推翻缺庭判决(失败) [2022] MLJU 991

被告是某公司的董事并持有该公司99.9%的股份。原告和被告在2019年3月22日签署了一份股份出售协议，原告同意以RM408,000 的价值购买被告的股份。LHDN之后表示需要被告提供公司最新审计报告，才能在协议上加盖印花。
原告之后要求多次要求被告提供审计报告；然而尽管提出了多次的要求，被告仍未提供。即使原告的律师于 2019年5月23日再次发出通知，也没有得到回复。由于被告未能履行其在股份出售协议项下的义务，原告随后提起诉讼要求被告做出赔偿。
原告于2019年9月将法庭传票寄往被告办公的地址，由于被告未能出庭，法庭对被告作出缺席判决，命令被告对原告做出赔偿。被告在一年后提出撤销缺席判决的庭令。
被告辩解他并没有在办公的地址收到控状。而且原告在自己的文件也承认他的传票送达人(office boy)是把控状放在A地址外面的一辆罗里上面。然而原告则解释说，传票送达人是联系被告，被告通知传票送达人到A地址找他。
传票送达人解释他当时要交控状给被告，可是被告不要接过控状。他只好把控状放在A地址外面的一辆罗里上面。法官认为她没有理由去质疑传票送达人的证词，法庭相信认为他的确见了被告，只是被告不愿意签收。
即使传票送达人没有把控状交到被告的的手上，而是放在办公室地址外面的一辆罗里上面，也代表他已经完成交递程序。法律的‘亲手必须把文件交给被告’的原则，就是让被告知道有人在法庭告他，让他准备在法庭抗辩。就算被告不要接收控状，原告已经知道了诉讼的存在，这就足够了。
另外，当一个正常人收到破产通知/破产诉讼文件，他会做出应有的咨询/调查、了解怎么回事。法庭不相信被告身为一个公司的董事，不可能会不知道自己为何会收到破产通知/破产诉讼文件的原因。而且推翻缺庭判决是必须在收到缺庭判决的30天内，向法庭申请推翻缺庭判决。
法庭质疑为何被告在05.09.2020收到破产通知/破产诉讼文件，但是却在19.11.2021才入禀法庭文件，申请推翻缺庭判决。
法庭表示被告不能无视判决，因此法庭拒绝了被告要求推翻缺庭判决的申请。

更多内容请参阅英文版的文章。

Introduction

The Defendant’s application in enclosure 12 is to set aside the judgment in default entered against him on 14.10.2019. The application is made pursuant to Order 13 rule 8 and/or Order 42 rule 13 and/or Order 92 rule 4 and/or Order 3 of the Rules of Court 2012.

Salient facts

On 24.7.2019, the Plaintiff filed a Writ of Summons and a Statement of Claim (subsequently amended with Amended Writ and Amended Statement of Claim on 5.9.2019) against the Defendant for various reliefs arising out of an agreement for the sale and purchase of shares (“Share Sale Agreement”).
The Plaintiff alleged that the Defendant was a majority shareholder in Waizuri Marketing (M) Sdn. Bhd. He held 99.9% shares in the company. On 22.3.2019, both the Plaintiff and the Defendant executed the Share Sale Agreement where the Plaintiff agreed to purchase 408,000 of the Defendant’s shares for RM 408,000.
However, when the agreement was presented to the LHDN Stamp Office for adjudication on 30.3.2019, the Stamp Office rejected the application for stamping and requested for a copy of the latest audited report of the company.
The Plaintiff then requested the Defendant to furnish him the audited report to complete the stamping process. In spite of several requests made, the Defendant failed to comply with the requests. A solicitor’s letter sent on 23.5.2019 to the Defendant also failed to elicit any response.
The Plaintiff attempted to obtain the report from the Companies Commission of Malaysia but was informed that only the 2017 audited report was available. When this report was furnished to the Stamp Office, the Plaintiff was informed that it cannot be accepted as the latest report of the company.
The Plaintiff then filed the instant suit as the Defendant had failed to perform his obligations under the Share Sale Agreement.
The reliefs sought by the Plaintiff include specific performance of the Share Sale Agreement, orders for the Defendant to furnish the latest audited report of the company and the Defendant to surrender and execute all necessary documents required to complete the performance of the Share Sale Agreement. In lieu of such orders, an order for damages be made. The Plaintiff also sought an alternative order that the Defendant refund the amount of RM 408,000 paid to him, together with a 5% interest on the said sum.
The Defendant was served with the Amended Writ of Summons and Amended Statement of Claim (“Amended Writ and SOC”) on the Defendant on 9.2019. As the Defendant failed to enter an appearance, and upon the issuance of a Certificate of Non- Appearance by the Registrar, a default judgment was entered against him on 14.10.2019.

