Bujang bin Haji Ulis v Nancy bte Abdullah

[2007] 4 MLJ (Hamid Sultan JC) 363

A Bujang bin Haji Ulis v Nancy bte Abdullah

(Imas anak Blanda & Anor as proposed interveners)

B HIGH COURT (KUCHING) — CIVIL SUIT NO 22–107 OF 2005–II

HAMID SULTAN JC
4 APRIL 2007

C Civil Procedure — Judgments and orders — Default judgment — Non compliance with
procedural rules — Default judgment for unliquidated damages obtained under O 13 r 1
without leave of court — Whether judgment a nullity and must be set aside — Liability
of solicitors to personally pay costs — Rules of the High Court 1980 O 19 r 7(1)

D
Civil Procedure — Parties — Intervention — Whether interveners were rightly made
defendants — Test to be applied — Rules of the High Court 1980 O 15 r 6 (2)(b)(ii)

E The cause of action arose based on a purported breach of the terms of a trust deed
dated 25 May 2001 between the plaintiff (‘appellant’) and the first defendant.
The first defendant had agreed to hold 100% of the shares in a firm known as Zabare
Motor Trading (‘firm’) for the benefit of the appellant. The appellant on
31 December 2004 had requested the first defendant to transfer the shares but the
F first defendant had refused and, in consequence, the appellant sought an order that
the defendant transfers all her shares in the firm to the plaintiff and a declaration that
any transfer of all her shares or part thereof in the firm to any person or persons made
between the dates of the trust deed, ie 25 May 2001 and 1 January 2005, if any, was
null and void. The first defendant did not enter an appearance and in consequence,
G the appellant had, pursuant to O 13 r 1 of the Rules of the High Court 1980
(‘RHC’), entered default judgment on 21 December 2005. The respondents filed an
application (encl 12) to intervene and set aside the default judgment which was
allowed by the learned deputy registrar. The appellant appealed.
In opposing the appellant’s appeal, the respondent submitted that since the plaintiff ’s
claim did not consist of a liquidated demand (O 19 r 2 of the RHC) but relates to
H
unliquidated damages (O 19 r 3 of the RHC), detention of immovable property
(O 19 r 4 of the RHC) and possession of immovable property only (O 19 r 5 of the
RHC), the plaintiff should have complied with O 19 r 7(1) of the RHC and applied
for leave to enter judgment against the defendant. Instead, the plaintiff filed the
default judgment without any application by summons supported by affidavit. In the
I circumstances, the respondent submitted, the default judgment was irregularly
entered by the plaintiff and ought to be set aside ex debito justitiae. The issues were
therefore whether the interveners were rightly made as defendants in this suit and if
so whether the default judgment ought to be set aside as of right on the grounds that
it was irregularly obtained.
364 Malayan Law Journal [2007] 4 MLJ

Held, dismissing the appeal: A

(1) To succeed in an interveners’ application, the applicants have to show that they
have a right in the subject matter of the suit and want to be made a party to
protect their interest. They must comply with the procedural requirement to
intervene as set out in O 15 r 6(2)(b)(ii) of the RHC. The test in determining
B
whether an applicant ought to be given leave to intervene is whether the
applicant’s rights against or liabilities to any party to the action, in respect of
the subject matter of the action, will be directly affected by any order which
may be made in the action. The respondents in this case had a direct interest
in the subject matter of the suit and they had satisfied the requirements
necessary to intervene in this case (see paras 9, 11 & 17). C

(2) It was glaringly obvious that the claim against the first defendant was not a
liquidated claim and in consequence a default judgment under O 13 r 1 of the
RHC would not apply. In this case, the appellant had wrongfully and in breach
of procedural rules, obtained a default judgment under O 13 r 1 of the RHC. D
The default order the plaintiff had procured was not only a nullity but also
illegal and needs to be set aside upon the application of an aggrieved party
(see paras 19–20); Badiaddin bin Mohd Mahidin & Anor v Arab-Malaysian
Finance Bhd [1998] 1 MLJ 393 followed.
(3) Notwithstanding the breach of procedural rules, the appellant without E
conceding submitted in length to sustain the default judgment. Any solicitor,
who knowingly procures a default order in blatant breach of the rules will
tantamount to have obtained the order in a manner which is inappropriate.
In the event the solicitors had done in ignorance of the rules and resisted the
application to set aside, it would be an appropriate case when the default F
judgment was set aside for the learned deputy registrar to issue a notice to show
cause why the solicitor concerned should not pay personally the costs of the
application on a solicitor-client basis to the applicant (see para 21).

