COURT OF APPEAL, MALAYSIA
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www.ipsofactoJ.com/appeal/index.htm [2000] Part 4 Case 1 [CAM] |
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COURT OF APPEAL, MALAYSIA |
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Coram N.H. CHAN JCA |
T.T. Lee -
vs - Hong Leong Finance Bhd |
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ABU MANSOR ALI JCA AHMAD
FAIRUZ JCA |
5
FEBRUARY 2000 |
Judgment
N.H. Chan, JCA
The
plaintiff Hong Leong Finance Bhd had sued Tamparuli Granite Quarry (Sabah)
Sdn Bhd and its guarantors, Sek Ann Thong and Lee Tain Tshung [T.T. Lee] for arrears of
rental in a leasing agreement. The action was commenced in the High Court at
Kota Kinabalu in Sabah and Sarawak.
The
plaintiff had applied under Order 18 r 19 of the Rules of the High Court
1980 to strike out the defence of the defendants and for judgment to be
entered against them. The High Court on February 16, 1987 granted the
application and judgment was obtained against all the defendants for
RM1,211,523.66. The defendants did not appeal against this judgment. In fact
it was not until very much later and after the plaintiff had taken execution
proceedings on the judgment that the third defendant Lee Tain Shung
decided to apply in 1995 to set aside the judgment against him. His
summons-in-chambers was dated January 16, 1995. On June 10, 1997 the
Judge-in-chambers dismissed Lee's application to set aside the judgment. Lee
appeals to the Court of Appeal.
IRREGULAR (VOIDABLE) JUDGMENTS AND THOSE IRREGULAR JUDGMENTS THAT WERE IN THE OLDER DAYS DESCRIBED AS "A NULLITY" OR "VOID"
Before us, Mr. TG Lim for Lee (now the appellant) argues that the judgment was obtained for an amount in excess of what was due and it is therefore a nullity (or void). Counsel contends that the appellant is entitled as of right (or in Latin, ex debito justitiae) to apply to have the judgment that the plaintiff (now the respondent in this appeal) had obtained against him on February 16, 1987 set aside.
However, Mr. Lim was not astute enough to know that nowadays words like "nullity", "void" and "voidable" should not be used to describe judgments or orders that are made by a court of unlimited jurisdiction in the course of contentious litigation. I would like to take this opportunity to point out that-
Isaacs v Robertson [1985] AC 97 (PC) per Lord Diplock at p 103
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Such an order is either irregular or regular. If it is irregular it can be set aside by the court that made it upon application to that court; if it is regular it can be set aside by an appellate court upon appeal if there is one to which an appeal lies. |
TNB v Prorak Sdn Bhd [2000] 1 AMR 1071 per Gopal Sri Ram JCA at p 1085
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It is settled law that the expressions "nullity", "void" and "voidable" are wholly inappropriate to describe an order made by a court of unlimited jurisdiction. |
It is misleading to seek to draw a distinction between orders that are "void" (in the sense that they can be ignored with impunity by those persons who are affected by such orders) and orders that are "voidable" (which may be enforced unless and until they are set aside).
In Isaacs v Robertson, Lord Diplock who delivered the judgment of the Board (Lord Diplock, Lord Keith of Kinkel, Lord Roskill, Lord Brightman and Lord Templeman) said, at 102, 103:
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Their Lordships would, however, take this opportunity to point out that in relation to orders of a court of unlimited jurisdiction it is misleading to seek to draw distinctions between orders that are "void" in the sense that they can be ignored with impunity by those persons to whom they are addressed, and orders that are "voidable" and may be enforced unless and until they are set aside. Dicta that refer to the possibility of there being such a distinction between orders to which the descriptions "void" and "voidable" respectively have been applied can be found in the opinions given by the judicial Committee of the Privy Council in the appeals Marsh v Marsh [1945] AC 271, 284 and MacFoy v United Africa Co Ltd [1962] AC 152, 160; but in neither of those appeals nor in any other case to which counsel has been able to refer their Lordships has any order of a court of unlimited jurisdiction been held to fall into a category of court orders that can simply be ignored because they are void ipso facto without there being any need for proceedings to have them set aside. The cases that are referred to in these dicta do not support the proposition that there is any category of orders of a court of unlimited jurisdiction of this kind; what they do support is the quite different proposition that there is a category of orders of such a court which a person affected by the order is entitled to apply to have set aside ex debito justitiae in the exercise of the inherent jurisdiction of the court without his needing to have recourse to the rules that deal expressly with proceedings to set aside orders for irregularity and give to the judge a discretion as to the order he will make. The judges in the cases that have drawn the distinction between the two types of orders have cautiously refrained from seeking to lay down a comprehensive definition of defects that bring an order into the category that attracts ex debito justitiae the right to have it set aside, save that specifically it includes orders that have been obtained in breach of rules of natural justice. The contrasting legal concepts of voidness and voidability form part of the English law of contract. They are inapplicable to orders made by a court of unlimited jurisdiction in the course of contentious litigation. Such an order is either irregular or regular. If it is irregular it can be set aside by the court that made it upon application to that court; if it is regular it can only be set aside by an appellate court upon appeal if there is one to which an appeal lies. [emphasis added] |
Isaacs v Robertson was an appeal to the Judicial Committee of the Privy Council from the Court of Appeal of Saint Vincent and the Grenadines in the West Indies where, apparently, they did not have anything similar to Order 2 r 1 of our Rules of the High Court 1980 (RHC). Yet the Privy Council has held that it is misleading to seek to draw a distinction between orders that are "void" so that they can simply be ignored by those persons to whom they are addressed without there being any need for proceedings to have them set aside, and orders that are "voidable" and may be enforced unless and until they are set aside.
In this country we have RHC Order 2 r 1(1) which had (as the Privy Council also had) done away with the old distinction between nullities and irregularities so that a failure to comply with the requirements of the Rules of the High Court would be treated as an irregularity and would not nullify the proceedings, any step taken in the proceedings, or any document, judgment or order in the proceedings (see Order 2 r 1(1)). Order 2 r 1(1) and (2) is as follows:
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1. |
(1) |
Where, in beginning or purporting to begin any proceedings or at any stage in the course of or in connection with any proceedings, there has by reason of any thing done or left undone, been a failure to comply with the requirements of these rules, whether in respect of time, place, manner, form or content or in any respect, the failure shall be treated as an irregularity and shall not nullify the proceedings, any step taken in the proceedings, or any document, judgment or order therein, |
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(2) |
Subject to paragraph (3), the Court may, on the ground that there has been such a failure as is mentioned in paragraph (1), and on such terms as to costs or otherwise as it thinks just, set aside either wholly or in part the proceedings in which the failure occurred, any step taken in those proceedings or any documents, judgment or order therein or exercise its powers under these rules to allow such amendments (if any) to be made and to make such order (if any) dealing with the proceedings generally as it thinks fit. [emphasis added] |
For convenience I have underlined the words in r 1(1) to show that a judgment which failed to comply with the requirements of the Rules of the High Court would be treated as an irregular judgment and it would not be nullified by it. RHC Order 2 r 1(1) sets out the provision that any
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failure to comply with [the Rules of the High Court] .... shall be treated as an irregularity and shall not nullify the proceedings, any step taken in the proceedings, or any document, judgment or order therein |
Although
a judgment obtained as a result of a failure to comply with statutory
requirements is not covered by this rule.
