Newlake Development Sdn Bhd

[2017] 5 MLRA v. Zenith Delight Sdn Bhd & Ors 333

NEWLAKE DEVELOPMENT SDN BHD

v.
ZENITH DELIGHT SDN BHD & ORS

Court of Appeal, Putrajaya

Rohana Yusuf, Mary Lim Thiam Suan, Zabariah Mohd Yusof JJCA
[Civil Appeal No: W-02(NCVC)(W)-2041-12-2015]
5 May 2017

Civil Procedure: Judge — Exercise of discretion — Striking out order — Trial judge
ordered plaintiff ’s suit (‘the suit’) to be struck out with no liberty to file afresh — Appeal
against said order — Whether plaintiff was dominus litis — Whether case was at
an advanced stage — Whether court could issue an order not prayed for — Whether
any miscarriage of justice — Whether order granted with a liberty to file afresh would
prejudiced defendants — Whether plaintiff should be punished for mistakes committed
by previous solicitors

This was the plaintiff ’s appeal against the order made by the Judicial
Commissioner (‘JC’) of the High Court in striking out the plaintiff ’s suit
(‘the suit’) with no liberty to file afresh. The claim by the plaintiff against the
defendants was premised on, inter alia, breach of trust and conspiracy over a
non-existent land deal. The main issues to be determined were, whether the
plaintiff was dominus litis; whether the case was at an advanced stage; whether
the court could issue an order not prayed for; whether there was a miscarriage
of justice occasioned by the JC’s refusal to permit the discontinuance with
liberty to file afresh; whether an order granted with a liberty to file afresh would
prejudice the defendants or take away any advantage to which they were fairly
and reasonably entitled; and whether the plaintiff should be punished for the
mistakes committed by its previous solicitors.

Held (allowing the appeal):

(1) It had not been shown in the present appeal that the discontinuance was
not made bona fide by the plaintiff but was made so as to obtain an advantage
to which he had no right to retain since he had become dominus litis as the
defendant had a good defence. (para 27)

(2) As far as the present case was concerned, it could not be said that the case
was at an advanced stage. Furthermore, on the date when the striking out was
ordered, the age of the suit was 18 months. Although the current trend of case
management meant that cases had to be disposed off within a limited time
from its filing date, nevertheless, practical considerations came into play when
confronted with ending a suit before it had the opportunity to be ventilated at
full trial on its merits. (para 34)

(3) The courts generally had wide discretion in granting an application to

discontinue an action subject to terms that befit the facts and circumstances of
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334 v. Zenith Delight Sdn Bhd & Ors [2017] 5 MLRA

the case. Hence, even if the application by the plaintiff was for a discontinuance
of the suit with liberty to file afresh, the court may very well be empowered to
grant the discontinuance but with no liberty to file afresh. What was pertinent
was the prejudice suffered by imposing such conditions to the plaintiff who
was now left without any remedy. (para 36)

(4) In this case, the prejudice to the plaintiff was graver as compared to the
defendants. In any event, the prejudice suffered by the defendants in the
rescheduling of the dates could be compensated by costs. However, this was
never considered by the JC. (para 45)

(5) The defendants submitted that if the order was granted with a liberty
to file afresh, it would erase the procedural advantages gained by the
defendants and constitute grave prejudice to the defendants which could not
be compensated by costs. However, the alleged “procedural advantages” were
actually “technical advantages” and were not advantages derived from the
facts of the case or the acts of parties that constituted the facts of the case.
Apart from those “procedural advantages” claimed by the defendants, there
was no other interim or interlocutory advantage to which the defendants
were fairly and reasonably entitled. Thus, the defendants were not deprived
of an advantage which they had already gained in the litigation of this case.
(paras 46, 48, 49 & 51)

(6) It was rather unwise to deprive a plaintiff of whatever remedy that was
available to it by the mere failure of its previous counsel to do what was
directed before trial, as the injustice or prejudice caused to the plaintiff could
not be remedied even if an action against the errant previous counsel was to be
instituted. (paras 53-54)

Case(s) referred to:

Castanho v. Brown & Root (UK) Ltd & Ors [1981] 1 Lloyd’s Report 113 (refd)
Chamberlain & Hookham, Ltd v. Huddersfield Corporation [1901] 18 Rep Pat Cas 454
(refd)
Covell Matthews & Partners v. French Wools Ltd [1977] 1 WLR 876 (refd)
Fox v. Star Newspaper Company [1898] 1 QB 636 (refd)
Doyle v. Olby (Ironmongers) Ltd [1969] 2 All ER 119 (refd)
Majlis Peguam Malaysia & Ors v. Raja Segaran S Krishnan [2002] 1 MLRA 207 (refd)
Marudachala Nadar v. Chinna Muthu Nadar [1932] AIR Madras 155 (refd)
Mazni Ibrahim v. Rosaidy Effandy Dari Tetuan Khairil & Co [2013] 3 MLRA 212
(refd)
Ng Hee Thoong & Anor v. Public Bank Bhd [1999] 1 MLRA 600 (distd)
O’Neal v. Mann [2000] FCA 1680 (refd)
Overseas Union Finance Ltd v. Lim Joo Chong [1971] 1 MLRH 23 (distd)
Punj Lloyd Oil & Gas (Malaysia) Sdn Bhd v. Etiqa Insurance Berhad & Ors [2016] 5
MLRA 241 (distd)
 Newlake Development Sdn Bhd
[2017] 5 MLRA v. Zenith Delight Sdn Bhd & Ors 335

