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IN THE HIGH COURT OF MALAYA IN JOHOR BAHRU

IN THE STATE OF JOHOR DARUL TAKZIM, MALAYSIA
[CIVIL SUIT NO. JA-11B-NCC-1-03/2019]

BETWEEN

LIAU TAI WAI DAVID ...APPELLANT

[PASPORT SINGAPURA NO. L0933505K]
[PASPORT SINGAPURA (LAMA): E4443774L]

AND

OUN SHAN SHAN ...RESPONDENT

[NRIC NO. 840119-01-5122]

GROUNDS OF JUDGMENT

This Appeal

[1] This is an appeal by the Appellant/ Plaintiff (“this Appeal”) against

the decision of the learned Magistrate dated 14 March 2019 in
allowing the application (“Enclosure 10”) of the
Respondent/Defendant to set aside the Judgment in Default of
Appearance (“JID”) dated 22 June 2018 obtained by the Appellant/
Plaintiff. For ease of reference, the Appellants and Respondents will
be referred to respectively as the Plaintiff and Defendant.

[2] I allowed this Appeal and the following are my reasons.

The brief facts

[3] The Plaintiff instituted an action on 24 May 2018 against the

Defendant for the recovery of MYR59,068.58, pursuant to a
friendly loan given to the Defendant in staggered payments between

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September 2017 and February 2018 (evidenced by the transaction

history exhibited at pages 31-41 of the Record of Appeal). The
Defendant had failed to enter appearance as prescribed by Order 12
rule 4 of the Rules of Court 2012 (“Rules of Court”), which reads:

Order 12 – Entry of appearance to writ

Rule 4 – Time limited for appearing

References in these Rules to the time limited for appearing

are references-

(a) in the case of a writ served within Peninsular Malaysia,

to fourteen days after service of the writ or, where that time
has been extended by or by virtue of these Rules, to that time
as so extended; and

[Emphasis added.]

[4] On 22 June 2018, the Plaintiff obtained JID against the Defendant
and thereafter proceeded with bankruptcy proceedings. It was only
after receiving the Creditors’ Petition on 9 December 2018 that the
Defendant had engaged solicitors and filed a stay of execution
proceedings.

[5] On 20 December 2018, the Defendant filed Enclosure 10 (in which

he had also filed a Defence dated 19 December 2018) to set aside
the JID, which was allowed by the Magistrate on 14 March 2019.

The Plaintiff’s case

[6] The Plaintiff contended that the learned Magistrate had erred in
allowing Enclosure 10, as the JID was regular, lawfully obtained,
and that the Defendant was out of time in filing Enclosure 10, and
had failed to provide reasonable explanation for such delay.

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The Defendant’s case

[7] The Defendant submitted that the Affidavit-In-Reply filed on behalf

of the Plaintiff in resisting Enclosure 10 was in breach of the law
and ethics as it was affirmed by his solicitor. The Defendant further
submitted that there were merits in his Defence, as the Plaintiff’s
claim was based on a loan which was not reduced into writing and,
therefore, not proved.

Contentions and findings

Whether the learned Magistrate erred in rejecting the affidavit affirmed

by the Plaintiff’s solicitor

[8] The learned Magistrate, in allowing Enclosure 10 had rejected the

Affidavit-In-Reply filed by the solicitors of the Plaintiff. Hence, at
this juncture, the issue that needed to be addressed was whether
there was a breach of the law and ethics when, in opposing
Enclosure 10, the Plaintiff’s Affidavit-In-Reply dated 9 January
2019, was affirmed by his solicitor.

[9] To address this issue, the starting point is Order 41 rule 5 of the
Rules of Court:

Order 41 – Affidavits

Rule 5 - Contents of affidavit (O. 41 r. 5)

(1) Subject to Order 14, rules 2(2) and 4(2), to paragraph

(2) of this rule and to any order made under Order 38,
rule 3, an affidavit may contain only such facts as the
deponent is able of his own knowledge to prove.

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(2) An affidavit sworn for the purpose of being used in

interlocutory proceedings may contain statements of
information of belief with the sources and grounds
hereof.

[Emphasis added.]

[10] The general rule that an Advocate and Solicitor is not allowed to
affirm an affidavit is rooted in rule 28 of the Legal Profession
(Practice & Etiquette Rules) 1978 which reads:

Rule 28 – Advocate and solicitor not to appear in a case

where he is a witness

(a) An advocate and solicitor shall not appear in

Court or in chambers in any case in which he has
reason to believe that he will be a witness in
respect of a material and disputed question of
fact, and if while appearing in a case it becomes
apparent that he will be such a witness, he shall
not continue to appear if he can retire without
jeopardising his client's interests.

