SIGNATURE CABINET SDN BHD v 1. ) LIM KENG HENG 2. ) MOHAMED IZHAM BIN HAMZAH 3. ) ALIGAN DESIGN SDN BHD 4. ) ALIGAN HOLDINGS SDN BHD 5. ) TULUS CONSTRUCTION SDN BHD 6. ) JAYA PRAKASH A/L MUNIANDY

Case Significance

Reinforces that summary striking out under Order 18 rule 19 is the exception, not the rule, and that a fraud claim disclosing a reasonable cause of action should ordinarily proceed to trial rather than be struck out summarily.

This High Court decision at Kuala Lumpur concerns an application to strike out a fraud claim against one of six defendants, and illustrates the caution with which the summary striking-out power is exercised. The plaintiff, Signature Cabinet Sdn Bhd, had sued six defendants for fraud, among them several corporate defendants and individuals. The fifth defendant, Tulus Construction Sdn Bhd (previously known as Brunsfield Construction), applied under Order 18 rule 19(1) of the Rules of Court 2012 to strike out the plaintiff's claim against it. Notably, the fifth defendant relied only on limb (b), that the claim was scandalous, frivolous or vexatious, and limb (d), that it was an abuse of process, and did not invoke limb (a) for disclosing no reasonable cause of action, which meant it accepted that the plaintiff had disclosed a reasonable cause of action. The central question was whether the claim against the fifth defendant should be summarily struck out or allowed to proceed to trial. The court emphasised that summary striking out under Order 18 rule 19 is the exception rather than the rule, and that a plaintiff should be given every opportunity to demonstrate that it can sustain its claim at trial, just as a defendant is given the equal opportunity to defend. Weighing the balance of justice, the court considered it fit and just to allow both sides their day in court so that the merits of the fraud allegations and the defence could be canvassed and finally determined at trial rather than summarily. It accordingly dismissed the fifth defendant's striking-out application, with costs of RM7,000 payable by the fifth defendant to the plaintiff. The judgment is a useful reminder that a fraud claim disclosing a reasonable cause of action should ordinarily be tried rather than struck out summarily. The decision reflects that the merits of a fraud allegation, once a reasonable cause of action is disclosed, are ordinarily to be canvassed and determined at trial rather than on affidavit.