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CLJ Bulletin, Issue 2013, Vol 28 12 July 2013 Print this page 
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CIVIL PROCEDURE: Interpleader summons - Nature of interpleader proceedings - Whether damages could be awarded pursuant to counterclaim raised in affidavit filed in interpleader proceedings - Application for interpleader relief - Whether appellant bringing an action or making a claim - Whether interpleader summons under O. 17 Rules of the High Court 1980 a specific kind of originating summons - Whether excepted from rules governing general originating summonses under O. 28 - Whether O. 17 permited counterclaim against party applying for interpleader relief
TETUAN TEH KIM TEH, SALINA & CO v. TAN KAU TIAH & ANOR
FEDERAL COURT, PUTRAJAYA
ARIFIN ZAKARIA CJ; RICHARD MALANJUM CJ (SABAH & SARAWAK); HASHIM YUSOFF FCJ; ABDULL HAMID EMBONG FCJ; AHMAD MAAROP FCJ
[CIVIL APPEAL NO: 02(f)-21-2010(W)]
29 MAY 2013
The question before the Federal Court in this appeal was whether damages could be awarded pursuant to a counterclaim raised in an affidavit filed to oppose an application for interpleader relief under O. 17 of the Rules of the High Court 1980 (`RHC'). The appellant, with whom 18 land titles (`the titles') had been deposited as stakeholders, had applied for such relief to decide to whom it should account to for the titles after a dispute arose between the first and second respondents. The first respondent (`Tan') was the registered owner of the titles. The second respondent (`BM') was a developer with whom Tan had entered into a contract to develop the land on which the titles stood. Tan terminated the agreement for alleged breach of the contract by BM and claimed for the return of the titles plus damages. The dispute between the parties was arbitrated. The award which followed (`the award') favoured Tan and it was ordered, inter alia, that the titles be returned by BM to Tan. A copy of the award was served on the appellant but despite repeated demands, the appellant did not return the titles to Tan presumably because BM had meanwhile written to the appellant suggesting that it hold on to the titles as BM was applying to set aside the award and also prevent the award from being registered with the High Court. The appellant informed Tan that it was unable to return the titles in view of the dispute and applied for interpleader relief. The High Court allowed the interpleader application and ordered the appellant to retain the titles pending the disposal of Tan's application for leave to enforce the award and BM's application to remove the arbitrator. On appeal against that decision, the Court of Appeal (`COA') held that the High Court should have dismissed the application for interpleader relief as, inter alia, the requirements in O. 17 r. 1(a) and r. 3(3)(b) of the RHC had not been fulfilled and there was evidence of collusion between the appellant and BM. The COA set aside the High Court's decision, ordered the appellant to return the titles to Tan forthwith and allowed a counterclaim Tan had raised in an affidavit filed in the interpleader proceedings. In the counterclaim, Tan had sought general damages for loss of use of the titles, aggravated damages for their wrongful detention and exemplary damages. These damages were ordered by the COA to be assessed by the registrar and to be paid by the appellant to Tan with interest and costs. The Federal Court granted the appellant leave to appeal against the COA's decision. Prior to the COA's decision, the appellant had already returned the titles to Tan when the High Court dismissed BM's application to set aside the award and allowed Tan leave to enforce the award. The appellant's complaint before the Federal Court was that the COA was wrong to have ordered it to pay damages to Tan based on the counterclaim in Tan's affidavit. The appellant contended that the court had no jurisdiction in interpleader proceedings to award damages on a counterclaim raised by way of affidavit and that Tan's cause of action against the appellant, if any, should be pursued by way of a separate action. Inter alia, Tan contended that the counterclaim was maintainable under r. 7 of O. 28 of the RHC which governed the general procedure relating to originating summonses.
