142 Malayan Law Journal [2008] 1 MLJ

Crystal Realty Marketing Sdn Bhd v A

Hicom United Leasing Sdn Bhd

HIGH COURT (KUCHING) — CIVIL APPEAL NO 12–35 OF 2006-II B

HAMID SULTAN JC
29 JUNE 2007

Civil Procedure — Affidavits — Service of — Affidavit in reply not served within C

14 days — Whether the application should be struck out for non-compliance —
Whether failure to reply treated as an admission — Evidence Act 1950 —
Subordinate Court Rules 1980 O 24 r 4(2)(b)

D
By an agreement, the appellant hired from the respondent equipment and it
was duly delivered. The appellant however defaulted on the monthly rental
payment despite reminders and it stated that its board of directors had never
resolved nor authorised any such agreements, that the hire agreement had
been tampered with and the respondent had not replied to its affidavit in E
opposition. The respondent argued that after the equipment was delivered, it
was never told by the appellant that the equipment had not requested for.
The respondent in the court below had taken a preliminary issue as to the
non-compliance of the rules of procedure, ie the failure to serve the affidavit
within 14 days as in O 24 r 4(2)(b) of the Subordinate Court Rules 1980 F
(‘SCR’). To this the appellant answered that the respondent’s counsel had not
objected to this when the case first came up for hearing and this amounted
to a waiver of the right to object and that the appellant’s affidavit was served
within 14 days of the date of service of the sealed copy of the respondent’s
application. On the issue of the resolution, the respondent stated that it was G
a matter within the internal management of the appellant and the respondent
was entitled to assume that all necessary acts were duly performed and the
hire agreement was signed by the appellant’s representative and was binding.
The appellant replied that there were no resolutions made authorising its
directors to enter into any agreements; the documents were not tampered H
with as it had a copy of it and because of the non-reply from the respondent,
it was to be treated as an admission. The learned judge in the court below
allowed the respondent’s application to strike out the appellant’s defence
pursuant to the SCR.
I

Held, allowing the appellant’s appeal with costs:

(1) On the issue of non-compliance, matters must be heard on merits and
 Crystal Realty Marketing Sdn Bhd v Hicom United
[2008] 1 MLJ Leasing Sdn Bhd (Hamid Sultan JC) 143

A must not be dismissed for non-compliance of rules, unless such

non-compliance could not be remedied and/or compensated by costs.
The respondent’s taking the issue of non-compliance purely to defeat
substantive justice was a matter which the courts would not condone
(see para 11).
B
(2) On the issue of resolution relating to internal management rule, the
decision in High Court Kuching Civil Appeal No 12-43-2006-I; Crystal
Machineries Sdn Bhd v Hicom United Leasing Sdn Bhd set out the
general proposition of the law. Such issues may be relevant to support
C
the contention of the appellant to rebut the case of the respondent in
the event there was other independent evidence to show that there was
in fact no agreement at all (see para 12).
(3) On the issue of whether failure to reply to any positive assertions ought
to be treated as an admission, the position stated in Ng Hee Thoong &
D Anor v Public Bank Bhd [1995] 1 MLJ 281 where it was held that in
evaluating affidavit evidence, where one party makes a positive
assertions upon a material issue, the failure of his appointment to
contradict it is usually treated as an admission by him of the fact so
asserted is correct exposition of the law. However, there are number of
E exceptions which were not spelt out. It must not be taken as admission
if it was not relevant to the issues. Such reasoning would accord with
the spirit and intent of the Evidence Act 1950 (‘EA ’) although the EA
is not applicable to evidence by affidavit (see paras 12–13).

F (4) The court should only give due weight to the allegation, if it was
relevant to the case. Further, the mere fact that an allegation which may
be relevant and has not been challenged by the other party should not
be presumed by the court to be the truth (see para 14).
(5) On the issue of tampering, since it was founded on some allegation that
G there was tampering, a trial proper would be the best mode to deal with
such issues (see para 15).
(6) The law in respect of striking out pleadings must not be seen as one area
of substantive law. It is purely a procedural law which must be exercised
H in the rarest of the rarest case not because ultimately the defendant may
not succeed. The appellant’s defence as pleaded was not frivolous,
vexatious and an abuse of process of court on the face of pleadings. The
appellant’s defence ought not to have been struck out (see paras 15–16).

