Hamid Sultan Abu Backer JC:

[1] This is my judgment in respect of the appellant/plaintiff's appeal against the decision of the learned deputy registrar ordering (i) the interveners (now the respondents/2nd and 3rd defendants) to be added as defendants in the suit; and (ii) setting aside the default judgment dated 21 December 2005 (hereinafter referred to as default judgment).

[2] The appellant in this action is claiming against the 1st defendant and seeking, inter alia, the following reliefs namely: (a) an order that the defendant transfers all her shares in the firm to the plaintiff; and (b) a declaration that any transfer of all her shares or part thereof in the firm to any person or persons made between the dates of the trust deed, that is 25 May 2001 and 1 January 2005, if any, is null and void.

[3] The cause of action arose based on a purported breach of the terms of a trust deed dated 25 May 2001 between the appellant and the 1st defendant. The 1st defendant had agreed to hold 100% of the shares in a firm known as Zabare Motor Trading (hereinafter referred to as the Firm) for the benefit of the appellant. The appellant on 31 December 2004 had requested the 1st defendant to transfer the said shares but the 1st defendant had refused and, in consequence, the appellant is seeking the reliefs stated above. The 1st defendant did not enter an appearance and in consequence, the appellant had, pursuant to O. 13 r. 1 of the Rules of the High Court 1980 ("the RHC 1980"), entered default judgment on 21 December 2005 (emphasis is mine). The respondents on 8 August 2006 filed an application (encl. 12) to intervene and set aside the default judgment which was allowed by the learned Deputy Registrar. This is the subject matter of this appeal.

[4] The 2nd defendant, in support of encl. 12 had filed an affidavit and stated, inter alia, as follows:

(a) the 2nd defendant became a partner, of the Firm in March 2002 and two-thirds of the Firm's share was transferred to him and Nancy binti Abdullah, the defendant, (1st defendant) who held the remaining one third.

(b) in September 2005, 60% of the shares of the Firm was transferred to Buang bin Bolhassan, (3rd defendant) by me and the 1st defendant and thereafter I held 10%, the 1st defendant held 30% and the 3rd defendant held 60% of the Firm's share until February 2006 wherein after, my shares and the 1st defendant's shares was transferred to the 2nd defendant and thereafter the 2nd defendant became 100% share holder of the Firm.

(c) sometime before February 2006, 100% of the Firm was transferred to the plaintiff without the knowledge of the 2nd and 3rd defendants. The 2nd and 3rd defendants came to know of the same in June 2006 and that too only as a result of an enquiry made by our solicitors at the business registry. The solicitors were informed that pursuant to a trust deed dated 25 May 2001 and a default judgment dated 21 December 2005 the shares were transferred as per the court order.

(d) the default judgment was irregularly entered and ought to be set aside ex debito justitiae; even if the default judgment were valid, it had only directed the 1st defendant to transfer her shares in the Firm to the plaintiff and it does not direct the 2nd defendant or the 3rd defendant. In consequence, the default judgment cannot affect the rights and proprietary interests of the 2nd and 3rd defendants in the Firm.

[5] The appellant in opposing the respondent's affidavit said, inter alia, as follows:

(a) the default judgment was regularly entered against the defendant.

(b) under the deed of trust, the 1st defendant was bound to hold on trust all the 100% of the shares, right title and interest in the Firm for the appellant until 31 December 2004 and thereafter she was to transfer all shares to the appellant. However, after 31 December 2004, the defendant failed, refused and neglected to transfer all the shares to the appellant, notwithstanding a demand was made by him.

(c) as per the said deed