Rajasundari v. Gowri [2006] AIR Mad 156 (distd)

Robertson v. Purdey [1906] 2 Ch 615 (distd)
Syed Omar Syed Mohamed v. Perbadanan Nasional Berhad [2013] 1 MLRA 181 (refd)
Tenaga Nasional Bhd v. Prorak Sdn Bhd & Anor [1999] 1 MLRA 604 (refd)
United Asian Bank Bhd v. Balakrishnan Thanakodi & Ors [1991] 1 MLRH 200 (refd)
Wah Bee Construction Engineering v. Pembenaan Fungsi Baik Sdn Bhd [1996] 1
MLRA 436 (refd)

Legislation referred to:

Criminal Procedure Code [Ind], O 23 r 1(3)
Moneylenders Ordinance 1951, s 16
Patents, Designs and Trade Marks Act 1883 [UK], s 19
Rules of Court 2012, O 21 rr 2(1), 3(1)
Rules of the Supreme Court [UK], O 18 r 19(1)(d), O 21 r 2

Counsel:
For the appellant: WSW Davidson (Wong Hin Loong, Edwin Navis & Rajesvaran
Nagarajan with him); M/s Edwin Navis & Associates
For the 1st & 4th respondents: Vijay Kumar Natarajan (N Nathan with him);
M/s Natarajan
For the 2nd & 3rd respondents: C K Yeoh (Villie Nethi with him); M/s Ranjit Singh
& Yeoh

[For the High Court judgment, please refer to Newlake Development Sdn Bhd v. Zenith
Delight Sdn Bhd & Ors [2015] MLRHU 1412]

JUDGMENT

Zabariah Mohd Yusof JCA:

[1] This is an appeal by the appellant (the plaintiff in the High Court)
against the order made by the learned Judicial Commissioner (JC) of the
High Court in striking out suit 22NCVC-279-2014 (“Suit”) with no liberty
to file afresh.

[2] After hearing submission from the counsel and perusing through the
Appeal Records, unanimously, we are of the view that there are merits in the
appeal. We therefore allowed the appeal, set aside the order of the learned
JC and remitted the Suit back to the High Court for the same to proceed with
further case management in preparation for full trial.

[3] Herein below are our grounds. Parties will be referred to, as they were, in
the High Court.
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336 v. Zenith Delight Sdn Bhd & Ors [2017] 5 MLRA

Background

[4] The claim by the plaintiff against the defendants was premised on, inter alia,
breach of trust and conspiracy over a non-existent land deal.

[5] The plaintiff claimed that it had paid RM9 million in deposit for a land
transaction to the 2nd defendant, a law firm.

[6] The 3rd defendant is the Managing Partner of the 2nd defendant.

[7] During case management on 4 December 2015, the plaintiff ’s newly

appointed counsel made an oral application to withdraw the Suit “with liberty
to file afresh”. The defendants’ counsel had no objections to the withdrawal of
the suit but insisted that the withdrawal shall be “with no liberty to file afresh”.

[8] After hearing submissions, the learned JC ordered that the Suit to be struck
out with no liberty to file afresh. Hence, the present appeal before us.

[9] The Suit has been discontinued against the 5th to the 11th defendants on 28
November 2014; therefore the appeal herein is only concerned with the claim
against the 1st to the 4th defendants.

Submission By The Plaintiff

[10] The application by counsel for the plaintiff before the learned JC was for
the Suit to be withdrawn with liberty to file afresh. It was the submission of the
plaintiff that when the learned JC allowed the application for the withdrawal
of the same but with no liberty to file afresh, he was acting in excess of
jurisdiction. Pursuant to O 21 r 3 of the Rules of Court 2012, the court may
either allow the plaintiff ’s application to withdraw the Suit with liberty to file
afresh or to dismiss the application by the plaintiff entirely. The court has no
power to substitute the plaintiff ’s application with another Order which was
never prayed for, ie to allow the withdrawal of the Suit without liberty to file
afresh.

[11] It was also argued that, that was not the only alternative order available
to the court. The court could have made an order dismissing the application
to withdraw with liberty to file afresh and ordered for the Suit to proceed with
trial.

[12] Further, in view of the nature of the claim by the plaintiff against the
defendants, the plaintiff stood to be gravely prejudiced by the Order of the
learned JC, in that plaintiff stand to incur a loss of over RM9 million. It was
submitted that this loss was disproportionate to any prejudice that would have
been incurred by the defendants as compared to the case being rescheduled for
trial and the defendants being compensated with costs.

[13] It was submitted that at the very least, the judge should have informed the
plaintiff ’s counsel that he was not minded to grant what was prayed for and
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[2017] 5 MLRA v. Zenith Delight Sdn Bhd & Ors 337

then left an option to counsel as to what would be the next course of action.
The plaintiff should not have been left with an order which he had never sought
for, in the first place.