The provisions in RHC Order 2 r 1 are in pari materia with the English Rules of the Supreme Court 1965 (RSC) Order 2 r 1. So that, in this country as in England the distinction between nullity and irregularity disappears (at least, in regard to "a failure to comply with the requirements of these rules"): see Harkness v Bell's Asbestos & Engineering Ltd [1967] 2 QB 729, at 735, 736, CA where Lord Denning MR said:
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In my opinion, therefore, Blain J. was in error, and so was James J. This new rule does away with the old distinction between nullities and irregularities. Every omission or mistake in practice or procedure is henceforward to be regarded as an irregularity which the court can and should rectify so long as it can do so without injustice. It can at least be asserted that "it is not possible for an honest litigant in Her Majesty's Supreme Court to be defeated by any mere technicality, any slip, any mistaken step in his litigation." (See Pontin v Wood [1962] 1 QB 594, per Holroyd Pearce LJ at 609). That could not be said in 1963: see In re Pritchard, deed [1963 ]Ch 5 02. But it can be in 1966. The rule does it. This is plainly a case where we should put the matter right under the new provisions and the leave should be treated as granted properly. I would allow the appeal accordingly. |
In the case of Harkness v Bell's Asbestos & Engineering Ltd as the plaintiff's claim would have been barred by the Limitation Acts of 1939 and 1954, his solicitors, before issuing a writ, applied ex parte to a district registrar under s 1 of the Limitation Act 1963 for leave of the court to proceed for the purposes of the Act. On April 16, 1964 the district registrar issued an order that s 2(1) of the Act of 1939 should not afford a defence to the plaintiffs proposed claim for damages against his employers. On April 17, 1964 a writ was issued. The defendants applied to set aside the district registrar's order on the grounds
that he had no jurisdiction to make it because the jurisdiction to grant such leave was vested in a judge-in-chambers by RSC, Ord. 128 r 1(1), and
that any order should have been for leave to proceed for the purposes of s 1 of the Act of 1963 (and not in the form as ordered by the registrar).
On May 10, 1966, Blain J, believing that the registrar's order was a nullity, made no order on the application. The plaintiff then applied under RSC, Ord. 2 r 1 to rectify the registrar's order by asking the Judge-in-chambers to treat the registrar's order as valid (see Ord. 2 r 1 (2) which provides that "the court may .... exercise its powers under these rules .... to make such order (if any) dealing with the proceedings generally as it thinks fit.").
On
July 11, 1966 James J dismissed the plaintiffs application. The plaintiff
appealed. The Court of Appeal allowed the appeal and held that the
application to the district registrar constituted "proceedings"
within RSC, Ord. 2 r1(1) under which the court had the power (see Ord. 2 r
1(2)) to correct the errors made by the registrar as irregularities by
making an order that treated the leave as having been granted properly (see
above, ibid, per Lord Denning MR at 736).
However, unlike Harkness v Bell's Asbestos & Engineering Ltd (above) the plaintiff in the present case did not apply under RHC, Ord. 2 r 1 (2) to correct the judgment by asking the judge to exercise his powers under r 1 (2) to amend the judgment sum to the correct amount. In the old days before Ord. 2 r 1 (2) took its present form, it was thought that it was the duty of the creditor if he obtained a wrong judgment to have it set right and not for the debtor to do so. See per Buckley LJ in Muir v Jenks [1913] 2 KB 412, CA, at 415:
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Both the Master and the judge appear to have thought that the debtor himself ought to have taken steps to get the judgment corrected and that for default in so doing he was now precluded by delay from having the judgment set aside. In my opinion that is wrong. It is the duty of the creditor if he obtains a wrong judgment to have it set right. It is not the duty of the debtor against whom he has obtained the judgment to do so. |
But that has all been changed by the present Ord. 2 r 1 (2) which gives the court the power to correct the judgment by amendment regardless of who makes the application. An irregular step judgment or order remains irregular until application is successfully made to the court to correct it: Metroinvest Anstalt v Commercial Union Assurance plc [1985] 1 WLR 513; [1985] 2 AII ER 318, CA. This is how it was put by Cumming-Bruce LJ, ibid ([1985] 1 WLR at 520; [1985] 2 All ER at 323):
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In
my view it is plain that on the ordinary language of Ord. 2 r 1
where there is a failure to comply with the rules, what has been
done or left undone remains irregular until the court takes action
either to kill the particular proceeding or to cure it .... As I construe Ord. 2 r 1, from the moment a step in proceedings is tainted by irregularity through failure to comply with the rules, the irregular step or document (judgment or order) remains irregular inter partes until the matter has been brought before the court and the court has decided in which way to exercise the jurisdiction conferred by Ord. 2 r 1(2), Ord. 2 r 2 does not restrict the power of the court in the sense of restricting its jurisdiction, and does not have the effect of suspending the irregularity until the application under Ord. 2 r 2 is made. The purpose and effect of Ord. 2 r 2 is to prescribe the procedure if and when an opposite party decides to apply so that the court on recognising the irregularity, may exercise its powers under r 1(2) by taking the action of killing or curing the irregular proceeding [judgment or order]. |
A judgment or order of the court which is irregular, however, cannot be ignored with impunity by the person to whom it is addressed; it must be observed unless and until it is set aside or rectified by amendment under. Ord. 2 r 1(2). In other words, all irregular judgments or orders will still be in force until they are set aside but this will require an application to the court that made them. The application is made under the Rules of the High Court that deal expressly with proceedings to set aside judgments or orders for not complying with the requirements of the rules (RHC). Such an application can be made under Ord. 2 r 2 or it can be made under another provision of the rules (RHC) that may be applicable independently of or in conjunction with Ord. 2. But if the application to set aside the irregular judgment or order is made under Ord. 2 r 2, then Ord. 2 r 2(2) sets out the procedure for such an application. Ord. 2 r 2(2) states:
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An application under this rule may be made by summons or motion and the grounds of objection must be stated in the summons or notice of motion. |
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under r 2(1) the application would not be allowed unless it is made within a
reasonable time and before the party applying has taken any fresh step after
becoming aware of the irregular judgment or order. The irregular judgment or
order remains irregular inter partes until it has been brought
before the court so that the court on recognising the irregularity, may
exercise its powers under Ord. 2 r 1(2) by taking the action of setting
aside or curing the irregular judgment or order. Once the matter has been
brought before the court. Ord. 2 r 1 (2) gives the court the widest
possible power in order to do justice, whether or not an application under Ord.
2 r 2 is before it.
It is to be noted that Ord. 2 r 1(2) provides the court with a discretion
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to set aside either wholly or in part .... any .... judgment or order (in the proceedings) or exercise its powers under these rules (RHC) to allow such amendments (if any) to be made and to make such order (if any) dealing with the proceedings as it thinks fit |
This rule gives the court the widest possible power in order to do justice (Metroinvest Anstalt v Commercial Union Assurance Co plc, supra, [1985] 1 WLR at 521; [1985] 2 All ER at 324). This is what Cumming-Bruce LJ, ibid, said:
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I would say that in most case the way in which the court exercises its powers under Ord. 2 r 1(2) is likely to depend upon whether it appears that the opposite party has suffered prejudice as a direct consequence of the particular irregularity, that is to say, the particular failure to comply with the rules. But I would construe Ord. 2 r 1(2) as being so framed as to give the court the widest possible power in order to do justice. [emphasis added] |
And Slade LJ put it in this way, he said (ibid [1985] 1 WLR at 522, 523; [1985] 2 All ER at 325):
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Where, in the course of proceedings, the court finds that a failure of the nature referred to in Ord. 2, r 1(1) has occurred, which has not been waived by the other party either expressly or by implication, it is given by Ord. 2 r 1(2) a choice of courses to pursue at its own discretion, whether or not an application under Ord. 2 r 2 is before it. In such a situation, in the exercise of its discretion under rule 1(2), it may either adopt the more draconian course of setting aside wholly or in part the proceedings in which the failure occurred, or the relevant step taken in those proceedings or the relevant document or order, alternatively, it may 'make such order .... dealing with the proceedings generally as it thinks fit. The last mentioned words are, in my opinion, manifestly wide enough to empower it to make a dispensing order waiving the relevant irregularity, see, for example, Leal v Dunlop Bio-Processes International Ltd [1984] 1 WLR 874, 880F, per Stephenson LJ. |
He continued (ibid, [1985] 1 WLR at 523; [1985] 2 All ER at 325, 326):
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.... Once a party to litigation has been guilty of a failure of the nature mentioned in Ord. 2 r 1(1) which has not been waived by the other party, the court, in my opinion, has a general discretion under paragraph (2) to make such consequential orders dealing with the proceedings generally as it thinks fit, as Stephenson LJ, in the Leal case [1984] 1 WLR 874, 882D, expressly recognised. |
Furthermore, he also said (ibid, on the same page):
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Furthermore, I accept that prejudice or lack of prejudice to the other party to the litigation is clearly a highly relevant matter in considering the interests of justice, it may be the all-important one. |
The court, when exercising its discretion to correct irregularities under Ord. 2 r 1(2), will perform its task in this way:
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In most cases the way in which the court exercises its powers under Ord. 2 r 1(2) is likely to depend upon whether it appears that the opposite party has suffered prejudice as a direct consequence of the irregularity, but the rule is so framed as to give the court the widest possible power. Hence prejudice, or lack of prejudice, although often the all-important factor in the exercise of the discretion, is not always the only relevant factor (Metroinvest Anstalt v Commercial Union Assurance Co plc [1985] 1 WLR 513, [1985] 2 AII ER 318.CA). |
the
Supreme Court Practice 1997, Vol 1, paragraph 2/1/1, Exercise of discretion
to correct irregularities.