[Bahasa Malaysia summary

G

Kausa tindakan timbul berdasarkan kepada kemungkiran terma-terma suratikatan

amanah yang bertarikh 25 Mei 2001 di antara plaintif (‘perayu’) dengan defendan
pertama. Defendan pertama telah bersetuju untuk memegang 100% saham di dalam
firma yang dikenali sebagai Zabare Motor Trading (‘firma’) bagi kepentingan perayu. H
Perayu pada 31 Disember 2004 telah meminta defendan pertama untuk
memindahkan saham-saham tersebut tetapi defendan pertama enggan, dan
kemudiannya, perayu cuba mendapatkan perintah bahawa defendan memindahkan
kesemua sahamnya dalam firma kepada plaintif dan satu deklarasi bahawa
mana-mana pemindahan kesemua sahamnya atau sebahagian daripadanya dalam
firma kepada mana-mana individu atau individu-individu yang dibuat antara tarikh I
suratikatan amanah, iaitu 25 Mei 2001 dan 1 Januari 2005, jika ada adalah terbatal
dan tidak sah. Defendan pertama tidak memasukkan kehadiran dan menyebabkan
perayu telah, menurut A 13 k 1 Kaedah-Kaedah Mahkamah Tinggi 1980 (‘KMT’),
memasukkan penghakiman ingkar pada 21 Disember 2005. Responden telah
 Bujang bin Haji Ulis v Nancy bte Abdullah
[2007] 4 MLJ (Hamid Sultan JC) 365

A memfailkan satu permohonan (Lampiran 12) untuk mencelah dan mengenepikan

penghaliman ingkar yang mana telah dibenarkan oleh timbalan pendaftar yang
bijaksana. Perayu merayu.
Dalam menentang rayuan perayu, responden menghujahkan bahawa
memandangkan tuntutan plaintif tidak mengandungi tuntutan jumlah tertentu
B (A 19 k 2 KMT) tetapi berkaitan dengan tuntutan jumlah tak boleh dikira (A 19 k 3
KMT), penahanan harta tidak alih (A 19 k 4 KMT) dan pemilikan harta tak alih
sahaja (A19 k 5 KMT), plaintif seharusnya mematuhi A 19 k 7(1) KMT dan
memohon kebenaran untuk memasukkan penghakiman tanpa apa-apa permohonan
secara saman yang disokong oleh afidavit. Dalam keadaan tersebut, responden
C menghujahkan, penghakiman ingkar telah dimasukkan di luar aturan oleh plaintif
dan seharusnya diketepikan secara ex debito justitiae. Oleh itu isu-isunya adalah sama
ada betul untuk pencelah dimasukkan sebagai defendan di dalam tindakan ini dan
jika begitu sama ada penghakiman ingkar seharusnya diketepikan sebagaimana
haknya atas alasan bahawa ianya diperoleh secara luar aturan.
D

Diputuskan, menolak rayuan:

(1) Untuk berjaya dalam permohonan pencelah, pemohon perlu menunjukkan
bahawa mereka mempunyai hak dalam perkara pokok tindakan guaman dan
E ingin dijadikan pihak untuk melindungi kepentingan mereka. Mereka perlu
patuh dengan keperluan prosedur untuk mencelah seperti mana yang
ditetapkan dalam A 15 k 6(2)(b)(ii) KMT. Ujian menentukan sama ada
pemohon akan diberikan kebenaran untuk mencelah adalah sama ada hak
pemohon terhadap atau liabiliti kepada pihak dalam tindakan, berkenaan
F dengan isi kandungan tindakan, akan secara langsung terjejas oleh mana-mana
perintah yang mungkin dibuat dalam tindakan. Responden dalam kes ini
mempunyai kepentingan secara langsung dalam perkara pokok tindakan
guaman dan mereka telah memenuhi keperluan utama untuk mencelah
di dalam kes ini (lihat perenggan 9, 11 & 17).
G (2) Adalah amat nyata dan jelas bahawa tuntutan terhadap defendan pertama
bukan tuntutan jumlah tertentu dan selanjutnya penghakiman ingkar
di bawah A 13 k 1 KMT tidak terpakai. Dalam kes ini, perayu telah secara
salahnya dan melanggar peraturan prosedur, mendapatkan penghakiman
ingkar di bawah A 13 k 1 KMT. Perintah ingkar yang diperolehi plaintif bukan
sahaja satu pembatalan tetapi juga tidak sah dan perlu diketepikan di atas
H
permohonan pihak yang terkilan (lihat perenggan 19–20) Badiaddin bin Mohd
Mahidin & Anor v Arab–Malaysian Finance Bhd [1998] 1 MLJ 393 diikut.
(3) Meskipun perlanggaran peraturan prosidur, perayu tanpa mengakui,
menghujahkan dengan panjangnya untuk mengekalkan penghakiman ingkar.
Mana-mana peguam yang mengetahui memperoleh perintah ingkar secara
I
terang-terangan melanggar peraturan akan sama seperti mendapatkan perintah
secara tidak sesuai. Dalam keadaan peguam yang telah tidak mengendahkan
peraturan dan menentang penghakiman ingkar diketepikan, adalah kes yang
sesuai apabila penghakiman ingkar diketepikan untuk timbalam pendaftar
yang bijaksana mengeluarkan notis untuk menunjuk sebab kenapa peguamcara
366 Malayan Law Journal [2007] 4 MLJ

tersebut tidak perlu membayar sendiri kos permohonan tersebut atas dasar A
peguam-anakguam kepada pemohon (lihat perenggan 21).]