The Defendant’s application

The application to set aside the judgment in default (“JID”) is supported by the Defendant’s Affidavit in Support affirmed on 12.11.2021. The first ground relied on is that the JID was irregularly obtained. He was never served with Amended Writ and SOC as his address is No. 6, Jalan Utama 2/15, Taman Perindustrian Puchong Utama, Seksyen 2, Batu 14, Jalan Puchong 47100 Puchong, Selangor (First Address) and not No. 31A, Jalan Teratai 5A, Taman Puchong Perdana, 47100 Puchong, Selangor (Second Address) as stated in the Amended Writ and SOC.
The Defendant alleged that the averment of the Plaintiff’s process server that he effected service of the Amended Writ and SOC at the First Address by leaving it on a lorry outside his office was false and untrue. It was falsely averred with the intention of obtaining judgment in default by stealth, and to put undue pressure on him to pay an excessive claim.
He only came to know of the judgment obtained against him when bankruptcy proceedings were instituted against him in the Shah Alam High Court vide suit BA-29NCC-3162-08/2020. To defend him in the proceedings, he appointed solicitors who did a file search on 11.2021 which then revealed that a judgment in default had been entered against him.
His second ground to set aside the JID is that he has a defence on the merits. He asserts that:-

(i) he was a shareholder of Waizuri Marketing (M) Sdn. Bhd. The value of his shareholdings was RM 1.3 million;

(ii) he took a loan of RM 300,000 from the Plaintiff. He was requested to furnish proof of ownership of the shares, which he did;

(iii) he did not sign any agreement to sell his shares as he had no intention of selling his shares. All he recalled was that he did sign some documents which the Plaintiff informed was to be held as security for the monies he borrowed until the loan was fully repaid;

(iv) at all material times, he attempted to repay the Plaintiff what he borrowed. To date, he has repaid an amount of RM 135,000.00 and only a sum of RM 116,500.00 is due and owing;

(v) the Plaintiff’s suit was an oppressive act as he was aware of the Defendant’s ill health and his financial situation as a result of the Movement Control Order; and

(vi) he ought to be given an opportunity to repay his debt to the Plaintiff.

The Plaintiff’s response

In opposing the Defendant’s application, the Plaintiff contends that the Defendant was out of time to file the application to set aside the judgment in default which was served on him on 11.2019. The Defendant’s application was only filed on 19.11.2021.
The Defendant was not unaware of the judgment obtained as he claimed. The Bankruptcy Notice was served on him on 9.2020. Since then no action had been taken by him. Therefore his claim that he was not aware of the judgment until a file search was conducted only after the bankruptcy proceedings were filed, cannot be true.
In his Affidavit In Reply, the Plaintiff denied the averment of facts by the Defendant. The Plaintiff alleged that the place for service of the Amended Writ and SOC was in fact requested by the Defendant himself. The Plaintiff’s process server called him prior to the service and was instructed by the Defendant to be present at the First Address to serve the documents. Upon the process server’s arrival at the address, the Defendant refused to accept service. The process server then left the documents on the lorry in front of the Defendant’s office.
The Plaintiff further denies that the Defendant has a meritorious defence, in the light of the Share Sale Agreement exhibited and the documentary proof evidencing payment by the Plaintiff towards the purchase of the shares.

