The guiding legal principles on the striking out of a winding up petition is trite and well-settled in reliance upon Order 18 Rule 19(1) and Order 92 Rule 4 of the Rules of Court 2012 which provides, inter alia, as follows: –
“Order 18 Rule 19
(1) The court may at any stage of the proceedings order to be struck out or amended any pleading or the endorsement, of any writ in the action, or anything in any pleading or in the endorsement, on the ground that:
(a) it discloses no reasonable cause of action or defence, as the case may be;
(b) it is scandalous, frivolous or vexatious;
(c) it may prejudice, embarrass or delay the fair trial of the action; or
(d) it is otherwise an abuse of the process of the court, and may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be.
Order 92 Rule 4
For the removal of doubt it is hereby declared that nothing in these rules shall be deemed to limit or affect the inherent powers of the court to make any order as may be necessary to prevent injustice or to prevent an abuse of the process of the court.”
The abovementioned provisions of law allow the applicant to invoke the inherent power of the court in exercising its unfettered power and jurisdiction to dismiss an application or pleading falling within any one of the limbs prescribed under Order 18 Rule 19(1) of the Rules of Court 2012. Hence, the law stands that the Court may strike out a pleading / application if:
- There are no reasonable causes of action or defence.
- It is scandalous, frivolous or vexatious.
- It prejudiced, embarrasses or delay the fair trial of the action.
- It is an abuse of court process.
Mohamed Dzaiddin SCJ (as he then was) in the Supreme Court locus classicus of Bandar Builder Sdn Bhd & 2 Ors v United Malayan Banking Corporation Bhd [1993] 4 CLJ 7 eloquently laid down the principles governing an application for a striking out, which can be summarised as follows:
- It is only in plain and obvious cases that recourse should be made to a striking out application.
- This procedure can only be adopted when a claim or answer is ‘obviously unsustainable’.
- This method cannot be exercised by a minute examination of the documents and facts in determining whether the party has a viable cause of action or defence.
- If there is a point of law which requires serious discussion, an objection should be raised on the pleadings.
- The court must be satisfied that there is no reasonable cause of action or that the claims are frivolous or vexatious or that the defences raised are not arguable.
The case of Bandar Builders (supra) forms the precedent in expounding the abovementioned principles of a striking out application. Following thereto, the Court of Appeal case of Middy Industries Sdn Bhd & Ors v Arensi-Marley (M) Sdn Bhd [2012] 1 LNS 830 in allowing the striking out application had further elaborated and clarified on the various limbs under Order 18 Rule 19(1) of the Rules of Court 2012. In defining the relevant terminologies, Ramly Ali JCA (as he ten was) had described them as follow:
“scandalous” refers to matters which improperly cause derogatory light to someone, usually a party to an action, with respect to their moral character or the usage of repulsive language.
“frivolous or vexatious” refer to a groundless action or statement with no prospect of success, often raised to embarrass or annoy the other party to the action. In fact, one is entitled to a look at the whole history of the matter in considering whether any proceedings are frivolous or vexatious. In short, the term may also mean that the case is obviously unsustainable or wrong.
“abuse of court process” signifies a situation where the process of the court must be used for an unlawful object and not for the actual purpose intended to achieve justice. It involves a process which is contrary to the good order established by usage. Hence, it is important to note that the process of the court must be used bona fide and not be abused. The court will prevent any improper use of its machinery or the judicial process as a means of vexation and oppression in the process of litigation.
In respect to the striking out of a winding up petition, various precedents of high authority had taken the position that Order 18 Rule 19 of the Rules of Court 2012 can also be invoked to strike out a winding up petition. The case of Ho Num Chon & Anor v Tech-Lab Manufacturing Sdn Bhd [2017] 9 MLJ 32 referred to several precedents in deriving the same. Nazlan JC (now JCA) in Ho Num Chon (supra) had referred to the Federal Court decision in Si & Si Sdn Bhd v Hazrabina Sdn Bhd [1996] 2 MLJ 509 which held that “Order 18 Rule 19 applies to winding up proceedings”.
Similarly, the pronouncement of Zaki Tun Azmi CJ (as he then was) in Blue Valley Plantation v Periasamy A/L Kuppannan & Ors [2011] 5 MLJ 521 had expressly provided the current position which is trite whereby the High Court is seized of the jurisdictional power under the Rules of Court 2012 to strike out a winding up petition under Order 18 Rule 19 and pursuant to the exercise of its inherent jurisdiction.
In conclusion, the current law is clear that the legal provisions governing the striking out of a petition is Order 18 Rule 19(1) and Order 92 Rule 4 of the Rules of Court 2012 and that the Court is possessed with the necessary jurisdictional power to hear and determine the striking out of a winding up petition.
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