Held (allowing appeal with costs; setting aside decision of the COA)
Per Ahmad Maarop FCJ delivering the judgment of the court:
(1) Although an application for interpleader relief must be made by originating summons (O. 17 r. 3(1) of the RHC), the interpleader summons was a specific kind of originating summons (`OS') for which special provisions had been made under O. 17 of the RHC. It was therefore a type of OS excepted under O. 28 r. 1 of the RHC from the OS procedure under O. 28 of the RHC. (para 33)
(2) In applying for the interpleader relief, the appellant was not bringing an action or making a claim against the respondents. Thus, if there was no claim by the appellant, there could not be a counterclaim. In the face of what it took to be countervailing claims between the respondents, the appellant filed the interpleader summons to seek the court's assistance; to get the court to decide to whom it should account for the titles. The summons called upon the respondents to come to court to put forward their claims and have them adjudicated upon. (para 36)
(3) Under O. 17 of the RHC, there was no provision to enable a counterclaim to be made against a person who applied for interpleader relief. (para 38)
(4) In addition to finding there was no real foundation for expectation of a rival claim by BM to the titles, the COA also found evidence of collusion between the appellant and BM. Having found that the requirements under O. 17 r. 1(a) and O. 17 r. 3(3)(b) of the RHC had not been satisfied, and having held that the application for interpleader relief should have been dismissed by the High Court, the COA should have just set aside the High Court's decision. The COA had no jurisdiction to then proceed to consider Tan's counterclaim, allow it and order damages (to be assessed) to be paid by the appellant to Tan. (paras 43 & 52)
(5) The decision on the merits or otherwise of Tan's claim for damages against the appellant and of the appellant's defence to such a claim would have to be decided in a separate action by Tan against the appellant and not in the application for interpleader relief. (para 46)
Bahasa Malaysia Translation Of Headnotes
Persoalan yang berbangkit di Mahkamah Persekutuan dalam rayuan ini adalah sama ada ganti rugi boleh diberi bagi tuntutan balas yang dibuat melalui afidavit yang difailkan bagi menentang permohonan untuk relif interplider di bawah A. 17 Kaedah-Kaedah Mahkamah Tinggi 1980 (`KMT'). Perayu, yang memegang 18 geran hak milik (`geran-geran') sebagai pemegang amanah, memohon relif bagi menentukan kepada pihak mana geran-geran perlu diserahkan, akibat pertikaian yang berbangkit antara responden pertama dan responden kedua. Responden pertama (`Tan') adalah pemilik berdaftar geran-geran, manakala responden kedua (`BM') adalah pemaju yang dengannya Tan memeterai kontrak bagi memajukan tanah-tanah berkenaan. Tan menamatkan kontrak atas alasan pelanggaran terma oleh BM dan kemudian menuntut pengembalian geran-geran serta ganti rugi. Pertikaian antara mereka telah dibawa untuk ditimbang tara. Award yang dibuat (`award') berpihak kepada Tan yang sekali gus memerintahkan antara lain supaya geran-geran dikembalikan oleh BM kepada Tan. Satu salinan award telah diserah kepada perayu, namun, walaupun berulang kali diminta, perayu gagal memulangkan geran-geran kepada Tan, atas alasan bahawa BM telah menulis kepada perayu supaya terus memegang geran-geran kerana BM telah memohon untuk mengenepikan award dan menghalangnya dari didaftar di Mahkamah Tinggi. Perayu memberitahu Tan bahawa ia tidak boleh mengembalikan geran-geran tersebut disebabkan oleh pertikaian yang berlaku dan telah memohon untuk relif interplider. Mahkamah Tinggi membenarkan permohonan interplider sekali gus memerintahkan perayu terus memegang geran-geran sementara menunggu permohonan Tan bagi kebenaran melaksanakan award dan permohonan BM untuk menolak penimbang tara. Atas rayuan terhadap keputusan tersebut, Mahkamah Rayuan