5 Things About Counterclaims

1. Are cross claims

In Permodalan Plantations Sdn Bhd v Rachuta Sdn Bhd [1985] 1 MLJ 157 (“Permodalan Plantations”), Salleh Abbas LP opined the following:

“A counterclaim on the other hand is also a cross-claim which a defendant has against a plaintiff but in respect of which the defendant can bring a separate action against the plaintiff if he wishes to do so.”[1]

2. Are a separate and independent action

Salleh Abbas LP also held in Permodalan Plantations that:

“… to all intents and purposes a counterclaim is a separate and independent action by the defendant, which the law allows to be joined to the plaintiff’s action in order to avoid multiplicity or circuity of suits.”[2] (Emphasis mine)

Consequently, a counterclaim still stands even if a principle action is discontinued by the Plaintiff(s) or the principle action is dismissed by the Court.

This position was expressly taken by the Court of Appeal in Tai Choi Yu & Co, Advocates v Ting Sie Chung @ Ting Sieh Chung [2017] MLJU 846:

“The law must therefore be taken to be well settled that by Order 15 rule 2 of the Rules of Court 2012 and based on the above authorities, a counterclaim is treated as a separate and independent action which does not come to an end in consequence of the plaintiff’s decision in discontinuing the action or the dismissal of the plaintiff’s action by the court as with the present case.”[3] (Emphasis mine)

3. Must be sufficiently connected with or allied to the subject matter of the principle claim

Order 15 Rule 2(1) of the Rules of Court 2012 is broadly worded and would appear to allow for counterclaims not sufficiently connected with or allied to the subject matter of the principal claim:

“Subject to rule 5(2), a defendant in any action who alleges that he has any claim or is entitled to any relief or remedy against a plaintiff in the action in respect of any matter (whenever and however arising) may, instead of bringing a separate action, make a counterclaim in respect of that matter: and where he does so he shall add the counterclaim to his defence.” (Emphasis mine)

Notwithstanding that, the courts have taken the view that a counterclaim must be sufficiently connected with or allied to the subject matter of a principle claim.

In Alloy Consolidated Sdn Bhd & Anor v Anjari Properties Sdn Bhd & Anor [2009] 4 MLJ 833, Ahmad Maarop JCA (later PCA) held the following:

“… it is settled law that a counterclaim cannot be maintained unless it is shown that the relief claimed is sufficiently connected with or allied to the subject matter of the principle claim as to make it necessary in the interest of justice that it should be dealt with along with the claim. Thus a counterclaim for slander cannot be maintained in a claim for money lent (see Esso Standard Malaya Bhd v Southern Cross Airways (M) Bhd [1972] 1 MLJ 168 at p 170, per Raja Azlan Shah J as His Royal Highness then was)).”[4] (Emphasis mine)

A similar position was taken by the Court of Appeal in M/S L.M. Ong & Co and Others v Chia Kah Gek (Dissenting avail MLJU (09) 1092 & 1094) [2009] MLJU 1093:

“As a rule, counterclaim must be sufficiently connected with the claim. Material affinity with the subject matter of the claim must be present in the counterclaim for defamation cannot be maintained in an action for a claim for a declaration that the clause in the sale and purchase agreement providing for the retention of the sale proceeds by a stakeholder was of no effect.

In this respect, it is pertinent to quote with our full agreement on what Raja Azlan Shah, J (as His Majesty then was) said in Esso Standard Malaysia v Southern Cross Airways (Malaysia) Bhd [1972] 1 MLJ 168 at p 170 …”[5] (Emphasis mine)

4. Defendant cannot be forced to bring a counterclaim

After considering the use of the word ‘may’ in Order 15 Rule 2(1) of the Rules of Court 2012, the Federal Court in Jaya Sudhir a/l Jayaram v Nautical Supreme Sdn Bhd [2019] 2 MLJ 816 held the following:

“Thus, a defendant cannot be forced to bring a counterclaim when sued for the law gives him an election.”[6]