Notes
For cases on default judgment, see 10 Mallal’s Digest (4th Ed, 2004 Reissue)
paras 314–320. B
For cases on intervention, see 9 Mallal’s Digest (4th Ed, 2004 Reissue)
paras 1094–1130.

Cases referred to
Ang Tun Cheong v Lim Yeok Beng (Public Bank, Intervener) [2002] 6 MLJ 198 (refd)
Arab Malaysian Merchant Bank Bhd v Jamaludin bin Dato Mohd Jariis [1991] 1 MLJ C
27 (refd)
Badiaddin bin Mohd Mahidin & Anor v Arab Malaysian Finance Bhd [1998] 1 MLJ
393 (folld)
Gula Perak Bhd v Varghese Mathai [1988] 3 MLJ 358 (refd)
Kheng Chwee Lian v Wong Tak Thong [1983] 2 MLJ 320 (refd) D
Mahindar Singh v Amanah Saham Pahang Bhd & Anor [1984] 1 CLJ 182 (refd)
Pegang Mining Co Ltd v Choong Sam & Ors [1969] 2 MLJ 52 (refd)
RHB Bank Bhd v Tan Boon Paw Kuching High Court OS No 24–233–2000-II
(unreported) (refd)
Syarikat Joo Seng v Habib Bank Ltd [1986] 2 MLJ 129 (refd)
Tan Khiaw v Gan Chye Khoon [1983] 2 MLJ 109 (refd) E
Tengku Jaya bin Raja Hassan v Mohamed bin Zakari & Anor (Talasco Insurance Sdn
Bhd intervener) [1987] 2 MLJ 97 (refd)
Tohtonku Sdn Bhd v Superace (M) Sdn Bhd [1989] 2 MLJ 298 (refd)

Legislation referred to F
Courts of Judicature Acts 1967 ss 16, 17, 32, 33, 34
Rules of the High Court 1980 O 13 rr 1, 7, O 14, O 19 rr 2, 3, 4, 5, 7, O 15
r 6(2)(b), O 42 r 12, O 83 r 1
Rules of the Supreme Court 1957 O 16 r 11
Trade Description Act 1972 s 16
G
Jimmy Simon Maja (Maja, Ngui & Co) for the appellant.
James Lo (George Lo & Partners) for the respondents/interveners.

Hamid Sultan JC:

H
[1] This is my judgment in respect of the appellant/plaintiff ’s appeal against the
decision of the learned deputy registrar ordering: (i) the interveners (now the
respondents/second and third defendants) to be added as defendants in the suit; and
(ii) setting aside the default judgment dated 21 December 2005 (‘default judgment’).
I
[2] The appellant in this action is claiming against the first defendant and seeking,
inter alia, the following reliefs namely:
(a) an order that the defendant transfers all her shares in the firm to the plaintiff;
and
 Bujang bin Haji Ulis v Nancy bte Abdullah
[2007] 4 MLJ (Hamid Sultan JC) 367

A (b) a declaration that any transfer of all her shares or part thereof in the firm to any
person or persons made between the dates of the trust deed, that is 25 May
2001 and 1 January 2005, if any, is null and void.

[3] The cause of action arises based on a purported breach of the terms of a trust
B deed dated 25 May 2001 between the appellant and the first defendant. The first
defendant had agreed to hold 100% of the shares in a firm known as Zabare Motor
Trading (‘firm’) for the benefit of the appellant. The appellant on 31 December 2004
had requested the first defendant to transfer the said shares but the first defendant
had refused and, in consequence, the appellant is seeking the reliefs stated above.
C The first defendant did not enter an appearance and in consequence, the appellant
had, pursuant to O 13 r 1 of the Rules of the High Court 1980 (‘RHC’), entered
default judgment on 21 December 2005. The respondents on 8 August 2006 filed an
application (encl 12) to intervene and set aside the default judgment which was
allowed by the learned deputy registrar. This is the subject matter of this appeal.

D [4] The second defendant, in support of encl 12 had filed an affidavit and stated,
inter alia, as follows:
(a) The second defendant became a partner, of the firm in March 2002 and
two-thirds of the Firm’s share was transferred to him and Nancy bte Abdullah,
the defendant, (first defendant) who held the remaining one third.
E
(b) In September 2005, 60% of the shares of the firm was transferred to Buang bin
Bolhassan, (third defendant) by me and the first defendant and thereafter I
held 10%, the first defendant held 30% and the third defendant held 60% of
the Firm’s share until February 2006 wherein after, my shares and the first
F defendant’s shares was transferred to the second defendant and thereafter the
second defendant became 100% share holder of the firm.
(c) Sometime before February 2006, 100% of the firm was transferred to the
plaintiff without the knowledge of the second and third defendants.
The second and third defendants came to know of the same in June 2006 and
G that too only as a result of an enquiry made by our solicitors at the business
registry. The solicitors were informed that pursuant to a trust deed dated
25 May 2001 and a default judgment dated 21 December 2005 the shares were
transferred as per the court order.
(d) The default judgment was irregularly entered and ought to be set aside
H ex debito justitiae; even if the default judgment were valid, it had only directed
the first defendant to transfer her shares in the Firm to the plaintiff and it does
not direct the second defendant or the third defendant. In consequence, the
default judgment cannot affect the rights and proprietary interests of the
second and third defendants in the firm.
I
[5] The appellant in opposing the respondent’s affidavit said, inter alia, as follows:
(a) The default judgment was regularly entered against the defendant.
(b) Under the deed of trust, the first defendant was bound to hold on trust all the
100% of the shares, right title and interest in the Firm for the appellant until
368 Malayan Law Journal [2007] 4 MLJ