memutuskan bahawa Mahkamah Tinggi sepatutnya menolak permohonan relif interplider antara lain kerana A. 17 k. 1(a) dan k. 3(3)(b) KMT tidak dipatuhi dan kerana terdapat keterangan wujudnya pakatan sulit antara perayu dan BM. Mahkamah Rayuan dengan itu mengenepikan keputusan Mahkamah Tinggi, memerintahkan perayu memulangkan geran-geran kepada Tan dengan serta merta, dan seterusnya membenarkan tuntutan balas Tan yang dibangkitkan dalam afidavit yang difailkan Tan dalam prosiding interplider. Dalam tuntutan balasnya itu, Tan menuntut ganti rugi am kerana kehilangan penggunaan geran-geran, ganti rugi teruk kerana penahanan salahnya serta ganti rugi teladan. Ganti rugi-ganti rugi ini telah diperintah oleh Mahkamah Rayuan supaya ditaksir oleh pendaftar dan dibayar kepada Tan bersekali dengan faedah dan kos. Mahkamah Persekutuan telah memberi kebenaran kepada perayu untuk merayu terhadap keputusan Mahkamah Rayuan. Apapun, sebelum keputusan Mahkamah Rayuan, iaitu setelah Mahkamah Tinggi menolak permohonan BM untuk mengenepikan award dan membenarkan permohonan Tan untuk melaksanakan award, perayu telah pun memulangkan geran-geran kepada Tan. Hujah perayu di hadapan Mahkamah Persekutuan adalah bahawa Mahkamah Rayuan khilaf apabila memerintahkannnya membayar ganti rugi kepada Tan berdasarkan kepada tuntutan balas dalam afidavit Tan. Hujah perayu lagi, mahkamah tersebut tidak mempunyai bidang kuasa dalam prosiding interplider untuk mengaward ganti rugi atas tuntutan balas yang dibangkitkan melalui afidavit, dan bahawa, kausa tindakan Tan terhadapnya, jikapun ada, haruslah melalui satu tindakan yang berasingan. Tan antara lain berhujah bahawa tuntutan balasnya boleh dipertahan di bawah A. 28 k. 7 KMT yang mengawal selia prosedur am mengenai saman pemula.
Diputuskan (membenarkan rayuan dengan kos; mengenepikan keputusan Mahkamah Rayuan)
Oleh Ahmad Maarop HMP menyampaikan penghakiman mahkamah:
(1) Walaupun permohonan relif interplider harus dibuat melalui saman pemula (A. 17 k. 3(1)), saman interplider adalah jenis saman pemula yang khusus di mana peruntukan khusus baginya telah dibuat di bawah A. 17 KMT. Dengan itu ia adalah sejenis saman pemula yang dikecualikan di bawah A. 28 k. 1 KMT dari prosedur saman pemula A. 28 KMT.
(2) Mengguna pakai prinsip relif interplider, perayu tidak membawa suatu tindakan atau membuat apa-apa tuntutan terhadap responden-responden. Oleh itu, jika tiada tuntutan oleh perayu, maka tidak boleh wujud tuntutan balas. Atas kewujudan apa yang kelihatannya seperti tuntutan-tuntutan balas antara responden-responden, perayu telah memfailkan saman interplider untuk mendapatkan bantuan mahkamah; supaya mahkamah memutuskan kepada pihak mana ia bertanggungjawab memulangkan geran-geran. Saman menuntut supaya responden-responden hadir ke mahkamah untuk mengemukakan tuntutan-tuntutan mereka dan supaya tuntutan-tuntutan tersebut diadili.
(3) Di bawah A. 17 KMT tidak terdapat peruntukan bagi membolehkan tuntutan balas dibuat terhadap seseorang yang memohon saman interplider.
(4) Selain mendapati tiada asas kukuh bagi mendukung tuntutan BM terhadap geran-geran, Mahkamah Rayuan juga mendapati keterangan bahawa terdapat pakatan sulit antara perayu dan BM. Setelah mendapati bahawa keperluan di bawah A. 17 k. 1(a) dan A. 17 k 3(3)(b) 17 KMT telah tidak dipenuhi, dan setelah mendapati permohonan relif interplider sepatutnya ditolak oleh Mahkamah Tinggi, Mahkamah Rayuan sepatutnya terus sahaja mengenepikan keputusan Mahkamah Tinggi. Mahkamah Rayuan tiada bidang kuasa untuk meneruskan dengan pertimbangan tuntutan balas Tan, membenarkan tuntutan tersebut dan memerintah ganti rugi (yang akan ditaksir) dibayar oleh perayu kepada Tan.
(5) Keputusan tuntutan Tan terhadap perayu untuk ganti rugi serta pembelaan perayu terhadap tuntutan tersebut, sama ada di atas merit atau sebaliknya, hanya boleh dibuat dalam suatu tindakan yang berasingan oleh Tan terhadap perayu dan bukannya dalam permohonan untuk relif interplider.