Even though the court has the widest possible power to do justice, not all irregularities can be cured under Ord. 2 r 1(2). There is no power to remedy irregularities of a more fundamental kind. Sometimes the irregularity is so fundamental a defect in procedure that the court is unwilling to exercise the discretion in Ord. 2 r 1(2) to disregard the irregularity. In such a case, the court will decline to exercise its power under r 1(2) to make any dispensing order waiving the irregularity.
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The power given to the court by Ord. 2 r 1 is a power to cure irregularities consisting of failures to comply with the rules. There is no power to remedy failures of a more fundamental kind. Thus the requirement that the plaintiff be in existence at the date of the commencement of the proceedings is a basic principle of law rather than a requirement of the rules. If an action is brought by a non-existent company, it must therefore be struck out: except in the case of a mere misnomer, the non-existent plaintiff cannot apply to have another person joined as a co-plaintiff (Dubai Bank Ltd v Galadari (No 4), The Times, February 23, 1990) |
[Supreme Court Practice 1997, Vol 1, para 2/1/1, Exercise of power under the rule.]
In Bernstein v Jackson [1982] 1 WLR 1082; [1982] 2 All ER 806, the failure to renew a writ for service is an irregularity which constitutes such a fundamental defect in procedure that the court would not exercise the discretion to disregard it under Ord. 2 r 1(2), since Ord. 6 r 8 provides a compendious set of rules for the extension and renewal of writs.
In Lam Kong Co Ltd v Thong Guan & Co (Pte) Ltd [1985] 2 MLJ 429 the plaintiff in an action for specific performance of a contract for the sale of land had entered a default judgment against the defendant when it failed to enter an appearance. The plaintiff had acted contrary to the requirements of Ord. 13 r 12 which is for the action to be set down on a motion for judgment. The Supreme Court held that the irregular judgment constituted such a fundamental defect that it was not curable. This is what Abdul Hamid CJ (Malaya) said, at 431:
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It is to be observed that the effect of the rule [Ord. 13 r 12] was to disentitle the respondents from entering default judgment on a writ specially indorsed for specific performance. They were to proceed in the manner provided by the Rules and that was to set down the action on motion for judgment. It was only on the further step being taken that it was open for the court or judge to consider giving judgment as upon the claim the court or judge should consider the respondents to be entitled. At that point of time, therefore, judgment in default was not only given in breach of r 12 but had resulted in a failure to comply with r 11 of 0rder 27. In the circumstances, we are constrained to hold that the breach and the non-compliance were not merely irregularities but fundamental defects. The fundamental defect was not in our view curable as the effect of the breach and non-compliance was to defeat the right of the other party to the action. [emphasis added] |
In White v Weston [1968] 2 QB 647, CA, it was held (Russell and Sachs LJJ) that a judgment should be set aside unconditionally ex debito justitiae without referring to the new rule (i.e. RSC Ord. 2 r 1(2)) because it was a plain case of the defendant being totally unaware of the proceedings at all. Both Russell and Sachs LJJ thought that one did not get much assistance from considering whether a judgment is to be described as having been obtained irregularly or whether it was a nullity. Russell LJ said, ibid, at 659 (and Sachs LJ agreed with him, ibid, 662):
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I do not my self attach importance to the question whether it is proper to label a judgment obtained in circumstances such as this as "irregular" or "a nullity". The defect is in my judgment so fundamental as to entitle the defendant as of right, ex debito justitiae, to have the judgment set aside. |
Yet in Ahmed Abdul Rahman v Arab-Malaysian Finance Bhd [1996] 1 AMR 215, FC, Edgar Joseph Jr FCJ is found to be still using the outdated label "nullity" to describe an irregularity in the judgment that is so fundamental that a court will refuse to exercise its power under Ord. 2 r 1(2) to waive the irregularity. This kind of case entitles the defendant as of right, ex debito justitiae, to have the judgment set aside. This is what he said, at 225:
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It is elementary that an irregular judgment is one which has been entered otherwise than in strict compliance with the rules or some statute or is entered as a result of some impropriety which is considered to be so serious as to render the proceedings a nullity. |
But
then what he did was to copy the phrase from this passage in the Supreme
Court Practice 1995, Vol 1, paragraph 2/1/1. For convenience I have
underlined the relevant part.
It reads:
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the above distinction between nullity and mere irregularity disappears (see Harkness v Bell's Asbestos & Engineering Ltd [1967] 2 QB 729, 735, CA) at any rate in regard to 'a failure to comply with the requirements of these rules', though it may still be that there are other failures to comply with statutory requirements or other improprieties so serious as to render the proceedings in which they occur and any order made therein a nullity. |
And he then went on to hold, in giving the judgment of the court at 235, that:
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.... the default judgment was by reason of uncertainty, a nullity, and the amendment made by the judge to it by deleting the words ' on monthly rests', did not cure that defect. |
Here
again he used the word "nullity" which was inappropriate. It could
be phrased in such a way as to avoid using the word "nullity" viz.
that the default judgment was by reason of uncertainty serious enough to
render it incurable. The court, in this kind of case, would decline to
exercise its powers under Ord. 2 r 1(2) to cure the irregularity. We do
not get much assistance from using the words "nullity and
"void" to describe a judgment that has been obtained with a defect
which is so fundamental as to entitle the defendant as of right, ex debito
justitiae, to have the judgment set aside. In fact, the use of these
words adds to the confusion.