5. Cannot be included when the principal action has been disposed of

In Ambank (M) Berhad v New Century Concepts Sdn. Bhd & Anor [2011] MLJU 741, Datuk Dr Haji Hamid Sultan bin Abu Backer J (later JCA) opined that:

“[4] … (i) The rules of the court do not strictly permit an amendment to include a counterclaim when the main suit has been disposed off. Order 15 rule 2(1) which the defendants purportedly relies on limits a counterclaim to bring in the plaintiffs action. If the plaintiffs action has been disposed off I do not think Order 15 rule 2 (1) will be of assistance to the defendants.”[7]

Additionally, His Lordship referred to the Salybia [1910] P 25 where Sir John Bingham (as he then was) was of the view that:

“I am of the opinion that no counterclaim was ever set up. A counterclaim can only be born of a living action. The letter of November 4 was written after the action had been wholly discontinued and when ‘the case’ had gone. If Bildt v Foy (1) be good law, I think it is distinguishable on the ground that there the counterclaim was mentioned while the action was still alive, whereas here it was not mentioned until after the action was dead. I doubt, moreover, whether a mere casual reference to an intention to prefer a counter claim can be described as setting up a counter claim at all. I think the registrar was right in refusing the application” (Emphasis mine)

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5 Things About The Review of Federal Court Decisions

1. An exercise of Federal Court’s inherent power

Rule 137 of the Rules of the Federal Court 1995 provides the following:

“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 hear any application or to make any order as may be necessary to prevent injustice or to prevent an abuse of the process of the Court.”

The Federal Court in Golden Star & Ors v Ling Peek Hoe & Ors [2021] 2 MLJ 259 expressly recognised that it has the inherent power to review its own decision pursuant to Rule 137 of the Rules of the Federal Court 1995:

“Under r 137 of the RFC the Federal Court has the inherent power to review its own decision but this is exercised only in rare and exceptional circumstances.”[1]

Previous Federal Courts have also taken a similar position [see e.g. Asean Security Paper Mills Sdn Bhd v Mitsui Sumitomo Insurance (Malaysia) BHD [2008] MLJU 1090 (FC)].

2. Cannot be invoked to review the merits of earlier Federal Court decision

In Kerajaan Malaysia v Semantan Estates (1952) Sdn Bhd [2019] 2 MLJ 609, Ahmad Maarop PCA held that:

“The inherent power of this court under r 137 cannot be invoked to review its own decision on its merits.”[2]

This position has consistently been taken by the Federal Court [see e.g. Datuk Seri Anwar Ibrahim v Government of Malaysia & Anor [2022] 1 MLJ 1 (FC), at para 29; TR Sandah ak Tabau & Ors (suing on behalf of themselves and 22 other proprietors, occupiers, holders and claimants of native customary rights (NCR) land situated at Rumah Sandah and Rumah Lajang, Ulu Machan, 96700 Kanowit, Sarawak) v Director of Forest, Sarawak & Anor and other appeals [2019] 6 MLJ 141 (FC), at para 13; Chan Yock Cher v Chan Teong Peng [2005] MLJU 673 (FC)].

3. Not intended to operate as another tier of appeal

Tengku Maimun CJ was of the view, in Yong Tshu Khin & Anor v Dahan Cipta Sdn Bhd & Anor and other appeals [2021] 1 MLJ 478 (“Yong Tshu Khin”), that:

“The review process is not intended to give the losing litigant a second bite at the proverbial cherry. Motions for review are not meant to operate as another tier of appeal. It is confined to the very specific purpose to prevent a manifest miscarriage of justice. While ‘miscarriage of justice’ is not an easy phrase to define, the development of our case law makes it abundantly clear that the correctness of a decision of the Federal Court is not, per se, a valid reason to seek a review of it. The public policy reason for setting this high threshold is premised on a simple fact that there must be finality to litigation, and if we may add: due respect to the decision of the final court of appeal.”[3] (Emphasis mine)