31 December 2004 and thereafter she was to transfer all shares to the appellant. A
However, after 31 December 2004, the defendant failed, refused and neglected
to transfer all the shares to the appellant, notwithstanding a demand was made
by him.
(c) As per the said deed of trust, the first defendant and appellant alone are the
parties involved in the cause of action and the other defendants are not privy B
to it; therefore, the other defendants cannot be made a party to this action.
(d) The second defendant’s cause of action should be against the first defendant
only, as she was the one who transferred the shares to the second defendant,
despite the fact that she had made a deed of trust dated 25 May 2001. If the
first defendant had improperly disposed of her shares to the second defendant C
as alleged, then the recourse to remedy for the second defendant is to take legal
action for recovery of her loss and/or damage from the first defendant.
(e) On acquiring the default judgment against the defendant, the appellant was
able to proceed with the registration of his share in the Firm giving him 100%
shares in the said firm. The recourse for the second defendant should be against D
the first defendant and/or the business registry, if she considers herself to be
unsatisfied with the registration of the shares.

[6] In opposing the appellant’s appeal, the respondent, inter alia, setting out the
facts, submits as follows: E
(a) The plaintiff had filed this action without the knowledge of the interveners and
obtained default judgment in breach of the rules of court and managed to
transfer all of the Firm’s share on to his name. As a result, the interveners’
propriety rights in the Firm have been affected and the interveners ought to
intervene and the default judgment set aside. F
(b) The plaintiff ’s claim does not consist of a liquidated demand (see O 19 r 2
RHC); but relates to unliquidated damages (see O 19 r 3 RHC), detention of
immovable property (see O 19 r 4 RHC) and possession of immovable
property only (see O 19 r 5 RHC). This being the case, the plaintiff should
have complied with O 19 r 7(1) RHC and applied for leave to enter judgment G
against the defendant. Instead, the plaintiff had filed the default judgment
without any application by summons supported by affidavit. In the
circumstances, the default judgment was irregularly entered by the plaintiff and
ought to be set aside ex debito justitiae as held in the Supreme Court case of
Syarikat Joo Seng v Habib Bank Ltd [1986] 2 MLJ 129.
H
(c) If the default judgment is deemed to be valid, it can be said that the default
judgment had only directed the first defendant to transfer her shares in the firm
to the plaintiff. It is trite that the order cannot affect the rights and proprietary
interests of unnamed parties as decided in the case of Kheng Chwee Lian v Wong
Tak Thong [1983] 2 MLJ 320 where George Seah FJ opined at pp 323–324:
I
In our judgment, the court below has no jurisdiction inherent or otherwise, over any
person other than those properly brought before it, as parties or as persons treated as
if they were parties under statutory provisions (Brydges v Brydges & Wood [1909]
p 187; Re Shephared [1890] 43 Ch D 131 and Coleman v Coleman [1920] p 71).
The terms ‘judgment’ and ‘order’ in the widest sense may be said to include any
 Bujang bin Haji Ulis v Nancy bte Abdullah
[2007] 4 MLJ (Hamid Sultan JC) 369

A decision given by a court on a question or questions at issue between the parties to

a proceeding properly before the court [see para 501 of Halsbury’s Laws of England
(4th Ed,) Vol., 26 at p 237] and at para 550 the following passage appears:

Subject to appeal and to being amended or set aside, a judgment is conclusive as

between the parties and their privies and is conclusive evidence against all the
B world of its existence, date and legal consequences.