Nowadays it is no longer appropriate to use the expressions "nullity" and "void" to describe an irregularity in a judgment or order which constitutes such a fundamental defect in procedure that the court will not exercise its discretion under Ord. 2, r 1(2) to disregard the irregularity. See Abdul Hamid CJ (Malaya) in Lam Kong Co Ltd v Thong Guan & Co (Pte) Ltd, supra, where he said, at 431,
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the breach and the non-compliance were not merely irregularities but fundamental defects. The fundamental defect was not .... curable as the effect of the breach and non-compliance was to defeat the right of the other party to the action. |
See also Gopal Sri Ram JCA in the Federal Court case of Lai Yoke Ngan v Chin Teck Kwee [1997] 3 AMR 2458. He said at pp 2467-2468:
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It must be borne in mind that the default judgment in question is merely irregular and not a nullity. Orders and judgments made or entered by such a court, in private law litigation, in the exercise of its coercive power upon default of a party to a suit, even when made or entered in breach of a rule of court or of practice, are merely irregular. They are not nullities. And it is quite wrong to describe them as such. |
And he concluded thus, at pp 2472:
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The proposition that is to be gathered from the decision of Lam Kong is this. A judgment in default of appearance entered by a plaintiff, or, for that matter, a counterclaiming defendant, in breach of the terms of Ord. 13 r 6(1), may be set aside ex debito justitiae. And on an application of the proposition to the facts of that instant appeal, there is no doubt whatsoever that the judgment in default obtained in the present case was fundamentally flawed. |
Before Ord. 2 took its present form, the previous rule had been Ord. 70 r 1 the terms of which had been:
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Non-compliance with any of these rules, or with any rule of practice for the time being in force, shall not render any proceedings void unless the court or a judge shall so direct, but such proceedings may be set aside either wholly or in part as irregular, or amended, or otherwise dealt with in such manner and upon such terms as the court or judge shall think fit. [emphasis added] |
This is explained by Gumming Bruce LJ in Metroinvest Anstalt v Commercial Union, CA, supra. He referred to the old Ord. 70 r 1 and said [1985] 1 WLR at 518; [1985] 2 All ER at 322):
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As a matter of construction of that rule it was clear that where there had been irregularity by non-compliance with the rules, the consequence would be that by reason of the irregularity, unless the court so directed, the power of the court when an irregularity was noted was either to set the proceedings aside or to amend them or otherwise deal with them in such a manner and on such terms as the court or judge thought fit. [emphasis added] |
And he gave his conclusion, ibid, thus:
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But
under the old rule there was a difficulty. What was the position if
the purported proceedings had such a character that they could not
be regarded as legal proceedings within the rule at all? In that
case, there were no proceedings; they were a nullity. So the court
had to decide, if the purported proceedings had not complied with
the rule of court, whether the court could exercise its jurisdiction
under 0rder 70 r 1. In those cases in which it was decided that the
characteristics of the purported proceedings were such that they
should be regarded as a nullity, and so void, there was nothing for
the court to exercise jurisdiction upon for the purposes of Ord. 70
r 1. It is quite clear from Harkness v Bell's Asbestos and Engineering Ltd [1967] 2 QB 729, 735 that the mischief at which the revision of the rules was aimed was to remove the distinction between irregular purported proceedings which were ab initio a nullity from irregular proceedings which were not void ab initio. The content of Ord. 2 is designed to enable the court, whenever faced with anything done or left undone in proceedings which constitutes a failure to comply with the requirements of the rules, to exercise powers conferred by the rules without having first to decide whether the Jurisdiction conferred by the rules applies at all. |
So the position, before Ord. 2 took its present form, was this. Before, under the old Ord. 70 r 1 there were purported proceedings that were ab initio a nullity. So that there were no proceedings at all, they were a nullity and so void. There was nothing for the court to exercise jurisdiction upon for the purposes of Ord. 70 r 1. On the other hand, there were irregular proceedings that were not void ab initio, so that, if they had not complied with the rules of court, the court could exercise its jurisdiction upon them for the purposes of Ord. 70 r 1. Lord Goddard in Marsh v Marsh [1945] AC 271 (PC) explained the effect of a void judgment or order. He said, at 284:
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A considered number of cases were cited to their Lordships on the question as to what irregularities will render a judgment or order void or only voidable. Anlaby v Praetorius (1888) 20 QBD 764 and Smurfhwaite v Hannay [1889] AC 494 are leading examples of the former, while Fry v Moore (1889) 23 QBD may be said to illustrate the latter. The practical difference between the two is that if the order is void the party whom it purports to affect can ignore it and he who has obtained it will proceed thereon at his peril, while if it be voidable only the party affected must get it set aside. [emphasis added] |
So
that in the old days of Ord. 70 r 1 the court had to decide whether the
jurisdiction conferred by the rules applies. In those cases where there had
been improprieties so serious as to render the proceedings in which they
occur, and any order made therein, a nullity, and so void, there was nothing
for the court to exercise jurisdiction upon for the purposes of Ord. 70 r
1. But in the cases where the proceedings were not void ab initio
and there had been irregularities by non-compliance with the rules, the
court could exercise the jurisdiction conferred on it by Ord. 70 r 1 upon
them.
Proceedings,
and any judgment or order made therein, that were a "nullity" or
"void" did not exist at all. They were non-existent. A judgment
that was a nullity was non-existent so that it could be ignored with
impunity by the person to whom the order was addressed, see per
Lord Goddard in Marsh v Marsh, supra, at 284. But then as a
matter of law there is no category of court orders that can simply be
ignored because they are void ipso facto without there being any need
for proceedings to have them set aside. It is in order to avoid such an
anomaly that Ord. 2 took its present form by removing the distinction
between irregular purported proceedings, judgments or orders which were ab
initio a nullity from irregular proceedings which were not void ab
initio.
IRREGULAR JUDGMENTS OR ORDERS ARE ENFORCEABLE UNTIL SET ASIDE
Under the old Ord. 70 r 1 irregular judgments or orders that were a nullity or void could be ignored with impunity by those persons to whom the orders were addressed. See per Lord Goddard in Marsh v Marsh, supra, where he said this (at 284):
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The practical difference between the two is that if the order is void the party whom it purports to affect can ignore it .... while if it be voidable only the party affected must get it set aside. |
But, as pointed out by Lord Diplock in Isaacs v Robertson (PC), supra, at 102,
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it is misleading to seek to draw distinctions between orders that are ' void' in the sense that they can be ignored with impunity by those persons to whom they are addressed, and orders that are 'voidable' and may be enforced unless and until they are set aside. |
Lord Diplock went on to show that the distinction between 'void' and 'voidable' orders is not supported by authority. He said, ibid, at 102, 103:
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Dicta that refer to the possibility of there being such a distinction between orders to which the descriptions 'void' and 'voidable' respectively have been applied can be found in the opinions given by the Judicial Committee of the Privy Council in the appeals Marsh v Marsh (1945] AC 271, 284 and MacFoy v United Africa Co. Ltd [1962] AC 152, 160; but in neither of those appeals nor in any other case to which counsel has been able to refer their Lordships has any order of a court of unlimited jurisdiction been held to fall into a category of court orders that can simply be ignored because they are void ipso facto without there being any need for proceedings to have them set aside. The cases that are referred to in these dicta do not support the proposition that there is any category of orders of a court of unlimited jurisdiction of this kind. |
Judgments
and orders of the High Court are either irregular or regular. An irregular
judgment or order of the High Court can be set aside by the court that made
it upon application to that court. Except for default judgments or judgments
that have been obtained against absent parties, a regular judgment or order
of the High Court can only be set aside by an appellate court upon appeal to
it if there is a court to which an appeal lies.
There
is no known category of court orders that can be ignored on the ground that
they are void without there being any requirement for proceedings to have
them set aside. There is, however, a category of orders of the High Court in
which a person affected by the order is entitled to apply to have it set
aside ex debito justitiae (as of right) in the exercise of the
inherent jurisdiction of the court that made it without his being required
to have recourse to the Rules of the High Court that deal expressly with
proceedings to set aside judgments or orders for irregularity of procedure.
This type of orders usually refers to judgments or orders that have failed
to comply with statutory requirements.
