Claims alleging negligence should not be struck out if they raise reasonable causes of action that require a trial, especially when factual disputes exist.

[1] The appellant in the present appeal was the plaintiff in the court below. The appeal before us is against the decision of the learned High court Judge dated 14 August 2012 in striking out the appellant's writ and statement of claim with costs under O 18 r 19 of the former Rules of the High 1980 (RHC) (now Rules of court 2012).

Appellant's Claim

[2] The appellant at the material time was a 3rd party chargor who had allowed its land vide Title No PN 10408, Lot 18, Section 20; Title No PN 10410, Lot 19 Section 20; and Title No PN 10411 Lot 20, Section 20, all at Petaling Jaya City Petaling District, Selangor to be charged to the respondent as security for several banking facilities granted by the respondent to one Percetakan Solai Sdn Bhd (borrower).

[3] The appellant's claim against the respondent is based on negligence, ie that the respondent had acted negligently and/or in breach of its obligations under the charge agreement between the appellant (as chargor) and the respondent (as chargee) when the respondent unilaterally terminated the loan agreements with the borrower, particularly unilaterally terminating the banking facilities and/or refused to honour the banking facilities, though the borrower at the material time was not in breach of its responsibility under the loan agreements; and as a result of the respondent's negligence the borrower had suffered cash flow problems and defaulted in making repayment under the said banking facilities and thus exposed the appellant's charged properties to foreclosure action filed via OS No: MT 24-2033-2008 in the High court of Shah Alam by the respondent. The appellant filed its writ and statement of claim at the Shah Alam High court on 30 November 2010.

[4] On 10 June 2011 the respondent filed an application to strike out the appellant's writ and statement of claim under O 18, r 19(1)(a), (b) and (d) of the former RHC 1980 on the grounds that:

(a) the writ and statement of claims discloses no reasonable cause of action (O 18 r 19(1)(a));

(b) the action is frivolous, scandalous and vexatious (O 18 r 19(1) (b)); and

(c) the action is an abuse of the process of the court (O 18 r 19(1)(d)).

[5] On 14 August 2012 the learned High court Judge allowed the respondent's application. Hence the present appeal before us.

Respondent's arguments

[6] The learned counsel for the respondent contended that the learned judge did not exercise her discretion wrongly and her findings of law and facts are correct for these reasons:

(a) the appellant's writ against the respondent displays no reasonable cause of action;

(b) the claim in the appellant's writ against the respondent is made in a wrong forum; the appellant's relief lies in the OS and not in the writ action. This renders the action an abuse of court process and/or frivolous;

(c) the appellant's writ against the respondent is res judicata as its basis has been heard and decided upon thus rendering the action an abuse of court process, frivolous and/or vexatious;

(d) to persist with the action will result in an undesirable consequence as a judgment at the disposal of the action will be inconsistent and/or conflicting with the order for sale already granted; this renders the action vexatious and/or and abuse of court process;

(e) the appellant's writ against the respondent is premised on facts which do not exist anymore or are superseded by events; this renders the action frivolous, and its continuation is an abuse of court process; and

(f) the appellant's writ against the respondent is bound to fail; contemporaneous and undisputed documents do not support the action.

Our Findings

[7] In the sum