How well accustomed are you with the legal proceedings before a court in Malaysia? Did you know that you have to enter an “appearance” in court when you are being sued? What about entering your “defence”?
Very recently, we at Nazreen Oon & Partners successfully represented our client as the Plaintiff to dismiss the Defendant’s application to set aside a Judgment in Default of Defence (“JIDD”) entered against him.
The Defendant was a tenant on our client’s premises and defaulted in payment of rental and utility bills. Having terminated the tenancy agreement, we commenced legal proceedings against the tenant for, among others, vacant possession of the premises and outstanding payments owing to our client by the Defendant. Despite entering an appearance in Court, the Defendant failed to enter his defence within the stipulated time period and hence had a JIDD entered against him.
Following the Defendant’s failure to comply with the JIDD, the Plaintiff commenced a Judgment Debtor Summons (“JDS”) against him. Only after the JDS order was ordered against him did the Defendant decide to file this application to set aside the JIDD, resulting in an inordinate delay of over one (1) year since the JIDD was entered against him.
After a protracted court battle, the application and subsequent appeal were both dismissed by the courts.
In light of the above, we wish to share some basic legal knowledge pertaining to a Judgment in Default (JID) and how to properly set it aside.
Here’s Our Breakdown
If you (as the defendant) have been duly served with a Writ by the party (as the plaintiff) who is commencing legal action against you, you must enter appearance in court within a specified time period.
Otherwise, you risk having a Judgment in Default of Appearance (JIDA) entered against you. Similarly, once you have been duly served with a Statement of Claim by the Plaintiff, you must file your defence within a specified time period thereafter or risk having a JIDD entered against you.
Say that you have mixed up the deadlines or for whichever reason were unable to enter an appearance or defence in court, and consequently you have just been served with a Judgment in Default (JID). What can you do now?
You can apply to set aside the JID. But act fast as time is of the essence: you only have thirty (30) days from the date of receipt of the JID to file the setting aside application in court under Order 42 rule 13 of the Rules of Court 2012 (“ROC 2012”).
O. 42 r. 13: Setting aside or varying judgment and orders
Save as otherwise provided in these Rules, where provisions are made in these Rules for the setting aside or varying of any order or judgment, a party intending to set aside or to vary such order or judgment shall make this application to the Court and serve it on the party who has obtained the order or judgment within thirty days after the receipt of the order or judgment by him. |
In general, it is up to the court’s discretion to set aside a JID or otherwise, as provided for under Order 13 rule 8 of the ROC 2012.
O. 13 r. 8: Setting aside judgment
The Court may, on such terms as it thinks just, set aside or vary any judgment entered in pursuance of this Order. |
Grounds to Set Aside a JID
In the Federal Court case of Lai Yoke Ngan & Anor v Chin Teck Kwee & Anor [1997] 2 MLJ 565, Mohd Azmi FCJ held that:
| “The principle of setting aside a default judgment under O 13 r 8 has been well established and needs no detailed repetition. What is important to observe is that a default judgment is not a judgment on the merits. Accordingly, when such judgment is obtained irregularly, such irregularity would be a sufficient ground by itself for setting it aside. But where the default judgment has been obtained regularly, in order to succeed, the defendant must file an affidavit of merits, ie the defendant must disclose by affidavit evidence that prima facie he has a defence on the merits. Put in another way, the affidavit must disclose that he has an arguable or triable issue on the merits.” |
Ground #1: Irregular Judgment
The above case established that irregularity of a JID is a sufficient ground by itself to set the JID aside. So, what then is an irregular judgment?
To enter a JID against a Defendant, the Plaintiff must comply with certain requirements prescribed by the ROC 2012. If the JID was entered without strict compliance with these rules, it is said to be an irregular judgment and can accordingly be set aside as of right, i.e. without the need to show the defence of merits.