Case(s) referred to:
BP Benzin UND Petroleum AG and Another v. European - American Banking Corporation and Others [1978] 1 Lloyd's Rep 364 (dist)
Belcher And Others, Assingnees Of The Maberly, A Bankrupt, v. John Smith [1832] 9 Bing 82 (refd)
Chan King Sheen & KC Tsang v. Co [2002] 3 HKC 209 (dist)
Chin Leong Soon & Ors v. Len Chee Omnibus Co Ltd & Anor [1969] 1 LNS 28 FC (refd)
De La Rue v. Hernu, Peron & Stockwell, Ltd De La Rue, Claimant [1936] 2 All ER 411 (foll)
Frederick and Pelhams Timber Buildings v. Wilkins (Read, Claimant) [1971] 3 All ER 545 (refd)
Glencore International AG v. Shell International Trading And Shipping Co Ltd And Another [1999] 2 All ER (Comm) 922 (refd)
Karya Lagenda Sdn Bhd v. Kejuruteraan Bintai Kindenko Sdn Bhd & Anor [2007] 6 CLJ 18 CA (not foll)
Liberty National Bank & Trust Company Of Oklahoma City v. Acme Tool Division Of Rucker Co [1976] USCA 10 159 (dist)
Malaysia Building Society Bhd v. Tan Sri General Ungku Nazaruddin Ungku Mohamed [1998] 2 CLJ 340 CA (refd)
Metal Scrap Trade Corporation Ltd v. Kate Shipping Co Ltd [1990] 1 WLR 115 (dist)
Mobikom Sdn Bhd v. Inmiss Communication Sdn Bhd [2007] 3 CLJ 295 CA (refd)
Oriental Bank Bhd v. Abdul Razak Rouse [1986] CLJ (Rep) 556; [1986] 1 CLJ 619 HC (refd)
PBJ Davis Manufacturing Co Ltd v. Fahn [1967] 2 All ER 1274 (refd)
Permodalan Plantations Sdn Bhd v. Rachuta Sdn Bhd [1984] 1 CLJ 115; [1984] 2 CLJ (Rep) 360 HC (refd)
Perwira Habib Bank (M) Bhd v. Loo & Sons Realty Bhd & Satu Lagi (No 2) [1996] 3 MLJ 421 (dist)
RHB Bank Bhd v. Comax Sdn Bhd & Anor [1999] 3 CLJ 552 HC (refd)
SI & SI Sdn Bhd v. Hazrabina Sdn Bhd [1996] 3 CLJ 657; [1996] 2 BLJ 115 FC (refd)
Sun Insurance Office v. Galinsky [1914] 2 KB 545 (refd)
Watson v. Park Royal (Caterers), Ltd [1961] 2 All ER 346 (refd)
Legislation referred to:
Arbitration Act 1952, ss. 17, 27
Companies Act 1965, s. 221
Rules of the High Court 1980, O. 14, O. 17 rr. 1(a), 3(1), (3)(b), 5(2), 6, 7, 8, 10, 11, O. 18 r. 19(1), O. 28 rr. 1, 7(1), (2)
Rules of Court 2012, O. 17 r. 5
Federal Rules of Civil Procedure [US], r. 13(a)
Rules of the Supreme Court 1965 [UK], O. 17 rr. 1, 5(2), 8, O. 28 r. 7(3)
Other source(s) referred to:
Mallal's Supreme Court Practice, 1983, 2nd edn, vol 1
Counsel:
For the appellant - Bastian Vendargon (Annou Xavier & Gene Vendargon with him); T/n Azri, Lee Swee Seng & Co
For the 2nd defendant - Su Tiang Joo (Teh Eng Lay & Ong Ing Hou with him); M/s Cheah Teh & Su
[Editor's note: For the Court of Appeal judgment, please see Tan Kau Tiah v. Tetuan Teh Kim Teh, Salina & Co & Anor [2010] 4 CLJ 914.]
