(a) Law on setting aside JID

[7]  The principles of setting aside JID is well established. In the Federal Court case of Lai
Yoke Ngan & Anor v Chin Teck Kwee & Anor [1997] 2 MLJ 565 it was said at page 573 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, i.e. 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…”.

Where JID was obtained irregularly that would be a sufficient ground for setting aside.
Where JID was obtained regularly there must be a defence on merits.

Whether the JID entered was regular or irregular

[19]  When is a judgment in default said to be an irregular judgment? His Lordship Edgar

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.

The general rule is that when it is clearly demonstrated to the satisfaction of the court that a
judgment has not been regularly obtained, the defendant is entitled to have it set aside ex
debito justitiae, that is to say, irrespective of the merits and without terms. Having said that, it
should be added that the application to set aside such a judgment should be made: (a)
with reasonable promptitude, in other words within a reasonable time; and (b) before the
defendant has taken any fresh step after becoming aware of the irregularity. (See O 2 r 2(i)
of the Rules of the High Court 1980). (Emphasis added.)

Whether if the judgment in default is a regular judgment does D1 have a defence on

[28]  Assuming for a moment that the judgment entered in default is nevertheless a valid and
regular judgment for having complied with the relevant provisions on service and entering
appearance in the Rules of the High Court 1980 ('RHC') though from the perspective of
control of companies it smacks of some impropriety, I shall proceed to consider if D1 has
some defence on the merits.

[29]  His Lordship Lee Hun Hoe, the former CJ (Borneo) in the Supreme Court case of Fira
Development Sdn Bhd v Goldwin Sdn Bhd [1989] 1 MLJ 40 at p 41 gave an elucidation on
the meaning of 'defence on the merits':

Where judgment is entered on the failure of a defendant to take any of the procedural steps
laid down under the Rules of the High Court 1980, the court has an absolute discretion to set
aside the judgment, if necessary, on terms and allow the case to be heard on the merits.
Lord Atkins stated clearly the principles in which the court should act in Evans v
Bartlam [1937] AC 473 in these words:
… The principle obviously is that unless and until the court has pronounced a judgment upon
the merits or by consent, it is to have the power to revoke the expression of its coercive
power where that has only been obtained by a failure to follow any of the rules of procedure.

[30]  In the instant case the learned judge did not consider the judgment to be[2012] 7 MLJ
1 at 14irregular. Mallal's Supreme Court Practice, (2nd Ed), Vol I at p 84 explains the
position where the judgment is regular thus:

The discretion will only be exercised if the affidavit supporting the application to set aside
discloses facts showing a defence on the merits; or for some very sufficient reason: Bank
Bumiputra Malaysia Bhd v Majlis Amanah Ra'ayat [1979] 1 MLJ 23; Farden v Richter (1889)
23 QBD 124.

A defence on the merits means merely raising only an arguable or triable issue, eg
contributory negligence in a running down case in White v Weston [1968] 2 QB 647. A
judgment in default is not a judgment on the merits: L Oppenheim & Co v Mahomed
Haneef [1922] 1 AC 482. (Emphasis added.)
[31]  His Lordship Jemuri Serjan former CJ (Borneo) in the Supreme Court's decision
of Hasil Bumi Perumahan Sdn Bhd & Ors v United Malayan Banking Corp Bhd [1994] 1 MLJ
312 said at pp 321–322 clarified the approach the court should take with respect to what
amounts to a defence on the merits:

To use common and plain language, the application must show that his defence is not a
sham defence, but one that is prima facie, raising serious issues as a bona fide reasonable
defence … It involves a mental process that goes through the mind of the judge when
making a decision in any case, weighing the evidence of the litigant against that of another
on the facts alleged …

1) What is the territorial jurisdiction of the Sessions Courts;

