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2010 MarsdenLR 2235

COURT OF APPEAL PUTRAJAYA
WITECH SDN BHD & ORS – Appellant
Versus
BHR GROUP LTD – Respondent
[Civil Appeal No: Q-03-149-2003]



Petitioner Advocates:Tai Choi Yu ,Respondent Advocate: Bong Ah Loi

Default judgments must be set aside ex debito justitiae when obtained irregularly due to procedural non-compliance, regardless of the merits.

Headnote:(A) High Court Rules 1980 - Order 19 - Default Judgments - Court found that four default judgments obtained by the plaintiff against the defendants were irregular due to non-compliance with procedural rules, entitling defendants to have them set aside ex debito justitiae - Plaintiff did not follow the proper procedure for entering default judgment under O 19 r 7(1) RHC, as the claim was not for a liquidated demand - Defendants' application to set aside was initially dismissed. (Paras 18, 21, 49)

(B) Procedural Compliance - Adherence to proper notification rules is critical in ensuring fair trial rights - Irregular default judgments must be set aside automatically where procedural rules were not followed. (Paras 20, 24, 46)

Facts of the case:
The plaintiff sought judgments in default against multiple defendants for claims that involved breach of trust and fiduciary duties related to financial transactions, but failed to comply with relevant procedural rules in doing so. (Paras 19, 30)

Findings of Court:
The court held that the default judgments were improperly entered and must be set aside as a matter of right due to the significant procedural breaches. (Paras 49)

Issues: Whether the default judgments should be maintained despite procedural non-compliance, and the applicability of O 19 concerning claims for liquidated demands.

Ratio Decidendi: The court emphasized the necessity for strict compliance with procedural rules, citing that non-compliance in entering default judgments renders them irregular and subject to automatic setting aside without considering the merits of the case. (Paras 21, 27)

Result: The appeal was allowed, with costs fixed at RM500 and deposit refunded to the appellants.

Table of Content
1. chronology of default judgments (Para 2)
2. non-compliance with procedural rules (Para 4 , 5 , 6)
3. types of default judgments (Para 8 , 10 , 11 , 12 , 13 , 24 , 26 , 27)
4. irregular default judgments set aside (Para 18 , 20 , 28 , 29)
5. plaintiff's claim against defendants (Para 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39)
6. compliance with rules is crucial (Para 50)
Abdul Malik Ishak JCA:

[1] I have read the judgment of my learned brother Nihrumala Segara MK Pillay, JCA and I totally agree with his Lordship that the appellants' appeal should be allowed with costs fixed at RM500 and that the deposit to be refunded to the appellants. In support of his Lordship's judgment, I have this to say.

[2] The chronology of events that led to the four (4) default judgments must be viewed in its correct perspective. They should be considered as important facts that cannot be swept under the carpet. I will now itemise them:

[2.1] The 1st, 7th and 8th defendants and that would be the 1st, 3rd and 4th appellants filed their memorandum of appearance on 23 June 2001.

[2.2] The 6th and 20th defendants and that would be the 2nd and 7th appellants filed their memorandum of appearance on 5 July 2001.

[2.3]The 19th defendant and that would be the 6th appellant filed its memorandum of appearance on 30 July 2001.

[2.4]The 2nd, 4th, 10th, 13th, 15th and 18th defendants filed their memorandum of appearance on 9 October 2001. The 13th defendant would be the 5th appellant.

[2.5]On 23 July 2001, the plaintiff respondent filed the ex parte judgment in default of defence against the 1st, 6th, 7th and 8th defendants and that would be the 1st, 2nd and 4th appellants without notice to the appellants or to the appellants' solicitors on record.

[2.6] Again, on 8 August 2001, the plaintiff respondent filed the ex parte judgment in default of defence against the 20th defendant and that would be the 7th appellant without notice to the appellants or to the appellants' solicitors on record.

[2.7] Yet again, on 22 August 2001, the plaintiff respondent filed the ex parte judgment in default of defence against the 19th and 21st defendants without notice to the appellants or to the appellants' solicitors on record. The 19th defendant would be the 6th appellant.

[2.8] Again, on 13 November 2001, the plaintiff respondent filed the ex parte judgment in default of defence against the 2nd, 4th, 10th, 15th and 18th defendants without notice to the defendants or to the defendants' solicitors on record.

[2.9] Finally, on 27 December 2001, the plaintiff respondent served the ex parte judgment in default of defence on the 1st, 6th, 7th, 8th, 13th, 19th and 20th defendants (referring to the 1st to the 7th appellants) as well as the 21st defendant through the appellants' solicitors on record.

[3] Now, O 12 r 2 of the Rules of the High 1980 ("RHC") defines the memorandum of appearance as a request to the registry to enter an appearance for the defendant or defendants specified in the memorandum. And the memorandum of appearance must be in the prescribed Form with such variations as the circumstances of the case require as stipulated in O 1 r 7 of the RHC. Here, the memorandum of appearance was correctly filed in the prescribed form.

[4] It was argued that there was non-compliance by the plaintiff respondent with r 56 of the Sarawak Advocates (Practice and Etiquette) Rules 1988. That rule reads as follows:

Where the name of the advocate or his firm appears on the Court record or the fact of representation is known to the other side, no advocate representing the other party to the proceedings shall enter judgment by default against the client of the first-named advocate or to take advantage of delay in pleading or filing documents in the nature of pleadings or in taking any necessary steps or in complying with any order in the proceedings by such first-named advocate, unless he shall have given to such first-named advocate written notice of his intention to do so, and forty-eig

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