Issues in a counterclaim that are identical to defenses previously adjudicated are subject to res judicata, preventing relitigation.

See Mee Chun JCA:

Introduction

[1] There are 2 appeals heard before the Court. Both appeals involve the same Appellant as the Plaintiff, similar applications, similar issues and the same set of solicitors. It is also agreed that appeal 927 will be heard first and the outcome will bind appeal 931.

[2] The appeals relate to the dismissal of the Appellant's striking out applications of the Respondent's counterclaims We allowed the appeals and we now give our reasons.

Background Facts

[3] The Respondent as the Defendant had appointed the Appellant to carry out work at a quarry site in Keramat Pulai, Mukim Sungai Raya, Kinta District, Perak. The work was done but full payment was not made. By letter dated 30 November 2017, the Respondent admitted it owed the Appellant RM2,419,873.61 for the work done and proposed to pay by 60 installments of RM40,331.22 from November 2017. The Appellant agreed to this proposal by letter dated 12 December 2017. From November 2017 to February 2018, 4 payments were made. The Appellant subsequently filed proceedings to recover the outstanding sum of RM2,258,548.72.

[4] The claim was resisted by the Respondent and its defence (para 10) was that the request for payment by the Appellant was mala fide for the reasons set out. The reasons are that the Appellant had purposely demolished the access road (paragraphs 11-14), that the Appellant had breached the terms of appointment when it failed to construct Platform D which delayed the Respondent's operation and production of the quarry (para 15) and in the alternative that the agreement to pay is void where the Respondent was not aware the Appellant had demolished the access road and that the damages suffered by the Respondent would be more than that claimed by the Appellant (paragraphs 20-21).

[5] There was also a counterclaim by the Respondent which forms the subject matter of this appeal.

[6] In the meanwhile, the Appellant had filed an application for summary judgment which was dismissed by the High Court but allowed by this Court on 27 July 2021. There was no appeal by the Respondent.

[7] Following from its claim for summary judgment being allowed, the Appellant filed its application to strike out the Respondent's counterclaim primarily on the ground of res judicata and issue estoppel.

Decision Of The High Court

[8] In the grounds of judgment (GOJ, encl 3/25-55), the High Court (HC) was of the view that if, in allowing summary judgment in favour of the Appellant, the Court of Appeal had decided that the demolition of the access road and the non-construction of Platform D are issues that do not merit a trial, then it would be obliged to allow the striking out of the counterclaim, premised upon res judicata and stare decisis (paragraph 33).

[9] The HC ultimately found it unclear whether the Court of Appeal had indeed considered and dismissed the above 2 issues. The HC therefore stated it was not bound by res judicata or stare decisis to hold that the 2 issues are no longer live issues. These were triable issues which were the foundation for the Respondent's counterclaim (paragraph 60).

[10] It was also stated that the Appellant had sought to take a different position in the striking out of the counterclaim where the premise is that the counterclaim is part and parcel of the main claim. In the summary judgment application, its position was that the counterclaim is separate and distinct from the main claim. The Appellant cannot be allowed to approbate and reprobate.

Submissions Of The Appellant

[11] The Appellant submitted that the issues raised by the Respondent in its counterclaim cannot be litigated anymore because they were exactly