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Issue #43/2024
24 October 2024
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CASE SPOTLIGHTS
YAP YOKE CHONG v. YAP CHEE SIANG [2024] 9 CLJ 620 A litigant is entitled to have a prior judgment set aside if it can be shown that the said judgment has been obtained by fraud. There is no necessity to show that the fresh evidence relied upon could not have been obtained without reasonable diligence. When a judgment or order is obtained by fraud, or where further evidence which could not possibly have been adduced at the original hearing is forthcoming, a fresh collateral action will lie to impeach the original judgment. The court has the jurisdiction to set aside a judgment obtained by fraud in a collateral action brought for that purpose. The doctrine of res judicata is not applicable in a separate and original action to impeach and set aside an earlier judgment which has been obtained by deception or under fraudulent circumstances practiced upon the court. Once fraud is proven, it vitiates judgments, contracts and all transactions. CIVIL PROCEDURE: Judgments and orders - Impeachment - Judgment obtained by way of fraud - Court fraudulently misled into granting judgment - Consequence of judgment revoked letters of administration granted to rightful beneficiaries of estate - Discovery of fraudulent materials that were not available at time of trial - Whether due to lack of reasonable diligence - Whether res judicata or estoppel apply in action to impeach judgment for fraud - Whether evidence had determining effect on outcome of impugned judgment - Evidence Act 1950, s. 44 EVIDENCE: Fresh or further evidence - Impeachment - Judgment obtained by way of fraud - Court fraudulently misled into granting judgment - Consequence of judgment revoked letters of administration granted to rightful beneficiaries of estate - Discovery of fraudulent materials that were not available at time of trial - Whether due to lack of reasonable diligence - Whether res judicata or estoppel apply in action to impeach judgment for fraud - Whether evidence had determining effect on outcome of impugned judgment - Whether there was necessity to show that fresh evidence relied upon could not have been obtained without reasonable diligence - Evidence Act 1950, s. 44 APPEAL UPDATES
LATEST CASESLegal Network Series
CLJ 2024 Volume 9 (Part 3) (i) The court cannot invoke its inherent powers to extend the time for the payment of a balance purchase price, in a sale under the National Land Code, beyond the mandatory 120-day period stipulated in s. 257(1)(g), even in exceptional circumstances such as the COVID-19 pandemic; (ii) Once an application for intervention has been struck out or dismissed, the court has no power to grant any order that would benefit the proposed intervener. LAND LAW | CIVIL PROCEDURE | WORDS & PHRASES
LAND LAW: Sale and purchase of property - Purchase price - Payment of balance of purchase price - Successful bidder in auction signed memorandum of sale - Bidder unable to pay balance purchase price within mandatory statutorily-provided period of 120 days - Bidder sought extension of time to make payment - Whether court could invoke inherent powers to extend time for payment of balance purchase price beyond mandatory statutorily-provided period of 120 days - National Land Code, ss. 256 & 257(1)(g) CIVIL PROCEDURE: Courts - Inherent powers - Successful bidder in auction unable to pay balance purchase price within 120 days - Whether court could invoke inherent powers to extend time for payment of balance purchase price beyond mandatory statutorily-provided period of 120 days stipulated in s. 257(1)(g) of National Land Code - Courts of Judicature Act 1964 CIVIL PROCEDURE: Intervention - Application for - Dismissal - Successful bidder in auction unable to pay balance purchase price within mandatory statutorily-provided period of 120 days - Bidder sought to intervene and for extension of time - High Court struck out/dismissed application but excluded 28 days from computation of 120 days - Indirect extension of time for payment of balance of purchase price - Whether court seized with power to grant any orders that would benefit proposed intervener once application for intervention has been struck out/dismissed - Rules of Court 2012, O. 15 r. 6 & O. 92 r. 4 WORDS & PHRASES: 'there shall be no extension of the period so specific' - Section 257(1)(g) of National Land Code - Whether mandatory - Whether court could invoke inherent powers to extend time for payment of balance purchase price beyond mandatory 120-day period S Nantha Balan JCA