Reported by Ashok Kumar
CIVIL PROCEDURE: Summary judgment - Triable issues - Whether raised - Claim for payment of loan - Acknowledgment of debt - Whether contravened Moneylenders Ordinance 1912 and Stamp Act 1949 - Whether a contract of past consideration - Whether defendant unduly influenced into executing acknowledgment of debt - Whether defendant given leave to defend
ALPINIA MURNI SDN BHD v.MATHEW SAN NGIEW [2012] 2 SMC 181 
MAGISTRATE’S COURT, KUCHING
PRADEEP SINGH MG
[CASE NO: KCH-72-3491-10-2011]
21 MARCH 2012
The plaintiff was in the business of supply and delivery of fertilizers and other agriculture imports. The plaintiff had loaned a certain amount of money to a company, Execbuilt Engineering Sdn Bhd (which the defendant was the managing director of) and was claiming for the defendant to repay the plaintiff. The plaintiff filed an application for summary judgment vide encl. 4, which was opposed by the defendant. From the materials adduced, the issues that arose were: (i) whether the acknowledgment of debt (`the acknowledgment of debt') contravened the Moneylenders Ordinance 1912 (`the Ordinance') and also the Stamp Act 1949 (`the Act'); (ii) whether the acknowledgment of debt was a contract of past consideration; (iii) whether the defendant was unduly influenced, put under duress and/or coerced by the plaintiff into executing the acknowledgment of debt; and (iv) whether the defendant was the wrong party to sue, and that the amount claimed by the plaintiff had in actual fact been fully settled.
Held (granting defendant conditional leave to defend):
(1) The Ordinance has since been repealed effective from 1 January 2008, which was prior to when the said sum was advanced. Further, the plaintiff did not fall within the term of "moneylender" for any of such related legislation in force to apply. The plaintiff did not lend the money in the course of its business. The terms on which the acknowledgment of debt was worded showed that the defendant was only obliged to repay the plaintiff the amount of RM24,000 which was the exact sum borrowed. That at most constituted a friendly loan (Floral Trends Ltd v. Li Onn Floral Enterprise (M) Sdn Bhd; refd). Even though there was a late payment interest condition, that did not per se make it a moneylending transaction. Further, the interest was not charged on the sum advanced, but only in the event of late payment (Muhibbah Teguh Sdn Bhd v. Yaacob Mat Yim; refd). (para 8)
(1a) If the said acknowledgment of debt was a promissory note, it would contravene the Act. However, the acknowledgment of debt was not a promissory note. Indeed, the courts do not "cast a wide net" when it comes to defining what is a promissory note for to give it a wide meaning would not lend to business efficiency (International Trust & Finance Ltd v. Chui Pui Cheng; refd). Therefore, the defendant's argument on this point failed. (paras 9, 10 & 11)
(2) An acknowledgment of debt is a valid deed and binding upon the party who executed it. Furthermore, it was done in relation to a sum of money advanced which was done without any proper arrangement as to how it was to be repaid. Indeed, the acknowledgment of debt was necessary for the plaintiff to establish its case. Even if it was a contract for past consideration, it was generally accepted as valid in Malaysia. (para 12)
(3) The defendant had signed the acknowledgment of debt because the company of which the defendant was the managing director owed the plaintiff money. The defendant expressly stated that if he did not sign the acknowledgment of debt, the plaintiff would take legal action against the said company. It is trite law that a threat to commence legal proceedings based on a valid cause of action does not amount to undue influence or duress. (para 13)
