Tuesday, September 9, 2008

Upheld Interlocutory Decision


Ask any Senior Assistant Registrar (SAR) or Magistrate (or any judicial officer for that matter) and they will tell you that it is truly a good feeling having your decision upheld by the higher Courts. Below is another one of my looooong decision that I wrote last year when I was a SAR. I was not required to write any reasoning but I figured it would assist the counsels when they want to appeal (or to assist the Deputy Registrar in explaining to the judge why I made such decision). I have no idea why the High Court Judge was dismissed the application but I would like to THINK that it was because of my reasoning. hehehe.


This was a jurisdictional issue. One party wanted the matter to be heard in KL and the other in Sabah. I gave the following decision:


DALAM MAHKAMAH TINGGI MALAYA DI KUALA LUMPUR
DI WILAYAH PERSEKUTUAN, MALAYSIA
(BAHAGIAN DAGANG)

Antara

Credit Card Company …PLAINTIF

Dan

Credit Card Defaulter 1 …DEFENDEN PERTAMA
Credit Card Defaulter 2 …DEFENDEN KEDUA
Credit Card Defaulter 3 …DEFENDEN KETIGA

(Grounds for dismissing the Striking Out Application under 2 R. 1(1) and (2) and /or O. 12 R 7 and/or O.18 R.19(1) (b) or (c) or (d) and /or O. 92 r. 4 of the Rules of High Court 1980 with costs vide Enclosure X)

This is a striking out application made under 2 R. 1(1) and (2) and /or O. 12 R 7 and/or O.18 R.19(1) (b) or (c) or (d) and /or O. 92 r. 4 of the Rules of High Court 1980 vide Enclosure 8. I dismissed the application with costs and now I lay the grounds for my decision.

BRIEF FACTS:

The Plaintiff is a charge card company. The first Defendant (D1) applied for a charge card from the Plaintiff as a principal card holder. The second Defendant (D2) and the third Defendant (D3) also applied for supplementary cards. The application was granted and all the Defendants started to use their cards then after.

The defendants then defaulted in making their payments. A notice of demand was sent to all the defendants on 1.10.2006 followed by a Writ of Summons and Statement of Claim on 26.4.2007.

The Defendants submitted that they paid RM 30,000 in the beginning to pay the debt but the money went missing. Due to this, the Defendants were afraid to pay more in case more payments went missing.

THE ISSUES:
There are two issues in this striking out application which are:
That the High Court of Kuala Lumpur did not have the local jurisdiction to hear this application.
That the High Court of Kuala Lumpur is not the forum of convenience for this matter.

1st Issue: Local Jurisdiction.
Section 23 of the Court of Judicature Act 1964 (CJA) is the law that the Defendants relied upon. I reproduce Section 23 below.


23. Civil jurisdiction - general.
(1) Subject to the limitations contained in Article 128 of the Constitution the High Court shall have jurisdiction to try all civil proceedings where -
(a) the cause of action arose;
(b) the defendant or one of several defendants resides or has his place of business;
(c) the facts on which the proceedings are based exist or are alleged to have occurred; or
(d) any land the ownership of which is disputed is situated,


within the local jurisdiction of the Court and notwithstanding anything contained in this section in any case where all parties consent in writing within the local jurisdiction of the other High Court.
The Defendants’ counsel submitted that:


That the cause of action happened in Kota Kinabalu, Sabah. This is because the failure or neglect by the Defendants to pay the amount claimed by the Plaintiff happened in Kota Kinabalu, Sabah. Furthermore, the Plaintiff sent the Notice of Demand to the Defendant’s address in Kota Kinabalu, Sabah.

All of the Defendants reside in Kota Kinabalu, Sabah. The addresses of all the Defendants in the charge card agreement, the address the notice of demand was sent to, the address on the Writ of Summons are in Kota Kinabalu, Sabah.

The Defendants cited the following authorities to support their contention:


Fung Beng Tiat@ Fang Beng Chee v. Marid Construction Co [1996] 2 AMR 2081 whereby in that case, the Federal Court decided that the legislature did not intend that any court in Malaya will assume jurisdiction of a matter arising in or which should be filed in a Borneo Court.
Cita Marine Sdn Bhd v. Progressive Insurance Bhd. & 3 Ors [2001] 2 AMR 1273 whereby in that case, the Miri High Court decided that where the premium was paid or the policy issued is the place where the cause of action arose. (The Plaintiff contended that this case involves shipping matter and is distinguished from the present case.)


