Judgment in default obtained without proper procedure is irregular and must be set aside; conflict of interest disqualifies representation.

[1] The first plaintif is Low Long Yoong. He is also known as Sunny Khoo and is a lawyer practising under the name and style of Messrs Sunny Khoo & Company in Penang. The second plaintiff is his wife. The first defendant (D1) is the father of the first plaintiff and was a retired Chinese School Headmaster in Kluang, Johor. He passed away on 6 May 2008 in Kluang, Johor. He was a bankrupt when he died. The second defendant ('D2') is the wife of D1 and mother of the first plaintiff.

[2] On 6 July 2004, the plaintiffs filed the present suit against the defendants at Penang High Court by way of Civil Suit No 22-364 of 2004 ('the 2004 suit'). About a year later after the writ had been served by way of substituted service, the plaintiffs obtained judgment in default on 7 July 2005 against the defendants for a sum of RM2,000,000 ('the JID'). Apparently, the plaintiffs commenced bankruptcy proceedings against D2 based on a judgment taken in another Court suit filed in the Penang High Court (No 22-501 of 2005) for RM1,000,000 and pursuant to which D2 was accordingly declared a bankrupt. Mr Sunny Khoo said that proof of debt was filed against D2 based on the JID in the 2004 suit. On the other hand, D2 says in paras 2 and 5 of her affidavit (encl 58) that both she and D1 were made bankrupt based on the JID. Be that as it may, in so far D2 was concerned, she was either made a bankrupt based on the JID or the sum stated in the JID was the basis on which proof of debt was filed. Either way, this does not matter as it has no impact on the issues pertaining to setting aside of the JID.

The 2008 Application To Set Aside The JID

[3] D2 applied to set aside the JID by an application which was filed on 20 October 2008 ('the 2008 application') through Messrs Segar & Co. By that time D1 had passed away. The 2008 application took a life of its own. What happened was that on 28 May 2009, the plaintiffs obtained an order, apparently, without the knowledge of D2's solicitors which states that D2's solicitors had agreed to withdraw the 2008 application (encl 12) without liberty to file afresh ('the withdrawal order').

[4] It is alleged that the plaintiffs did not serve the draft copy of the withdrawal order for approval by D2's solicitors. Also, the sealed copy of the withdrawal order was not served on D2's solicitors. However, the plaintiffs served a sealed copy of the withdrawal order on the Insolvency Department and informed them that D2 had lost the case. The Insolvency Department called D2's solicitors and informed them of the situation. On 6 November 2009, Messrs Segar & Co, made an application to set aside the withdrawal order. The application was allowed by the senior assistant registrar on 28 July 2010 with costs. The matter did not end there.

[5] The plaintiffs appealed to the judge in chambers and their appeal was dismissed with costs. The plaintiffs took it further and appealed to the Court of Appeal. On 30 August 2012, the Court of Appeal dismissed the appeal. Next, during case management on 6 May 2013 before the deputy registrar, D2's solicitors informed the Court that they were withdrawing the 2008 application with liberty to file afresh because the plaintiffs raised preliminary objections on the jurat in D2's affidavit. The deputy registrar allowed the application with costs. Thus, the merits of the 2008 application were never heard. This is therefore D2's second setting aside a