[14] The newly appointed counsel for the plaintiff, Mr Edwin Navis took
over the suit from the previous solicitors on 26 November 2015, which
was five days before the deadline to file the witness statements. The trial
dates; 14, 15 and 16 December 2015 were fixed by the earlier court. This
Suit was transferred to the present court on 20 November 2015 following an
administrative transfer of files. Given the complexity and the seriousness of
the Suit, it would have been an uphill task for the plaintiff to be able to comply
with the directions of the court within the deadline. The plaintiff had a total
of 14 witnesses, eight of whom are subpoenaed witnesses. Between the four
defendants, they were calling two witnesses. It was not in dispute that little
had been done by the previous solicitors of the plaintiff in preparing the Suit
for trial. It was submitted by the plaintiff ’s counsel that the plaintiff should
not be penalised for the mistakes of his previous solicitors.

Submission By The Defendants

[15] The order given by the learned JC was an exercise of discretion. Hence,
appellate intervention should be discouraged unless it can be shown that the
exercise of the discretion was premised on a wrong principle of law.

[16] The counsel for the defendants submitted that the appellant’s attempt to
withdraw the Suit with liberty to file afresh would deprive the 1st and the 4th
defendants of a procedural advantage which are now in the defendants’ favour
and this could not be compensated with costs. The 1st and the 4th defendants
have amended their Defence to plead that the plaintiff has no locus standi since
it had assigned the agreement. As at the date of the application to withdraw the
Suit, the plaintiff had not filed a Reply to the Amended Defence, and the Suit
was scheduled for hearing in 10 days’ time. The defendants’ counsel submitted
that the Suit was already at an “advanced stage”.

[17] Therefore, it was submitted that, if the application by the plaintiff to

withdraw the Suit with liberty to file afresh was allowed by the learned JC, the
plaintiff would file a similar suit against the 1st to the 4th defendants and this
would expose the 1st and the 4th defendants to extreme prejudice.

[18] The defendants referred to the Federal Court case of Syed Omar Syed
Mohamed v. Perbadanan Nasional Berhad [2013] 1 MLRA 181 whereby the
following paragraph was cited:
“[17] We shall now deal with the second issue. It should be noted that even
in the case of Birkett v. James it was conceded that a second suit filed after the
first suit was dismissed for breach of a peremptory order would be an abuse of
the court’s process and liable to be dismissed. This point was discussed fully
by the English Court of Appeal in Janov v. Morris [1981] 3 AER 780, where
the relevant principles to consider were set out in the head-notes as follows:
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338 v. Zenith Delight Sdn Bhd & Ors [2017] 5 MLRA

Where an action had been struck out on the ground of the plaintiff ’s
disobedience of a peremptory order of the court and the plaintiff
commenced a second action within the limitation period raising the same
cause of action, the court had a discretion under RSC O 18 r 19(1)(d) to
strike out the second action on the ground that it was an abuse of the court’s
process. In exercising that discretion the court would have regard to the
principle that court orders were made to be complied with. Accordingly,
because there had been no explanation by the plaintiff for his failure
to comply with the peremptory order made in the first action and there
was no indication that he was likely to comply with orders made in the
second action, the commencement of the second action was an abuse of
the process of the court and the court would exercise its discretion under
O 18 r 19(1)(d) to strike it out ...”

[Emphasis Added]

[19] It was submitted that the plaintiff failed to comply with the order given
by the High Court to file and serve the witness statements by 20 November
2015 and exchange the same with the defendants. As far as the defendants are
concerned, they have informed the court that their witnesses’ statements were
ready.

[20] Further, when the plaintiff ’s counsel informed the court that it wished
to withdraw the Suit with liberty to file afresh, the counsel for the plaintiff
never informed the court that the plaintiff would only do so, if liberty to file
afresh was granted. Nowhere in the Notes of Proceedings was this recorded.
What was stated was that the plaintiff was withdrawing as the plaintiff was not
ready to proceed with the trial. The plaintiff never requested for further time
to comply with the directions issued by the court earlier, nor requested for an
adjournment of the trial dates before the learned JC. Hence, the counsel for the
defendants submitted that the JC did not err when he allowed the withdrawal
but with no liberty to file afresh.

Findings

[21] In an action begun by writ, a plaintiff may, without leave of the court,
discontinue the action not later than 14 days after service of the defence (see
O 21 r 2(1) of the Rules of Court 2012). Once the 14 days for service of the
defence has passed, discontinuance may be done only with leave. The court in
granting such leave may impose such terms as it thinks just, inter alia, in respect
of costs and in respect of bringing a further subsequent actions (see O 21 r 3(1)
of the Rules of Court 2012).

[22] The plaintiff herein applied to discontinue the Suit under O 21 r 3(1)
of the Rules of Court 2012. In the exercise of its discretion when granting
leave, the court has a wide discretion, based on judicial principles. Practical
considerations do come into play when exercising the discretion. (See Majlis
Peguam Malaysia & Ors v. Raja Segaran S Krishnan [2002] 1 MLRA 207). The
court may/can impose terms (Chamberlain & Hookham, Ltd v. Huddersfield
 Newlake Development Sdn Bhd
[2017] 5 MLRA v. Zenith Delight Sdn Bhd & Ors 339

Corporation [1901] 18 Rep Pat Cas 454; United Asian Bank Bhd v. Balakrishnan
Thanakodi & Ors [1991] 1 MLRH 200, Wah Bee Construction Engineering v.
Pembenaan Fungsi Baik Sdn Bhd [1996] 1 MLRA 436).