(b) An advocate and solicitor shall not appear before

an appellate tribunal if in the case under appeal he
has been a witness on a material and disputed
question of fact in the Court below.

(c) This rule does not prevent an advocate and

solicitor from swearing or affirming an affidavit
as to formal or undisputed facts in matters in
which he acts or appears.

[11] There are, however, exceptions to this rule. In the case of Malayan
Banking Bhd v. Charterefield Corporation Sdn Bhd [2001] 6 CLJ

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407 (which was subsequently adopted by RK Nathan J in

Sivanathan a/l Jaganathan v. Teh Yee Fun [2003] 3 AMR 584)
Ramly Ali JC (as he then was) in the following paragraphs,
summed up the situation where an Advocate and Solicitor is
allowed to depose an affidavit on behalf of the litigant:

… I am of the view that a solicitor may depose an affidavit on

behalf of the litigant if all the following conditions are
fulfilled:

i) the facts to be deposed must not be contentious or

disputed question of facts;

ii) the facts to be deposed must be from his

knowledge (if the affidavit is for the purpose of
being used in interlocutory proceedings, it may
contain statements of information or belief with
sources and grounds thereof); and

iii) he is authorised to depose the affidavit by the

litigant.

[12] As such, the first issue, was whether the facts were not disputed.
According to the facts of the present case, the Defendant had
ignored the Writ and Statement of Claim upon receipt of the same,
and had failed to file a Defence. In fact, in paragraphs 9 and 10 of
his Affidavit-In-Support dated 19 December 2018, the Defendant
himself had admitted that he ignored the Writ and Statement of
Claim although he was aware that the Plaintiff had proceeded to
litigate the matter, and it was only the bankruptcy proceedings that
prompted him to respond to the legal documents. On this point, I
find instructive the case of Waseem Yaqoob Sheikh Muhammad
Yaqoob v. Wan Muhammad Irywan Wan Mohamad Sahini & Ors
[2018] 1 LNS 1992, where it was held that the Defendant is deemed

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to have admitted the Plaintiff’s claim if he does not enter

appearance and defence.

[13] The facts deposed to by the Plaintiff’s solicitor in the Affidavit -In-
Reply dated 9 January 2019 was based on the Plaintiff solicitor’s
own knowledge, and statements of information with sources
thereof. Furthermore, the Plaintif’s solicitor had also stated that she
was authorised to depose the affidavit on behalf of the Plaintiff, as
he had business overseas, and that he would be filing a further
Affidavit-In-Reply, which he had in fact affirmed on 23 January
2019.

[14] It is, therefore, my view that the learned Magistrate had erred when
he rejected the Plaintiff’s Affidavit-In-Reply that was deposed to
by the Plaintiff’s solicitor, as the latter had not breached any rule of
law or ethics in doing so.

Whether the learned Magistrate erred in deciding that there was a

defence on merits

[15] The learned Magistrate also held that the reason for allowing
Enclosure 10 was that the defence had merits.

[16] It is trite that the Defendant must show that his defence is not a
sham, but one that is, prima facie, raising serious issues as a bona
fide reasonable defence. A defence on the merits means a defence
which discloses an arguable and triable issue

[17] Since the judgment was in fact regular, the starting point is the
Federal Court case of Lai Yoke Ngan & Anor v. Chin Teck Kwee &
Anor [1997] 3 CLJ 305, where the following was expressed:

But where the default judgment has been obtained regularly,

in order to succeed the defendant must file an affidavit of
merits, ie, the defendant must disclose by affidavit evidence

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that prima facie he has a defence on the merits. Put in another

way, the affidavit must disclose that he has an arguable or
triable issue on the merits.

[18] I also find instructive, the Supreme Court decision of Hasil Bumi
Perumahan & 5 Ors v. United Malayan Banking [1994] 1 AMR
297, where it was stated by Amar Haji Mohd Jemuri Serjan CJ:

…the applicant must show that he has a defence which has

some merits and which the court must try. To use common
and plain language, the applicant must show that his defence
is not a sham defence but one that is prima facie, raising
serious issues as a bona fide reasonable defence.

[19] The Defendant contended that the friendly loan had no basis as the
Plaintiff had not produced any documentary evidence to that effect.

[20] In my view, this argument is untenable, on the basis that verbal

contracts are just as valid. Furthermore, it has been explained by
Mokhtar Sidin JCA in the Court of Appeal case of Tan Aik Teck v.
Tang Soon Chye [2007] 5 CLJ:

A friendly loan is a loan given by the lender to the borrower

based on mutal trust whereby the borrower is to repay the
loan within the specified time with no interests charged...