I [Bahasa Malaysia summary

Melalui satu perjanjian, perayu telah menyewa peralatan daripada responden

yang telah dihantarkan. Perayu bagaimanapun telah gagal membuat bayaran
sewaan bulanan meskipun telah diberi peringatan dan ia menyatakan bahawa
144 Malayan Law Journal [2008] 1 MLJ

lembaga pengarahnya tidak pernah memberi kebenaran membuat perjanjian A

sedemikian, bahawa perjanjian penyewaan tersebut telah diubah dan
responden tidak menjawab afidavit tentangannya. Responden berhujah
bahawa selepas peralatan tersebut dihantar, ia tidak diberitahu oleh perayu
yang peralatan tersebut tidak diminta. Responden di mahkamah rendah telah
memulakan isu awalan berhubung ketidakpatuhan peraturan prosedur, iaitu B
kegagalan untuk menyerahkan afidavit dalam tempoh 14 hari seperti dalam
A 24 k 4(2)(b) Kaedah-Kaedah Mahkamah Rendah 1980 (‘KMR’).
Berhubung ini perayu telah menjawab bahawa peguam responden tidak
membantah apabila kes pada mulanya didengar dan ini membentuk
penepian hak untuk membantah dan bahawa afidavit perayu telah diserahkan C
dalam tempoh 14 hari dari tarikh serahan salinan bermeterai permohonan
responden. Berhubung isu resolusi, responden menyatakan bahawa ia satu
perkara dalam pengurusan dalaman perayu dan responden berhak untuk
mengandaikan bahawa segala tindakan sewajarnya telahpun dilaksanakan dan
perjanjian penyewaan tersebut telah ditandatangani oleh wakil perayu dan D
adalah mengikat. Perayu menjawab bahawa tiada resolusi yang dibuat
memberi kuasa kepada pengarah-pengarahnya untuk memasuki apa-apa
perjanjian, dokumen-dokumen tersebut telah diubah kerana ia mempunyai
salinannya dan oleh kerana tiada jawapan daripada responden, ia dianggap
sebagai satu pengakuan. Hakim yang bijaksana di mahkamah rendah telah E
membenarkan permohonan responden untuk membatalkan pembelaan
perayu menurut KMR.

F
Diputuskan, membenarkan rayuan perayu dengan kos:
(1) Berhubung isu ketidakpatuhan, perkara-perkara hendaklah didengar
berdasarkan merit dan tidak patut ditolak kerana ketidakpatuhan
kaedah-kaedah, kecuali ketidakpatuhan sedemikian tiada remedi
dan/atau diberi pampasan dengan kos. Responden dengan mengambil G
isu ketidakpatuhan semata-mata untuk menggagalkan keadilan
substantif merupakan satu perkara yang mana mahkamah tidak boleh
biarkan berlaku (lihat perenggan 11).
(2) Berhubung isu resolusi berkaitan peraturan pengurusan dalaman, H
keputusan di Mahkamah Tinggi Rayuan Sivil No 12-43-2006-I; Crystal
Machineries Sdn Bhd v Hicom United Leasing Sdn Bhd membentangkan
kenyataan am undang-undang. Isu-isu sebegini mungkin relevan untuk
menyokong hujah perayu untuk mematahkan kes responden sekiranya
terdapat keterangan berasingan yang menunjukkan sememangnya tiada I
perjanjian langsung (lihat perenggan 12).
(3) Berhubung isu sama ada kegagalan untuk menjawab apa-apa penegasan
positif patut dianggap sebagai satu pengakuan,kedudukan yang
dinyatakan dalam Ng Hee Thoong & Anor v Public Bank Bhd [1995] 1
 Crystal Realty Marketing Sdn Bhd v Hicom United
[2008] 1 MLJ Leasing Sdn Bhd (Hamid Sultan JC) 145

A MLJ 281di mana ia memutuskan bahawa dalam meneliti keterangan

afidavit, di mana satu pihak membuat penegasan positif berhubung isu
penting, kegagalan pelantikannya untuk menyangkalnya biasanya
dianggap sebagai satu pengakuan olehnya tentang fakta yang ditegaskan
sebagai penjelasan undang-undang yang betul (liaht perenggan).
B Bagaimanapun, terdapat beberapa pengecualian yang tidak dinyatakan.
Ia tidak patut dianggap sebagai satu pengakuan jika ia tidak relevan
kepada isu-isu. Hujah sedemikian hendaklah bersesuaian dengan
maksud tersirat dan niat Akta Keterangan 1950 (‘AK’) meskipun AK
tidak terpakai untuk keterangan melalui afidavit (lihat perenggan
C 12–13).
(4) Mahkamah hendaklah hanya menimbangkan pengataan tersebut, jika
ia relevan kepada kes. Tambahan pula, fakta semata-mata bahawa
pengataan yang mungkin relevan dan tidak dicabar oleh pihak satu lagi
D tidak boleh dianggap oleh mahkamah sebagai yang benar (lihat
perenggan 14).
(5) Berhubung isu pengubahan, memandangkan ia didapati dalam
beberapa pengataan bahawa telah berlaku pengubahan, satu perbicaraan
E patut diadakan untuk mengendalikan isu sebegini (lihat perenggan 15).
(6) Undang-undang berkaitan pembatalan pliding tidak patut dilihat
sebagai satu bidang undang-undang substantif. Ia semata-mata satu
undang-undang prosedur yang patut digunakan dalam kes yang jarang
sekali berlaku kerana sudahnya defendan tidak akan berjaya. Pembelaan
F perayu seperti yang diplidkan tidaklah remeh, menyusahkan dan satu
penyalahgunaan proses mahkamah berdasarkan pliding tersebut.
Pe,belaan perayu tidak sepatutnya dibatalkan (lihat perenggan 15–16).]