[23] Before granting the order for discontinuance of an action, the court must
be satisfied that:

(i) if a defendant is dominus litis, the general rule is to refuse leave to

discontinue (see Overseas Union Finance Ltd v. Lim Joo Chong [1971]
1 MLRH 23);

(ii) the case is not at an advanced stage; if so, care must be taken
not to permit discontinuance. What constitutes an advanced stage
depends on the facts and circumstances of the case (see Fox v. Star
Newspaper Company [1898] 1 QB 636);

(iii) the plaintiff may have gained an interim interlocutory advantage

between the date of issue of the writ and the point of time he
seeks to discontinue (O’Neal v. Mann [2000] FCA 1680);

(iv) there is no miscarriage of justice occasioned by its refusal to

permit the discontinuance;

(v) it will not prejudice the opponent to the application or take away
from him any advantage to which he is fairly and reasonably
entitled.

[24] In summary, the discretion to allow the application to discontinue an

action and the discretion to impose the terms accompanying it, depends very
much on the facts and circumstances of each case.

Whether The Plaintiff (Applicant) Is Dominus Litis?

[25] In Overseas Union Finance Ltd v. Lim Joo Chong [1971] 1 MLRH 23, Justice
Raja Azlan Shah (as His Lordship then was) had the occasion to deal with
the issue of when to allow discontinuance of an originating summons filed
by the chargee bank, whereby His Lordship held as follows:
“However, it is at my discretion whether I should allow discontinuance.
Guidelines to the discretion can be found in the Annual Practice 1963 at
p 593 under the heading Before Judgment which reads:

Leave may be refused to a plaintiff to discontinue the action if the plaintiff is

not wholly dominus litis or if the defendant has by the proceedings obtained
an advantage of which it does not seem just to deprive him.

If the applicant is dominus litis, then leave to discontinue may be granted. If

he is not then it is unlikely that I would grant him leave to discontinue. I do
not think that the applicant is wholly dominus litis. He cannot dispose of the
case as he thinks fit or allow it to be dismissed or let judgment go by default.
The parties have come to a stage where the respondent chargor has gained
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an upper hand by an advantage in that he could find flaws in the applicant/

chargee’s allegation namely the wrong dates in the memorandum etc and the
fact that the reason for wanting a discontinuance is not a very strong one.
The respondent/chargor is not to be deprived of these advantages which have
made him a well matched adversary in the arena.

Having considered all the points, I am of the opinion that the application to
discontinue should be dismissed.”

[Emphasis Added]

[26] In Ng Hee Thoong & Anor v. Public Bank Bhd [1999] 1 MLRA 600, the notice
of demand was not properly issued to the guarantor. However, the bank did
not discontinue the action after discovering the improper issuance of the notice
of demand. The bank instead sought summary judgment after the defendant
guarantor successfully set aside the default judgment obtained against him. In
the High Court, the bank was successful in obtaining the summary judgment
but was reversed on appeal. The Court of Appeal ordered the matter to be set
down for trial. At the High Court, instead of proceeding with the full trial as
ordered by the Court of Appeal, the bank applied to discontinue the action
with liberty to file afresh. The High Court allowed the application. The Court
of Appeal allowed the appeal in part. The Court of Appeal granted leave to
discontinue on the following term:
“... gave leave to the respondent to discontinue on the terms that no fresh
action should be brought on the same cause of action based on the same or
substantially the same factual situation ...”

In doing so, NH Chan JCA said:

“A perusal of the learned judge’s grounds of judgment would show that
the learned judge had failed to consider the prejudice and the disadvantage
contended to have been suffered by the appellants and the fact that the
appellants would be deprived of a defence which was available to them if
an order in terms of the said application was granted. The learned judge had
thereby, in the words of Goulding J in Re Reed (a debtor) [1979] 2 All ER
22 (referred to above) “excluded matters that it ought to have taken into
account”. Consequently, we have allowed the appeal with costs and set aside
the order of the High Court ...”
[Emphasis Added]

