Chapter 5 - Parties in Litigation Flashcards
1
Q
PARTIES IN LITIGATION
Overview
A
1) Joinder of actions
2) Counterclaims
3) All appropriate parties
4) Joinder of parties
5) Striking-out parties
6) Interverner
7) Third party proceedings
2
Q
JOINDER OF ACTIONS
Overview
A
1) The law & test
2) Procedures
3
Q
JOINDER OF ACTIONS
The law & test
A
1) The law - O.15, r.1:
- All matters in dispute can be resolved in one set of proceedings;
- With the conditions thereof or with the leave of court;
- Allow the court to adjudicate the whole dispute with finality in mind & save the court’s and parties’ resources.
2) Conditions:
- same capacity in respect of all cause of actions; or
- in the personal capacity & capacity as executor or administrator, but in respect of same estate;
- with leave of court.
4
Q
JOINDER OF ACTIONS
Procedures
A
O.15, r.1(2):
- Mode: ex parte notice of application;
- Affidavit: stating the grounds of application
5
Q
COUNTERCLAIMS
Overview
A
1) The difference between set-off & counterclaim
2) Counterclaim against P
3) Counterclaim against additional parties
6
Q
COUNTERCLAIMS
Difference between set-off & counterclaim
A
Permodalan Plantations Sdn Bhd v Rachuta Sdn Bhd (FC):
1) Set-off:
- a cross-claim for a sum of money by a defendant against a plaintiff’s claim for another sum of money for which the defendant is being sued.
- it is relied & included as a defence to meet the whole or part of the plaintiff’s claim;
- the matter sought to be set-off must essentially be connected with or form part of the matter upon which the plaintiff’s action is founded.
- it is immaterial whether it is added or not as a counterclaim as long as it is included in the defence.
2) Counterclaim:
- a cross-claim which a D has against a P but in respect of which the D can bring a separate action against the plaintiff if he wishes to do so.
- A counterclaim is a separate and independent action by the D, which the law allows to be joined to the plaintiff’s action in order to avoid multiplicity or circuity of suits.
- a counterclaim is governed by the provisions of O. 15 r. 2.
7
Q
COUNTERCLAIM
Counterclaim against P
A
1) The law:
- O.15, r.2
2) Scope:
- D may issue a counterclaim against P;
- Counterclaim must be pleaded as part of D’s defence.
- D is put in the position of P in respect of counterclaim.
3) Pre-requisite - Esso Standard Malaya Bhd v Southern Cross Airways (M) Bhd:
- It must be shown that the relief claimed is sufficiently connected with the subject matter of the principal claim as to make it necessary in the interests of justice that it should be dealt with along with the claim.
- e.g. a counterclaim for slander cannot be maintained in a claim for money lent.
8
Q
COUNTERCLAIM
Counterclaim against additional party
A
1) The law - O.15, r.3:
- D may issue a counterclaim against additional party. i.e. co-D or a stranger to the suit.
- If D wishes to pursue a claim against a stranger outside the circumstances set-out in O.15, r.3, D should either issue a 3rd party proceedings under O.16 or issue a separate suit.
2) Scope - Mercury Securities Sdn Bhd & Anor v Concrete Parade Sdn Bhd & Anor:
- O.15 r.3 permits counterclaims to be raised in all modes of action against a party other than a plaintiff, including originating summonses. .
9
Q
ALL APPROPRIATE PARTIES
Overview
A
1) General rule & scope
2) Rationale
3) Example
4) Effect of misjoinder & non-joinder
10
Q
ALL APPROPRIATE PARTIES
General rule & scope
A
1) General rule & conditions - O.15, r.4:
- All appropriate parties should be involved in the proceedings;
- P may bring an action against a D or any number of D if:
- Some common question of law or facts would arise in all the actions; AND
- All rights to relief claimed arise out of same transactions.
- In other instance, leave of court is required.
2) Scope - S. Constantine & Anor v SOCSO (CA): - Under O. 15 r. 4(1), the leave of the High Court is required if:
- (i) there is no common question of law or fact involved in the actions; and
- (ii) the rights to the relief claimed in the statement of claim against each of the defendants are not concerned with the same transaction or series of transactions.
