HO KAM CHOY v CHUNG CHIN HIONG

Case Significance

Illustrates the high threshold for summary strike-out under Order 18 rule 19 where genuine factual disputes over the nature of a payment require resolution at trial.

This High Court decision at Shah Alam determines an application to strike out a claim for the return of money said to have been advanced as a friendly loan. The plaintiff, an uncle of the defendant, sued for the return of monies which he characterised as a loan, while the defendant disputed that any loan existed at all, contending that the money received had been used for share transactions carried out on the plaintiff’s own instructions. The judgment records that the plaintiff had brought similar claims against the defendant’s wife and mother, and had filed a separate action against the same defendant concerning another advance said to have funded a café venture. Of the interlocutory applications originally before the Court, the plaintiff’s discovery application was withdrawn, leaving the defendant’s application under Order 18 rule 19(1) of the Rules of Court 2012 to strike out the action. In support of the strike-out the defendant adopted a two-pronged approach, contending in essence that there had been no loan at all and that allowing the case to proceed to trial would serve no useful purpose because the plaintiff would ultimately fail to establish the existence of a loan. The defendant’s primary reliance was on limbs (b) and (d) — that the claim was scandalous, frivolous or vexatious, or an abuse of process — rather than limb (a), on which no evidence is admissible under Order 18 rule 19(2). The Court declined to strike out. It noted that, despite the contemporaneous documents, numerous questions remained unanswered, and it was not persuaded that the claim was scandalous, frivolous, vexatious or an abuse of process. Whether the arrangement was truly a benevolent loan or something else was a matter to be determined at a full trial, where the defendant, if vindicated, could be protected by an appropriate order as to costs. Accordingly, per Choong Yeow Choy JC, the striking-out application was dismissed with costs of RM5,000. The judgment illustrates the high threshold for summary strike-out where genuine factual disputes require a trial.