ARMANEE CONDOMINIUM JOINT MANAGEMENT BODY v BURGESS RAWSON MANAGEMENT SDN BHD

Case Significance

Illustrates the distinction between an Order 14 summary judgment application and an Order 18 rule 19 striking-out application — which rest on different tests and burdens of proof — and the consequence of a court applying the wrong standard when striking out a pleading.

This High Court decision at Shah Alam is an appeal from the Sessions Court concerning the striking out of a counterclaim, and it draws a clear line between two distinct procedural mechanisms. The appellant was the joint management body of a condominium, responsible for the management and maintenance of the development; the respondent was a company carrying on the business of property management and consultancy to joint management bodies. In the Sessions Court the respondent, as plaintiff, had obtained an order striking out the appellant's counterclaim under Order 18 rule 19 of the Rules of Court 2012. The appellant appealed. The core of the appeal was that the Sessions Court Judge had conflated two different applications: an application for summary judgment under Order 14 and an application to strike out under Order 18 rule 19 rest on different principles, tests and burdens of proof, even where the underlying facts and the issues arising may look similar. The High Court agreed that the consideration required for a summary judgment application differs from that required to strike out a pleading, and held that the Sessions Court Judge had, in a key passage of his grounds, applied the wrong standard of proof to the striking-out application — a misdirection in procedural law. Because a striking-out application under Order 18 rule 19(1)(a) proceeds on the assumption that the pleaded facts are true and asks only whether the pleading is obviously unsustainable, importing a summary-judgment-style weighing of evidence was an error. The court allowed the appeal with costs of RM3,000, set aside the decision of the Sessions Court, and remitted the matter so that the joint management body could proceed with its counterclaim. The judgment illustrates the importance of keeping the distinct tests for summary judgment and striking out separate, and the consequence when a court applies the wrong one.