[21] A friendly loan, therefore, does not have to be in writing, and as

such there is no requirement for the Plaintiff to adduce a written
agreement to that effect. In any event, the Plaintiff had deposited
the loan into the Defendant’s account and the fact that the
Defendant had made repayments showed that he had taken the loan
from the Plaintiff.

[22] Based on the facts, it is clear that the Defendant did not have any
defence on the merits. He himself had admitted in his Affidavit-In-

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Support that he had ignored the Writ and Statement of Claim, and
that the delay was due to wrong advice by his family and ignorance
of the court process. The same omission was referred to in the case
of Mirra Sdn Bhd v. The Ayer Molek Rubber, where it was stated by
James Foong JCA:

...when the defendant is already fully appraised of such claim

in the statement of claim and had failed, refused or neglected
to enter appearance or defence as the case may be, I do not
see any injustice done to the defendant in awarding such
interest without assessment since the defendant had been
accorded full opportunity to contest this by entering an
appearance or a defence. Obviously, by not doing so, the
respondent must be deemed to have opted not to challenge
any part of the claim which includes the part on pre-judgment
interest.

...Like in this case, I do not see how the respondent could, at

the material time, be prejudiced when the respondent had,
despite full knowledge of the appellant’s claim for this item,
took no action to defend it.

[Emphasis added.]

[23] It is pertinent to also note that it was only the bankruptcy

proceedings that prompted him to respond to the documents

[24] Since it is my view that the JID was regular, and that the Defence
had no merits, the issue of the delay on the part of the Defendant in
filing Enclosure 10 becomes imperative.

Whether the learned Magistrate erred in failing to consider the delay

[25] It was undisputed that the JID obtained against the Defendant was
regularly entered in accordance with the rules following proper

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service of the Writ on the Defendant. The issue, therefore, was

whether the delay by the Defendant in applying to set aside the JID
was satisfactorily explained.

[26] The Defendant had filed Enclosure 10 only on 20 December 2018 ,

which was more than 180 days (approximately six months) after the
JID was obtained, and thus, not in accordance with the 30 -day
period as prescribed by Order 42, rule 13 of the Rules of Court,
which reads:

Order 42 – Judgment and orders

Rule 13 – Setting aside or varying judgment and orders

Save as otherwise provided in these Rules, where provisions

are made in these Rules for the setting aside or varying of any
order or judgment, a party intending to set aside or to vary
such order or judgment shall make an application to the Court
and serve it on the party who has obtained the order or
judgment within thirty days after the receipt of the order or
judgment by him.

[Emphasis added.]

[27] The importance of complying with this time-period was highlighted

in several cases including Mirra Sdn Bhd v. The Ayer Molek Rubber
Co Bhd [2008] 2 MLJ 348, Khor Cheng Wah v. Sungai Way
Leasing Sdn Bhd [1996] 1 MLJ 223, Thye Ah Chai (t/a Kent Naga
Enterprise) v. Teraju Mercu Construction & Engineering Sdn Bhd
[2014] 1 MLJ 422, and Malayan Banking Bhd v. Mahmood Zuhdi
Hg Mohd Nor [2001] 6 MLJ 209.

[28] In Mirra Sdn Bhd v. The Ayer Molek Rubber Co Bhd [2008] 2 MLJ
348, the application to set aside was filed four months after the
judgment was served on the defendant. The Court of Appeal

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acknowledged that delay is a vital factor to be considered in

exercising any discretion to set aside a judgment in def ault, and as
such, refused to set aside the judgment, on the basis of delay and
lack of a defence.

[29] In Khor Cheng Wah v. Sungai Way Leasing Sdn Bhd [1996] 1 MLJ
223, in dismissing an application to set aside a regular judgment, it
was stated:

It is a cardinal principle of law, that when a litigant seeks the

intervention of the court in a matter that affects his rights, he
must do so timeously. The maxim vigilantibus, non
dormientibus, jura subveniunt, though having its origins in
the Court of Chancery, is of universal application. Even in
cases where a right is exercisable ex debito justitiae, a court
may refuse relief to an indolent litigant.

In all cases in which delay in approaching the court is in

issue, the burden is upon the litigant who has delayed to
render a satisfactory explanation for it.

[Emphasis added.]

[30] It is pertinent to note therefore, that an application to set aside a

JID must be made timeously, even where the right is exercisable ex
debito justitiae, and that the Court may refuse relief, especially
where the delay is not satisfactorily explained.