An irregular judgment or order of the High Court, even one where the defect is so fundamental that the court will not exercise the discretion to disregard the irregularity under Ord. 2 r 1(2) cannot be ignored with impunity by the party to whom the judgment or order is addressed. Such a judgment or order remains in force unless and until it has been set aside by the court that made the judgment or order. This is how Lord Diplock put it in Isaacs v Robertson (PC), supra, at 101, 102:
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The main attack by the defendant on the Court of Appeal's judgment was based on the contention that as a consequence of the operation of Ord. 34 r 11(1)(a) of the Rules of the West Indies Associated States Supreme Court (rev 1970) the order made by the High Court granting that interlocutory injunction on May 30, 1979 was a nullity; so disobedience to it could not constitute a contempt of court. Glasgow J accepted this contention: the Court of Appeal rejected it, in their Lordships' view correctly, upon the short and well established ground that an order made by a court of unlimited jurisdiction, such as the High Court of Saint Vincent, must be obeyed unless and until it has been set aside by the court. For this proposition Robotham JA (Acting) cited the passage in the judgment of Romer LJ in Hadkinson v Hadkinson [1952] P 285, 288:
This, in their Lordships' view, says all that needs to be said upon this topic. It is in itself sufficient reason for dismissing this appeal. |
The
passage in the judgment of Romer LJ in Hadkinson v Hadkinson [1952] P
285, 288 which was cited with approval by Lord Diplock in Isaacs v
Robertson, see above, has been endorsed by the Supreme Court in Pembinaan
KSY Sdn Bhd v Lian Seng Properties Sdn Bhd [1991] 1 MLJ 100 (see per Hashim
Yeop A Sani CJ (Malaya) at 102).
There is no such thing as an irregular judgment or order of the High Court that can be ignored with impunity by those persons who are affected by the judgment or order. A judgment or order of the High Court is either irregular or regular. An irregular judgment or order of such a court can be enforced unless and until it is set aside. An application has to be made to the court that made the irregular judgment or order to have such judgment or order set aside.
Such an application is made to the court that made it. The application is made under the Rules of the High Court that deal expressly with proceedings to set aside judgments or orders for irregularity under order 2 r 2 or under other provisions of the rules (RHC) without the need to have recourse to Ord. 2 r 2.
However,
in a certain type of case (such as a judgment or order which did not comply
with statutory requirements) an application can be made to have the
irregular judgment or order set aside ex debito justitiae (as
of right) under the inherent jurisdiction of the court without the applicant
being required to have recourse to the rules that deal expressly with
proceedings to set aside orders for irregularity. For this, see below under
the heading "Applications to set aside irregular judgments or orders
under the inherent jurisdiction of the court without being required to have
recourse to the rules that deal expressly with proceedings to set aside
judgments or orders if or irregularity" and Ord. 92 r 4.
SETTING ASIDE IRREGULAR JUDGMENTS FOR IRREGULARITY OF PROCEDURE UNDER ORDER 2 AND SETTING ASIDE OF DEFAULT JUDGMENTS UNDER OTHER PROVISIONS OF THE RHC
(1)
Setting aside irregular judgments for
irregularity of procedure under Ord. 2
It
must be noted that Ord. 2 deals expressly with, inter alia,
irregular judgments or orders which could either be set aside or rectified
under r 1(2). But, in other parts of the Rules (RHC) there are also other
provisions for setting aside judgments or orders of the High Court without
the need to have recourse to Ord. 2. I shall deal with this aspect in a
moment (see below under the heading "(2) setting aside of default
judgments under other provisions of the RHC").
There are two preconditions that must be fulfilled or it will be fatal to an application to have a judgment or order set aside for irregularity of procedure under Ord. 2. The grant of the application is only permissible if it is made within a reasonable time and before the party applying has taken any fresh step after becoming aware of the irregularity (Ord. 2 r 2(1)). I must now quote Ord. 2 r 2(1):
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An application to set aside for irregularity any proceedings, any step taken in any proceedings or any documentation, Judgment or order therein shall not be allowed unless it is made within reasonable time and before the party applying has taken any fresh step after becoming aware of the irregularity. [emphasis added] |
Rule 2(1) sets out the provisions that:
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An application to set aside for irregularity .... any .... judgment or order [in the proceedings] shall not be allowed unless it is made within a reasonable time and before the party applying has taken any fresh step after becoming aware of the irregularity. |
An
application to set aside an irregular judgment under Ord. 2 r 2 would not
be allowed unless it is made within a reasonable time (see Ord. 2, r 2(1)).
But in Muir v Jenks, supra, it was held (see the headnote at 412 and per Buckley LJ at 415) that delay on the part of the debtor to apply to set aside a judgment entered for too much would not deprive him of his right to have the judgment set aside.
Muir v Jenks was decided way back in 1913 long before Ord. 2 r 2(1) took its present form. It is no longer the law today because Ord. 2 r 2(1) as it is now provides that an application to set aside for irregularity any judgment or order shall not be allowed unless it is made within a reasonable time. And since August 1, 1993 (see PU(A) 192193), Ord. 42 r 13 provides that all applications to set aside or vary any order or judgment under the RHC must be made and the applications served on the party who has obtained the order or judgment within thirty days after the receipt of the order or judgment by him.
In Singh v Atombrook Ltd [1989] 1 All ER 3 85, CA, a defendant who applied to set aside an irregular judgment three months after learning of the judgment was held to be too late to rely on Ord. 2 r 2(1) to have the judgment set aside as of right. But the provisions of Ord. 2 r 2(1) only apply to applications to set aside. So where judgment has been entered for too much, as in the present case, the court may amend the judgment sum under Ord. 2 r 1(2) even though it is not permitted to set aside the judgment by Ord. 2 r 2(1) because of unreasonable delay.
Also, an application to set aside must be made before the party applying has taken any fresh step after becoming aware of the irregular judgment. A "fresh" step for the purpose of this rule (Ord. 2 r 2(1)) is one sufficient to constitute a waiver of the irregularity (see the Supreme Court Practice 1997, Vol 1, paragraph 2/2/3). This is how Edgar Joseph Jr FCJ put it in Ahmed Abdul Rahman v Arab-Malaysian Finance Bhd, supra, at 225:
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The general rule is that when it is clearly demonstrated to the satisfaction of the court that a judgment has not been regularly obtained, the defendant is entitled to have it set aside ex debito justitiae, that is to say, irrespective of the merits and without terms. Having said that, it should be added that the application to set aside such a judgment should be made:
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(2)
Setting aside of default judgments
under other provisions of the RHC
The case of Singh v Atombrook Ltd, supra, clearly illustrates the point that where a defendant is not able to rely on Ord. 2 r 2(1) to have the judgment set aside because he could not fulfil the two preconditions in r 2(1), he may still be able to have the judgment set aside by seeking the discretion of the court under another provision of the RHC. (But, in this country, this is now subject to Ord. 42 r 13). This is what Kerr LJ said, ibid at 389:
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It will be noted that under Ord. 2 r 2(1) the grant of an application to set aside for irregularity is only permissible if it is made within a reasonable time. As already mentioned, the judge rightly took the view that the summons to set this judgment aside had not been issued within a reasonable time. Accordingly, as he held, the defendant was not entitled to have the judgment set aside under Ord. 2 as a matter of right. He accepted, and I shall have to deal with this in a moment, that the judgment had been obtained irregularly in two respects. First, there was no firm called Sterling Travel; the only relevant entity was 'Atombrook Limited, trading as Sterling Travel'. Second, the writ and subsequent proceedings had not been served at the registered address of Atombrook Ltd in Goswell Road but at an address in Rupert Street. However, he held that while the defendant could accordingly not rely on Ord. 2 r 2, he was willing in the circumstances to set aside the judgment under Ord. 13, r. 9, which provides that the court may set aside any judgment on such terms as it thinks just, which would include the default judgment in the present case. [emphasis added] |
And at 393, Kerr LJ concluded thus:
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This is a case which falls plainly within the scope of the new Ord. 2, r 1. The judgment had been obtained irregularly in the two respects to which I have referred. But it could still be amended, although it was a final judgment, both under Ord. 2 r 1(2) and Ord. 20 r 5. The defendant was not entitled to have it set aside as of right. It was only entitled to have it set aside, as it was, under Ord. 13 r 9 .... and [the judge] was also entitled to amend the name of the defendant in the writ as he did. |
In Atombrook the defendant could not rely on Ord. 2 r 2 to set aside the default judgment because the Judge rightly took the view that his application to set the judgment aside had not been made within a reasonably time. In the circumstances, the Judge was only willing to set aside the judgment under Ord. 13 r 9 which provides that the court may set aside any judgment on such terms as it thinks just. In the Court of Appeal (Kerr LJ and Sir John Megaw), Sir John Megaw said this, at 394, 395:
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The judge thought it right to set aside the judgment on the basis that there was at least a possibility that the defendant had not had the opportunity to appear in court and put its case before judgment was entered, because it may not have had notice of the writ and of the proceedings by that time. If that is a possibility, then it could be an injustice that it should not have the judgment set aside and the opportunity to be heard and to put its defence. |
There
the Court of Appeal on recognising the irregularity in the misnomer of the
name of the defendant exercised its powers under Ord. 2 r 1(2) by taking
the action of curing the irregularity by allowing the plaintiff to amend his
writ even after final judgment in the proceedings had been entered for the
purpose of substituting the defendant's correct name for the incorrect name
in which it was sued. As for the irregularity regarding the non-compliance
with s.725(1) of the Companies Act 1985 that the writ was served on the
defendant company at an address other than its registered office, the Court
of Appeal did not consider the defect was so fundamental that the judgment
should be set aside on that ground. But the irregularity was enough for the
court to hold that the defendant was entitled to have the default judgment
set aside under Ord. 13 r 9 because of the possibility that it could have
been obtained in breach of rules of natural justice (i.e. "that there
was at least a possibility that the defendant had not had the opportunity to
appear in court and put its case before judgment was entered, because it may
not have had notice of the writ and of the proceedings by that time.").