Notes
G For cases on service of affidavit, see 2(1) Mallal’s Digest (4th Ed, 2007
Reissue) paras 477–481.
Cases referred to
Abu Baker bin Haji Yusuf v Mohd Hamzah bin Hanapiah & Anor [1978] 2
H
MLJ 78 (refd)
Alloy Automotive Sdn Bhd v Perusahaan Ironfield Sdn Bhd [1986] 1 MLJ 382
(refd)
Chan Thiam Teng v Ban Swee Heng Sdn Bhd (refd)
I Cold Storage Singapore Pte Ltd v Management Corp of Chancery Court [1992]
1 SLR 521 (refd)
Crystal Machineries Sdn Bhd v Hicom United Leasing Sdn Bhd High Court
Kuching Civil Appeal No 12–43–2006-I (refd)
Dalip Bhagwan Singh v PP [1998] 1 MLJ 1 (refd)
146 Malayan Law Journal [2008] 1 MLJ

Dato Ting Check Sii v Datuk Haji Mohamad Tufail bin Mahmud & Ors A
OP-26–05–2006-II (refd)
Davy v Garrett (1877) ChD 473 (refd)
Elite Jewellers Sdn Bhd v Wong Tin Kai [1998] 6 MLJ 511 (refd)
Famous Ltd v Ge Im Ex Italia SRL Times 3 August 1987 (refd)
Malayan Banking Bhd v Lim Tee Yong & Ors [1994] 3 MLJ 715 (refd) B
Malaysian Indian Congress & Ors v Makkal Osai Sdn Bhd & Anor [2001] 2
MLJ 253 (refd)
MBf Factors Sdn Bhd v Ban Hoo Electrical & Furniture Sdn Bhd [1999] 6 MLJ
721 (refd)
Mokhtar bin Amin v Mohamed Mokhtar bin Omar [2001] 4 MLJ 329 (refd) C
Morris v Kanssen & Ors [1946] 1 All ER 586 (refd)
Ng Hee Thoong & Anor v Public Bank Bhd [1995] 1 MLJ 281 (refd)
Pendakwa Raya lwn Che Saufi bin Kadir [2005] 6 MLJ 159 (refd)
Perbadanan Nasional Insurans Sdn Bhd v Pua Lai Ong [1996] 3 MLJ 85 (refd)
Pertamina v Kartika Ratna Thahir & Ors [1983] 1 MLJ 136 (refd) D
Sarawak Electricity Supply Corp v MS Shipping Sdn Bhd [1998] 2 MLJ 83
(refd)
Structural Concrete Sdn Bhd & Ors v Wing Tiek Holdings Bhd [1997] 1 MLJ
581 (refd)
Tunku Abdul Rahman Putra Al-Haj & Ors v Dato Seri Dr Mahathir Mohamed E
[1989] 1 MLJ 48 (refd)
Usman bin Ahmad v Chin Brothers Construction Co [2001] 5 MLJ 281 (refd)
Legislation referred to
Evidence Act 1950 ss 3, 5–55 F
Rules of the High Court 1980 O 18 r 19, O 92 r 4, O 32 r 13(2)(b)
Subordinate Courts Rules 1980 O 24 r 4(2)(b)
Abang Halit bin Abang Malik (Loke King & Goh) for the appellant/defendant.
Susan Gau (Chan & Gan Advocates) for the respondent/defendant.
G
Hamid Sultan JC:

[1] This is my judgment in respect of the appellant/defendant’s appeal

against the decision of the learned sessions judge who allowed the H
respondent/plaintiff ’s application to strike out the defendant’s defence
pursuant to Subordinate Courts Rules 1980 (‘SCR 1980’).