[27] It has not been shown in the present appeal that the discontinuance was
not made bona fide by the plaintiff but was made so as to obtain an advantage
to which he has no right to retain since he has become dominus litis as the
defendant has a good defence. In Overseas Union Finance Ltd v. Lim Joo Chong
(supra), where it was an Originating Summons case where the Chargee Bank
was proceeding to apply for an order for sale on a property upon default by the
lender. There was a memorandum of agreement for the loan drawn up pursuant
to the Moneylenders Ordinance 1951 and signed by the parties on January
21, 1969. A memorandum of charge was also signed by parties. The chargor
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opposed the application for sale stating that the contract was unenforceable as
the memorandum of agreement did not comply with s 16 of the Moneylenders
Ordinance 1951 in that the date of the loan was not correctly stated and the
terms of the loan was not correctly set out. The applicant/bank (Chargee)
sought to discontinue the action on grounds that, even if the court were to
grant an order for sale they, the applicant would find difficulty in selling the
property, it being a residence and in an area where the value had fallen. It was
held that the flaws in the memorandum of agreement were material errors
which tended to mislead and hence rendered the contract unenforceable. It
was also held that the applicant/bank failed to discharge the burden to show
that the requirements of s 16 of the Moneylenders Ordinance 1951 had been
complied with. Clearly, the chargor had a good defence. Further the reason
given by the applicant/bank to discontinue was said by the court to be “not a
very strong one”.
[28] Similarly in Ng Hee Thoong & Anor v. Public Bank Bhd (supra), the defence
of the appellant was that there was improper issuance of demand by the
respondent. The appellant would be deprived of a defence which was available
to them if an order in terms of the application to discontinue was granted.
[29] The facts in our present case are not at all close or similar to the facts as
in Overseas Union Finance Ltd v. Lim Joo Chong (supra) or Ng Hee Thong & Anor v.
Public Bank Bhd (supra).
[30] The court in Overseas Union Finance Ltd v. Lim Joo Chong (supra) did not
discontinue the action with no liberty to file afresh (unlike our present case).
Instead, the court dismissed the application to discontinue by the applicant/
bank. Hence, no party was prejudiced by the order of the court.
Whether The Case Is At An Advanced Stage?
[31] What constitutes as “an advanced stage” again depends very much
on the facts and circumstances of the case. The learned JC did not address
this aspect in his grounds. Here, the pleadings were closed and on the case
management date of 20 November 2015, parties were given directions to
file witness statements in preparation of trial. At this point in time the new
counsel of the plaintiff was not engaged yet. He was only engaged on
26 November 2015. The date 4 December 2015 was only a case management
date, the trial had not started when the application for the discontinuance on
4 December 2015 was made.
[32] Both parties submitted on the case of Punj Lloyd Oil & Gas (Malaysia) Sdn
Bhd v. Etiqa Insurance Berhad & Ors [2016] 5 MLRA 241 before us. There, the
trial was ongoing and the decision to strike off the suit without liberty to file
afresh upon withdrawal of the suit was considered to be justified by the Court
of Appeal as the facts shows that the trial court “had already indulged the
appellant with one adjournment to secure the attendance of the second witness.
Nowhere in the submission or the judgment of the court was the reason why
the second witness could not attend court stated. Thus, the court could only
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inferred that no such reason or explanation was advanced or proferred to by the

appellant”. Rightly so, the court struck out the Suit without liberty to file afresh.
Compared to the facts in our present case where the trial has not commenced,
but only at the case management stage.
[33] Similarly in Rajasundari v. Gowri [2006] AIR Mad 156, which was cited by
the plaintiff herein, involved a civil revision petition directed against an order
of the trial court in Madras which allowed the leave filed under O 23 r 1(3) of
the Indian CPC to withdraw the suit but declined to grant leave to file a fresh
suit as the case was already at a part heard stage.
[34] As far as our present case is concerned, it cannot be said that the
case is at an advanced stage as presented from the abovementioned cases.
Furthermore, on the date when the striking out was ordered, the age of the
Suit was 18 months. Although we are minded that in the current trend of
case management, cases have to be disposed off within a limited time from
its filing date, nevertheless, practical considerations do come into play when
confronted with ending a suit before it has the opportunity to be ventilated at
full trial on its merits.
Whether The Court Can Issue Out An Order Not Prayed For?
[35] In granting the application by the plaintiff herein, whether the court
could in the circumstances allow the application in part ie allowed the
discontinuance but with no liberty to file afresh. The appellant cited Indian
authorities as in Rajasundari v. Gowri [2006] AIR Mad 156, which allowed
the leave filed under O 23 r 1(3) of the Indian CPC to withdraw the suit
but declined to grant leave to file a fresh suit. The trial court found that the
application was filed late as the case was at the part heard stage and the judge
was of the view that it would not be appropriate to grant leave to file a fresh
suit. The case went on appeal and it was argued on behalf of the petitioner
that the trial court erred in partly allowing the application to withdraw without
liberty to file afresh on the same cause of action. It was argued on behalf of
the petitioner that the trial court could have dismissed the application entirely
and the petitioner would have proceeded with the suit. The petitioner relied on
reported decisions of Marudachala Nadar v. Chinna Muthu Nadar [1932] AIR
Madras 155, as well as T W Ranganathan v. T K Subramaniam, and submitted
that the impugned order of the trial court was in violation of O 23 r 1(3) CPC
as the court cannot split the order to cause serious prejudice to the plaintiff.
The counsel for the respondent therein submitted that the suit was already in
a part heard stage and in consideration of the facts and circumstances of the
case, the trial judge rightly declined to grant leave to file afresh since the 3rd
defendant was aged 73 years old and the suit was filed only to harass the 3rd
defendant.
It was subsequently held that:
“12. An application to withdraw a suit with liberty to file afresh must either
be allowed or refused in toto. It is not open to the court to grant a prayer for
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withdrawal and refuse the leave. If liberty is refused, the suit should not be
dismissed, but must be retained in the file for trial/continuation of trial. If an
application is made for withdrawal of the suit with liberty to file a fresh suit,
it is not open to the ccourt to grant only permission for withdrawal, without
liberty to file afresh suit. If the court simply allows withdrawal but refuses
liberty, the court would be acting without jurisdiction in dividing the Petition
into two parts. It is to be noted that the application under the O 23 r 1(3) of
CPC. is indivisible whole. The trial court was not right in separating the prayer
for withdrawal and the leave to file a fresh suit. When the court has declined
to grant leave to file a fresh suit, the trial court ought to have dismissed the
application in toto.”