RHB Bank Berhad v. Kawood Sdn Bhd & 2 Ors [2002] 2 AMR 1455 whereby the Sibu High Court decided that the place where the refusal to pay happened is where the place the cause of action arose. (The Plaintiff contended that in that case, the Plaintiff had a main branch in Miri and Kuching, whilst in the present case, the only main branch is in Kuala Lumpur.)

I am of the opinion that the cause of action actually arose in Kuala Lumpur instead of Kota Kinabalu, Sabah. I do agree with the Defendants authorities. However, the authorities did not show that in this particular case, the cause of action actually arose in Kota Kinabalu, Sabah. It merely lay down that the action should be filed where the cause of action arose.

I find that the cause of action arose where the office of the Plaintiff was situated (at that time). The agreement was also concluded in Kuala Lumpur as the Plaintiff is the one who had authority to approve the Defendant’s charge card and not the agent. The word “or” in Section 23 CJA means that the section should be read disjunctively. Furthermore, the Defendant in their affidavit in reply at Enclosure 11 stated that all of the application form was sent to the Plaintiff in Kuala Lumpur for it to be approved. It may be that the Defendants are from Kota Kinabalu, Sabah, however,the Kuala Lumpur High Court also has the jurisdiction to hear this matter.

The Plaintiff cited Sogelease Advance (Malaysia) Sdn Bhd v. Kemajuan Tat Young Sdn Bhd & Ors [1999] 5 CLJ 331 and said that its facts are almost similar to the present case. I do see some similarities. I would think that the most important issue that was discussed in this case is that the cause of action arose when the Plaintiff failed to receive the payments. Even though the Defendants resided in Sarawak, and by virtue of Section 23 (1) (b) the High Court in Sabah and Sarawak would also have jurisdiction to try the action that did not affect the High Court of Malaya to try the action. What it amounted to was that the Plaintiff could have brought the action in either of the High Courts.

I feel that this case succinctly justify my reason for dismissing the application. For the sake of completeness, I shall now show why I disagreed with the second issue as well.

2nd Issue: Forum of Convenience.

The Plaintiff cited Malacca Securities Sdn Bhd v. Loke Yu [1998] 3 CLJ 23 to rebut this issue. I will have to disregard this case as it involves the High Court in Malaya and nothing to do with the High Court of Sabah and Sarawak.

The Defendant submitted that because of forum convenience, this matter should be heard in Kota Kinabalu High Court. The reasons are as follows:


The Defendants are residents in Kota Kinabalu, Sabah.
The Plaintiff is more financially capable to travel to Sabah than the Defendants are to travel to Kuala Lumpur.
The Defendants have defences and counter claim that require the Plaintiff’s agent(s) in Sabah to be witness(es).
The Plaintiff’s witnesses are not necessary because the only the amount is in dispute and not the charge card agreement.

I would have to disagree with the Defendants. Assuming that the Plaintiff applies for a summary judgment, than there would be no need for the Defendant to even travel to Kuala Lumpur as they would only need to furnish affidavits and this could be done in Kota Kinabalu itself.

Should this matter go for full trial, the burden is upon the Plaintiff to prove its claim. It would be easier for the Defendants to come to Kuala Lumpur as there are only three (3) Defendants in this case. This is not so for the Plaintiff as more witnesses are needed to prove their claim.

The Plaintiff submits that hearing the matter in Kuala Lumpur is actually more towards the Defendant’s advantage. In Kuala Lumpur, the Defendants can cross examine all of the Plaintiff’s witnesses relevant to the issue of fraud as raised by the Defendants.

Lastly, and I note that this reason was agreed by both parties, I was also of the opinion that the cost to have this case in Kota Kinabalu, Sabah might be more since the number of witnesses that needs to be transported there would be more. At the end of the day, should the Defendant lose this suit in Kota Kinabalu, they would have to incur more losses than if the matter was heard here in Kuala Lumpur. If the Defendant win this suit, then, all of the cost incurred will be reimbursed by the Plaintiff. Therefore, the issue of financial capability is not a concrete argument.

I conclude this decision with an excerpt from Amanah Finance Malaysia Berhad v. Aura Vista Sdn Bhd. & Ors [2000] 5 CLJ 229 whereby Justice Abdul Wahab Patail commented the following remark:

Much of the argument is based on simple convenience of the defendants, and little effort is made to show why the proceeding is more appropriately conducted in Pulau Pinang. The distinction is this. If the matter involves property or works or large numbers of witnesses located in Pulau Pinang, then clearly the proceeding is more appropriately conducted in Pulau Pinang. But this case involves a loan transaction only. Convenience alone is weak persuasion with regard to the question of appropriateness that the proceeding in this case be conducted in Pulau Pinang.


Decision:
Application is dismissed with costs.


Blog adjourned!

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