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2010 MarsdenLR 4240
COURT OF APPEAL, PUTRAJAYA
MAYBAN ALLIED BHD – Appellant
Versus
KENNETH GODFREY GOMEZ & ANOR AND ANOTHER APPEAL – Respondent
[Civil Appeal Nos: W-02-1094-2008 & W-02-1095-2008]
Res judicata precludes re-litigation of identical claims after a prior suit is withdrawn without liberty to file afresh. Limitation period barred the subsequent suit, rendering it an abuse of process.
Headnote:(A) Rules of the High Court 1980 - Order 18 Rule 19(1) - Limitation Act 1953 - Appeal dismissed due to res judicata and limitation, where suit for auction proceeds withdrawn without liberty to file afresh led to estoppel preventing re-litigation of same facts - Consent order was properly acknowledged and upheld, hence continuation of action constituted abuse of process. (Paras 10, 28, 35)
(B) Res Judicata - Grounds for strike out include res judicata and limitation; once a matter is adjudicated by competent court, parties cannot litigate the same issues again. (Paras 12, 15)
(C) Limitation - Claim arises from contract; time limits established under Limitation Act; claim was filed beyond six-year limitation period, rendering the second suit time-barred. (Paras 30, 34)
Facts of the case:
The appellant company seeks return of auction proceeds after withdrawal of an initial suit against the respondents, with claims substantively identical across both actions. (Paras 2, 5)
Findings of Court:
On grounds of res judicata and limitation, the Court finds the second suit an abuse of process and upholds the strike out. (Paras 28, 34)
Issues: Whether the second suit is barred by res judicata and limitation.
Ratio Decidendi: A consent order signifies closure; res judicata applies to actions withdrawn without a provision allowing re-filing, thus preventing litigation of identical claims. (Paras 15, 27)
Result: Appeals dismissed with costs.
| Table of Content |
|---|
| 1. plaintiff's claims related to auction proceeds. (Para 1 , 2 , 3 , 4 , 5 , 6) |
| 2. appellant argues against res judicata and limitation. (Para 7 , 8) |
| 3. respondents support striking out based on prior suit. (Para 9) |
| 4. court's power to strike out claims. (Para 10 , 11) |
| 5. res judicata principles and their implications. (Para 12 , 13) |
| 6. consent order implications on res judicata. (Para 14 , 15 , 16 , 17 , 18 , 19) |
| 7. withdrawal conditions and implications. (Para 20 , 21 , 22) |
| 8. consent order binds parties legally. (Para 23 , 24 , 25 , 26 , 27) |
| 9. appeals dismissed due to res judicata. (Para 28) |
| 10. limitation period for contract claims. (Para 29 , 30 , 31 , 32 , 33 , 34) |
[1] The plaintiff (the appellant in the present appeal) is a company that has taken over the assets of the Co-operative Central Bank Limited (CCB). The defendants (the respondents in the present appeal) are all partners and advocates and solicitors practising under the firm name of M/s Nordin Hamid & Co during the period when the plaintiff's alleged cause of action arose.
[2] The appellant's claim against the respondents is for the return of auction proceeds allegedly kept by the Kuala Lumpur office of M/s Nordin Hamid & Co pursuant to a the foreclosure proceeding in Originating Summons No S6-31-3262-1987 wherein a property was auctioned on 11 November 1996 for the sum of RM385,000. On or about 18 November 1997 the sum of RM377,350 was allegedly paid to the Kuala Lumpur office of M/s Nordin Hamid & Co It is the contention of the defendants that they were not aware of this payment into the firm's client's account at this date.
[3] On 27 November 2002, the appellant brought an action (Kuala Lumpur High Court Suit No D1-22-1943-2002) against the respondents to recover the auction proceeds (1st suit).
[4] On 25 August 2003, the appellant withdrew the 1st suit. The withdrawal of the 1st suit was recorded in the notes of proceeding for that suit. The notes of proceeding for 25 August 2003 show that the Court ordered the 1st suit and the firm's counterclaim be struck out, and the parties were directed to file a notice of discontinuance within one week. The Court also ordered costs be agreed between the parties.
[5] After the 1st suit was withdrawn, the plaintiff on 21 October 2004 filed the present action (the subject matter of the present appeal) against the partners of the firm to recover the same auction proceeds. The appellant's claims in both the 1st and 2nd suits are identical.
[6] On 18 February 2005, the respondents filed applications to strike out the 2nd suit under O 18 r 19(1) of the Rules of the High 1980, on the ground of res judicata. The respondents in the 1st appeal (Appeal No W-02-1094-2008) also relied on limitation period in applying to strike out the 2nd suit. On 29 August 2008, the learned judge struck out the 2nd suit. Hence the present appeals.
Appellant's Arguments
[7] The appellant argued that the 2nd suit is not barred by res judicata as it was withdrawn without the merits being heard or adjudicated by the Court. To the appellant, cause of action estoppel and issue estoppel do not apply on the facts of this matter.
[8] The appellant also argued that the 2nd suit is not barred by limitation; and the facts necessary for a considered decision on whether the 2nd suit is time barred have to be determined at trial. Thus the appellant concluded that this is not a plain and obvious case to be summarily struck out.
Respondents' Arguments
[9] The respondents on the other hand, took the position that since the 1st suit was withdrawn by the appellant by way of a consent order, this fact by itself has given rise to two (2) grounds for striking out, ie res judicata or issue estoppel and limitation period which are legal issues arising from the same set of facts. The respondents claimed that the appellant's own pleadings state that their cause of action arose on or about 1 December 1997 and would therefore have expired on 30 November 2003, where