[36] We are not in agreement with the decision of the abovementioned

Indian cases in this respect, as we are not deplete of local authorities that
have established that the courts generally has wide discretion in granting an
application to discontinue an action subject to terms that befit the facts and
circumstances of the case. Hence, even if the application by the plaintiff is for
a discontinuance of the Suit with liberty to file afresh, the court may very well
be empowered to grant the discontinuance but with no liberty to file afresh.
What is pertinent is the prejudice suffered by imposing such conditions to the
plaintiff who is now left without any remedy. This issue will be addressed in
the later part of this judgment.

[37] In considering this appeal, we are mindful of the fact that under the new
Rules of Court 2012, the court plays a proactive role in moving the pace for
litigation. The courts no longer leave it to the litigants to decide the same.

[38] The counsel for the defendants referred to the case of Syed Omar Syed
Mohamed v. Perbadanan Nasional Berhad [2013] 1 MLRA 181 and to the part
of the judgment which states that “where an action had been struck out on
ground of the plaintiff ’s disobedience of a peremptory order of the court and
the plaintiff commenced a second action within the limitation period raising
the same cause of action, the court had a discretion under the Rules of the
Supreme Court, O 18 r 19(1)(d) to strike the second action on the ground
that it was an abuse of the court’s process. In exercising that discretion the
court would have regard to the principle that court orders were made to be
complied with. Accordingly, because there had been no explanation by the
plaintiff for his failure to comply with the peremptory order made in the first
action and there was no indication that he was likely to comply with orders
made in the second action, the commencement of the second action was an
abuse of the process of the court and the court would exercise its discretion
under O 18 r 19(1)(d) to strike out”.

[39] However, such reference was not the context under which our present
case was struck out. The learned JC made it clear at para 52 of his grounds
that “this is not a case where the suit was struck out for non compliance of
Pre Trial Case Management directions”. Rather, the learned JC stated in his
grounds that, it was the plaintiff who sought leave of the court to withdraw
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344 v. Zenith Delight Sdn Bhd & Ors [2017] 5 MLRA

the suit but had asked that they be given liberty to file afresh. Hence, the
reliance by the defendants’ counsel on this case to discontinue the Suit
without liberty to file afresh, is misconceived.

[40] It was submitted by the counsel for the defendants that the plaintiff had
failed to provide a valid reason to justify the withdrawal of the suit with
liberty to file afresh. This was echoed by the learned JC at para 53 of his
judgment. The reason that was given by the plaintiff is that, the new solicitors
took over the conduct of the case from the previous solicitors who failed to
do anything towards preparation of the trial. By the time the new solicitors
took over the case there was barely 11 days to the trial date. Given that the
learned JC had intimated to parties that no adjournment of the trial would
be entertained, and that no witness would be allowed to testify without their
witness statements filed, the new solicitors were left with limited choice but
to apply for a withdrawal of the suit with liberty to file afresh. Is that not a
valid reason to go by? Compare to the reason given by the applicant/bank in
Overseas Union Finance Ltd v. Lim Joo Chong (supra) which Raja Azlan Shah J
(as His Majesty then was) said that the reason was not a strong one for the
action to be discontinued. There, the chargee bank said that even if the court
is to grant the order for sale which they sought for, they would not be able to
sell due to the falling price of the property. Hence, the applicant/bank sought
to discontinue the action.

[41] Further, it was never shown by the defendants that the change of
solicitors by the plaintiff at that stage was a mala fide act on the part of the
plaintiff. Neither was it suggested that it was a tactical manoeuvre on the part
of the plaintiff when the change in solicitors was made, that it was to delay
the matter. It was just unfortunate that the plaintiff had earlier chosen less
industrious solicitors to represent him in such a serious matter. Hence, it was
not an invalid reason to be totally dismissed outright by the learned JC.

[42] It was also not shown that the application for discontinuance was made
with an ulterior motive to obtain a collateral advantage as illustrated in the
facts of Castanho v. Brown & Root (UK) Ltd & Ors [1981] 1 Lloyd’s Report 113.
In that case, the appellant had been rendered quadriplegic in an accident while
working on the respondent’s vessel in the North Sea. He instituted an action in
England and interim payments had been made to the appellant. Subsequently,
Texan lawyers had persuaded the appellant to sign a power of attorney so as
they could bring an action (on a contingency fee basis) in Texas, given that the
respondents being a multinational company based in Texas. Consequently, a
Notice of Discontinuance of the English action under RSC O 21 r 2 was served
within the time limit laid down by that order.

[43] It was also submitted on behalf of the defendants that when the counsel
of the plaintiff applied for the withdrawal of the Suit before the learned JC, it
was never stated that the plaintiff would only do so if liberty to file afresh was
granted. This, in our view is irrelevant.
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[2017] 5 MLRA v. Zenith Delight Sdn Bhd & Ors 345

Whether There Is A Miscarriage Of Justice Occasioned By Its Refusal To

Permit The Discontinuance With Liberty To File Afresh?