[31] The same reminder was administered by Edgar Joseph Jr FCJ i n

Tuan Haji Ahmed Abdul Rahman v. Arab-Malaysian Finance Bhd
[1996] 1 MLJ 30:

Having said that it should be added that the application to set

aside such a judgment should be made: (a) with reasonable
promptitude, in other words within a reasonable time; and (b)

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before the defendant has taken any fresh step after becoming
aware of the irregularity.

[32] In Thye Ah Chai (t/a Kent Naga Enterprise) v. Teraju Mercu

Construction & Engineering Sdn Bhd [2014] 1 MLJ 422, it was
stated by the Court of Appeal that Order 42 rule 13 is mandatory,
and an applicant filing an application beyond the prescribed time
limit, is obliged to provide cogent reasons for any delay. In that
case, since the reasons were not satisfactorily explained, the Court
of Appeal allowed the appeal and reinstated the JID without even
considering the merits of the application.

[33] In this case, the delay was more than 180 days and the reasons
provided by the Defendant for the delay in filing Enclosure 10 were
unacceptable, as he said it was due to wrong advice by his family
and ignorance of the court process. In my view, the learned
Magistrate had not considered the issue of delay on the part of the
Defendant and the absence of a satisfactory explanation for the
same.

[34] Furthermore, in the absence of an application for extension of time

by the Defendant despite a lapse of 180 days (approximately six
months), this application was filed well out of time, and was bad in
law. This was emphasised in Malayan Banking Bhd v. Mahmood
Zuhdi Hg Mohd Nor [2001] 6 MLJ 209, where the Court
acknowledged that the 30-day time frame is a strict one, and that a
party would be required to file an application to extend time under
Order 3 rule 5 of the Rules of Court, which reads:

Order 3 – Time

Rule 5 – Extension of time

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(1) The Court may, on such terms as it thinks just, by order

extend or abridge the period within which a person is
required or authorized by these Rules or by any judgment,
order or direction, to do any act in any proceedings.

(2) The Court may extend any such period as referred to in

paragraph (1) although the application for extension is not
made until after the expiration of that period.

(3) The period within which a person is required by these

Rules, or by any order or direction, to serve, file or amend
any pleading or other document may be extended by consent
in writing without an order of the Court being made for that
purpose.

Conclusion

[35] In the upshot, based on the aforesaid reasons, and after careful
scrutiny of all the evidence before this Court, both oral and
documentary, and submissions of Counsel for both parties, this
Appeal is allowed with costs in the sum of MYR1,000 (subject to
allocatur fees).

Dated: 31 JULY 2020

(EVROL MARIETTE PETERS)

Judicial Commissioner
High Court, Johor Bahru

Counsel:

For the appellant/plaintiff - Aidah Mohamed; M/s Zaid Ibrahim & Co

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For the respondent/defendant - P Thirumalai; M/s Thiru & Co

Case(s) referred to:

Hasil Bumi Perumahan & 5 Ors v. United Malayan Banking [1994] 1 AMR 297

Khor Cheng Wah v. Sungai Way Leasing Sdn Bhd [1996] 1 MLJ 223

Lai Yoke Ngan & Anor v. Chin Teck Kwee & Anor [1997] 3 CLJ 305

Malayan Banking Bhd v. Charterefield Corporation Sdn Bhd [2001] 6 CLJ 407

Malayan Banking Bhd v. Mahmood Zuhdi Hg Mohd Nor [2001] 6 MLJ 209

Malaysia Hasil Bumi Perumahan & 5 Ors v. United Malayan Banking [1994] 1
AMR 297

Mirra Sdn Bhd v. The Ayer Molek Rubber Co Bhd [2008] 2 MLJ 348

Sivanathan a/l Jaganathan v. Teh Yee Fun [2003] 3 AMR 584

Tan Aik Teck v. Tang Soon Chye [2007] 5 CLJ

Thye Ah Chai (t/a Kent Naga Enterprise) v. Teraju Mercu Construction &
Engineering Sdn Bhd [2014] 1 MLJ 422

Tuan Haji Ahmed Abdul Rahman v. Arab-Malaysian Finance Bhd [1996] 1

MLJ 30

Waseem Yaqoob Sheikh Muhammad Yaqoob v. Wan Muhammad Irywan Wan

Mohamad Sahini & Ors [2018] 1 LNS 1992

Legislation referred to:

Contracts Act 1950, s. 2

Rules of Court 2012, O. 3 r. 5, O. 12 r. 4, O. 41 r. 5, O. 42 r. 13

Legal Profession (Practice & Etiquette Rules) 1978, r. 28

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