Nivesh Nair a/l Mohan v Dato’ Abdul Razak bin Musa, Pengerusi Lembaga Pencegahan Jenayah & Ors [2021] 5 MLJ 320 referred to and relied upon the above dictum in Yong Tshu Khin.[4]

4. Will only be successfully invoked in exceptional circumstances

The Federal Court in Asean Security Paper Mills Sdn Bhd v Mitsui Sumitomo Insurance (Malaysia) BHD [2008] MLJU 1090 provided some circumstances in which the Federal Court could exercise its power to review:

“(a) that there was a lack of quorum e.g. the court was not duly constituted as two of the three presiding judges had retired (Chia Yan Tek & Anor v Ng Swee Kiat & Anor [2001] 4 MLJ 1);

(b) the applicant had been denied the right to have his appeal heard on merits by the appellate court (Megat Najmuddin bin Dato Seri (Dr) Megat Khas v Bank Bumiputra (M) Bhd [2002] 1 MLJ 385);

(c) where the decision had been obtained by fraud or suppression of material evidence (MGG Pillai v Tan Sri Dato’ Vincent Tan Chee Yioun [2002] 2 MLJ 673);

(d) where the court making the decision was not properly constituted, was illegal or was lacking jurisdiction, but the lack of jurisdiction is not confined to the standing of the quorum that rendered the impugned decision (Allied Capital Sdn Bhd v Mohd Latiff bin Shah Mohd and another application [2005] 3 MLJ 1);

(e) clear infringement of the law (Adorna Properties Sdn Bhd v Kobchai Sosothikul [2006] 1 MLJ 417);

(g) where an applicant under r 137 has not been heard by this court and yet through no fault of his, an order was inadvertently made as if he had been heard (Raja Prithwi Chand v Sukhraj Rai [AIR] 1941);

(h) where bias had been established (Taylor & Anor v Lawrence & Anor [2002] 2 All ER 353);

(i) where it is demonstrated that the integrity of its earlier decision had been critically undermined eg where the process had been corrupted and a wrong result might have been arrived at (Re Uddin [2005] 3 All ER 550);

(j) where the Federal Court allows an appeal which should have been consequentially dismissed because it accepted the concurrent findings of the High Court and Court of Appeal (Joceline Tan Poh Choo & Ors v V Muthusamy [2007] 6 MLJ 485).”

5. There must have been an error which obviously was an injustice

Tun Zaki Azmi CJ in Badan Peguam Negara v Kerajaan Malaysia [2009] 2 MLJ 161 held the following:

“Before the application can succeed, he must be able to show on the face of the record that there was injustice. That error must be obvious on the face of the record. It should be able to be seen just by reading the record that there was an error which obviously was an injustice … It cannot apply where a decision of this court is only questioned, whether in law or on the facts of the case.”[5] (Emphasis mine)

This test was applied by subsequent Federal Courts [see e.g. Golden Star & Ors v Ling Peek Hoe & Ors [2021] 2 MLJ 259 (FC), at para 43].

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Judicially Recognised Social Legislation

Social legislation are “a specific set of laws passed by the legislature for the purpose of regulating the relationship between a weaker class of persons and a stronger class of persons.”[1]

The rationale behind social legislation was stated by the Federal Court in PJD Regency Sdn Bhd v Tribunal Tuntutan Pembeli Rumah & Anor and other appeals [2021] 2 MLJ 60 (FC):

“Given that one side always has the upper hand against the other due to the inequality of bargaining power, the state is compelled to intervene to balance the scales of justice by providing certain statutory safeguards for that weaker class.”[2]

When it comes to interpreting social legislation, the courts are to “[construe] its provisions to give [its] provisions a construction which would assist to achieve the object of the Act.”[3]

The following is a non-exhaustive list of legislation (arranged alphabetically) which have been expressly recognised by the courts as social legislation.