[44] When the learned JC allowed the application by the plaintiff for the
withdrawal of the suit but with no liberty to file afresh, it has the effect of
shutting the plaintiff entirely of any remedy available to them. The plaintiff
had parted with RM9,056,124.00 towards the purchase of the subject land. He
had lost his monies and ended up with no land. There were serious allegations
of impropriety on the part of defendants and all the more reason for it to be
ventilated at full trial rather than ending the life of the case before it has the
chance to start.

[45] Although the defendants submitted that, to allow the plaintiff the liberty
to file afresh would cause prejudice to the defendants, in that they would be
exposed to a similar suit by the plaintiff, we are of the view that, such prejudice
(if any) is disproportionate to the loss and prejudice suffered by the plaintiff.
The learned JC said that the defendants are also entitled to a fair share of
justice. However, a balancing act ought to be struck between both of the
prejudices caused to the parties and see where the justice lies. In this case the
prejudice to the plaintiff is more grave as compared to the defendants. In any
event, the prejudice suffered by the defendants in the rescheduling of the dates
could be compensated by costs. This was never considered by the learned JC.
Both parties would have their day in court to ventilate the merits of the case.

Whether The Order Will Prejudice The Opponent To The Application

Or Take Away From Him Any Advantage To Which He Is Fairly And
Reasonably Entitled?

[46] It was submitted on behalf of the defendants and also reflected in the
grounds of judgment of the learned JC at para 41 that, in granting liberty
to file afresh and thereby erasing the procedural advantages gained by the
defendants constituted grave prejudice to the defendants which could not be
compensated by costs. This procedural advantage referred to by the defendants
is the fact that the defendants would be able to seek for a dismissal of the Suit
on the basis of “no case to answer” due to the failure of the plaintiff to file the
witness statements on or before 1 December 2015. That may not be entirely
correct, as it had been intimated by the plaintiff ’s counsel on 20 November
2015 case management date that he would also be calling eight subpoenaed
witnesses. Subpoenaed witnesses do not require witness statements. Hence,
the case could proceed with the evidence of such witnesses without witness
statements, given that the earlier set of trial dates were only for three days ie 14,
15 December 2015. This was never considered by the parties nor the learned
JC before granting the order of discontinuance.

[47] The other procedural advantage submitted by the defendants is that

the defendants have filed in their Defence stating that the plaintiff does not
have the locus standi to proceed with the action as the plaintiff had assigned
the agreement and there has not been any reply on the part of the plaintiff.
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Since the case has been fixed for trial, the defendants claimed that it had the
upper hand in terms of procedural advantage. However, even if the case had
proceeded with the trial, there is nothing to prevent the plaintiff from making
an application to amend its pleadings at any stage of the trial before judgment.
In any event, if it is true that the plaintiff lacks the locus standi to institute the
Suit, the facts still remain and there is nothing to prevent the defendants from
using the same defence.

[48] These “procedural advantage” are actually “technical advantage” and they
are not advantages derived from the facts of the case or the acts of parties that
constitute the facts of the case as can be seen from the facts in Overseas Union
Finance Ltd v. Lim Joo Chong (supra), Ng Hee Thoong & Anor v. Public Bank Bhd,
Punj Lloyd Oil & Gas (Malaysia) Sdn Bhd v. Etiqa Insurance Berhad & Ors (supra).

[49] Apart from these two “procedural advantages” claimed by the

defendants, there is no other interim or interlocutory advantage to which the
defendants are fairly and reasonably entitled.

[50] Neither can it be said that the facts in our case is anything similar to or
anything near to the facts as in Robertson v. Purdey [1906] 2 Ch 615 which was
a situation where discontinuance of a suit was granted upon an application by
the plaintiff, with terms that the plaintiff was not allowed the liberty to file a
fresh suit against the defendant pertaining to the same infringement of a patent
in question. The discontinuance of the suit was ordered without liberty to file
afresh even though the trial had not started.

The defendant in Roberson v. Purdey (supra), insisted that the application for
leave to discontinue the suit by the plaintiff should only be on terms that no
fresh action should be instituted.

The plaintiff therein instituted an action for an injunction to restrain

infringement of his letters of patent for an invention. The defendant delivered
his defence wherein he stated his particulars of objection. The defendant alleged
that “he had not infringed the patent or threatened to infringe it, and that the
patent was invalid by reason of the matters in the accompanying particulars
of objection appearing. In his particulars of objections, the defendant alleged
that the plaintiff was not the first and true inventor of the alleged invention;
that the alleged invention was not new, but had been on several occasions
anticipated; that the alleged invention was not the proper subject-matter of
valid letters patent”. The plaintiff then delivered his reply. Subsequently, the
defendant gave notice of an application to amend his particulars by stating
certain alleged defects in the specifications. However, the defendant abandoned
the said application. Be that as it may, the said notice of application by the
defendant had disclosed to the plaintiff that he could not succeed in the action
unless he corrected his patent. Hence with a view to doing just that, the plaintiff
applied for leave to discontinue the action against the defendant. It was held by
Buckley J, that leave should only be granted on terms that the plaintiff should
not be given the liberty to file afresh against the defendant in respect of any
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[2017] 5 MLRA v. Zenith Delight Sdn Bhd & Ors 347

