JUDGMENT

The Appeal

This is an appeal by the defendant against the decision of the learned Deputy Registrar striking out its counterclaim.

Background

By an agreement made on 18.7.96 (Exh. STS1) between the plaintiff and the defendant, the plaintiff undertook to carry out and complete building works comprising 20 units of factory building belonging to the defendant. The contract price was RM15,200,000.00.

When the defendant failed to pay the plaintiff 4 payments certificates totaling RM4,710,280.74, the plaintiff filed the present action on 2.12.97 to recover the payment, to which the defendant entered an unconditional appearance. On 15.1.98 the defendant applied for a stay of further proceedings pending reference to arbitrator under s 6 of the Arbitration Act 1952 . In the meantime on 22.1.98 the plaintiff applied for a summary judgment. The application for stay was refused by the learned judge. The appeal by the defendant was dismissed by the Court of Appeal on 16.11.98.

Following the dismissal of the appeal, the defendant filed its defence and counterclaim on 3.12.98. The counterclaim against the plaintiff is for the sum of RM 15,760,000,00 for the failure to complete the works in accordance to the agreed specification in the contract. It is pertinent to note that judgment under o 14 of Rules of the High , 1980 (RHC) was entered against the defendant on 8.6.99. The appeal by the defendant was dismissed by the Court of Appeal. Therefore, the o 14 judgment is now final.

On 29.3.01 this counterclaim was struck out by the learned Deputy Registrar. Thus the present appeal.

The Application

The grounds the plaintiffs application to strike out the defendant's counterclaim are that:-

(i) The defendant is guilty of want of prosecution in that there has been inordinate delay in applying for Summons for Direction. The defendant only took out the Summons for Direction on its counterclaim about one year later against the requirement of one month under o 25 r. 1(1)(b) RHC .

(ii) Alternatively, the counterclaim discloses no reasonable cause of action and/or that it is scandalous, frivolous or vexatious and/or it is an abuse of the process of Court.

The Law

The House of Lords in Birkett v. James [1978] 2 A.C. 297 in approving Allen v. Sir Alfred McAlphine & Sons Ltd & Ors [1968] 2 Q.B. 229, had firmly established the principle that a judge has a discretionary power to strike out an action for want of prosecution in the following circumstances:-

(1) That the default has been intentional and contumelious, eg, disobedience to and or conduct amounting to an abuse of the process of the Court; or

(2) (a) that there has been inordinate and inexcusable delay on the part of the plaintiff or his lawyer, and

(b) that such delay will give rise to a substantial risk that is not possible to have a fair trial of the issues in the action or is such as is likely to cause or to have caused serious prejudice to the defendants.

This decision has been accepted and applied in our courts. (See United Malayan Banking Corp Bhd v. Palm and Vegetable Oils (M) Sdn Bhd & Ors, [1994] 3 CLJ 144 ; [1994] 3 MLJ 73; Toh Hock Thye & Ors v. Toh Chwee Biow; [1981] CLJ (Rep) 292 ; [1982] 1 MLJ 152, to name a few).

Based on the principles enunciated above, I now proceed to deliberate on the application before me.

Findings

The plaintiff filed and served its reply and defence to the counterclaim on 14.12.98. Under o 18 r. 20(1) RHC the pleadings are deemed to be closed on 28.12.98. Under o 25 r. 1 RHC , it is incumbent upon the defendant to take out Summons for Direction within one month after the pleadings in the action are deemed to be closed. Here the defendant had failed to take out a Summons for Direction until 18.12.99 that is almost a year after the close of the pleadings.

If he desired to take out the Summons for Direction he should apply for an extension of time to do so. This is for obvious reasons that o 25 r. 1(1) of the RHC has fixed a time limit within which he must take out the summ