We are constrained to agree with the submission of learned counsel for the
interveners that the order of the learned Judge was wholly irregular insofar as it
purports to affect the registered title, share and interest of the said interveners in the
C said land when they had not been made parties or given a full opportunity of taking
part in the proceedings in the court below. If the respondent had wanted the whole
one-half share in the said land in pursuance of the first agreement after knowledge
of the registration of these transfers by the appellant to her five sons, he ought to have
joined the sons and particularly Soon Hup Cheng as co-defendants in the
proceeding.
D
(d) The proposed interveners’ joinder as parties to these proceedings and their
presence before the court is necessary to ensure that all matters in dispute may
be effectually and completely determined and adjudicated upon. There exists
a question or issue between the plaintiff and the proposed interveners (namely
ownership of their proportionate shares of the Firm) arising out of or relating
E to or connected with the relief or remedy sought by the plaintiff which would
be just and convenient to be determined as between the plaintiff and the
proposed interveners. The respondents rely on the unreported case of RHB
Bank Bhd v Tan Boon Paw Kuching High Court OS No 24–233–2000-II dated
29 May 2006 where it was stated:
F
What is the test in dealing with an application to intervene in proceedings under
O 15 r 6 RHC? The locus classicus case which is well accepted is Pegang Mining Co
Ltd v Choong Sam & Ors [1969] 2 MLJ 52, Lord Diplock said (at p 55):

The cases illustrate the great variety of circumstances in which it may be sought
G to join an additional party to an existing action. In their Lordships’ view one of
the principal objects of the rule is to enable the court to prevent injustice being
done to a person whose rights will be affected by its judgment by proceeding to
adjudicate upon the matter in dispute in the action without his being given an
opportunity of being heard. To achieve this object calls for a flexibility of approach
which makes it undesirable in the present case, in which the facts are unique, to
H attempt to lay down any general proposition which could be applicable to all cases.

Expanding further on whether a proposed intervener should possess a ‘legal interest’

to differentiate it from a ‘commercial interest’ the Privy Council in the same case
expressed:
I
It has been sometimes said as in Moser v Marsden and in In re IG Farbenindustrie
AG that a party may be added if his legal interests will be affected by the judgment
in the action but not if his commercial interests only would be affected.
While their Lordships agree that the mere fact that a person is likely to be better
off financially if a case is decided one way rather than another is not a sufficient
370 Malayan Law Journal [2007] 4 MLJ

ground to entitle him to be added as a party, they do not find the dichotomy A
between ‘legal’ and ‘commercial’ interests helpful. A better way of expressing the
test is: will his rights against or liabilities to any party to the action in respect of
the subject matter of the action be directly affected by any order which may be
made in the action?

B
Now, will the claimant’s rights to any party to the action in respect of the subject of
the action be directly affected by any order which may be made in this action?
Such test has been clarified further in Arab Malaysian Merchant Bank Bhd v
Jamaludin Bin Dato Mohd Jariis [1991] 1 MLJ 27 at p 28 where Gunn Chit Tuan
SCJ (as he then was) said:
C
One of the class of cases covered by the said rule, which allows intervention by
persons not parties, is where the proprietary or pecuniary rights of the intervener
are directly affected by the proceedings or where the intervener may be rendered
liable to satisfy any judgment directly or indirectly. The ambit of this class has been
materially widened by the decision of the UK Court of Appeal in Gurtner v
Circuit, the effect of which is to include any case in which the intervener is directly D
affected not only in his legal rights but in his pocket. In this connection, we would
refer to and respectfully adopt the following dictum of Lord Denning MR, in that
case, in which his Lordship said as follows:

It seems to me that, when two parties are in dispute in an action at law and the
determination of that dispute will directly affect a third person in his legal rights E
or in his pocket, in that he will be bound to foot the bill, then the court in its
discretion may allow him to be added as a party on such terms as it thinks fit.
By so doing, the court achieves the object of the rule. It enables all matters in
dispute to be effectually and completely determined and adjudicated upon
between all those directly concerned in the outcome.
F
(e) Applying the authorities, it is clear that the proposed interveners’ proprietary
and pecuniary rights, viz. their shareholding in the Firm which was summarily
taken from them, was directly affected by the plaintiff ’s action. Allowing the
proposed interveners to be added as defendants would achieve the object of
O 15 r 6(2)(b) RHC, as it enables all matters in dispute to be effectually and G
completely determined and adjudicated between all those directly concerned in
the outcome. The case of Ang Tun Cheong v Lim Yeok Beng (Public Bank,
Intervener) [2002] 6 MLJ 198 supports this notion.

[7] The appellant on the facts of this case and the law, in an unusual manner, H
vehemently objects to the interveners’ application which was allowed by the learned
deputy registrar, the full submission of which I do not wish to set out here. In support
of the appeal, the appellant, inter alia, submits as follows:
(a) the plaintiff is not obliged to search the business registry before he commences
the action against the first defendant. The plaintiff ’s action against the first I
defendant is based on the trust deed. Hence the plaintiff ’s action is purely
against the first defendant and she is duty bound to transfer all the shares in
the firm to the plaintiff.
 Bujang bin Haji Ulis v Nancy bte Abdullah
[2007] 4 MLJ (Hamid Sultan JC) 371

A (b) the proposed interveners are not parties to the deed of trust. If the first
defendant had wrongly transferred the shares to the proposed interveners then
it is for the proposed interveners to commence an action against the first
defendant to recover the considerations which have been given to the first
defendant who had earlier transferred the shares to the proposed interveners.
B In this case, the second and third defendants are not affected; the appellant
relies on the case of Arab Malaysian Merchant Bank Bhd v Jamaludin bin Dato
Mohd Jariis [1991] 1 MLJ 27 and Tohtonku Sdn Bhd v Superace (M) Sdn Bhd
[1989] 2 MLJ 298.