infringement alleged in the present action. The learned judge agreed with the
submission by the defendant, and in his judgment explained the reasons as to
why he imposed such a term. He pointed out that due to the terms of s 19 of
the Patents, Designs and Trade Marks Act 1883, he has to impose such terms.
Otherwise the court will in effect enable the plaintiff to get round the statutory
impediment imposed by the said s 19. This was what Buckley J said:
“... it seems to me that, if I were to give leave to discontinue this action without
imposing this term, I should be, so to speak, repealing the Act of Parliament; I
should be enlarging s 19 so as in substance, although not in form, to allow the
plaintiff in the action to correct his patent pending the action. That is the very
thing which the statute, as construed, says I ought not to do.”

[51] Such is not the situation in our case to warrant the discontinuance without
liberty to file afresh. Nothing was shown that the defendants were deprived of
an advantage which they have already gained in the litigation. (See also Covell
Matthews & Partners v. French Wools Ltd [1977] 1 WLR 876).
Whether The Plaintiff Should Be Punished For The Mistakes Committed By
His Previous Solicitors?
[52] Although the plaintiff in this case is not entirely without fault due to the
lackadaisical attitude of its previous counsel, however it should not be punished
for the absence/lack of actions on the part of its counsel. Lord Denning in
Doyle v. Olby (Ironmongers) Ltd [1969] 2 All ER 119 said at p 1214 that:
“We never allow a client to suffer for the mistakes of his counsel if we can
possibly help it. We will always seek to rectify it so far as we can. We will
correct it whenever we are able to do so without prejudice to the other side.”

Similar principle was adopted by the Court of Appeal in Tenaga Nasional Bhd v.
Prorak Sdn Bhd & Anor [1999] 1 MLRA 604 at p 604 when Gopal Sri Ram JCA
in delivering the judgment of the court said:
“This case demonstrates the terrible harm that may be visited upon the
litigant’s head because of his solicitor’s mistake. We hasten to add that the
solicitor concerned is no longer on record in the proceedings before us.
Whenever possible, where there is no risk of sacrifice of principle in the name
of justice or at the alter of convenience, we do our best to ensure that a lay
client does not suffer because of the mistake of his legal advisers. We do so
in the interest of justice. When we act, we always bear in mind what Lord
Denning said in Doyle v. Olby (Ironmongers) Ltd [1969] 1 All ER 119 at p 121:
We never allow a client to suffer for the mistake of his counsel if we can
possibly help it. We will always seek to rectify it as far as we can. We will
correct it whenever we are able to do so without injustice to the other side.
Sometimes the error has seriously affected the course of the evidence, in
which case we can at best order a new trial.”

[53] Obviously, the previous counsel failed to do the necessary preparations

for the full trial as directed by the JC, however such lack of action by its
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348 v. Zenith Delight Sdn Bhd & Ors [2017] 5 MLRA

counsel and in failing to abide to the directions of the learned JC would

deprive it of the opportunity of ventilating the merits of its case at trial. It
is rather unwise to deprive a plaintiff of whatever remedy that is available
to him by the mere failure of its previous counsel to do what was directed
before trial.
[54] The 1st and 4th defendants cited the case of Mazni Ibrahim v. Rosaidy
Effandy Dari Tetuan Khairil & Co [2013] 3 MLRA 212 where Abdul Wahab
Patail JCA said in his judgment that “the general principle that a client
should not suffer from the negligence or mistake of his solicitor is confined
to a limited application where the injustice is one that cannot be remedied
by an action against the errant solicitors”. As far as the facts of our present
case is concerned, it can safely be said that the injustice or prejudice caused to
the plaintiff cannot be remedied even if an action against the errant previous
counsel is to be instituted.
Conclusion
[55] There was nothing that was before the court to suggest that the
discontinuance applied for by the plaintiff had caused an injustice to the
defendant. In fact, the plaintiff stands to be gravely prejudiced by the order of
the learned JC.
[56] It is true that serious allegations of impropriety were levelled against the
defendants and it is in the best interest of parties that the case be tried and
disposed off at the earliest opportunity. On the facts and circumstances of the
case and given that the case was filed 18 months from the decision of the striking
out was made, justice is best served if the case is allowed to remain for trial.
The defendants’ concern that this is no ordinary case and that the defendants,
especially the 3rd defendant (who is a senior member of the Malaysian Bar)
has been accused of fraudulent conspiracy to siphon trust monies belonging to
the plaintiff, gives it all the more reason that the Suit should be ventilated at
trial on its merits, rather than have it struck out on mere technicalities.
[57] In addition, the multiple trial dates (5 & 6 February 2015, 22 & 23
June 2015, 18, 19 & 20 August 2015, 4 & 5 December 2015 and 14, 15 & 16
December 2015) confirm the complexity and seriousness of the Suit; and that
in all likelihood the Suit would not have been completed in these first set of
dates. Hence, discretion should have been to dismiss the application and direct
the Suit to proceed to trial.
[58] Therefore, the order of the learned JC is set aside. The case is remitted
back to the High Court for further case management in preparation for full
trial.
[59] Appeal is allowed with no order as to costs.