Analysis and decision of this court

A defendant is entitled to set aside a judgment in default obtained against him. (Order 13 r. 8 of the Rules of Court 2012). However, he must do so within the time frame stipulated. If he fails to do so, he must explain the delay.
Order 42 rule 13 of the Rules of Court 2012 provide:

“Setting aside or varying judgment and orders (O. 42, r. 13)

[13] 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.”

The Defendant claims he did not receive a copy of the judgment which the Plaintiff sent. I have perused the exhibit “A-1” to the Plaintiff’s Affidavit In Reply. There is proof of posting that it was sent by Registered Post on 8.11.2019. I am however unable to ascertain from the exhibit that there is proof of receipt by the Defendant.
The issue whether proof of posting suffices was recently answered by the Federal Court in Goh Teng Whoo & Anor v Ample Objectives Sdn Bhd [2021] 3 MLJ 159. Although the document in that case was sent by AR registered post, the AR card evidencing receipt was not tendered as proof. The Federal Court held:

“[40] The appellants had asserted under oath that they did not receive the writ but the respondent chose not to contradict the assertions by producing the AR cards duly signed by the appellants or their authorised representatives. In the case of the first appellant, the AR card was signed by his brother who was not his authorised representative and in the case of the second appellant, the AR card was not even returned. On the facts therefore, it is more probable than not that the appellants did not receive the writ.

[41] It would have been easy for the respondent to produce the AR cards to prove service but no explanation was given as to why this was not done except to say that it was not required by law to do so.

[42] Therefore, the respondent’s failure to contradict the appellants’ assertions that they did not receive the writ must be taken as an admission of the fact so asserted: see Alloy Automotive Sdn Bhd v Perusahaan Ironfield Sdn Bhd [1986] 1 MLJ 382 (‘Alloy Automative’) which the Court of Appeal applied in Ng Hee Thoong & Anor v Public Bank Berhad [1995] 1 MLJ 281. In Alloy Automative, this is what Lee Hun Hoe CJ (Borneo) delivering the judgment of the Supreme Court said:

“In his affidavit dated 30 April 1984 Choo Chak Low did not answer the matters raised in the above affidavit of Liew Mook. There is force in the appellant’s contention that an affidavit must reply specifically to the allegations, and if it does not, then those allegations not replied must be taken to have been accepted. In Dawkins v Prince Edward of Saxe Weimar [1875-76] 1 QBD 499 Blackburn J stated: … Now, upon that, if that is the true state of the case, we are of opinion that no cause of action can be shewn. Colonel Dawkins does not meet that in the affidavit in reply …”

[43] For all the reasons aforementioned, our answer to the leave question is in the negative, that is to say, where service of a writ is alleged to have been effected by way of sending the same to a defendant by AR Registered post pursuant to O 10 r 1(1) of the Rules of Court 2012, the court cannot seal a judgment in default of appearance where the affidavit of service does not exhibit the AR Registered card containing an endorsement as to receipt by the defendant himself or someone authorised to accept service of the same on his behalf.

