JUDGMENT

Mohamed Dzaiddin J:

Decision on Enclosure 14

This is an application by the plaintiffs for leave to amend their writ of summons indorsed with the statement of claim under O. 20 r. 5(1) of the Rules of the High Court 1980.

Mr. Gerard Chan, Counsel for the 2nd defendant objected to this application as affecting his client. One would have thought that since the decision of the Federal Court in Yamaha Motor Co. Ltd. v. Yamaha Malaysia Sdn. Bhd. & Ors. [1983] CLJ (Rep) 428 any application for amendments made in our Courts would as a matter of course be granted. Alas, this is not so and we shall shortly see why in the present application it should not be so.

Let me briefly state the background to the present application. On 27 May 1986 the plaintiffs commenced an action against the defendants for a declaration that the sale of a piece of land known as Lot 2841, Mukim 13, North East District, Penang ("the said land") to the 1st defendant was null and void and that they are the owners of the said land free from any charge registered in favour of the 2nd defendant. It will be seen from their statement of claim that their claim and the prayer seeking relief against the 2nd defendant are pleaded in the following manner:

10. Upon the promise and covenants by the 1st defendant to deliver the said houses duly completed fit for immediate occupation and land to plaintiffs or their nominees the plaintiffs duly executed and transferred the said property to the 1st defendant, the said memorandum of transfer was duly registered at this Registry of Land Titles on 23 August 1980.

11. Without notice to and on consent of the plaintiffs, the 1st defendant wrongfully charged the said property to Tai Cheng Finance Bhd. the 2nd defendant abovenamed as security for a loan of RM700,000 granted by the 2nd defendant to the 1st defendant.

The prayer against the 2nd defendant reads as follows:

(a) The said sale of Lot 2841 Mk. 13, MED, Penang be declared null and void;

(b) A declaration that the plaintiffs are the owners of the said property freed and discharged of the charge in favour of the 2nd defendant;

(c) ...

(d) Damages

Pausing here, it should be observed that the above paragraphs merely pray for reliefs against the 1st defendant and a declaration against the 2nd defendant appears to me to be consequential.

On 14 July 1986 the 2nd defendant entered an appearance. Soon after the entry of an appearance, the 2nd defendant through their solicitors filed an application by summons-in-chambers on 8 July 1986 for an order that the said writ indorsed with the statement of claim be struck out under O. 18 r. 19 of the Rules of the High Court 1980 as it discloses no reasonable cause of action against them. Unfortunately, this application failed to get the immediate attention of the High Court registry and was not fixed for hearing until about one year after the filing date when suddenly the solicitors were informed that the matter had been fixed on 20 July 1987.

In the meantime, on 22 April 1987 the plaintiffs filed the present application and hearing was fixed on the same day as the 2nd defendant's application for striking out writ. However, in view of this application for amendment requiring to be heard first, the latter application has been adjourned to another date.

In the present application, the plaintiffs proposed to amend their writ and statement of claim by pleading fraud against the 2nd defendant. The proposed new paras. 11A and 13A read as follows:

11A. The plaintiffs aver that the said charge and/or its registration was obtained by fraud and/or collusion of the 2nd defendant with the 1st defendant. The 2nd defendant or its agent(s) is a party of privy to the said fraud.

Particulars

(i) The 2nd defendant had knowledge or ought reasonable to have knowledge of the existence of the agreement dated 5 December 1979 and/or agreements dated 17 October 1979 before the abovesaid loan and charge transactions were entered into.

(ii) The 2nd defendant knew