TENAGA NASIONAL BERHAD v 1. ) TEBRAU BAY CONSTRUCTIONS SDN. BHD. 2. ) ISKANDAR WATERFRONT CITY BERHAD 3. ) TEBRAU BAY SDN BHD (DAHULU DIKENALI SEBAGAI KPRJ NUSANTARA SDN BHD) PIHAK KETIGA PEMBINAAN HAMID ABD RAHMAN SDN BHD PIHAK TERKILAN 1. ) RADIANT SEAS SDN. BHD. 2. ) RADIANSEA SDN BHD 3. ) SHARIKAT SUKMA KEMAJUAN DAN PERUSAHAAN SDN BHD

Case Significance

Illustrates that a court may refuse leave to widen third-party proceedings by a fifth-party notice where it would delay the main trial, since such proceedings are independent and their determination awaits the main action, the applicant's remedy lying in a separate action.

This High Court decision at Johor Bahru concerns an application by a fourth party for leave to issue a fifth-party notice in third-party proceedings, and the independent nature of such proceedings relative to the main action. In the underlying action Tenaga Nasional Berhad had sued several defendants, who had in turn brought in a third party, and a fourth party had been joined by an order of court. The fourth party applied ex parte under Order 16 rule 9 of the Rules of Court 2012 for leave to issue a fifth-party notice against a further company, on the basis that it would be entitled to claim an indemnity or contribution from that company should judgment be given against it in the main action or the third-party proceedings. The court considered the objective of the rules of the just, expeditious and economical disposal of proceedings and the settled character of third-party (and onward) proceedings. It held that third-party proceedings are independent proceedings between a defendant as plaintiff and the third party as defendant, whose determination has to await the determination of the issues in the plaintiff's action, drawing on United Merchant Finance Bhd v Majlis Agama Islam Negeri Johor. Given that the main action had already commenced trial, the court took the position that it would not entertain any step that would delay the disposal of the main case, and that the fourth party was in any event free to pursue its own separate action against the proposed fifth party if it were found liable in the main action, without prejudice to any party. On that footing the court dismissed the fourth party's application without costs. The judgment is a useful illustration that a court may refuse leave to widen third-party proceedings by a fifth-party notice where doing so would delay the main trial, the fourth party's remedy lying in a separate independent action.