11
Q
ALL APPROPRIATE PARTIES
Rationale
A
1) For the proper & complete determination of all issues & affected interests;
2) Further, the proceedings are not automatically invalidated because a person has wrongly been added as a party (misjoinder) or was not a party when he is supposed to (non-joinder).
12
Q
ALL APPROPRIATE PARTIES
Example
A
S. Constantine & Anor v SOCSO (CA):
- P brought an action against D1 & D2 for different claims;
- D1 - declaration that he was entitled to receive invalidity pension;
- D2 - damages or reinstatement for wrongful dismissal.
Held:
- this was improper as both of the claims are unrelated with no common question of law or fact.
13
Q
ALL APPROPRIATE PARTIES
Effect of misjoinder & non-joinder
A
1) The law - O.15, r.6(1):
- A cause or matter shall not be defeated by reason of the misjoinder of parties.
2) Effect of misjoinder - Lembaga Arkitek Malaysia v Chea Kim Fah:
- O.15, r.6 explicitly states that no suit shall be defeated by reason of a misjoinder.
- CA hold that the issue of misjoinder raised by the appellant is completely without basis.
3) Effect of non-joinder -Yeap Nah Khe & Ors v. Tye Cho Chun & Anor:
- In any case, by virtue of O.15, r.6(1), the non-joinder has hardly affected the issue before the court.
14
Q
JOINDER OF PARTIES
Overview
A
1) Rule of joinder of parties
2) Adding new plaintiff - general
3) Adding new plaintiff - P adds co-P
4) Adding new defendant - general
5) Adding new defendant - P adds new D
6) Adding new defendant - D adds new D
7) Effect of misjoinder
15
Q
JOINDER OF PARTIES
Rule of joinder of parties
A
1) The rule - O.15, r.4:
- All appropriate parties should be involved in the proceedings;
- P may bring an action against a D or any number of D if:
- Some common question of law or facts would arise in all the actions; AND
- All rights to relief claimed arise out of same transactions.
- In other instance, leave of court is required.
2) Leave of court - S. Constantine & Anor v SOCSO (CA): - Under O. 15 r. 4(1), the leave of the High Court is required if:
- (i) there is no common question of law or fact involved in the actions; and
- (ii) the rights to the relief claimed in the statement of claim against each of the defendants are not concerned with the same transaction or series of transactions.
3) Power of court - O.15, r.6:
- Existing parties adding another person as a party, either P or D;
- Existing parties remove themselves as a party in the suit.
- A stranger to intervene & add himself as a party to the suit.
16
Q
JOINDER OF PARTIES
Adding new plaintiff - general
A
1) O.15, r.6(2):
- Court may order a person to be added as a party.
2) O.15, r.6(4):
- A plaintiff shall be added only with his consent.
17
Q
JOINDER OF PARTIES
Adding new plaintiff - P adds co-P
A
1) General - Malite Sdn Bhd v Abdul Karim Bin Gendut & Ors:
- FC allowed the application pursuant to O.15 r.6(2);
- Held: leaving out the new P would not lead to a complete determination and adjudication of the matter.
2) When limitation has expired - Government of Malaysia v Mohamed Amin bin Hassan:
- A new party pleading a fresh cause of action (i.e. personal injury claim), cannot be added to the suit after the expiry of limitation;
- i.e. granting application to add a party will depend on limitation - if limitation has set in, court has no power to grant such an application.
18
Q
JOINDER OF PARTIES
Adding new defendant - general
A
O.15, r.6(2):
- Court may order a person to be added as a party.
19
Q
JOINDER OF PARTIES
Adding new defendant - P adds new D
A
1) Limitation has set in - Dato’ Wira Nordin (CA):
- CA referred to Mohamed Amin & held that P’s claim against the new purported defendants was barred by limitation.
2) Applicability of the doctrine of relation back - Instantcolor System Sdn Bhd v Inkmaker Asia Pacific (FC):
- This doctrine is only applicable in amendments specified in r. 5(3), (4) and (5) only.
