G Nanda Gobang.Rajasingam Bersama, 18-01-2016

• Judge: Y.A. TUAN LEE SWEE SENG
• Judgment Date: 18 January 2016
• Court: High Court (Malaysia)
• Appellant: G Nanda Goban,Siva Shankar
• Record Number: B52C-6-04/2015

DALAM MAHKAMAH TINGGI MALAYA DI KUALA LUMPUR

(BAHAGIAN SIVIL)

RAYUAN SIVIL NO: 12AC-17-12/2015

BETWEEN

KLASS CORPORATION (M) SDN BHD ... APPELLANT/DEFENDANT

(NO SYARIKAT: 455384-T)

AND

MKRS MANAGEMENT SDN BHD … RESPONDENT/PLAINTIFF

(NO SYARIKAT: 641712-D)

Dalam Perkara

DALAM MAHKAMAH SESYEN DI KUALA LUMPUR

(BAHAGIAN SIVIL)

GUAMAN NO. B52C-6-04/2015

ANTARA

MKRS MANAGEMENT SDN BHD ... PLAINTIF

(No Syarikat : 641712-D)

DAN

KLASS CORPORATION (M) SDN BHD ... DEFENDAN

(No Syarikat : 455384-T)

THE JUDGMENT OF

YA TUAN LEE SWEE SENG

1. The plaintiff had sued the defendant for the balance sum of RM715,381.79 being charges due and owing to it for the supply of labour, construction and letting of erected tabular scaffolding to the defendant. The suit was filed in the Sessions Court in April 2015.

2. The basis of this claim arises from the terms and conditions set out in a quotation No. MKRS/016/14/kcsb/quo1/rev1 dated 10 June 2014 (“Quotation” marked as Exhibit P-1 at trial) which was duly accepted by the defendant vide its Purchase Order No. 0567 dated 11 June 2014 (“Purchase Order” marked as Exhibit P-2 at trial). These documents are collectively marked as Exhibit “KS-1” and “KS-2” to the plaintiff’s affidavit respectively. (See pg. 103-105 and pg. 107 of the Appeal Record respectively).

3. Subsequent thereto, the plaintiff supplied workers and installed scaffolding and charged rent for the installed scaffolding. After that the plaintiff issued its invoices which were supported by contemporaneous documentation which showed the work was done at the defendant’s request and as approved by the defendant. Such documents included the ‘Scaffolding Completion Form’, ‘Manpower Form’ and or ‘delivery order’ (collectively referred to as “Site Inspection Forms” or “SI Forms”). A sampling of the SI Forms are in Exhibit “KS-3” to the plaintiff’s affidavit and marked as Exhibit P12 and P13 at trial. (See pg. 109-132 Appeal Record).

4. The defence filed was that the billing had not captured the correct quantity and measurement of scaffolding supplied and that the calculation of the charges is not in accordance with the “Purchase Order” and further that there had been tampering of the relevant SI Forms countersigned by the defendant confirming the work done.

5. Thereafter no less than 6 case management dates were fixed for the parties to comply with the directions of the Sessions Court Judge ("SCJ") for trial. Trial was finally fixed on 23 and 27 November 2015 and further on 1, 4, 14 - 16 December 2015. The plaintiff therefore prepared for trial focusing on proving that there had been no dispute on quantity and measurement with respect to height and that the defendant's agents having signed the relevant SI Forms confirming the extent of work done, they are estopped from contending otherwise.

6. On the first day of trial, PW1 completed his evidence-in-chief. It was then that the defendant served on the plaintiff an unsealed application to amend the defence. The trial had to be adjourned to enable the defendant's application for amendment to be heard. On 4 December 2015 the Court dismissed the defendant's application.

Prayer

7. The new paragraphs sought to amend the Defence filed to introduce the element of set-off as well as to plead that the billing had not been in accordance with "the construction industry practice generally and the supply of tabular scaffolding specifically."

8. The defendant is now appealing against that decision dismissing the defendant's application to amend filed at the 11th hour and served on the plaintiff after trial had started. As provided for under O 55 r 2 Rules of Court 2012 ("ROC 2012"), this appeal to the High Court from the decision of Sessions Court is by way of re-hearing.

