MOK CHIA WU v 1. ) CHUA CHEE WEAE 2. ) CHUA CHEE LIANG
Catchwords
Practice Areas
Judges (1)
Counsel (5)
Case Significance
A strike-out under Order 18 rule 19(1)(a) where want of privity — an Option to Purchase signed only by the first defendant — rendered the claim against the second defendant plainly unsustainable.
This High Court decision concerns an application to strike out a civil action under Order 18 rule 19(1)(a) of the Rules of Court 2012 — the limb directed at a pleading that discloses no reasonable cause of action. The application was made by the second defendant only, and required the Court to decide whether the plaintiff's claim against that defendant disclosed any reasonable cause of action in law, or whether, even assuming all the plaintiff's pleaded facts to be true, the action was plainly and obviously unsustainable and so fit to be terminated at an early stage.
The Court began from the settled principles governing this limb, drawn from Bandar Builder Sdn Bhd & Ors v United Malayan Banking Corporation Bhd, the landmark authority on striking out. It emphasised that the power to strike out is a drastic one, to be exercised with great care so as not to deny any party a fair trial, but recognised that a court also has a responsibility to prevent parties being put to the expense of a trial that is bound to fail. The determinative issue was one of privity of contract: the Option to Purchase relied upon had been signed only by the first defendant, and the second defendant was not a party to it. With no contract binding the second defendant, the claim against that defendant disclosed no reasonable cause of action, and a trial could not be used to create a legal right that did not exist.
The Court accordingly struck out the action against the second defendant, fixed costs of RM3,000 payable by the plaintiff to that defendant, and terminated the proceedings against the second defendant at that stage, while directing that the plaintiff's action against the first defendant was unaffected and should continue. The judgment is a clear illustration of how privity of contract can be decisive on a strike-out application.
Summary
Mok Chia Wu sued two co-owners of a property to enforce an Option to Purchase signed only by the 1st defendant. The 2nd defendant applied to strike out the action, arguing no privity of contract existed. The court struck out the claim against the 2nd defendant, finding that the OTP was signed only by the 1st defendant, no agency relationship was established, and requiring a non-contracting co-owner to transfer his undivided share was plainly unsustainable.
On what basis was the strike-out sought?
The second defendant applied under Order 18 rule 19(1)(a) to strike out the claim against it as disclosing no reasonable cause of action, on the ground that the Option to Purchase was signed only by the first defendant and there was no contract binding the second defendant.
What did the Court decide?
Applying the Bandar Builder principles, the Court held the claim against the second defendant was plainly and obviously unsustainable for want of privity, struck it out with costs of RM3,000 payable by the plaintiff, and directed that the action against the first defendant continue.
Statutes Cited
Cases Cited (9)
Judgment
Read the full judgment on the official Malaysia Courts portal.
Read on eJudgmentSource: eJudgment (ja-22ncvc-141-10-2024)