- On the facts, it is the issue of amendment of party rather than amendment of pleadings;
- Therefore, doctrine of relation back DOES NOT apply to situation of adding a new party.
20
Q
JOINDER OF PARTIES
Adding new defendant - D adds new D
A
1) Exception - Hee Awa & Ors v Syed Muhammad & Anor (SC):
- Application by D to add new D is allowed;
- the Pegang Mining test in respect of an intervener application applied in respect of adding a co-defendant; and
- G had a choice to proceed either under O.15 r.6(2)(b) (adding a co-D) or O.16 (3rd party proceedings).
- There was absolutely nothing in the Rules that prevented G from making the choice.
2) General rule - cf. Tajjul Ariffin v Heng Cheng Hong (FC):
- It was an act of supreme futility to have ordered the joinder of X since if P refuses to amend his claim, X could successfully apply the suit to be struck out as disclosing no reasonable cause of action against him.
- There was nothing in rules or the authorities empowering a judge to order a P to amend his SOC & plead negligence against a new D.
- A plaintiff cannot be forced, upon the application of the defendant, to have a second defendant added, against whom he does not wish to proceed for the reason that the negligence of the intended second defendant is not an issue involved in the claim he has made;
- A plaintiff should be allowed to proceed against the defendant of his choice.
- Therefore, a D cannot add a co-D unless P consents & P agrees to amend his SOC to include claims against the new co-D.
3) Recent - DR Y G TAN JURUTERA PERUNDING SDN BHD v. PROJEK LEBUHRAYA USAHASAMA BHD (CA, 2018):
- Logic dictates that a Plaintiff has the absolute discretion to decide whom to sue and the type of remedies.
- a defendant against whom no relief is sought by the plaintiff will generally not be added against the wish of the Plaintiff.
- A third party notice is in such a case usually the proper procedure to adopt though such a defendant can be added in a proper case.
21
Q
JOINDER OF PARTIES
Effect of misjoinder
A
1) The law - O.15, r.6(1):
- A cause or matter shall not be defeated by reason of the misjoinder of parties.
2) Effect of misjoinder - Lembaga Arkitek Malaysia v Chea Kim Fah:
- O.15, r.6 explicitly states that no suit shall be defeated by reason of a misjoinder.
- CA hold that the issue of misjoinder raised by the appellant is completely without basis.
22
Q
JOINDER OF PARTIES
Procedures to join
A
O.15, r.6(3):
- Application to be supported by an affidavit showing interest in the matter of dispute.
23
Q
STRIKING OUT PARTIES
The law
A
O.15, r.6(2)(a):
- Allows the court to order a party to be removed on the ground of improperly or unnecessarily added.
24
Q
INTERVENER
Overview
A
1) The law & scope
2) Test to intervene
3) When should a party intervene
4) Application & examples
5) Effect of wrongly intervened
6) Procedure to intervene
25
INTERVENER
The law & scope
1) The law - O.15, r.6
- Allows a stranger to intervene in the suit & be named as a party, usually as a D.
2) Scope - Kithur Mohamed v Ameer Hamsa MSK Mohamed Haneefa & Ors (HC, 2019):
- r.6(2)(b)(i) enables intervention where the presence of a non-party is necessary for all matters in dispute to be effectually & completely determined & adjudicated upon;
- r.6(2)(b)(ii) enables intervention of a non-party where a party in an action claims relief which will affect the non-party's rights
26
INTERVENER
Test to intervene
Pegang Mining Company Ltd v Choong Sam:
- a proposed intervener must show to the court that he has some interest which is directly related to the subject matter of the action; and
- that his interest (rights or liability) will be directly affected by any order of the court
27
INTERVENER
When should a party intervenes
1) Any time - Tradium Sdn Bhd v Zain Azahari:
- Intervention can be done at any time of the proceedings, pursuant to O.15, r.6(2);
- However, the leave of court must be sought for;
- Court will grant permission at its discretion & it will not assist those who delay.