Principles

9. One cannot deal with the issue of amendment of pleadings without referring to the Federal Court's decision in Yamaha Motor Co. Ltd v Yamaha (M) Sdn Bhd & Ors [1983] 1 CLJ 191; [1983] CLJ (Rep) 428 at p. 428-429 and to the dicta of his Lordship Mohd Azmi FJ:

“The general principle is that the Court will allow such amendments as will cause no injustice to the other parties. Three basic questions should be determined whether injustice would or would not result, (1) whether the application is bona fide; (2) whether prejudice caused to the other side can be compensated by costs and (3) whether the amendments would not in effect turn the suit from one character into a suit of another character and inconsistent character. (See Mallal’s Supreme Court Practice p.342). If the answers are in the affirmative, an application for amendment should be allowed at any stage of the proceedings particularly before trial, even if the effect of the amendment would be to add or substitute a new cause of action, provided the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the original statement of claim.” (emphasis added)

10. The test in Yamaha Motor's case (supra) has been modified by the recent Federal Court case in Hong Leong Finance Bhd v. Low Thiam Hoe & Another Appeal [2015] 8 CLJ 1. The principles that may be gleaned from the Hong Leong Finance's case (supra) are as summarised in the headnotes of the report as follows:

“(1) The principles in Yamaha Motor’s case were laid down in respect of an application to amend that was made at an early stage of the proceedings in particular before the trial commences. The Court of Appeal fell into an error of law when it applied the principles in Yamaha Motor without appreciating that those principles were insufficient to deal with an application to amend, which introduced two new defences on the eve of a trial. (paras 16 & 29).

(2) Yamaha Motor was decided under the old Rules of the High Court 1980. The civil procedure has since then changed with he introduction of the pre-trial case management. Under the new case management regime the court recognises that a different approach needs to be taken to prevent delay in the progress of a case to trial. The management of cases by the courts prior to the trial is intended to ensure ‘just, expeditious and economical disposal’ of an action. (paras 18 & 26).

(3) When an application to amend a pleading is made at a very late stage, the principles in Yamaha Motor ought not to be the sole consideration. This was because an order for compensation by payment of costs in such a case may not be an adequate remedy and it would also disrupt the administration of justice. There had been five case managements since 2011 and there was no indication at all that an amendment application was contemplated by the defendant. (paras 18 & 27).

(4) The Court of Appeal failed to appreciate that Low bears the burden of producing material and cogent reasons to explain why the change was sought so late and was not sought earlier. In the defendant’s affidavit-in-support, all that was stated was that he had only realised that important issues, namely the first and second proposed amendments were not pleaded when he was preparing for trial. Such an explanation could not be accepted. (para 29).

(5) The defendant’s affidavit-in-support failed to adduce an explanation for the delay in filing the said application. The Court of Appeal erred in holding that the plaintiff should have filed an affidavit to oppose the application to amend since the defendant’s affidavit in support contained nothing more than a bare assertion. A bare assertion carries no evidential value and hence, here was nothing to reply. Low’s affidavit also did not discharge the heavy onus imposed on the amending party as Low did not disclose any material and cogent reasons to explain the inordinate delay. (para 30)."

11. There is a palpable and indeed purposeful paradigm shift under the ROC 2012 under the new regime of proactive case management by the Courts such that a late application to amend especially on the eve of a trial or after a trial has commenced would not be viewed favourably by the Courts. The Courts in the light of the Hong Leong Finance's case (supra) are enjoined to factor in delay caused by the party's late application to amend as part of the overall considerations to be taken into account in determining where the justice of the case lies with respect to such an application in the context of a just, expeditious and economical disposal of a case.

12. The various considerations involved are now discussed below.

Whether the defendant's application to amend its Defence after trial has proceeded is bona fide and that the delay is reasonable

13. O 20 r 5 ROC 2012 provides that the Court may at any stage of the proceedings allow any party to amend his pleading on such terms as to costs or otherwise as may be just and in such a manner, if any, as it may direct.

14. Whilst an application to amend may be made at any stage of the proceedings, the discretion lies with the Court taking into consideration a host of factors in deciding whether or not the amendments should be allowed. The Court of Appeal in Raphael Pura v. Insas Berhad & Anor [2001] 1 MLJ 49 at page 55 had this to say on O. 20 r 5:

“It should be noted that an application for amendment of a writ or pleading is not as a matter of right of a party but is left to the judicial discretion of the court depending on the circumstances of each case.”

15. In Kaplands Sdn Bhd v Lee Chin Cheng Dengkil Oil Palm Plantations Sdn Bhd [2000] 4 CLJ 281 the High...