An insurer's statutory liability, under s. 96(1) of the Road Transport Act 1987 ('RTA'), arises when the claimant proves on a balance of probabilities that 'notice of the proceedings' has been given to the insurer either before or within seven days of the commencement of the suit, as per s. 96(2)(a) of the RTA. The phrase 'notice of the proceedings' refers to the insurer's knowledge of the claimant's suit, which would allow the insurer to make informed decisions. The said notice can be formal or informal, written or oral and may come from the claimant or even a third party. When an insurer has knowledge of the claimant's suit, similar suits subsequently initiated by the same claimant will not require a fresh notice. ROAD TRAFFIC | INSURANCE | STATUTORY INTERPRETATION
ROAD TRAFFIC: Accident - Liability - Insurer's statutory liability - Claimant met with accident with person insured by insurer - Claimant served notice on insurer regarding claim against insured for damages - Notice acknowledged by insurer - Claimant filed suit against insured followed by another similar suit against same insured - Whether insurer liable to pay any judgment which may be obtained against insured in second suit - Whether claimant ought to serve fresh notice of second suit on insurer 'before or within seven days' after commencement of second suit - Whether insurer had 'notice of the proceedings' in second suit - Road Transport Act 1987, s. 96(1) & (2)(a) INSURANCE: Accident insurance - Liability - Insurer's statutory liability - Claimant met with accident with person insured by insurer - Claimant served notice on insurer regarding claim against insured for damages - Notice acknowledged by insurer - Claimant filed suit against insured followed by another similar suit against same insured - Whether insurer liable to pay any judgment which may be obtained against insured in second suit - Whether claimant ought to serve fresh notice of second suit on insurer 'before or within seven days' after commencement of second suit - Whether insurer had 'notice of the proceedings' in second suit - Road Transport Act 1987, s. 96(1) & (2)(a) STATUTORY INTERPRETATION: Statutes - Road Transport Act 1987 - Section 96(2)(a) - 'notice of the proceedings' - Insurer's knowledge of claimant's suit which may subsequently give rise to insurer's statutory liability pursuant to s. 96(1) Kamaludin Md Said JCA
In a situation where a developer whose bank loan has been unlawfully terminated, the duty to mitigate damages means the developer must take reasonable actions to reduce the financial impact caused by the termination. While it may be easy for the bank to demand the developer to immediately seek funds elsewhere, the situation is far more complex for the developer to secure alternative financing. It is unjust for the bank to claim the developer has no intention of carrying out the housing project when, in reality, it is the bank's actions that significantly hampered the developer's ability to proceed with the said project as intended as well as to fully exercise their duty to mitigate damages, underscoring the need for a thorough re-assessment of the circumstances. The developer ought to be entitled to damages that naturally flowed from such unlawful termination. BANKING | CONTRACT | DAMAGES
BANKING: Banks and banking business - Facilities - Bridging finance facility - Developer defaulted resulting in termination of facilities by bank - Counterclaim by developer for compensation for losses suffered as consequence of wrongful termination of facility - Assessment of damages by Registrar - Registrar awarded nominal damages in favour of developer - Appeal against - Whether developer's project failure resulted from unlawful termination of facilities - Whether damages claimed by developer fell within parties' contemplation - Whether developer entitled to damages that naturally flowed from unlawful termination of facilities - Quantum of damages CONTRACT: Loan - Facilities - Bridging finance facility - Developer defaulted resulting in termination of facilities by bank - Counterclaim by developer for compensation for losses suffered as consequence of wrongful termination of facility - Assessment of damages by Registrar - Registrar awarded nominal damages in favour of developer - Appeal against - Whether developer's project failure resulted from unlawful termination of facilities - Whether damages claimed by developer fell within parties' contemplation - Whether developer entitled to damages that naturally flowed from unlawful termination of facilities - Quantum of damages DAMAGES: Assessment - Quantum - Bridging finance facility - Developer defaulted resulting in termination of facilities by bank - Counterclaim by developer for compensation for losses suffered as consequence of wrongful termination of facility - Assessment of damages by Registrar - Registrar awarded nominal damages in favour of developer - Appeal against - Whether developer's project failure resulted from unlawful termination of facilities - Whether damages claimed by developer fell within parties' contemplation - Whether developer entitled to damages that naturally flowed from unlawful termination of facilities Yusrin Faidz Yusoff JC