2) At the earliest opportunity - Tradium Sdn Bhd v. Zain Azahari Zainal Abidin & Anor:
- the intervener application must be made at first instance where the proposed interveners had knowledge of the proceedings in the High Court and the opportunity to take the necessary steps.
3) Must be before judgment - Hong Leong Bank v Staghorn Sdn Bhd:
- the application must be made before judgment;
- otherwise the proceedings have already been concluded and that there is no longer a proceeding in existence for the party to intervene in;
- the judge had also become functus officio.
4) The test - Hong Leong Bank v Staghorn Sdn Bhd:
- The stages & test to be satisfied are:
* * Whether there was a proceeding in existence for a stranger to intervene;
* * Only if there was a proceeding still pending would the principles in Pegang Mining become applicable.
28
INTERVENER
Examples insufficient interest
1) Major shareholder - Ulimas Sdn Bhd v Hi Summit Construction Sdn Bhd (2017):
- Being a beneficial owner with the majority shares in the company did not clothe a person with the locus standi to object to the filing of the suit, and she also did not have any registered interest in the share of the company.
- As such, she had no locus to intervene in the matter.
2) Strangers on appeal - Chong Fook Sin v Amanah Raya Bhd (Administrator for the Estate of Raja Nong Chik) (FC):
- the subject matter of the appeal before the COA was the consequence of non-compliance with the unless order on the part of ARB.
- This was a matter in which the interveners were not involved at all.
- Even if the interveners were beneficiaries, they did not have legal interest in the estate of the deceased pending the administration of the same.
29
INTERVENER
Procedures to intervene
1) Procedural requirements - O.15, r.6(3) + r.6(2)(b):
- Application to be supported by an affidavit showing interest in the matter of dispute.
2) Duty of court - general:
- The court must first determine that the requirements of r.6(2)(b) & (3) are satisfied.
- If the requirements are satisfied, only then does the court exercise its discretion based on the material available before it to determine whether to allow or not to allow the application of a non-party to intervene based on test in Pegang Mining.
3) Test - Pegang Mining Company Ltd v Choong Sam:
- a proposed intervener must show to the court that he has some interest which is directly related to the subject matter of the action; and
- that his interest (rights or liability) will be directly affected by any order of the court.
4) Duty of judge - Hong Leong Bank Bhd v Staghorn Sdn Bhd:
- The judge merely decides on affidavit evidence whether or not leave intervene should be granted.
- At that stage, the judge should not make a definite finding of facts.
- While the principles laid down in Pegang Mining Co Ltd v. Choong Sam & Ors as to the exercise of discretion are applicable, all the requirements of O. 15 r. 6(2) must first be satisfied by the proposed intervener.
5) Order to amend pleadings - Pacific Orient Insurance Co. Bhd v Kumari a/p Nadason (2019):
- Once leave to intervene is granted, the nature of the originating summons has changed because there is a new party to the action;
- a consequential order to amend the pleadings is made to include the intervener and to allow all parties to file their respective affidavits.
30
INTERVENER
Effect of wrongly intervened
HC, 2019
Dan-Bunkering (Singapore) Pte Ltd v The Ship or Vessel PDZ Mewah:
- A party who has willingly and voluntarily intervened in an admiralty action in rem concedes that there are questions and issues to be tried between the parties;
- He is therefore estopped from claiming that it has been wrongly made a party to the said action.
- Hence, the intervening party should remain a necessary and proper party in the action for effective and complete adjudication of the dispute between parties.
31
THIRD PARTY PROCEEDINGS
Overview
1) Why it should be issued
2) When it should be issued
3) When does time start running
4) Examples of delay
5) Procedures to issue TPP
6) Failure to comply with affidavit requirements
32
THIRD PARTY PROCEEDINGS
The law & why it should be issued
1) The law:
- O.16
2) Why it should be issued:
- Claims to contribution: O.16, r.1(1)(a)
- Claims to indemnity: O.16, r.1(1)(a), (b) & (c)
3) What is TPP - Dato’ Abul Hasan bin Mohamed Rashid v Multi-Code Electronics Industries & Anor (2012):
- The third party proceedings constitutes independent proceedings between the defendant as plaintiff and the third party as defendants.