1. Drug Dependants (Treatment and Rehabilitation) Act 1983

In the Supreme Court case of Ang Gin Lee v Public Prosecutor [1991] 1 MLJ 498, Hashim Yeop A Sani CJ (Malaya) held:

“[The Drug Dependants (Treatment and Rehabilitation) Act 1983] is a social legislation of sort.”[4]

2. Employees Provident Fund Ordinance 1951

The Federal Court in Employees Provident Fund Board v Dr Chelliah Bros [1969] 1 MLJ 161 enunciated the following:

“The Employees Provident Fund is essentially a social legislation enacted to benefit employees.”[5]

The Employees Provident Fund (“EPF”) Ordinance 1951 later became the EPF Act 1951, and subsequently was repealed and replaced by the EPF Act 1991.[6]

3. Employees Provident Fund Act 1991

In Lembaga Kumpulan Wang Simpanan Pekerja v Ong Lian Chee (suing as administrator of the estate of Goh Tin Poh, deceased) [2010] 4 MLJ 762, Low Hop Bing JCA stated:

“… the EPF Act 1991 which is a piece of social, legislation wherein the underlying purpose or object is no doubt the promotion of the welfare of the members, in the context of beneficient social legislation, the provisions therein must receive a broad, liberal and functional or purposive interpretation — see Golden Hope Plantations (Peninsular) Sdn Bhd (Ladang Sungei Senarut) v Sarawathy Kathan [2009] 1 MLJ 611; [2009] 3 CLJ 335 (CA).”[7]

See also Sivamurthy s/o Muniandy & Ors v Lembaga Kumpulan Wang Simpanan Pekerja [2013] 5 MLJ 533 (CA), at para 14.

4. Employees’ Social Security Act 1969

The Federal Court in Rethana v Government of Malaysia [1984] 2 MLJ 52 recognised that the Employees’ Social Security Act 1969 is a social legislation:

“In the present case the Employees’ Social Security Act, 1969 is being challenged not on the basis that Parliament has no power to enact it, but on the ground that some of its provisions are inconsistent with certain provisions of the Constitution. Being a social legislation involving matters pertaining to labour and social security …”[8]

See also Sri Mahanum bt Yup (suing as widow to Mohd Yusof bin Sahak, deceased) v Representative of the estate for Raden Benni bin RS Tanuwidjaja, deceased & Anor [2019] 4 MLJ 362 (CA), at para 8; Golden Hope Plantations (Peninsular) Sdn Bhd (Ladang Sungei Senarut) v Saraswathy a/p Kathan [2009] 1 MLJ 611 (CA), at para 17.

5. Employment Act 1955

Low Hop Bing JCA in Golden Hope Plantations (Peninsular) Sdn Bhd (Ladang Sungei Senarut) v Saraswathy a/p Kathan [2009] 1 MLJ 611 enunciated the following:

“The question for determination in the instant appeal calls for an examination and interpretation of the Employment Act 1955 and the SOCSO Act. Both these Acts come within the category of social legislation.”[9] (Emphasis mine)

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5 Things About The Right to Property

1. Guaranteed under the Federal Constitution

Article 13(1) of the Federal Constitution provides the following:

“No person shall be deprived of property save in accordance with law.”

In Superintendent of Land and Survey Department Kuching-Divisional Office & Anor v Ratnawati bt Hasbi Mohamad Suleiman [2020] 2 MLJ 553, the Federal Court affirmed that:

“… no one, not even this court in this regard can dispute that right to property is guaranteed by and firmly entrenched in the Federal Constitution.”[1]

The Federal Court in Bungsar Hill Holdings Sdn Bhd v Damansara Realty Bhd [2019] MLJU 222 shared a similar view when it held:

“A person’s right to property is protected and entrenched in Article 13 of the Federal Constitution …”[2]

2. Is not an absolute right

A person can be deprived of his/her property in accordance with law [see Article 13(1) of the Federal Constitution]

Zainun Ali FCJ in the seminal case of Semenyih Jaya Sdn Bhd v Pentadbir Tanah Daerah Hulu Langat and another case [2017] 3 MLJ 561 (“Semenyih Jaya”) observed that:

“[The right to acquire, hold and enjoy property] is not an absolute right since ownership of property is subject to what is provided for in the Federal Constitution.”[3]

3. Property can be compulsorily acquired/used

Implied from the wording of Article 13(2) of the Federal Constitution which provides:

“No law shall provide for the compulsory acquisition or use of property without adequate compensation.”

