James Foong JCA (delivering judgment of the court):

INTRODUCTION

The appellant, as plaintiff, has sued the respondent on 10 October 2005 in the High Court for a sum of RM2,097,315.62 with interest thereon at 8% per annum from 24 March 1999 and costs. The writ of summons was served on the respondent on 27 October 2005 and when no appearance was filed by the respondent within the prescribed time, judgment in default of appearance was entered against the respondent on 22 November 2005. When the respondent failed to satisfy the judgment sum, despite being served with a sealed copy of the judgment order on 30 November 2005, the appellant issued a notice under s 218 of the Companies Act to the respondent. Still receiving no reaction from the respondent, the appellant presented a winding up petition against the respondent in the bankruptcy court. This time, the respondent responded by filing an application on 23 March 2006 to strike out the appellant's judgment in default. This was some two months 24 days after the period of 30 after the receipt of the judgment order.

Three grounds were listed by the respondent in support of its application to set aside the judgment in default of appearance:

(1)There was a settlement agreement between the parties where the appellant had agreed to accept a sum of RM300,000 as full settlement of the appellant's claim.

(2)The appellant's claim is time barred.

(3)The appellant is not entitled to pre-judgment interest without the sum being assessed.

The respondent's application was heard by the senior assistant registrar (‘SAR’) of the High Court who allowed the application. On appeal to judge in chambers, the decision of the SAR was affirmed.

In affirming the decision of the SAR, the learned High Court judge first ruled that the delay of ‘2 months and 24 days (in making the application) is not unduly long considering that the cause of action arose from nearly six years earlier in mid 1999 and legal action therefore was only filed on 10 October 2005’.

Then he proceeded to say:

The consideration in an application to set aside a default judgment is unlike that in an application for judgment under the summary jurisdiction under O 14 of the Rules of the High Court 1980. Given the long delay before filing the action, the entry of judgment in default under the summary jurisdiction is unsafe to be maintained, particularly in light of the fact the defendant has submitted itself to the jurisdiction of the court so that a decision on the merits may be made. There is no injustice caused upon the plaintiff for the reason that if the merits are not with the plaintiff, the judgment in default should not be maintained upon a technicality, and if the merits are with the plaintiff, all that the plaintiff suffers is a delay which can be compensated with an order for interest and costs.

PRINCIPLES OF LAW TO BE APPLIED

Before I touch on the initial issue of delay in filing the application to set aside the default judgment, I shall first consider whether the learned High Court judge has erred in applying the right legal principle when considering a matter of this nature. Regrettably, it is my humble opinion that he failed to appreciate the correct test to apply. The said judge should, when considering such application, first identify whether the judgment in default is a regular or irregular judgment. It is well settled that if the judgment is irregular then the respondent is entitled to have the judgment set aside ex debitio justitiae. If it is regularly obtained, then the principle expounded in Evans v Bartlam Hasil Bumi Perumahan Sdn Bhd & Ors v United Malayan Banking Corp Bhd Tuan Haji Ahmed Abdul Rahman v Arab-Malaysian Finance Bhd is an incorrect approach when the issue of injustice is to be decided by applying established legal tests rather than one concocted by the trial judge himself. As the learned judge had applied the wrong principles of law and asked the wrong questions, on this ground alone, this appeal should be allowed.

DE