[2] The gist of the respondent’s claim can be summarised as follows: (i) by
an agreement the appellant hired from the respondent an equipment subject I
to the terms and condition therein contained. (ii) the equipment were duly
delivered to the appellant; (ii) the appellant breached the agreements by
defaulting to pay the monthly rentals amounting to RM30,310 with interest,
etc and failed to remedy the same despite repeated reminders; (iii) the
 Crystal Realty Marketing Sdn Bhd v Hicom United
[2008] 1 MLJ Leasing Sdn Bhd (Hamid Sultan JC) 147

A appellant’s defence is based on the following issues namely: (a) the board of
directors of the appellant has never resolved nor authorised any of its directors
to enter into any agreements with the respondent. (b) the hire agreement had
been tampered. (c) the respondent has never replied to the appellant’s
affidavit in opposition.
B
[3] The respondent says that (a) the equipment in the hire agreement was
delivered to the appellant at their site. Ever since the delivery of the
equipment, the appellant never informed the respondent that they had never
requested for the hire of the equipment, and the equipment continued to be
C kept at their site. (b) if the appellant had never entered into the hire
agreement, they would have at that time, questioned the delivery of the
equipment to their site. However, the equipment remained at the appellant’s
site without any protest or dispute by the appellant and that too for more
than a year.
D
[4] The respondent in the court below had taken preliminary issue as to
non-compliance of rules of procedure, that is the failure to file and serve
affidavit within 14 days within the time provided for in O 24 r 4(2)(b) of
SCR 1980 and relies on the following cases namely:
E
(a) In the case of Sarawak Electricity Supply Corp v MS Shipping Sdn Bhd
[1998] 2 MLJ 83, where Steve Shim J (as he then was) held that:
Such omission and failure [to state reasons for the delay or to apply for
F an extension of time to serve the affidavit] would have a prohibitive or
restrictive effect on the court in considering any affidavit filed out of time
… This court could not be seen to be condoning the negligence or
mistake of the Respondent/Plaintiff at the expense and prejudice of the
appellant/defendant (see p 89B–E); Ng Hee Thoong & Anor v Public Bank
Bhd [1995] 1 MLJ 281, Ting Hua Yiew v Ace Commercial Enterprise Sdn
G Bhd [1996] 2 MLJ 678 and KS Chua & Co v Chui Miang Chew & Ors
[1995] 4 MLJ 436 followed.

(b) In the case of Structural Concrete Sdn Bhd & Ors v Wing Tiek Holdings
Bhd [1997] 1 MLJ 581, the court held that:
H
the critical words in O 32 r 13(2) … are ‘within 14 days from the date
of the filing of the application’ and in O 32 r 13(2)(b) within 14 days
from the date of service.

(c) In MBf Factors Sdn Bhd v Ban Hoo Electrical & Furniture Sdn Bhd
I
[1999] 6 MLJ 721, the court held that:
The language of O 24 r 4(2)(b) the SCR is clear — that time starts to run
from the date of the service of the affidavit on the plaintiff, even when the
application which the affidavit to be used in support is unsealed but only
148 Malayan Law Journal [2008] 1 MLJ

filed in court (see p 723C); Structural Concrete Sdn Bhd & Ors v Wing Tiek A
Holdings Bhd [1997] 1 MLJ 581 followed; Perbadanan Nasional Insurans
Sdn Bhd v Pua Lai Ong [1996] 3 MLJ 85 not followed.

[5] The appellant’s response to the issue of non-compliance is as follows: B

(a) the respondent’s counsel had not objected to the said affidavit in
opposition, when the case first came up for hearing. The respondent’s
counsel only raised the preliminary objection on the second hearing
date. This amounted to a waiver of the respondent’s right to object and C
as such, the respondent was estopped from raising any objection and
relies on the case of Malayan Banking Bhd v Lim Tee Yong & Ors [1994]
3 MLJ 715 where Mohd Hishamudin JC (as he then was) held that the
appellant’s counsel’s failure to object but instead asked for a
postponement to file affidavit in reply when the case first came up for D
hearing amounted to a waiver of the appellant’s right to object and they
were estopped from raising any objection under O 32 r 13(2)(b) of
RHC 1980 (which is in pari materia with O 24 r 4(2)(b) of SCR 1980).
(b) time would run from the date of service of the sealed copy of the E
application as being held by the Court of Appeal in Perbadanan
Nasional Insurans Sdn Bhd v Pua Lai Ong [1996] 3 MLJ 85 in contrast
to the decision of Structural Concrete Sdn Bhd & Ors v Wing Tiek
Holding Sdn Bhd; [1997] 1 MLJ 581. By applying the decision in
Perbadanan Nasional Insurans Sdn Bhd, the appellant’s affidavit in F
opposition served on the respondent’s advocates was within the 14 days’
period from the date of service of the sealed copy of the respondent’s
application.
(c) although there are two conflicting decision of Court of Appeals in this G
point which are both equally binding on the High Court, the appellant
says the decision in Perbadanan Nasional Insurans Sdn Bhd ought to be
followed.
(d) in Dalip Bhagwan Singh v Public Prosecutor [1998] 1 MLJ 1, the Federal
Court held that the court in the tiers below the Court of Appeal may H
choose between two conflicting decisions, irrespective of the dates of
those conflicting decisions.
(e) in Elite Jewellers Sdn Bhd v Wong Tin Kai [1998] 6 MLJ 511, Abdul
Malik Ishak J preferred the decision in Perbadanan Nasional Insurans I
Sdn Bhd when confronted with a similar situation (see Usman bin
Ahmad v Chin Brothers Construction Co [2001] 5 MLJ 281 and
Malaysian Indian Congress & Ors v Makkal Osai Sdn Bhd & Anor [2001]
2 MLJ 253).
 Crystal Realty Marketing Sdn Bhd v Hicom United
[2008] 1 MLJ Leasing Sdn Bhd (Hamid Sultan JC) 149