The definition of irregular judgment can be drawn from the Federal Court case of Tuan Haji Ahmed Abdul Rahman v Arab-Malaysian Finance Bhd [1996] 1 MLJ 30:
| “It is elementary that an irregular judgment is one which has been entered otherwise than in strict compliance with the rules or some statute or is entered as a result of some impropriety which is considered to be so serious as to render the proceedings a nullity.” |
Irregularity of a judgment could happen in situations where the Writ and Statement of Claim (SOC) were served to the Defendant’s previous address, thus rendering them not duly served. If you wish to argue on the basis that the Writ and SOC were not properly served onto you, you will have to prove that you did not receive them either by personal service or AR Registered Post.
A JID entered following such situation would cause the JID to be irregular. If you are able to successfully prove bad service on the part of the Plaintiff, you have a valid ground to set aside the JID.
On the other hand, a regular JID is a judgment in default recorded with full compliance of the ROC 2012. To set a regular JID aside, you will have to prove that you have a defence on the merits.
Ground #2: Defence on the Merits
A defence on the merits is one wherein an arguable or triable case is raised as observed in PL Construction Sdn Bhd v Abdullah bin Said [1989] 1 MLJ 60:
| “In Evans v Bartlam [1937] AC 473, Lord Atkin in his judgment at p 480 said ‘… that where the judgment was obtained regularly there must be an affidavit of merits, meaning that the applicant must produce to the court evidence that he has a prima facie defence …’ In Bank Bumiputra Malaysia Bhd v Majlis Amanah Ra’ayat, Raja Azlan Shah Ag CJ (Malaya), as he then was, said, ‘… It is axiomatic that if the judgment is regular, then it is an inflexible rule that there must be an affidavit of merits, that is, an affidavit stating facts showing a defence on the merits …’ The term ‘defence on the merits’ means a defence which discloses an arguable and triable issue: B Dialdas & Co (Pte) Ltd v Sin Sin & Co & Ors [1984] 2 MLJ 223.” |
You can set aside a JID by proving to the Court that you have a valid defence against the initial lawsuit and thus should be given a chance to defend your case in court. Though, whether there is any merit in the defence raised is once again up to the discretion of the court.
Be Timely, Don’t Delay
As mentioned earlier, Order 42 rule 13 of the ROC 2012 lays down a thirty (30) day period for parties intending to set aside a JID to submit their application in court.
You risk your application to set aside a JID being dismissed in limine if there was an inordinate delay in submitting your application and/or there was no reasonable nor satisfactory explanation for such delay. This principle is emphasised in the Court of Appeal case of Ng Han Seng & Ors v Scotch Leasing Sdn Bhd (Appointed Receivers and Managers) [2003] 4 MLJ 647:
| “The appellants’ applications did not comply with O 42 r 13 of the Rules of the High Court 1980 which requires that a party intending to set aside a judgment must make his application to the court and serve it on the party who obtained the judgment within 30 days after the receipt of the judgment by him. On thefacts, the first and third appellants were two months out of time whereas the second appellant was out of time by seven months. There was no explanation whatsoever from the appellants for their delay in approaching the court and they had also not prayed for extension of time to make their applications. Thus there was clearly no need for the merits of the appellants’ applications to be considered and the applications should in fact be dismissed in limine.” |
Summary
It is imperative that you as a defendant for a suit enter an appearance when served with a Writ and a defence when served with a Statement of Claim within the specified time periods, failing which a JID (either a JIDA or JIDD) can be entered against you. Thus, you must at all times be vigilant as to the status of the court proceedings of an ongoing suit by not ignoring any cause papers or letters served onto you as well as frequently checking with your lawyers for any updates.
In the event a JID has been entered against you, it is crucial to take the thirty (30) day period into consideration when applying to set it aside. Otherwise, the doctrine of laches might be applied against you and your application might subsequently be dismissed in limine. Thus, if you have had a JID entered against you, it is important to seek immediate legal advice so as to avoid any delay in making a setting aside application to court.
If the JID is irregular, you are entitled to set it aside as of right. If it is regularly entered and in compliance with the ROC 2012, then you must prove that there is a defence on the merits of your case.
Have a question? Please contact us at general@nazreenoon.com.
This article was co-authored by Derrick Oon (Partner) and Alyssa Lee (Intern) from Nazreen Oon & Partner’s dispute resolution practice.