A court should not rehear disputes between parties to an arbitration. The arbitrator is the sole judge of the disputes and the court has no jurisdiction to substitute its own interpretation of the laws and facts reached by the arbitrator, however erroneous it may be. In the setting aside of an arbitration award, the court shall not delve into the merits of the disputes brought forth during the arbitration proceedings. The scope of public policy to set aside an arbitral award should only be invoked where there is a violation of the most basic notions of morality and justice. ARBITRATION
ARBITRATION: Proceedings - Jurisdiction - Rehearing of disputes - Whether courts could rehear disputes between parties to arbitration - Whether arbitrator sole judge of dispute - Whether there was breach of rule of natural justice - Whether there was conflict of interest - Whether there was likelihood of bias by arbitrator - Whether there were justifiable doubts as to arbitrator's impartiality or independence - Whether court could express views on correctness or otherwise of arbitrator's conclusions ARBITRATION: Award - Setting aside - Application for - Whether courts could rehear disputes between parties to arbitration - Whether arbitrator sole judge of dispute - Whether there was breach of rule of natural justice - Whether there was conflict of interest - Whether there was likelihood of bias by arbitrator - Whether there were justifiable doubts as to arbitrator's impartiality or independence - Whether court could express views on correctness or otherwise of arbitrator's conclusions
Ong Chee Kwan J (Originating Summons No: WA-24NCC(ARB)-40-12-2023)
Section 43 of the Securities Industry (Central Depositories) Act 1991 ('Act') prohibits Bursa Malaysia from giving, divulging, revealing or disclosing any information or document relating to the affairs of any depositors. Disclosure would only be allowed if the circumstances of the case fall within any of the categories under s. 45 of the Act. CIVIL PROCEDURE
CIVIL PROCEDURE: Discovery - Documents - Application for - Application for discovery of documents pertaining to details of transaction concerning company shares - Whether Bursa Malaysia prohibited from divulging or disclosing information relating to affairs of depositors - Legal requirements and prerequisites - Whether fulfilled - Whether circumstances of case fell within any of categories allowed under s. 45 of Securities Industry (Central Depositories) Act 1991
Mohd Arief Emran Arifin J
(i) A binding contract can be inferred from the conduct of the parties showing an intention to be bound, even if a formal agreement has yet to be signed; (ii) The phrase 'subject to contract' in a letter of offer does not negate the conclusion that the parties had already entered into a binding agreement through their words and conduct. On a proper construction, the 'subject to contract' marking in a letter of offer is a mere expression of the desire of the parties to formalise the agreed terms in the agreements, and not a condition precedent to the formation of a binding contract. CONTRACT | JURISDICTION | WORDS & PHRASES
CONTRACT: Specific performance - Claim for - Sale and purchase and leaseback of property - Non-execution of formal agreements - Whether conduct of parties demonstrated intention to be bound by agreement - Whether purchaser demonstrated continuous willingness and readiness to complete agreement - Whether vendor discharged evidential burden that damages were adequate remedy - Whether justice of case demands grant of specific performance - Specific Relief Act 1950, ss. 11, 20 & 21 CONTRACT: Agreement - Concluded contract - Sale and purchase and leaseback of property - Non-execution of formal agreements - Whether terms of agreements concluded - Whether letter of offers and part performance to fulfil conditions of sale constituted binding contract - Whether conduct of parties demonstrated