A [6] On the issue that there was no resolution authorising the appellant’s
director to enter into the agreement, the respondent says:
(a) whether the appellant had made a resolution to enter into the hire
agreement with the appellant is not within the knowledge of the
B
respondent. These are matters within the internal management of the
appellant and the respondent is entitled to assume that all the necessary
acts in the appellant company have been properly and duly performed
(see Morris v Kanssen & Ors [1946] 1 All ER 586).
(b) the hire agreement bears the appellant’s name and company stamp, and
C was signed by the appellant/defendant’s representative. This is enough
for the respondent to rely on as showing that they were legitimately
dealing with the appellant.
(c) in the recent case of High Court Kuching Civil Appeal No
D 12–43–2006-I; Crystal Machineries Sdn Bhd v Hicom United Leasing
Sdn Bhd decided on 28 February 2007 the facts which are similar with
this instant case, the High Court there found that there is no law to say
that the hire agreement requires the seal of the company and the
resolution of the company. The manner of entering into the hire
E agreement and whether there was a board resolution for that purpose
are matters within the internal management of the company and the
respondent is not expected to know the same. The appellant’s appeal
was therefore dismissed.

F [7] On the above issue, the appellant says there were no resolutions made
by the appellant’s board of directors, authorising its directors to enter into any
agreement with the respondent. The agreement is therefore not binding upon
the appellant in this case. To assert the same the appellant relies on the
following cases:
G (a) In Mahfuz bin Hashim v Koperasi Pekebun Kecil Daerah Segamat & Ors
[2005] 3 MLJ 726, where Jeffrey Tan J held that “there was no power
to the Chairman to execute an agreement without the prior approval of
the Board. In the absence of such express power, the second third party
could not enter into the agreement without the approval of the board”.
H
(b) In Chan Thiam Teng v Ban Swee Heng Sdn Bhd; [1992] 2 MLJ 583, it
was held that a resolution properly passed is binding on the defendants
and until it is dissolved, cancelled or annulled, expressly or by
implication, it binds the defendants on action taken by its director, who
I acted within the ambit of the resolution.

[8] On the issue of tampering of the documents, the respondent says the
appellant is in possession of a copy of the hire purchase agreement.
In consequence, the appellant cannot on the one hand deny that it had
150 Malayan Law Journal [2008] 1 MLJ

entered into the hire agreement with the respondent and on the other hand, A
allege that the hire agreement had been tampered with.

[9] In response to the above issue, the appellant says the document which
has been tampered with is totally different from the agreement in the
possession and custody of the defendant and relies on the case of Pendakwa B
Raya lwn Che Saufi bin Kadir [2005] 6 MLJ 159.

[10] Finally, the appellant complains that the respondent had not replied to
the appellant’s affidavit in opposition and in consequence must be treated as
admission and relies on the case of Ng Hee Thoong & Anor v Public Bank Bhd C
[1995] 1 MLJ 281 where it was held that: ‘In evaluating affidavit evidence,
where one party makes a positive assertion upon a material issue, the failure
of his appointment to contradict it is usually treated as an admission by him
of the fact so asserted’.
D
[11] I have read the appeal record and the submission of the parties in
detail. On the issue of non-compliance, I do not see much relevance in the
cases the respondent has submitted. For, the decisions stated in those cases
must be read with the new amendments to rules of procedure and the vibrant E
decisions of our apex court which has repeatedly affirmed that matters must
be heard on merits and must not be dismissed for non-compliance of rules,
unless such non-compliance cannot be remedied and/or compensated by
costs. The respondent by taking the issue of non-compliance purely to defeat
substantive justice is a matter which the courts now will not condone. I have F
dealt with this area of law in my judgment delivered on 25 April 2007 in the
case of Dato Ting Check Sii v Datuk Haji Mohamad Tufail bin Mahmud & Ors
OP-26–05–2006-II and I reproduce the relevant parts for the purpose of this
appeal which reads as follows:
15. Court’s time is often unnecessarily wasted by procedural objections and G
technicalities raised without regard to rules and case laws which
condone procedural non-compliance. To avert frivolous objections it is
an opportune moment to summarise the rules and principles in vogue
and they are as follows:
H
(a) As a general rule, the parties to a civil proceeding must strictly
comply with the rules of the court. However where parties have by
reason of anything done or left undone failed to comply with the
requirements of the rules of the court, whether in respect of time,
place, manner, form or content or in any other respect, the court is I
required to treat the failure of non-compliance as an irregularity and
the failure does not nullify the proceedings or any steps taken in the
proceedings or any documents, judgment or order therein. This rule
has a number of exceptions and will only appear to cover steps taken
 Crystal Realty Marketing Sdn Bhd v Hicom United
[2008] 1 MLJ Leasing Sdn Bhd (Hamid Sultan JC) 151

