K SENG SENG CORPORATION BERHAD v TAN LIAN CHOON

Case Significance

Confirms that the tort of abuse of process requires proof of a dominant collateral purpose in commencing the action, and that discontinuing a suit does not, without more, establish that it was an abuse — so an award premised on abuse of process will be set aside where that purpose is not proved.

This High Court decision at Shah Alam concerns the tort of abuse of process, and the strict requirements a defendant must satisfy to establish it against a claimant who has commenced and then discontinued an action. The appellant company had sued the respondent, a former group accountant of the company who had been dismissed, in the Sessions Court. The appellant later discontinued its main action, and the trial proceeded only on the respondent's counterclaim, which alleged that the appellant's main action had been an abuse of process. The Sessions Court found for the respondent on the counterclaim, ruling that the main action was an abuse of process, and awarded her general damages of RM300,000, exemplary damages of RM250,000 and costs of RM15,000. The appellant appealed.

The court examined whether the ingredients of the tort of abuse of process had been made out, and in particular whether the appellant had commenced the main action for a dominant collateral purpose — here, the alleged purpose of pressuring the respondent to abandon her Industrial Court claim. It found the evidence wanting. The main action had been commenced about two years after the Industrial Court case was filed, when that case was already drawing to a close, so the timing did not support the theory that the suit had been brought to pressure the respondent into dropping the Industrial Court claim. The court also stressed that the mere initiation of an action and its subsequent withdrawal are, by themselves, insufficient to constitute an abuse of process, since suits are withdrawn for many legitimate reasons.

The court allowed the appeal on liability and set aside the Sessions Court's decision, the appeal on damages becoming academic, and ordered costs of RM20,000 here and below. The judgment illustrates that the tort of abuse of process requires proof of a dominant collateral purpose, and that discontinuing an action does not, without more, establish that it was an abuse.