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2025 MarsdenLR 136
HIGH COURT MALAYA KUALA LUMPUR
LKW PETROLEUM SDN BHD & ANOR – Appellant
Versus
LOH POON HOE – Respondent
[Civil Appeal No: WA-12ANCC-138-11/2022]
For a Third Party Notice to succeed, a legally recognizable cause of action must be evidenced; mere allegations without support do not suffice.
Headnote:(A) Rules of Court 2012 - Order 16 - Third party proceedings - Defendants issued a Third Party Notice claiming indemnity from a third party concerning a loan agreement - The third party's application to set aside the Third Party Notice was allowed by the Sessions Court, ruling no legally recognizable cause of action was pleaded against the third party - Defendants alleged collusion in illegal money lending, yet failed to provide evidence of any connection with the third party - Summary judgment previously granted to the plaintiff against defendants. (Paras 10-22)
(B) Summary Judgment - The requirement of establishing a reasonable cause of action to counter a third-party notice - The Court affirms that evidence must substantiate any claims made against a third party, which was not met in this case. (Paras 15-22)
Facts of the case:
The defendants borrowed RM500,000 under a loan agreement with the plaintiff and alleged that the loan came from a person using proxies, attempting to shift liability by filing a Third Party Notice against a third party involved.
Findings of Court:
The appeal was dismissed, affirming the lower court's ruling; the Third Party Notice was set aside due to insufficient evidence of cause of action.
Issues: The main issues addressed the legitimacy of the Third Party Notice and whether a viable claim was presented against the third party.
Ratio Decidendi: The court held that without a clear evidential link to the third party, and the absence of a legally viable claim, the third party's application was rightly granted.
Result: Appeal dismissed.
| Table of Content |
|---|
| 1. loan agreement and third party claim context. (Para 4 , 5 , 6 , 7 , 9) |
| 2. procedural requirements for third party proceedings. (Para 10 , 11 , 12 , 13 , 14) |
| 3. lack of legally recognizable cause of action. (Para 15 , 16 , 17 , 20) |
| 4. assessment of evidence and claims. (Para 18 , 19 , 21) |
| 5. affirmation of the lower court's decision. (Para 22 , 23) |
A. Introduction
[1] For convenience, the parties shall be referred to as they are in the Sessions Court, namely the appellants as the defendants, the respondent as the third party and D2D Bizhub Sdn Bhd as the plaintiff.
[2] This appeal arises from the defendants' dissatisfaction with the decision of the learned Sessions Court judge, in allowing the third party's application to set aside the third party notice ("Third Party Notice") and statement of claim ("Third Party Statement of Claim") against him.
[3] After considering the evidence before the Court, and hearing submissions of counsel, the Court dismissed the appeal. The reasons for the decision are set out below.
B. Background Facts
[4] By a friendly loan agreement dated 30 April 2021 ("Agreement"), the plaintiff provided a loan amounting to RM500,000 to the 1st defendant. The 2nd defendant entered into a letter of guarantee dated 30 April 2021, agreeing to indemnify the plaintiff against all losses and damages that the plaintiff may incur in the event the 1st defendant defaults on the repayment of the loan.
[5] The plaintiff commenced the action at the Sessions Court to recover the outstanding amount due and owing by the defendants.
[6] While the defendants did not deny receiving the loan, they claimed that the loan was not given by the plaintiff, but by one Low Jack @ Ah Jack ("Low Jack"), who had used different individuals and/or companies as his proxies to release the loan and/or to accept repayments from the defendants. The defendants alleged that the third party was one of Low Jack's proxies.
[7] The defendants thus issued the Third Party Notice and the Third Party Statement of Claim, to seek indemnity and/or contribution from the third party vis-à-vis the claim by the plaintiff.
[8] The third party applied to set aside the Third Party Notice and the Third Party Statement of Claim. The application was allowed by the learned Sessions Court judge. The appeal before this Court is an appeal against the decision of the learned Sessions Court judge.
[9] It must be highlighted that before the third party's application to set aside the Third Party Notice and the Third Party Statement of Claim was allowed, the plaintiff had applied and successfully obtained summary judgment against the defendants.
C. Considerations And Findings
[10] Third party proceedings are governed by O 16 of the Rules of Court 2012 (" ROC "). Order 16 r 1(1) provides that:
"(1) Where in any action a defendant who has entered an appearance:
(a) claims against a person not already a party to the action any contribution or indemnity;
(b) claims against such a person any relief or remedy relating to or connected with the original subject matter of the action and substantially the same as some relief or remedy claimed by the plaintiff; or
(c) requires that any question or issue relating to or connected with the original subject matter of the action should be determined not only as between the plaintiff and the defendant but also as between either or both of them and a person not already a party to the action, then, subject to paragraph (2), the defendant may issue a notice in Form 18 or 19, whichever is appropriate (which is referred to as a "third party notice" in this Order), containing a statement of the nature of the claim made against him and, as the case may be, either of the nature and grounds of the claim made by him or of the question or issue required to be determined."
[Emphasis Added]
[11] In the present case, in issuing the Third Party Notice, the defendants relied on O 16 r 1(1)(a), in that they are seeking indemnity or contribution fr