C [8] I have considered both the submissions in detail. To determine the fate of this
appeal, I have to decide: (i) whether the interveners were rightly made as defendants
in this suit and if so whether the default judgment ought to be set aside as of right
on the grounds that it was irregularly obtained; and/or (ii) it has to be set aside on
the grounds that the respondents have meritorious defence to the appellant’s claim.
D
[9] To succeed in an interveners’ application, the applicants have to show that they
have a right in the subject matter of the suit and want to be made a party to protect
their interest. They must comply with the procedural requirement to intervene as set
out in O 15 r 6 (2)(b)(ii) of the RHC.
E
[10] The law on interveners is almost well settled and is inextricably interwoven
with the rules of natural justice. In fact, in my view, it is nothing but an extension
of the rules of natural justice related to the principles of audi alteram partem ie the
right to be heard. This principle is advocated through rules of procedure such as O 15
r 6 of the RHC. However, intervener’s right is not a substantive right. If it is, it will
F be specifically reflected in one of the Acts of parliament. This is not the case. It is
essentially a necessary and a discretionary relief to be exercised by the courts
according to the justice of the case for the proper administration of justice. This is
to make sure that proper parties to the dispute are heard and also to ensure that the
administration of justice is not put to disrepute by litigants by not naming all the
G parties who will be affected by the decision of the court. Being a discretionary relief,
the decision to admit the interveners by the first instant court, although by the
learned Deputy Registrar, should not ordinarily be disturbed. It must be emphasized
here that the right to be heard by an aggrieved party is a fundamental right within
the spirit and letters of the Federal Constitution. In cases where third parties’ rights
H are affected, the spirit of the constitution is advocated through O 15 r 6 RHC and
its like, formulated by the rules committee headed by the Chief Justice, pursuant to
ss 16 and 17 of the Courts of Judicature Acts 1967 (‘CJA’) for one purpose, that is
to ensure that the arguments and rights of third parties, who are going to be affected
or will be affected by the order of court, are heard and proper reliefs are granted to
I the relevant parties according to the justice of the case. This would ensure that
multiplicity of proceedings is arrested in limine. The limitation to this is that it can
only be done according to the rules of procedure and provided that the intervener can
satisfy the threshold requirement set out in case laws. This is so for the reason that
the intervener is a person who is not originally a party to the suit, but is a person
claiming an interest in the subject matter and wants to be made a party to the suit
372 Malayan Law Journal [2007] 4 MLJ

in order to protect his interest. It is trite that the court does not allow the right to A
be heard to busy bodies and such like who have no direct interest other than one of
commercial in nature.

[11] The test in determining whether an applicant ought to be given leave to

intervene is whether the applicant’s rights against or liabilities to any party to the B
action, in respect of the subject matter of the action, will be directly affected by any
order which may be made in the action.

[12] In the case of Tohtonku Sdn Bhd, the applicant obtained an ex parte order
under s 16 of the Trade Description Act 1972 declaring that the intervener’s trade C
mark was in infringement of the applicant’s rights in respect of its registered trade
mark. The intervener applied to set aside the order. The applicant raised two
preliminary objections to the intervener’s application: (a) the intervener had no locus
standi as he had no interest in the matter at all and a mere commercial interest was
not sufficient; (b) as the order of court had been perfected, the court could not review
it any longer and the intervener could only proceed by way of a separate action. D
The court stated that a person who wants to intervene must show that he has some
interest which is directly related to the subject matter of the action. A mere
commercial interest in the outcome is not enough. One will be allowed to intervene
only if his rights or liability in respect of the subject matter of the action will be
directly affected by any order of the court in the action. It was held by the Privy E
Council in Pegang Mining Co Ltd v Choong Sam & Ors [1969] 2 MLJ 52 that one
of the principal objects of O 16 r 11 of the former Rules of the Supreme Court 1957,
is to enable the court to prevent injustice being done to a person whose right will be
affected by its judgment, by proceedings to adjudicate upon the matter in dispute in
the action without he being given an opportunity of being heard.
F
[13] The principle stated in Pegang Mining Co Ltd, was adopted by the Supreme
Court in the case of Arab Malaysian Merchant Bank Bhd v Jamaludin bin Dato Mohd
Jariis. The issue before the Supreme Court was whether the order made by the high
court allowing the respondent to intervene was right. The appellants obtained
judgment against the debtors. The respondent who was not a party to the action G
agreed to pay the appellants by way of instalments in consideration of the appellants
refraining at his request from enforcing the judgment against the judgment debtors.
Due to some financial difficulties, the respondent was not able to meet with the
instalments, and also realised that the judgment was irregular, as the interest ordered
to be paid in the judgment exceeded the amount under O 42 r 12 of the RHC. H
In order to set aside the judgment the respondent applied for leave to intervene and
to be made a party to the action. The High Court allowed the application of the
respondent. The appellant’s appeal to the Supreme Court was dismissed.