(4) Exhibit P1 was a payment voucher issued out by the plaintiff, stating in print that it was issued out to Execbuilt Engineering Sdn Bhd and that a payment of RM24,000 was made from the plaintiff to the said company. Handwritten and appearing next to the print of the said company was the defendant's name. Clearly, the payment was received by the defendant who had signed it. On the other hand, exh. P8 was an official receipt issued by the plaintiff to Execbuilt Engineering Sdn Bhd for RM50,000 being payment for `partial payment of amount owing to the plaintiff company'. Thus, the defendant contended that the RM24,000 debt had been paid in full. However, it was this court's view that the combined effect of exh. P1 and the acknowledgement of debt was that the plaintiff and the defendant had the consensus that the money was to be repaid by the defendant. (paras 15 & 16)
(5) The appropriate order was for the defendant to be given leave to defend with condition that the sum claimed or a lesser sum be paid into court. The defendant's defence that the sum claimed for had been paid off did cast a slight doubt over the plaintiff's entitlement to the money. It is not the practice of the courts to shut out a defendant unless it is certain that the plaintiff ought to be entitled to judgment. The matter, therefore, ought to be resolved at trial. (paras 18 & 19)
(6) This court would grant the defendant leave to defend the plaintiff's claim on condition that a sum of RM12,000 or any other security to the satisfaction of the plaintiff, be deposited into court, failing which the plaintiff would be at liberty to enter judgment for the full amount claimed for. (para 24)
Case(s) referred to:
Alliance (Malaya) Engineering Co Sdn Bhd v. San Development Sdn Bhd [1974] 1 LNS 5 FC (refd)
Bank Negara Malaysia v. Mohd Ismail Ali Johor & Ors [1992] 1 CLJ 627; [1992] 1 CLJ (Rep) 14 SC (refd)
British and Commonwealth Holdings Plc v. Quadrex Holdings Inc [1989] QB 842 (refd)
Cho Chin Huat v. Lee Boo Hock [1969] 1 LNS 29 FC (refd)
Comptroller-General of Inland Revenue, Malaysia v. Weng Lok Mining Co Ltd [1969] 1 LNS 32 HC (refd)
Credit Lyonnais Bank Nederland NV v. Burch [1997] 1 All ER 144 (refd)
Fieldrank Ltd v. Stein [1961] 3 All ER 683 (refd)
Floral Trends Ltd v. Li Onn Floral Enterprise (M) Sdn Bhd [2006] 6 CLJ 525 HC (refd)
Foong Weng Tat v. Vu Siew Chin [1974] 1 LNS 34 FC (refd)
Guthrie Waugh Bhd v. Malaippan Muthucumaru [1970] 1 LNS 31 HC (refd)
International Trust & Finance Limited v. Chui Pui Cheng [1986] 1 LNS 1 HC (refd)
Jacobs v. Booth's Distillery Co [1901] 85 LT 262 (refd)
Lee Wah Bank Ltd v. Chee Kong Electrical Engineering Sdn Bhd & Ors [1999] 2 CLJ 977 HC (refd)
Lim Goh Huat @ GS Lim v. Saw Keng See [1998] 1 LNS 274 HC (refd)
Malayan Insurance (M) Sdn Bhd v. Asia Hotel Sdn Bhd [1987] 1 CLJ 246; [1987] CLJ (Rep) 182 SC (refd)
Maria Chia Sook Lan v. Bank of China [1975] 1 LNS 100 PC (refd)
Muhibbah Teguh Sdn Bhd v. Yaacob Mat Yim [2005] 4 CLJ 853 HC (refd)
National Company For Foreign Trade v. Kayu Raya Sdn Bhd [1984] 2 CLJ 220; [1984] 1 CLJ (Rep) 283 FC (refd)
Navaradnam v. Suppiah Chettiar [1973] 1 LNS 98 FC (refd)
Nawab Major Sir Mohamed Akbar Khan v. Attar Singh & Ors [1933] 1 LNS 51 PC (refd)
Ooi Boon Teong (Trading as Mitsu-Da Construction) v. MBF Construction Sdn Bhd [1994] 1 LNS 216 HC (refd)
Perkapalan Shamelin Jaya Sdn Bhd v. Alpine Bulk Transport New York [1998] 1 CLJ 424 CA (refd)
RHB Bank Bhd v. Majmekar Holdings Sdn Bhd & Ors [2009] 9 CLJ 73 HC (refd)
Sinodaya Industrial Gas Sdn Bhd v. Astrol Hover Engineering Sdn Bhd & Another Cases [2002] 1 LNS 208 HC (refd)
Legislation referred to:
Rules of the High Court 1980, O. 14
Subordinate Courts Rules 1980, O. 26A
Kaunsel:
For the plaintiff - Colin Lai; M/s Lai & Co Advocates
For the defendant - Ignatius Melaka Nisau; M/s Nisau & Co
Reported by Suhainah Wahiduddin