A
defendant may, instead of relying on Ord. 2 r 2, seek the exercise of the
discretion of the court by applying under another provision of the RHC for
setting aside or varying a default judgment. Although in this country, he
must now (i.e. since August 1, 1993) make his application within the time
constraints of Ord. 42 r 13. As a general rule regular judgments are
appealable but in the case of default judgments which have been regularly
obtained, the rules permit applications to the court to have the default
judgments set aside as the court thinks just but this will require merits to
be shown. On the other hand, in the case of default judgments that have been
irregularly obtained, it may be set aside (without reference to the merits
of the case) or varied either under Ord. 2 r 1(2) or under another
provision of the rules that applies (see the examples given below).
In the case of a judgment entered in default of appearance, it may be set aside under Ord. 13 r 8 as was done in Singh v Atombrook, see above, where the default judgment was set aside under RSC Ord. 13 r 9 (our RHC Ord. 13 r 8). Ord. 13 r 8 reads:
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8. |
The Court may, on such terms as it thinks just, set aside or vary any judgment entered in pursuance of this Order. |
A defendant who does not appear at the hearing of an application under Ord. 14 r 1 may apply to have the judgment set aside under Ord. 14 r 11. Rule 11 reads:
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Any judgment given against a party who does not appear at the hearing of an application under rule I or rule 5 may be set aside or varied by the court on such terms as it thinks just. |
Similarly
a judgment obtained against a defendant who does not appear at the hearing
of an application under Ord. 81 r 1 may be set aside or varied under Ord. 81 r 7 by the court on such terms as it thinks just.
A judgment entered in default of defence may be set aside or varied under Ord. 19 r 9. It reads:
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The Court may, on such terms as it thinks just, set aside or vary any judgment entered in pursuance of this Order. |
Under Ord. 35 r 2(1):
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Any judgment or order obtained where one party does not appear at the trial may be set aside by the Court, on the application of that party on such terms as it thinks just. |
An
application under this rule must be made within seven days after the trial
(see rule 2(2)).
APPLICATIONS TO SET ASIDE IRREGULAR JUDGMENTS OR ORDERS UNDER THE INHERENT JURISDICTION OF THE COURT WITHOUT BEING REQUIRED TO HAVE RECOURSE TO THE RULES THAT DEAL EXPRESSLY WITH PROCEEDINGS TO SET ASIDE JUDGMENTS OR ORDERS FOR IRREGULARITY
Lord Diplock in Isaacs v Robertson, supra, has pointed out (at 103),
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that there is a category of orders of [a court of unlimited jurisdiction] which a person affected by the order is entitled to apply to have set aside ex debito justitiae in the exercise of the inherent jurisdiction of the court without his needing to have recourse to the rules that deal expressly with proceedings to set aside orders for irregularity and give to the judge a discretion as to the order he will make. |
In this country we can also rely on Ord. 92 r 4 which reads:
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For the removal of doubts it is hereby declared that nothing in these rules shall be deemed to limit or affect the inherent powers of the Court to make any order as may be necessary to prevent injustice or to prevent an abuse of the process of the Court. |
In
fact it is Mr. Lim's argument (when he realised that Ord. 2 r 2(1) is
against him) that his application was made under this rule (Ord. 92 r 4).
Ord. 2 and all the other provisions in the RHC that deal expressly with proceedings to set aside judgments or orders do not extend to those judgments or orders obtained as a result of a failure to comply with statutory requirements. In regard to irregular judgments or orders they only deal with failures to comply with the requirements of the rules of the RHC.
Although a judgment or an order obtained as a result of a failure to comply with the requirements of statutes is not covered by the RHC, a person affected by such an order is entitled to apply to have it set aside as of right (or ex debito justitiae) under the inherent jurisdiction of the court without his needing to have recourse to the rules of court that deal expressly with proceedings to set aside for irregularity as in Ord. 2 or elsewhere in the rules of the RHC. This remedy is reiterated in Ord. 92 r 4. See Badiaddin Mohd Mahidin v Arab Malaysian Finance Bhd [1998] 1 AMR 909, FC. This is how it was put by Gopal Sri Ram JCA at 946:
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It is true, as a general rule, that orders of a court of unlimited jurisdiction may not be impugned on the ground that they are void in the sense that they may be ignored or disobeyed. The decision of the Judicial Committee of the Privy Council in Isaacs v Robertson [1985] AC 97 affirms the existence of the rule. |
He continued at 947:
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It is one thing to say that an order of a court of unlimited jurisdiction must be obeyed until it is set aside. It is quite a different thing to say that a court of unlimited jurisdiction may make orders in breach of written law. Isaacs v Robertson is certainly not authority for the latter proposition. I take it to be well settled that even courts of unlimited jurisdiction have no authority to act in contravention of written law. Of course, so long as an order of a court of unlimited jurisdiction stands, irregular though it may be, it must be respected. But where an order of such a court is made in breach of statute, it is made without jurisdiction and may therefore be declared void and set aside in proceedings brought for that purpose. It is then entirely open to the court, upon the illegality being clearly shown, to grant a declaration to the effect that the order is invalid and to have it set aside. |
It is important to notice in Gopal Sri Ram JCA's judgment (above) that the Judge was careful not to use the word "void" in reference to orders of a court of unlimited jurisdiction in the sense that they can be ignored or disobeyed with impunity. He said, at 947,
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Of course, so long as an order of a court of unlimited jurisdiction stands, irregular though it may be, it must be respected. But where an order of such a court is made in breach of statute, it is made without jurisdiction and may therefore be declared void and set aside in proceedings brought for that purpose. |
As
long as an irregular order stays it must be observed unless and until it is
set aside. An irregular order, even where it has been described as
"void" or "a nullity", stands as an effective order and
cannot be ignored with impunity unless and until it is set aside. 'That is
why Gopal Sri Ram JCA said this in Tenaga Nasional Bhd v Prorak Sdn Bhd,
supra, at 1085 - "It is settled law that the expressions
"nullity", "void" and "voidable" are wholly
inappropriate to describe an order made by a court of unlimited
jurisdiction."