A in the course of commencement of any proceedings and will not

include any steps which is a condition precedent before instituting
proceedings.
(b) Dismissal of an action for non compliance of procedural rules has
B been an anathema in procedural jurisprudence. To avert procedural
miscarriage of justice, order 2 of the Supreme Court Practice (white
book) was introduced in England. It was meant to be a saving
provision to condone procedural irregularities. However, some
English judges often defied this sacrosanct provision and in
C consequence matters were dismissed without merits being heard.
The English position is aptly described by Sir Jack I.H. Jacob in his
book ‘The reform of the Civil Procedure Law and other Essays in
Civil Procedure London’, 1982, London, Sweet & Maxwell at p 214
as follows:
D
A change of fundamental importance was made in relation to the effect
of non-compliance with the requirements of the Rules. In all such cases,
such non-compliance whatever form it takes must be treated, not as a
nullity, but as an irregularity which the court will have power to amend
E or rectify or regularize. This power, together with the extended powers of
amendments after the expiry of the current period of limitation, is
intended to prevent technical defects or errors in proceedings from being
fatal in themselves and to remove some of the blots which ‘have marred
our copybook.’ They go a long way towards reaching out to the rather
F exuberant remark made by Lord Bowen that ‘It may be asserted without
fear of contradiction that it is not possible in the year 1887 for an honest
litigant in Her Majesty’s Supreme Court to be defeated by any mere
technicality, any slip, any mistaken step in his litigation.’ This ideal state
has yet to be achieved.
G
In Malaysia, the Chief Justice Yang Amat Arif Tun Dato’ Sri Ahmad Fairuz
whilst sitting in Court of Appeal in the case of United Malayan Banking
Corp Bhd v Ernest Cheong Yong Yin [2001] 1 MLJ 561, has shown the lead
and rightly said that procedural and technical objection must not be
allowed to obstruct the process of giving justice.
H
Justice Abdul Hamid Mohamad FCJ sitting in the Court of Appeal in the
case of Hock Seng Construction Sdn Bhd & Anor v Yeoh Poh Owi & Anor
[2001] 4 CLJ 1, had boldly asserted that the main function of the court is
to do justice and not just to dispose cases. Further, His Lordship stated that
I it was unjust to dismiss a matter without hearing merits simply because of
the mistake of the solicitor in not complying with the rules.
Justice Gopal Sri Ram JCA had in Mokhtar bin Amin v Mohamed Mokhtar
bin Omar [2001] 4 MLJ 329, placed the nail on the coffin in respect of
procedural objections by stating that non-compliance of procedural
152 Malayan Law Journal [2008] 1 MLJ

requirements should not be treated as invalidating any action or proceeding A

or steps taken therein unless it occasions a substantial miscarriage of justice.

(c) From the cases above it is clear that the court has a wide discretion
whether to condone or not to condone irregularities. In this
context it is noteworthy to be guided by the observation of Suffian B
LP in the case of Tan Chwee Geok & Anor v Khaw Yen-Yen & Anor
[1975] 2 MLJ 188 where His Lordship observed:

The Rules of the Supreme Court are intended to facilitate, not impede,
the administration of civil justice. C
In the bad old days in country-regionplaceEngland from where we
took our Rules, if you put a comma wrong you were thrown out of
court, so strict were they about technicalities.
But over the years this strictness gave way to common sense, and every
time the Rules were amended it was with the object of removing fussy D
technicalities, and making it easier for parties to get justice.
This change of attitude was reflected in the remarks of Lord Collins
MR about 70 years ago in Re Coles and Ravenshear:
E
Although a court cannot conduct its business without a code of
procedure, the relation of the rules of practice to the work of justice
is intended to be that of handmaid rather than mistress; and the
court ought not to be so far bound and tied by rules, which are after
all only intended as general rules of procedure, as to be compelled to
do what will cause injustice in the particular case. F

Today Order 70 rule 1 of our Rules explicitly states that

non-compliance with our Rules —

Shall not render any proceedings void unless the court or a judge G
shall so direct ….