33
THIRD PARTY PROCEEDINGS
When it should be issued - general
- The filing of the third party proceedings application at such a late stage would have the effect of delaying the trial.
- i.e. the time needed for the pleadings & any pre-trial directions.
- i.e. more time and costs had to be expended to recall the witnesses that testified earlier to be cross-examined and re-examined.
- If TPPs are allowed at an advance stage, it will cause significant prejudice to the plaintiff & its expectation of speedy disposal of the case.
- The plaintiff has to sit through the proceedings when the Third Party proceeds with the trial, incurring more time and money.
- Therefore, objective can only be achieved if the application is made promptly at the early stage of proceedings.
34
THIRD PARTY PROCEEDINGS
Examples of delay
1) Nearly close of P's case - the KL Eco City Sdn Bhd v Tuck Sin Engineering & Construction Sdn Bhd & Anor (TY Lin International Sdn Bhd, third party) (2018):
- Case is at an advance stage whereby 7 witnesses have testified and the Plaintiff is about to close its case.
- Court struck out the application to add the third party because:-
* Inordinate delay of the disposal of the main action.
* Prejudice to the Plaintiff.
* No prejudice to the defendants.
2) Case management stage - Kewangan Bersatu Bhd v Victory Ceramics Industries Sdn Bhd & Ors (2002):
- Application is made during case management stage but the suit was filed some 4 years ago;
- Court held that a third party proceedings application is an abuse of court process as the main action would be delayed for the parties to file, serve and amend the pleadings.
3) After 3 years post-issuance of suit - Dato’ Abul Hasan bin Mohamed Rashid v Multi-Code Electronics Industries & Anor (2012):
- Court held that the TPP issued is an abuse of process where the defendant took nearly three years to file the third party proceedings.
35
THIRD PARTY PROCEEDINGS
When can D enforce his claim against 3rd P & when time starts to run for limitation
1) When can D enforce his claim against 3rd P - Pacific Asia Leasing (M) Sdn Bhd v Senanti Motor Sdn Bhd:
- there is no precondition that the defendant must establish that his cause of action for a contribution should already have accrued at the time he takes out his third party notice;
- D was claiming a contribution in the event that the court found him liable to make any payment to P;
- The potential cause of action D had against TP would have crystallized at that point;
- Therefore, D is entitled to enforce his potential right even before he has paid anything;
- i.e. Potential cause of action of D against TPP is sufficient; D is entitled to issue a TPP notice even before he is found liable.
2) When does time start to run for limitation - Mat bin Abu Man v Medical Supritendent, General Hospital Taiping:
- Third party proceedings for contribution should be regarded as independent of and separate from proceedings by P against D.
- When D is made liable to P, he then has his right open against a third party to bring a fresh suit & establish that he possesses a right to contribution or indemnity from the third party.
- Time should begin to run from the date D is held liable.
36
THIRD PARTY PROCEEDINGS
Procedures to issue TPP
1) Pre-requisites - O.16, r.1:
- D must enter appearance.
2) Leave application - O.16, r.2:
- When: If the defendant only decided to initiate third party proceedings after serving his defence.
- i.e. leave is not required if TPP notice is issued after serving defence to P.
- Mode: ex parte Notice of Application in Form 20;
- Service: as the Court may direct.
3) Standard of proof for leave - Dato’ Abul Hasan bin Mohamed Rashid v Multi-Code Electronics Industries & Anor (2012):
- before leave to issue a third party notice is granted to the defendant, he must show a prima facie case.
4) Affidavit requirements - O.16, r.2(2):
- nature of claim made by P;
- stage of proceedings;
- nature of claim made by applicant;
- name & address of the person whom the third party notice is to be issued.
5) Issuance of TP notice - O.15, r.1:
- Form 18 or 19;
- Statement of the nature of claim;
- Question or issues to be determined.
37
THIRD PARTY PROCEEDINGS
Failure to comply with affidavit requirements
Punca Klasik Sdn Bhd v Liza James:
The learned judge dismissed an application for leave to issue a Third Party Notice as D failed to comply with the affidavit requirements under r.2.
