8] Before I proceed to examine the grounds for the striking out as advanced by the defendant, and the arguments posited by the three remaining plaintiffs, it is useful that the law on striking out be stated, albeit in summary fashion.
The Law On Striking Out - A summary
[9] The starting point of reference must be O 18 r 19(1) of the Rules of 2012 ("the RC 2012") which relevant provisions read as follows:-
"19. Striking out pleadings and endorsements (O 18 r 19)
(1) The Court may at any stage of the proceedings order to be struck out or amended any pleading or the endorsement, of any writ in the action, or anything in any pleading or in the endorsement, on the ground that-
(a) it discloses no reasonable cause of action or defence, as the case may be;
(b) it is scandalous, frivolous or vexatious;
(c) it may prejudice, embarrass or delay the fair trial of the action; or
(d) it is otherwise an abuse of the process of the Court,
and may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be.
(2) No evidence shall be admissible on an application under subparagraph (1) (a)...."
[10] The defendant grounded its application on limbs (a), (b) and (d) of Order 18 r 19(1). It was thus stated that