The
present case is not a case where the court had acted in contravention of any
statute when it gave judgment for the plaintiff in 1987. Therefore, Mr.
Lim's submission that he could rely on Ord. 92 r 4 to have the judgment set
aside because it was entered for too much is misconceived and I have no
hesitation in rejecting it.
In the case of Ahmed Abdul Rahman v Arab-Malaysian Finance Bhd, supra, the Federal Court held that the default judgment was by reason of uncertainty, a nullity and this had entitled the defendant to have the irregular judgment set aside as of right. This is how Edgar Joseph Jr FCJ put it, at pp 234-235:
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We would add that under its inherent jurisdiction to prevent an abuse of its proceedings, the court has power to set aside a judgment in default, despite the defendant's application being out of time, if the particular circumstances of the case require the intervention of the court. |
(See Beale v McGregor (1886) 2 TLR 311)
There
the Federal Court was of the view that the default judgment was irregular
for uncertainty and the impropriety of this was considered to be so serious
as to entitle the defendant as of right, ex debito justitiae,
to have the judgment set aside. The irregularity was so fundamental that it
was not curable under Ord. 2 r 1(2). (But according to Edgar Joseph Jr FCJ
it was a nullity). Since the judgment could not be set aside under Ord. 2 r
2 because the defendant's application was made out of time, the Federal
Court set aside the judgment under its inherent jurisdiction instead to
prevent abuse of its proceedings.
CONCLUSION
In the present case, it will be recalled, the plaintiff (the respondent) had obtained judgment against Lee (the appellant) after striking out his defence in an application under Ord. 18 r 19 which was heard inter partes. That was on February 16,1987. Lee did not appeal. Instead, some eight years later, in January 1995, he filed a summons to set aside the judgment. If it had been a regular judgment then Lee's recourse was to appeal. But he did not appeal. Instead, he applied to have the judgment set aside which he could do if the judgment had been irregularly obtained. Lee claims the judgment was irregular because it was obtained for an amount in excess of what was due. In Cheow Chew Khoon v Abdul Johari [1995] 1 AMR 759 Gopal Sri Ram JCA said at pp 798-799:
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Now, it is an established principle that in monetary claims, the amount for which judgment is entered must be limited to the amount actually due: Hughes v Justin [1894] 1 QB 667, Muir v Jenks [1913] 2 KB 412 .... If judgment is entered for more than is actually due, it is liable to be set aside. If an error appears in the judgment then this may be corrected in the following circumstance:
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The above dicta regarding the circumstances on which an error in the judgment amount may be corrected require some explanation lest it be misunderstood, lf judgment was obtained for the wrong amount, it is true the plaintiff may apply to have the judgment amount corrected. This is because Ord. 2 r 1(2) empowers the court "to allow such amendments (if any) to be made". Strictly speaking, the authority for this is not Armitage v Parsons [1908] 2 KB 410 which is an old case decided long before Ord. 2 took its present form but is the rule (rule 1(2)) itself which empowers the court to amend.
On an application made by the defendant to set aside the judgment because it was entered for too much, the court may under Ord. 2 r 1(2) set aside either wholly or in part the judgment or (regardless of who had initiated the application to set aside) exercise its powers under the RHC
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to allow such amendments (if any) to be made and to make such order (if any) dealing with the proceedings generally as it thinks fit. |
Compare this with the previous position under the old cases of Hughes v Justin [1894] 1 QB 667 and Muir v Jenks, supra, where the law was that unless the party who held the judgment applied to have the incorrect sum put right, the defendant was (upon the authority of Hughes v Justin) entitled as of right to have the judgment for the incorrect amount set aside. See Buckley LJ in Muir v Jenks, supra, at 417 where he said:
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.... Hughes v Justin is an authority for the following proposition: If the plaintiff in the absence of the defendant, proceeding properly under the rules, signs judgment for a sum in excess of that which is due to him, the defendant is entitled to have that judgment set aside, unless the party who holds the judgment applies as he may to reduce it to the proper amount. If application to amend be duly made it may be right not to set the judgment aside but to reduce it to the proper sum; but unless the party who holds the judgment elects to have it put right then upon the authority of Hughes v Justin it seems to me the defendant is entitled to say "This is a wrong judgment, set it aside." In the case of Armitage v Parsons the right to amend which I have mentioned was exercised. |
There
was then no power as there is now in Ord. 2 r1(2) for the court to allow
amendments to be made without regard to who had initiated the application to
have the judgment set aside.
In the present case, unfortunately for him, Lee's only recourse was to apply under Ord. 2 r2 to have the irregular judgment set aside. He was unable to apply under any other provision of the RHC because the judgment that had been obtained against him was not a default judgment.
In this appeal we are unanimous in our opinion that he was not entitled to have the judgment, even though it was irregular, set aside under Ord. 2 r2 because we are of the view that his summons to set this judgment aside had not been issued within a reasonable time (see Ord. 2 r2(1)). By allowing eight years to elapse after the irregular judgment had been obtained against him before taking action on it has, in our judgment, precluded him from being allowed to have the judgment set aside because of his unreasonable delay in making his application (Ord. 2 r2(1)).
The
Judge below was right to have dismissed the application. We have, therefore,
affirmed his decision and dismissed the appeal. But now, since the matter
has been brought to our attention, this court on recognising the
irregularity of the incorrect amount on the judgment, has the power under Ord.
2 r1(2) to correct the error in the judgment by amending it to the
correct amount regardless of who had initiated the application to have the
judgment set aside. This we do by correcting the judgment sum to the amount
that is due.
The error arose in this way. I will let the Judge below take up the story. This is what Charles Ho J said:
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It
is conceded by Miss Willie that the amount of tax indemnity should
not have been included in the judgment sum of RM1,211,523.66. The
mistake arose in this way. At the time the plaintiff instituted the
action they were entitled to include the claim for tax indemnity in
respect of the leased equipment because if the leased equipment were
disposed of or sold within 2 years they would have to pay the
Government for the capital allowance. However, by the time they
obtained judgment on 16th February, 1987, the 2 years period had
elapsed and the plaintiffs were no longer liable to pay the
Government the capital allowance. Thus, the plaintiffs (were) no
longer entitled then to make the claim for tax indemnity against the
defendants. This fact seemed to have escaped the attention of both
the parties and the Court during the hearing of the Ord. 18 r 19
application. It is not disputed that when the mistake was discovered the solicitors for the plaintiffs on 11.7.89 wrote to the then solicitors of the third defendant, Messrs David Fung & Co to notify them that the original judgment sum has been reduced by the amount of the tax indemnity i.e. the sum of RM93,3 62.37 and the third defendant's solicitors acknowledged this on the same date. The plaintiffs in their execution proceedings have never sought to enforce this part of the judgment. This is reflected in the statements of account rendered to the third defendant. In the circumstance the defendants have not been prejudiced or made to suffer any loss as a result of the mistake. |
This
is plainly a case where we should put the matter right and this we do by
amending the judgment to reflect the correct amount, which is RM1,117,161.29
(i.e. RM1,211,523.66 less RM93,362.37).
Abu
Mansor Ali, JCA
I
have had the opportunity of reading the draft judgments of my brothers, NH
Chan, JCA and Ahmad Fairuz JCA and I agree with them
that the appeal should be struck out since the application of the appellant
to set aside the default judgment was tainted by unreasonable and
unexplained delay.
Fairuz
J's judgment had answered all points raised by the appellant whilst NH Chan
J's judgment has explained in detail that the term nullity, in the present
context, is no longer available.