Similarly here, there is only evidence of posting, but not receipt. This fact alone however, does not excuse the Defendant of delay on his part.
The Plaintiff’s contention that the Defendant was made aware of JID when he was served with the Bankruptcy Notice has merit. He personally accepted service of the notice on 5.9.2020, a fact he does not deny. A prudent man would have done the necessary enquiries upon receipt of a bankruptcy notice. I do not think the Defendant, who is a director of Waizuri Marketing (M) Sdn. Bhd., can be unaware of the reason for the service of a bankruptcy notice. Nonetheless it was not, until a search was done by his solicitors on 11.11.2021 that this application was filed. 法庭觉得，当一个正常人收到破产通知/破产诉讼文件，他会做出应有的咨询/调查、了解怎么回事。法庭不相信被告身为一个公司的董事，不可能会不知道自己为何会收到破产通知/破产诉讼文件的原因。
42 r.13 states that the application must be made 30 days from date of receipt of judgment or order. Although there is no proof of receipt of the JID sent on 8.11.2019, I am of the view that the Defendant clearly had an indication of a judgment obtained against him from the time of service of the bankruptcy notice on 5.9.2020. He cannot feign ignorance of the judgment. Nor can he be excused from explaining the delay, which he has not. 推翻缺庭判决是必须在收到缺庭判决的30天内，向法庭申请推翻缺庭判决。法庭认为，被告在05.09.2020收到破产通知/破产诉讼文件，但是却在19.11.2021才入禀法庭文件，申请推翻缺庭判决。法庭觉得被告不能无视判决，并不接受被告提出的延误申请(推翻缺庭判决).
I shall now deal with the substantive issues arising from the Defendant’s application to set aside the JID.
It is trite law that a judgment in default will be set aside as of right irrespective of the merits if it can be shown that it was obtained irregularly. (See: Evans v Bartlam [1937] AC 473, Lai Yoke Ngan & Anor v Chin Teck Kwee & Anor [1997] 3 CLJ 305 [FC], Tuan Haji Ahmed Rahman v Arab-Malaysian Finance [1996] 1 MLJ 30).
An irregular judgment is one that has been entered otherwise than in strict compliance with the rules or is entered as a result of some impropriety which is considered to be so serious as to render the proceedings a nullity. (Tuan Haji Ahmad Abdul Rahman v Arab- Malaysian Finance Bhd [1996] 1 MLJ 30 (FC))
I do not find any such irregularity here. The rules do not provide that the Writ must be served on the address stated therein. I have no reason to doubt the truth of the process server who stated he was requested by the Defendant to serve the Amended Writ and SOC at the First Address. When he met the Defendant, the latter refused to accept service. The process server then left it on the lorry in front of the office. 被告说，他并没有在A地址(被告办公的地址)收到控状。而且原告在自己的文件也承认他的传票送达人(office boy)是把控状放在A地址外面的一辆罗里上面。

原告则解释说，传票送达人是联系被告，被告通知传票送达人到A地址找他。当传票送达人，解释要交控状给被告，被告则不要接过控状。传票送达人只好把控状放在A地址外面的一辆罗里上面。

法官认为她没有理由去质疑传票送达人的证词，认为他的确见了被告，只是被告不愿意签收。

I find service to have been effected even though the documents were not placed in the hands of the Defendant. The underlying purpose of personal service is to bring the documents to the notice and attention of the Defendant in order that he has an opportunity to answer them and defend himself. He was not deprived of such an opportunity even though he refused to accept service as he was well aware of the attempted service. 法官认为就算传票送达人没有把控状交到被告的的手上，放在A地址外面的一辆罗里上面已经完成交递程序。法律的‘亲手必须把文件交给被告’的原则，就是让被告知道有人在法庭告他，让他准备在法庭抗辩。就算被告不要接收控状，原告已经知道了诉讼的存在，这就足够了。

Whether there is merits in Defendant’s ddefence

Where a judgment is regularly entered, then it is an inflexible rule that there must be an affidavit of merits, that is, an affidavit stating facts showing a defence on the merits (See: Bank Bumiputra Malaysia Bhd v Majlis Amanah Ra’ayat [1979] 1 MLJ 23).
A defence on the merits has been held to mean that the Defendant has an arguable and triable. The Defendant 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 that ought to be tried (See: Hasil Bumi Perumahan Sdn Bhd & Ors v United Malayan Banking Corporation Bhd [1994] 1 MLJ 312 (SC), PL Construction Sdn Bhd v Abdullah Said [1989] 1 MLJ 60).
The Defendant exhibited his proposed Defence as exhibit “RR-3” to his Affidavit In Support. Having perused it, I am not persuaded that the Defendant has an arguable defence.
Whilst the Defendant denied signing any agreement to sell his shares, he did not refute his signature on the Share Shares Agreement exhibited the Plaintiff as exhibit “A-4”. He clearly executed the agreement. His explanation that he thought he was merely signing some documents intended as security for repayment for the loan taken from the Plaintiff, does not seem credible in the light of the contents of the agreement. In fact, he did not deny owing monies to the Plaintiff. He only said he owed less.