intention to be bound by agreement - Whether term 'subject to contract' and non-execution of formal agreements negated binding contract - Whether agreements subject to further negotiation - Whether term 'subject to contract' mere expression of desire to formalise agreed terms - Whether binding contract established CONTRACT: Privity - Existence - Sale and purchase and leaseback of property - Third party acted on behalf of purchaser as trustee - Intention expressed in letter of offer - Whether third party had authority to negotiate and enter into contracts on behalf of purchaser - Whether vendor had knowledge of purchaser's interest in contract - Whether vendor estopped from denying purchaser's privity and locus standi JURISDICTION: Courts - High Court - Proper forum - Sale and purchase and leaseback of property - Property and vendor's place of business located in Kedah - Signing of letter of offer in Kuala Lumpur - Whether cause of action arose in Kuala Lumpur - Whether High Court in Kedah proper forum - Whether location of property strong connecting factor in determination of forum - Whether High Court at Kuala Lumpur proper and more convenient forum - Courts of Judicature Act 1964, s. 23(1) WORDS & PHRASES: 'subject to contract' - Meaning of - Inclusion of term in contract - Whether term 'subject to contract' and non-execution of formal agreements negated binding contract - Whether agreements subject to further negotiation - Whether term 'subject to contract' mere expression of desire to formalise agreed terms Atan Mustaffa Yussof Ahmad J
The general principle is that if there is a personal interest, then only counsel alleged to be pecuniarily interested would be disqualified from representing himself and/or the law firm, as to avoid being embarrassed in the course of the trial. However, if no other counsel of the firm is implicated, then they should not be disqualified from handling the case. The courts ought to secure a fair trial between the parties, and to prevent an abuse of the court process which is intended to deprive parties of their right to a counsel of their choice. LEGAL PROFESSION | CIVIL PROCEDURE
LEGAL PROFESSION: Practice of law - Practice and etiquette - Whether legal firm ought to be removed from acting as solicitors in suit - Whether there was pecuniary interest - Whether legal firm breached Legal Profession Rules (Practice and Etiquette) 1978 - Whether counsel alleged to be pecuniarily interested would be disqualified from representing himself and/or law firm - Right to counsel of choice - Whether ought not to be deprived CIVIL PROCEDURE: Preliminary objection - Practice of law - Practice and etiquette - Whether legal firm ought to be removed from acting as solicitors in suit - Whether there was pecuniary interest - Whether legal firm breached Legal Profession Rules (Practice and Etiquette) 1978 - Whether counsel alleged to be pecuniarily interested would be disqualified from representing himself and/or law firm - Right to counsel of choice - Whether ought not to be deprived - Whether preliminary objection proved on balance of probabilities
Noor Ruwena Md Nurdin JC
The principles governing discovery in judicial review proceedings is different from the ordinary civil jurisdiction of the High Court. It is a rule that discovery and inspection must be restricted to matters relevant to an existing dispute and, in principle, no discovery can be ordered unless and until the court is satisfied on reasonable grounds that there has been a breach of public duty. Discovery in judicial review proceedings is granted on a more limited basis than in an ordinary action because the function of judicial review is to question the decision-making process and not whether the decision is in itself correct. Evidence being withheld is to be weighed against the public interest in the administration of justice and courts should have the fullest possible access to all relevant materials to fairly dispose of matters before the court. CIVIL PROCEDURE
CIVIL PROCEDURE: Discovery - Judicial review - Governing principles - Whether granted in limited basis - Whether documents sought relevant and directly related to judicial review proceedings - Whether amounted to fishing expedition - Whether documents important for fair disposal of matter - Whether documents would enable applicant to respond accordingly - Whether production of documents contrary to public interest - Whether of class that demanded protection - Whether discovery ought to be allowed
Amarjeet Singh Serjit Singh J
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