Judgments
to be set aside can either be irregular or regular judgments. Irregular
judgments may be set aside by the court that gave the judgments and regular
judgments can only be set aside by an appellate court. Then lastly I wish to
commend N.H. Chan JCA for taking time to write a lengthy judgment some
twenty days before going on retirement instead of being on leave prior to.
Ahmad
Fairuz
JCA
The appellant was one of the defendants in a suit instituted by the respondent / plaintiff in the High Court of Sabah and Sarawak at Kota Kinabalu. The claim of the respondent was for arrears of rental under a leasing agreement. On an application made by the respondent under Ord. 18 r 19 of the Rules of the High Court 1980 (RHC), the High Court struck out the defence of the defendants and gave judgment against the defendants in the sum of RM1,211,523.66 ("the said judgment").
No appeal was lodged against the said judgment. The respondent then commenced execution proceedings.
The appellant, by way of a summons-in-chambers, applied for an order of the court to stay all execution proceedings and to set aside the said judgment. When the application was heard, the appellant abandoned his prayer for stay and proceeded only with the prayer for setting aside the said judgment. On June 10, 1997, the High Court dismissed the appellant's application.
Against
this decision, the appellant now appeals to this court. The appeal was heard
and dismissed by this court on February 25, 1998. I now give my reasons for
dismissing the appeal.
The
first issue taken up by the appellant pertains to the contention that the
High Court has no power to grant interest of 18% per annum on the judgment
sum. On this, the learned High Court Judge had referred to the amendment to Ord.
42 r 12 of the RHC which came into force on December 11, 1986. The
amendment clearly empowers the High Court to order an interest above 8% per
annum if the rate has been agreed upon by the parties. And the learned Judge
stated in his judgment that Clause 12 read with item 9 of the schedule to
the lease agreement enabled him to make the order that he had made. As the
order was made on February 16, 1987, it is therefore clear that the
amendment to Ord. 42 r 12 of the RHC applied. Consequently, I hold that
there is no merit in this argument.
The next argument advanced by the appellant was on the inclusion of tax indemnity in the judgment sum. The appellant argued that it was wrong for the respondent to include the tax indemnity in the judgment sum. This, according to the appellant, caused the judgment to be a nullity and it ought therefore be set aside. The appellant referred us to the case of Cheow Chew Khoon v Abdul Johari [1995] 1 AMR 759 CA which dealt with a default judgment that contained terms which were different from the prayers in the statement of claim. The damages stipulated in the default judgment were more than the amounts prayed for. The Court of Appeal consequently held that the default judgment was irregular and the appellant therein was entitled to have it set aside ex debito justitiae.
Before the High Court, the appellant had submitted a number of authorities which show how judgments for sums bigger than what has been claimed had been set aside on the ground of irregularity or nullity. The High Court, however, held that the authorities deal with setting aside of judgments in default. And I agree with the High Court that the authorities and the case of Cheow Chew Khoon (supra) are consequently irrelevant to the issue before this court as the judgment here was pursuant to an inter partes hearing.
Furthermore,
as pointed out by the learned Judge in his judgment, the respondent's
solicitor had notified the appellant's solicitors that the judgment sum had
been reduced by the amount of the tax indemnity. The respondent, in fact,
had never sought, in their execution proceedings, to enforce the judgment
sum that included the sum of the tax indemnity. In the circumstances I agree
with the learned Judge when he held that the appellant had not been in any
way prejudiced or made to suffer any losses as a result of the mistake of including
the tax indemnity sum into the judgment sum. As such I have to
hold that this argument on tax indemnity matter has no merit too.
The
final issue taken up by the appellant revolves on the appellant's delay of
about eight years before he came to the High Court to apply to set aside the
judgment. The appellant relied on the case of Ahmed Abdul Rahman v
Arab-Malaysian Finance Bhd [1996] 1 AMR 215 wherein the Federal Court
held that under the court's inherent jurisdiction to prevent abuse of its
proceedings, the court has power to set aside the judgment in default,
despite the appellant's application being out of time.
In the case of Ahmed Abdul Rahman (supra) the delay was about three years. The Federal Court agreed with the trial judge that the explanation given for the delay was a ludicrous explanation and consequently unacceptable. The Federal Court then said:
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Nevertheless, it is clear law that the court still retains a discretion to set aside an irregular judgment despite long delay, provided it is satisfied that:
We
would add that under its inherent jurisdiction to prevent an abuse
of its proceedings, the court has power to set aside a judgment in
default, despite the defendant's application being out of time, of
the particular circumstances of the case require the intervention of
the court. (See Beale v McGregor (1886) 2 TLR P 311.) In our view, having regard to the principles enunciated above, on when the court can condone delay on the part of a defendant, the tardiness or the laches of the appellant in making his application, to set aside this default judgment, was not fatal to his application, especially since, in our view, the default judgment was by reason of uncertainty, a nullity, and the amendment made by the judge to it by deleting the words "on monthly rests", did not cure that defect. |
In
the appeal before this Court no explanation at all was given for the delay.
There were no particular circumstances in the appeal that could entitle me
to ignore the delay and proceed in the way that the Federal Court did in the
case of Ahmed Abdul Rahman (supra). Consequently, I
agree with the learned Judge that the appellant's application should be
dismissed on the ground of delay on the part of the appellant.
Cases
Armitage v Parsons [1908] 2 KB 410; Badiaddin Mohd Mahidin v Arab Malaysian
Finance Bhd [1998] 1 AMR 909; Cheow Chew Khoon (t/a Cathay Hotel) v Abdul Johari
Abdul Rahman [1995] 1 AMR 759; Isaacs v Robertson [1985] AC 97 PC; Harkness v
Bell's Asbestos & Engineering Ltd [1967] 2 QB 729; Lai Yoke Ngan v Chin Teck
Kwee [1997] 3 AMR 2458; Lam Kong Co Ltd v Thong Guan & Co (Pte) Ltd [1985] 2
MLJ 429; Metroinvest Anstalt v Commercial Union Assurance plc [1985] 1 WLR 513,
[1985] 2 All ER 318 CA; Tenaga Nasional Bhd v Prorak Sdn Bhd [2000] 1 AMR 1071
CA; Ahmed Abdul Rahman v Arab-Malaysian Finance Bhd [1996] 1 AMR 215 FC; Marsh v Marsh [1945] AC 271 PC; Hughes v Justin [1894] 1 QB 667; Singh v
Atombrook Ltd [1989] 1 All ER 3 85 CA; White v Weston [1968] 2 QB 647 CA.;
Bernstein v Jackson [1982] 1 WLR 1082, [1982] 2 All ER 806; Dubai Bank Ltd v
Galadari (No 4), The Times, February 23, 1990; Muir v Jenks [1913] 2 KB 412;
Pembinaan KSY Sdn Bhd v Lian Seng Properties Sdn Bhd [1991] 1 MLJ 100.
Legislations
Malaysia
Companies Act 1965: s.725
Rules
of the High Court 1980: Ord.2 rr 1 (1), (2), 2(1), (2), Ord.13 rr 8, 12, Ord.18 r1 9,
Ord.35 r 2(1), Ord.42 r 13, Ord.70 r 1, Ord.81 r 1, Ord.92 r 4
United
Kingdom
Limitation Act 1939: s.2
Limitation
Act 1963: s.1
Rules
of the Supreme Court 1965: Ord.2 r 1, Ord.13 r 9, Ord.128 r 1(1),(ii)
Authors
and other references
Supreme
Court Practice 1997, Vol 1
Representations
T.G.
Lim and T.Y. Lee (TG Lim & Partners) for Appellant
S.A. Wong
(Skinner Lind Willie Wong & Chin) for Respondent
Notes:-
This decision is also reported at [2000] 3 AMR 2707
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