(d) When non-compliance does not occasion any injury and cause no
injustice to the opposite party or where they can be sufficiently
compensated by costs or other terms imposed by the court, I take H
the view that the courts have a constitutional duty to hear the cases
on merits. However, the power to condone non-compliance
though discretionary must be exercised judicially on proper
consideration within the spirit of the Federal Constitution and of
the special circumstances of each case. I

[12] On the issue of resolution relating to internal management rule, the

decision in High Court Kuching stated above sets out the general proposition
of the law. However, such issues may be relevant to support the contention
 Crystal Realty Marketing Sdn Bhd v Hicom United
[2008] 1 MLJ Leasing Sdn Bhd (Hamid Sultan JC) 153

A of the appellant to rebut the case of the respondent in the event there are
other independent evidences to show that there was in fact no agreement at
all. On the issue whether failure to reply to any positive assertions ought to
be treated as an admission, I take the view that the position stated in Ng Hee
Thoong & Anor is correct exposition of the law (see Alloy Automotive Sdn Bhd
B v Perusahaan Ironfield Sdn Bhd [1986] 1 MLJ 382).

[13] However, the learned judge of the Court of Appeal was very cautious
in his proposition and says ‘usually treated as admission’. Thus, there are
number of exceptions the learned judge must have in mind which was not
C spelt out. It must not be taken as admission if it is not relevant to the issues to
be decided before the court. Such reasoning will accord within the spirit and
intent of the Evidence Act 1950 (‘EA 1950’) though EA 1950 is not
applicable to evidence by affidavit. The law in this area can be summarised as
follows:
D
(a) Generally, the word relevant in the context of facts means that any two
facts when applied are so related to each other that according to the
ordinary course of events one, either taken by itself or in connection
with the other facts, proves or renders possible the past, present or
E future existence or non-existence of the other. Relevant in one sense
means connected, in another sense means admissible. Section 3 of the
EA 1950 defines relevant as: ‘One fact is said to be relevant to another
when the one is connected with the other in any of the ways referred to
in the provisions of this Act relating to the relevancy of facts’. Where a
F fact is relevant it need not necessarily mean that the fact will be
admissible. Whether a relevant fact is or is not admissible is subject to
other provisions of the EA 1950.
(b) Generally, fact means anything of any state or thing capable of being
perceived by our senses or any mental condition of which any person is
G conscious. For example, the existence of a mountain in a particular
place is a fact. A man having heard or seen something is a fact.
The reputation of a particular person is a fact. Facts can be divided into
physical facts and psychological facts. The physical facts are perceived
by senses and psychological facts are only a mental condition of a
H person. The existence of a mountain in a particular place is a physical
fact, which can be perceived by our senses. The reputation of a
particular person is only a psychological fact showing the mental
condition of the person. Facts can be further divided into facts in issue
and relevant facts. This classification only serves legal purpose. All rights
I and liabilities in an action before the court are dependent upon and
arise out of the facts of the case. Section 3 of the Act defines fact as: (a)
any thing, state of things or relation of things capable of being perceived
by the senses; (b) any mental condition of which any person is
conscious.
154 Malayan Law Journal [2008] 1 MLJ

(c) Facts in issue mean the disputed facts or the facts, which need to be A
proved. Matters, which are alleged by one party to the action and
denied by the other, may be stated as facts in issue. What facts are in
issue in a particular case is a question to be determined by the
substantive law or in some cases by that branch of the law of procedure,
which regulates the law of pleadings. For example, A is charged with B
murder of B. The prosecution as a matter of law must prove the
following facts: (a) B died; (b) A only caused the death of B; (c) A had
the intention to cause the death of B. These are the main issues to be
proved by the prosecution, and these are called facts in issue.
Unless these main issues are proved, the accused cannot be convicted. C
All these issues are connected with one another to assert the charge of
murder. If the prosecution fails to prove any one of the issues, the
accused will be acquitted. Section 3 of the EA 1950 defines fact in issue
to mean any fact from which either by itself or in connection with other
facts, the existence, non-existence, nature or extent of any right, liability D
or disability asserted or denied in any suit or proceeding, necessarily
follows. It is submitted that the definition by itself is very wide.
(d) Relevant facts are facts so connected with each other as to prove or
disprove the facts in issue. Relevant facts are not themselves issues E
before the court. However, they are useful inference regarding the facts
in issue. For example, A is charged with the murder of B. Here the facts
in issue are: (a) whether A caused the death of B; and (b) whether he
intended to cause B’s death. The fact that A had the motive to kill B and
also the opportunity to commit murder are relevant facts for the F
prosecution. An inference as to the existence of the facts in issue may
be drawn from these relevant facts. The distinction between facts in
issue and relevant fact is that facts in issue are facts which are in dispute
and which form the subject of decision in a case. Relevant facts are
connected facts and because of their connection with the principal fact, G
they lead to an inference as to the existence or non-existence of the facts
in issue. Examples of relevant facts may be motive, dying declaration,
conspiracy, judgments, confessions, opinions, depending on the nature
of the case. What are relevant facts are set out from s 5 to 55 EA 1950
and are exhaustive. The court will not treat any other facts as relevant H
unless it falls into one of the sections mentioned above.

