The Court of Appeal ruled that absent defendants must demonstrate justifiable reasons for absence and a defense on merits, or their application to set aside a default judgment will be dismissed.

James Foong FCJ (delivering majority judgment):

INTRODUCTION

The facts of this case are rather straight forward. On the date fixed for hearing, which was on 13 January 2008, neither the defendants nor their counsel turned up in court. The High Court judge after giving indulgence of up to 10.30am decided to proceed with the hearing of the case in the absence of the defendants and/or their counsel. Three witnesses for the plaintiffs took the stand and tendered evidence supporting the plaintiffs’ claim. After deliberation, the High Court decided in favour of the plaintiffs and awarded them a sum of RM7.1m as general damages, 10% of RM7.1m as aggravated damages, interest at 8%pa on RM7,810,000 from date of filing the writ to date of realisation and costs, all to be paid by the first and third defendants.

The defendants’ solicitors became aware of this on the evening of the judgment through a television news broadcast. They immediately applied, [2009] 4 MLJ 610 at 625the next day, to set-aside the judgment under O 35 r 1 of the Rules of the High Court 1980 (‘RHC’). This application was heard and dismissed by the High Court on 28 January 2008. On the very same day, the defendants filed a notice of appeal against the decision of the High Court handed down on 13 January 2008 (Appeal No D-01–21 of 2008) and another against the decision of the learned judge in refusing to set aside the default judgment ie the decision handed down on 28 January 2008 (Appeal No D-01–22 of 2008).

The defendants applied to consolidate these two appeals but was rejected by this court which ordered these two appeals be heard one after the other. Accordingly, we heard Appeal No D-01–22 of 2008 first.

PRELIMINARY OBJECTION

Before we dwell into the substantive appeal, we have to dispose of a preliminary objection raised by the plaintiffs in encl 15A. In this application, the plaintiffs requested us to strike out Appeal No D-01–21 of 2008 on the ground that the defendants had elected to appeal against the decision on the refusal of the High Court to set aside the default judgment. In short, they are contending that since the defendants have filed an appeal against the decision to set aside the default judgment, the defendants are estopped from pursuing with their appeal against the decision of the High Court for entering judgment against them.

In support of this proposition, the plaintiffs’ counsel cited to us a number of authorities. We need not deal with them all since they relate to the same principle except to highlight one case Annie Quah Lay Nah v Syed Jafer Properties Sdn Bhd & Ors and another appeal 2007 MarsdenLR 2774 [2007] 1 CLJ 1which says (at p 230 of MLJ):

If one of the parties to litigation is faced with two mutually exclusive alternatives and he elects to pursue one then he will be estopped from retreating from the position he has adopted by his election.

The defendants on the other hand insisted that they have the right to pursue both appeals. Their Appeal No D-01–22 of 2008 arose out of their application made under O 35 r 2 of the RHC which says:

(1)Any judgment or order obtained where one party does not appear at the trial may be set aside by the Court, on the application of that party, on such terms as it thinks just.

(2)An application under this rule must be made within 7 days after the trial.

After the High Court has refused to set aside the judgment in default made pursuant to O 35 r 2 of the RHC, according to the defendants this order is appealable to the Court of Appeal by virtue of Courts of Judicature Act 1964 which provides:

The Court of Appeal shall have jurisdiction to hear and determine appeals from any judgment or order of any High Court in any civil cause or matter, whether made in the exercise of its original or of its appellate jurisdiction, subject nevertheless to this or any other written law regulating the terms and conditions upon which such appeals shall be brought.

Similarly, in respect of the default judgment made on 13 January 2008,