[14] In Gula Perak Bhd v Varghese Mathai [1988] 3 MLJ 358, the petitioner Gula
I
Perak presented a petition to seek the sanction of the court for a scheme of
arrangement, pursuant to s 176 of the Companies Act 1965 between the petitioners
and its unsecured creditors, in respect of the unsecured debts of the petitioner.
The secured creditors had waived a substantial portion of the claim to enable the
scheme of arrangement to succeed. The intervener, Mr Mathai was a minority
 Bujang bin Haji Ulis v Nancy bte Abdullah
[2007] 4 MLJ (Hamid Sultan JC) 373

A shareholder in Telok Plantation Sdn Bhd (TP) and other companies which controlled
the petitioner. TP was the biggest creditor of the petitioner. The intervener
contended that the basis of the proposal for TP to go along with the proposed scheme
of arrangement was erroneous and ran foul of prudent management and business
sense, and he was thereby affected. The court held that to succeed in an application
B to intervene, the intervener must show that there is a question or issue to be tried
between the intervener and the parties to the action. Since TP as well as the other
secured creditors were not parties to the action, the court decided that this did not
satisfy the rule.

C [15] Rules do not impose time limit for an intervener to intervene in a proceeding.
However, case laws show that if a person wants to intervene in proceedings, he must
act promptly. In Tengku Jaya bin Raja Hassan v Mohamed bin Zakari & Anor (Talasco
Insurance Sdn Bhd intervener) [1987] 2 MLJ 97, the plaintiff had obtained an
interlocutory judgment against both defendants and thereafter by assessment of
damages, obtained final judgment against both defendants. More than a year later,
D the first defendant applied to set aside the judgment on the grounds of irregularity
and that he had merits in his defence. The court on the facts held that there was no
irregularity and that the defendant had failed to produce sufficient evidence to state
that he had a prima facie defence. The court further stated that since the insurers had
already been served with the notice pursuant to the Road Traffic Ordinance 1958
E before the commencement of the proceedings, and since the insurers did not take
proper steps to protect their interest from the beginning of the proceedings and there
was sufficient delay in intervening, they should be precluded from intervening.
Abdul Malek J opined:

On these considerations and guided by the applicable authorities cited, I saw no reason to
F set aside the interlocutory judgment given on 3 October 1983 and final judgment given on
8 December 1984 against both defendants or to allow the insurers the liberty to intervene
at this late stage. Accordingly, I dismissed the appeal against the order of the senior assistant
registrar with costs.

G [16] In Tan Khiaw v Gan Chye Khoon [1983] 2 MLJ 109, it was stated that any
application for intervention or to be added as a party to any existing proceedings
should be made promptly.

[17] Having perused all the authorities above and the facts of the case, I am
H satisfied and can come to the conclusion that the respondents have a direct interest
in the subject matter of the suit and that they have satisfied the requirements
necessary to intervene in this case.

[18] The next issue is to see whether the judgment in default ought to be set aside
as of right. The respondents in my view have wrongfully submitted in reliance of
I
various provisions of O 19 RHC which relates to claim in respect of liquidated,
unliquidated, damages, etc; where appearance has been entered but defence is not
filed. In this case, a certificate of non appearance has been entered pursuant to O 13
r 7 RHC and that means that the first defendant had not filed his appearance.
In consequence, the default provisions in O 13 RHC will apply in this case and not
374 Malayan Law Journal [2007] 4 MLJ

O 19. As the respondents have not stated the right provisions of the rule and to stress A
that solicitors if they make use of the rules in the right perspective will help to reduce
backlog, it is necessary for me to adumbrate the principles and application of these
orders for the following claims namely:

(a) Liquidated Sum B

A liquidated sum is a genuine pre-estimate of money due and payable under a
contract. It must be capable of being ascertained by mere matter of arithmetic.
Where the claim by the plaintiff is for a liquidated sum and the defendant fails to
enter an appearance within the stipulated period, then the plaintiff can enter final
judgment for a sum not exceeding that claimed by the writ in respect of the demand C
and for costs. In Mahindar Singh v Amanah Saham Pahang Bhd & Anor [1984] 1 CLJ
182 VC George J observed:

A liquidated demand is in the nature of a debt i.e. a specific sum of money due and payable
under or by virtue of a contract. Its amount must either be already ascertained or capable
of being ascertained as a mere matter of arithmetic. If the ascertainment of a sum of money, D
even though it be specified or named as a definite figure, requires investigation beyond mere
calculation, then the sum is not a ‘debt or liquidated demand’ but constitutes ‘damages’.

(b) Unliquidated Sum

E
Where the plaintiff ’s claim is for unliquidated damages and the defendant fails to
enter an appearance within the stipulated period, then the plaintiff may enter
interlocutory judgment against the defendant for damages to be assessed and costs.
An unliquidated sum as opposed to a liquidated sum is a sum which cannot be
ascertained by precise mathematical calculation. In Credit Corporation (M) Bhd v
Bulan Sabit Sdn Bhd & Ors [1989] 2 MLJ 127 Shankar J observed at p 128: F

One cannot convert an unliquidated claim to a liquidated one merely by putting down some
allegedly precise mathematically calculation. What is reasonable in any particular case is
more than a matter of mathematics.

