Counterclaims must show a sufficient connection with the principal claim to be maintained, particularly in defamation actions within breach of contract disputes.

[1] I have had the advantage of reading the judgment of my learned brother Sulong Matjeraie and agree with his reasons All I wish to do is to add a few words of my own.

[2] As my learned brother has pointed out, this is a case in which counsel clearly missed the target. This is a case in which the plaintiff's claim is essentially monetary in nature based on a clause in an agreement for the sale and purchase of land. The defendant's counterclaim is based on an alleged defamatory statement made in the course of correspondence. The question is not the one that counsel addressed, namely, the application of the proviso to s 8(1) of the Civil Law Act 1956 . The true question is whether as a matter of procedure the counterclaim was properly joined in the present instance. In my judgment that question must be answered against the appellant.

[3] The rule of practice and procedure established by the decision in High Commissioner for India & Ors v. Ghosh [1959] 3 WLR 811 is that:-

a counterclaim cannot be maintained unless it is shown that... (see Esso Standard Malaya Bhd v. Southern Cross Airways (Malaysia) Bhd, 1972 MarsdenLR 207 , per Raja Azlan Shah J (as His Royal Highness then was).

[4] In Mobil Oil Malaysia Sdn Bhd v. Yap Eng Hock Nik Hashim J attempted to distinguish the Esso Standard case on the ground, inter alia, that it was based on O 21 of the Rules of the Supreme Court 1957 which is differently constructed than RHC O 15 r 2(1). He there expressed the view that O 15 r 2(1) is wider than its precursor As I understand his judgment, if the facts of the Esso Standard case were to recur today, the result may well be different. With respect I do not agree. In my judgment, the rule in Ghosh as explained in the Esso Standard case is still good law. It would make nonsense of RHC O 15 r 2(1) if it were to be read as permitting a counterclaim that claimed relief which is not sufficiently connected with or allied to the subject matter of the principal claim. I would therefore overrule Mobil Oil Malaysia Sdn Bhd v. Yap Eng Hock on this point.

[5] Since the counterclaim in the present case does not meet the test laid down in the Esso Standard case it must be struck out. The decision of the High Court may therefore be sustained on this ground.

Raus Sharif JCA:

[6] I have the advantage of reading the judgment of my learned brother Sulong Matjeraie and agree with his reasons that the appeal be dismissed with costs

Sulong Matjeraie JCA:

[7] The 1st defendant/appellant (hereinafter referred to as 'the defendant') is appealing against the decision handed down by Gengadharan J, on 10 March 2006 in Johor Bahru. The relevant facts of the case are as follows

[8] The plaintiff/respondent (hereinafter referred to as 'the plaintiff') is the sole administratrix of the estate of her deceased parents while the defendant is, at all material times, a firm of Advocate and Solicitors having its practice at Johor Bahru in the State of Johor

[9] Pursuant to a sale and purchase agreement, the plaintiff agreed to sell two properties, known as Lot 1698 in EMR 277 and Lot 1699 in EMR 278 Mukim Tebrau, Daerah Johor Bahru (hereinafter referred to as "the said two parcels of land") to the 2nd defendant. The defendant acted for both the plaintiff as well as the 2nd defendant in the sale of the said two parcels of land.

[10] With the assistance of the defendant the plaintiff applied for and obtained a High Court Order to sell the said two parcels of land at a price of not less than RM30 per square feet.

[11] A dispute arose as to the said transaction prompting the plaintiff to seek, inter alia, for declaratory relief in the High Court. The plaintiff's claim against the defendant was for