The Federal Court in Semenyih Jaya also pointed out the following:

“One’s property can be acquired by the state.”[4]

The Land Acquisition Act 1960 is an Act of Parliament which allows the state authority to compulsorily acquire property.

4. Can only be taken away if it is the clear effect of a statute

The Federal Court in Tenaga Nasional Bhd v Bukit Lenang Development Sdn Bhd [2019] 1 MLJ 1 relied on the UK House of Lords decision in R v Secretary of State for the Home Department, ex parte Simms and another [1999] 3 All ER 400; [2000] 2 AC 115 and held:

“A person cannot have his right to property taken away unless that is the clear effect of a statute.”[5]

5. Statutes which deprive a person of the right must be strictly interpreted in favour of the person

In Ee Chong Pang & Ors v The Land Administrator of the District of Alor Gajah & Anor [2013] 2 MLJ 16, the Federal Court opined that:

“The Land Acquisition Act is a legislation that empowers a state authority to deprive a person of his property. As such, we are of the view that the provisions of the Act must be strictly interpreted in favour of the person who is to be deprived of his property so as to give meaning to the constitutional protection of a person’s right to his property (see Ismail bin Bakar & Ors v Director of Lands and Mines, Kedah Darul Aman [2011] 5 MLJ 197; [2010] 9 CLJ 810).”[6]

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Anti-Defection Provisions in Selected Countries

1. Bangladesh

Article 70 of the Constitution of the People’s Republic of Bangladesh:[1]

“A person elected as a member of Parliament at an election at which he was nominated as a candidate by a political party shall vacate his seat if he –

(a) resigns from that party ; or

(b) votes in Parliament against that party ;

but shall not thereby be disqualified for subsequent election as a member of Parliament.”

2. Belize

Article 59(2)(e) of the Belize Constitution Act:[2]

“A member of the House of Representatives shall also vacate his seat in the House

(e) if, having been a candidate of a political party and elected to the House of Representatives as a candidate of that political party, he resigns from that political party or crosses the floor.”

3. Fiji

Article 63(1) of the Constitution of the Republic of Fiji:[3]

“The seat of a member of Parliament becomes vacant if the member—

            …

(g) resigns from the political party for which he or she was a candidate at the time he or she was elected to Parliament;

(h) votes or abstains from voting in Parliament contrary to any direction issued by the political party for which he or she was a candidate at the time he or she was elected to Parliament, without obtaining the prior permission of the political party; or

(i) is expelled from the political party for which he or she was a candidate at the time he or she was elected to Parliament and—

(i) the expulsion was in accordance with the rules of the political party relating to party discipline; and

(ii) the expulsion did not relate to any action taken by the member in his or her capacity as a member of a committee of Parliament.”

4. India

Item 2 in the Tenth Schedule to the Constitution of India:[4]

“… a member of a House belonging to any political party shall be disqualified for being a member of the House—

(a) if he has voluntarily given up his membership of such political party; or

(b) if he votes or abstains from voting in such House contrary to any direction issued by the political party to which he belongs or by any person or authority authorised by it in this behalf, without obtaining, in either case, the prior permission of such political party, person or authority and such voting or abstention has not been condoned by such political party, person or authority within fifteen days from the date of such voting or abstention.”

5. Malawi

 Article 65(1) of Malawi’s Constitution:[5]

 “The Speaker shall declare vacant the seat of any member of the National Assembly who was, at the time of his or her election, a member of one political party represented in the National Assembly, other than by that member alone but who has voluntarily ceased to be a member of that party or has joined another political party represented in the National Assembly, or association or organization whose objectives or activities are political in nature.”

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