[14] The court should only give due weight to the allegation, if it is relevant
to the case. Further the mere fact that an allegation which may be relevant
and has not been challenged by the other party should not be presumed by I
the court to be the truth. Support for my proposition can be garnered from
many cases; to name a few are as follows: (a) Cold Storage Singapore Pte Ltd
v Management Corp of Chancery Court [1992] 1 SLR 521; (b) Famous Ltd v
Ge Im Ex Italia SRL Times 3 August 1987.
 Crystal Realty Marketing Sdn Bhd v Hicom United
[2008] 1 MLJ Leasing Sdn Bhd (Hamid Sultan JC) 155

A [15] On the issue of tampering, I take the view that since it is founded on
some allegation that there was tampering, a trial proper will be the best mode
to deal with such issues. The law in respect of striking out pleadings must not
be seen as one area of substantive law. It is purely a procedural law which
must be exercised at the rarest of the rarest case not because ultimately the
B defendant may not succeed. The principles in this area of law can be
summarised as follows:
(a) The court may at any stage of the proceedings order to strike out or
amend any matter in any pleading which may be unnecessary,
C
scandalous, frivolous or vexatious or which may tend to prejudice,
embarrass or delay the fair trial of the action, or which is otherwise an
abuse of the process of court. The rule is silent as to when the
application must be made. However, case laws say that the application
should be made as soon as possible.
D (b) The court has always the inherent jurisdiction to strike out any
pleadings or to make any order, as may be necessary, to prevent injustice
or to prevent an abuse of the process of court (RHC O 92 r 4). In Davy
v Garrett (1877) ChD 473 it was emphasised that the Court of Appeal
will not readily interfere with the discretion of the court of first instance
E in a matter of procedure. In this case, the statement of claim was in the
opinion of the Court of Appeal, calculated to embarrass the defendants
by reason of stating immaterial facts, and setting out at great length
documents which could not be material except as evidence by way of
admission. The court ordered it to be struck out even though a motion
F for that purpose had been dismissed with costs by the court below.
(c) Under O 18 r 19 of the RHC 1980, a pleading may be struck out on
the grounds that: (a) it discloses no reasonable cause of action or
defence; or (b) it is scandalous, frivolous or vexatious; or (c) it may
G prejudice, embarrass or delay the fair trial of the action; or (d) it is
otherwise an abuse of the process of the court.
All the above grounds arguably will appear to overlap (see Tunku
Abdul Rahman Putra Al-Haj & Ors v Dato Seri Dr Mahathir
Mohamed [1989] 1 MLJ 48). Under this order, the court is also
H empowered to make such other order on such term as it thinks just.
This may include an order that the action be stayed or dismissed or
judgment be entered (see Re Allapitchay Rawther, deceased [1949]
MLJ 60).
(d) In Abu Baker bin Haji Yusuf v Mohd Hamzah bin Hanapiah & Anor
I [1978] 2 MLJ 78, the court stated that as a general rule it is only in
plain and obvious cases that recourse should be had to this summary
procedure. The mere fact that the case is weak and unlikely to
succeed is no ground for striking out a pleading. Where the
allegation is that the statement of claim discloses no reasonable cause
156 Malayan Law Journal [2008] 1 MLJ

of action, the plaint and its documents alone should be considered A

and all allegations in it should be assumed to be true. It must be tried
upon the allegations contained in the pleading, and evidence in
support of the applicant’s case is not admissible.
However, with regard to the second limb of the rule relating to
frivolous and vexatious action, the inherent jurisdiction of the court B
remains unaffected. Affidavits are admissible not by virtue of the
rule, but by virtue of the general jurisdiction of the court. The court
is entitled to look at the affidavits as to the history of the matter and
if in that light, the action was vexatious or frivolous, the pleading
could be struck out and the action dismissed. C
(e) In Pertamina v Kartika Ratna Thahir & Ors [1983] 1 MLJ 136, the
court stated that only in plain and obvious cases should recourse be
had to the summary process under O 18 r 19 of The Rules of The
High Court, 1980. It cannot be exercised by a minute and protracted D
examination of the documents and facts of the case in order to see
whether the plaintiff really has a cause of action. As long as the
statement of claim or the particulars disclose some cause of action, or
raise some question fit to be decided by a judge, the mere fact that
the case is weak and is not likely to succeed is no ground for striking E
it out.

[16] I take the view that the appellant’s defence as pleaded is not frivolous,
vexatious and abuse of process of court on the face of pleadings.
In consequence, the appellant’s defence ought not to have been struck out. F

[17] For reasons stated above, I allow the appellant’s appeal with costs.
The costs of getting up fees in this case should not exceed RM5,000. If costs
cannot be agreed, the appellant are at liberty to tax their costs accordingly.
I hereby order so. G

Appellant’s appeal allowed with costs.

Reported by Chew Phye Ken

H