被告说，他在其公司持有的股份，价值RM1.3M。他只是跟原告借300千，并没有售卖其公司股份。他没有签署任何售卖股份给原告的合约。但他承认他有签了一些文件，那些文件是原告当时告诉他，是作为保障原告贷款利益的文件。到目前为止，被告还了原告135千，尚欠116千(小编加起这两个数目但总数却不到300千)。

法官则认为，被告一方面说没签任何买卖股权合约，但却没有针对原告所呈交的股权合约上，挑战那份合约上的签名，不是他签的(小编认为，当被告说‘没签任何买卖股权合约’，意思就是‘原告呈交的股权合约上的签名不是他的’的。律师写法庭文件和结案呈词的时候，用词要很小心，不要让法官有机会扭转你的案件或者误读，让对方给赢了案件)。而且买卖股份的合约内容也没有提起贷款之类的内容。

Upon considering his draft Defence, I find the proposed defence to be a mere sham defence. No useful purpose would be served to set aside the JID and allow a trial of the matter when the defence does not appear to have a real prospect of success.
Premised on the foregoing reasons, the application in enclosure 12 is dismissed. I order that costs of RM 2,000 be paid to the Plaintiff.

Source: Thanapathy a/l Kumaraiah v Ravi a/l Ramaswami [2022] MLJU 991. High Court Shah Alam. Alice Loke Yee Ching JC.

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法律知识 Part 1：推翻缺庭判决是有时间限制的

你被告，收到法庭文件(Saman)，你不理会，让对方赢了，获得法庭判决。你可以以后等你有心情了或者等有钱了，才请律师去申请推翻以前的庭令吗？
这个案件里，法官指出，推翻缺庭判决是必须在收到缺庭判决的30天内，向法庭申请推翻缺庭判决。法庭认为，被告在09.2020收到破产通知/破产诉讼文件，但是却在19.11.2021才入禀法庭文件，申请推翻缺庭判决。法庭觉得被告不能无视判决，并不接受被告提出的延误申请(推翻缺庭判决)。
如股你迟申请推翻缺庭判决，法庭有权利不批准你的申请。到时你欲哭无泪。

法律知识 Part 2：原告说、被告说、法官总结

有人(原告)告你，你说你没有收到控状。原告的office boy说他有联系你，并见到你，但是你不签收，所以他丢在地上。你觉得法官会相信你还是相信office boy?
在这案件里，被告抗辩，他没有在A地址(被告办公的地址)收到控状。而且原告在自己的文件也承认他的传票送达人(office boy)是把控状放在A地址外面的一辆罗里上面。

法官认为她没有理由去质疑传票送达人的证词，认为他的确见了被告，只是被告不愿意签收。

结论：当各有各的证词，法官不一定会相信你。。。就算你是无辜的。

法律知识 Part 3：原告说、被告说、法官总结

官司是充满变数的，律师永远猜不到法官会如何分解一个案件，然后判哪方胜出。
在这案件里，原告说被告和他签了买卖公司股份的合约，被告同意卖他的股份，由于被告毁约，所以入禀法庭，提告被告。被告则说他只是跟原告借了300千，并没有售卖其公司股份。他没有签署任何售卖股份给原告的合约。但他承认他有签了一些文件，那些文件是原告当时告诉他，是作为保障原告贷款利益的文件。到目前为止，被告还了些钱，尚欠了些钱。

法官则认为，被告一方面说没签任何买卖股权合约，但却没有针对原告所呈交的股权合约上，挑战那份合约上的签名，不是他的签名。所以不相信被告的版本。