Generally, in any action there are two issues; one the issue as to liability, and the other G
as to quantum. Where the claim is for a liquidated sum and the defendant does not
enter appearance, the plaintiff can enter final judgment, wherein the court declares
the liability and quantum and there remains nothing more to be done. However, if
it is an unliquidated claim and the defendant does not enter appearance, only then
can the plaintiff enter interlocutory judgment and the quantum of liability would H
need to be assessed. Assessment of quantum normally takes place by way of separate
application made by the plaintiff, wherein the plaintiff will be required to prove his
claim, subject to the normal rules of procedure and rules of evidence.

(c) Claim in Detinue

I
Where the plaintiff ’s claim is in relation to the detention of movable property and if
the defendant fails to enter appearance, the plaintiff may at his option enter either:
(i) interlocutory judgment against the defendant for the delivery of the property or
their value to be assessed and cost; or (ii) interlocutory judgment for the value of the
property to be assessed and costs.
 Bujang bin Haji Ulis v Nancy bte Abdullah
[2007] 4 MLJ (Hamid Sultan JC) 375

A (d) Claim for Possession of Immovable Property

Where the plaintiff ’s claim is for possession of immovable property and the plaintiff
does not claim any relief under O 83 r 1 RHC and the defendant does not enter
appearance within the stipulated time, the plaintiff may enter judgment after
producing a certificate by his solicitor or an affidavit stating that he is not claiming
B any relief in the nature specified in O 83 r 1 and enter judgment for possession of
the immovable property with cost.

(e) Mixed Claim

Where the plaintiff ’s claim is a mixed claim and the defendant fails to enter
C appearance within the stipulated period, the plaintiff may enter judgment in respect
of any such claim as he would be entitled to enter under any provisions set out under
O 13.

(f ) Other Claims
D Where the plaintiff ’s claim is one which does not fall within any one of the above
claims and the defendant fails to enter appearance within the stipulated period, then
the plaintiff can proceed with the action as if the defendant had entered an
appearance. In such case, there must be an affidavit of service filed and defence served
before the plaintiff can proceed under O 14 RHC for summary judgment or under
O 19 r 7 for default of defence, or for other orders as the case may be.
E

[19] It is glaringly obvious that the claim against the first defendant is not a
liquidated claim and in consequence a default judgment under O 13 r 1 of the RHC
will not apply. In this case, the appellant has wrongfully and in breach of procedural
F rules, obtained a default judgment under O 13 r 1 of the RHC on the following
terms: (a) the defendant transfers all her shares in the firm Zabare Motor Trading to
the plaintiff; and (b) any transfer of all the defendant’s shares or part thereof in the
firm Zabare Motor Trading to any person or persons made between the dates of the
trust deed which is 25 May 2001 and 1 January 2005, if any, is null and void; and
(c) costs.
G
[20] The default order the plaintiff has procured is not only a nullity but also illegal
and need to be set aside upon the application of an aggrieved party as set out by the
Federal Court in Badiaddin bin Mohd Mahidin & Anor v Arab-Malaysian Finance
Bhd [1998] 1 MLJ 393. In addition to the principles enunciated in this case, in my
H view it must not be forgotten that civil courts are also conferred with supervisory
jurisdiction in a limited sense to arrest any form of injustice on the court’s own
motion, pursuant to ss 32 to 34 of CJA, a point which is not necessary for me to
elaborate on for the purpose of this case.

I [21] Notwithstanding the breach of procedural rules, the appellant without

conceding submits in length to sustain the default judgment. This cannot be done as
the plaintiff ’s claim is not a liquidated claim and in fact he is claiming discretionary
relief. In consequence, the court cannot grant a default order. Any solicitor, who
knowingly procures a default order in blatant breach of the rules, in my view, will
tantamount to have obtained the order in a manner which is inappropriate.
376 Malayan Law Journal [2007] 4 MLJ

Solicitors must not forget that they are officers of court and answerable to the court A
and any form of irregular conduct may be seen as an act of contempt or subject
matter of complaint to the Advocates Disciplinary Board by the courts as well as the
aggrieved parties. In the event the solicitors have done in ignorance of the rules and
resist the application to set aside, then it will be an appropriate case when the default
judgment is set aside for the learned Deputy Registrar to issue a notice to show cause B
why the solicitor’s concern should not pay personally the costs of the application on
a solicitor client basis to the applicant.

[22] It is my judgment that the appellant’s claim is not liquidated or unliquidated

claim but only a discretionary relief and for reasons stated above, I dismiss the
appellant’s appeal with costs and the costs to be paid to the second and third C
defendants, the respondents in this appeal.

Appeal dismissed.

D
Reported by Loo Lai Mee