 (b)If no local limits of jurisdiction have been assigned to them, whether the Sessions
Courts have the same local jurisdiction as the High Courts.
The law applicable in respect of the territorial jurisdiction of the Subordinate Courts is found in
Section 59, Part VI of the Subordinate Courts Act, 1948 ("SCA 1948"). Section 59 states:
"Constitution and territorial jurisdiction of Sessions Courts.
59.
 (1)The Yang di-Pertuan Agong may, by order, constitute so many Sessions Courts as he may
think fit and shall have power, if he think fit, to assign local limits of jurisdiction thereto.
 (2)Subject to this Act or any other written law, a Sessions Court shall have jurisdiction to
hear and determine any civil and criminal cause or matter arising within the local limits of
jurisdiction assigned to it under this section or, if no such local limits have been assigned,
arising in any part of the local jurisdiction of the respective High Court.
 (3)Each Sessions Court shall be presided over by a President appointed by the Yang di-
Pertuan Agong on the recommendation of the Chief Justice.
 (4)Sessions Courts shall ordinarily be held at such places as the Chief Justice may direct, but
should necessity arise they may also be held at any other place within the limits of their
jurisdiction".
Therefore section 59 SCA 1948 sets out the constitution and territorial jurisdiction of the Sessions
Courts. In section 59(2) it is stated that the Sessions Courts have jurisdiction to hear cases within the
local limits of jurisdiction assigned to them and if no such local limits have been so assigned, then
their jurisdiction will be the jurisdiction of the respective High Courts.
Another relevant provision in respect of the territorial jurisdiction is found in section 3 of the Courts
of Judicature Act, 1964 (Act 91) ("CJA 1964"). Section 3 of the CJA 1964 define the terms "High
Court" and "local jurisdiction" as below:

"High Court" means the High Court in Malaya and the High Court in Sabah and Sarawak or either of
them, as the case may require.
"local jurisdiction" means:
 (a)"in the case of the High Court in Malaya, the territory comprised in the States of Malaya,
namely, Johore, Kedah, Kelantan, Malacca, Negeri Sembilan, Pahang, Penang, Perak, Perlis,
Selangor and Terengganu and the Federal Territory of Kuala Lumpur; and
 (b)"in the case of the High Court in Sabah and Sarawak, the territory comprised in the States
of Sabah and Sarawak and the Federal Territory ofLabuan, including, in either case, the
territorial waters and the air space above those States and the territorial waters;"

Therefore section 3 of the CJA 1964, sets out the territorial jurisdiction of the two High Courts; the
High Court in Malaya and the High Court in Sabah and Sarawak. The High Court in (of) Malaya have
territorial jurisdiction in Peninsular Malaysia or West Malaysia while the High Court in (of) Sabah and
Sarawak have territorial jurisdiction over the two states of Sabah and Sarawak or East Malaysia.

The question then, based on the provisions mentioned above, what is the territorial jurisdiction of
the Sessions Courts?

In deciding what is the territorial jurisdiction of the Sessions Courts, I am in agreement with the
decision of Public Prosecutor v Segaram a/I S Mathavan (supra) that under section 59(1), only the
Yang di-Pertuan Agong has the power to assign local limits of jurisdiction to the Sessions Courts. And
since His Royal Highness has not made any such order under the said section, which order has to be
gazetted, to assign the local limits of jurisdiction of each Sessions Court, then, section 59(2) comes
into play; that is, if no such local limits have been assigned to the Sessions Courts, then the Sessions
Courts have jurisdiction to hear and determine any cause or matter arising in any part of the local
jurisdiction of the respective High Court. This mean that the Sessions Courts have the same local
jurisdiction as the High Courts as defined under section 3 of the CJA 1964; that is the Sessions Courts
in Malaya have jurisdiction which covers all states in Peninsular Malaysia or West Malaysia and the
Sessions Courts in Sabah and Sarawak have jurisdiction which covers both the states of Sabah and
Sarawak or East Malaysia.

Therefore, the Sessions Courts in (of) Malaya just like the High Courts in (of) Malaya can sit
anywhere, at any branch, in Peninsular Malaysia or West Malaysia. Likewise, the Sessions Courts in
(of) Sabah and Sarawak just like the High Courts in (of) Sabah and Sarawak can sit anywhere, at any
branch in Sabah and Sarawak or East Malaysia. The result is that both the High Courts and the
Sessions Courts have the same territorial (local) jurisdiction and as such the Sessions Courts just like
the High Courts enjoy concurrent and co-ordinate jurisdiction of each other.
Reverting back to our instant case, the position is that the Sessions Judge in Butterworth just like her
counter-part in Shah Alam has territorial jurisdiction to hear and determine the plaintiff's claim since
they enjoy concurrent as well as co-ordinate jurisdiction of each other.
Therefore the answers to the first issue are:
 (a)The Sessions Courts have no restriction of local limits of jurisdiction assigned to them. This
is so since His Royal Highness the Yang di-Pertuan Agong has not assigned them their local
limits of jurisdiction under section 59 (1) of SCA 1948 and;
 (b)Since no local limits of jurisdiction have been assigned to the Sessions Courts by His Royal
Highness the Yang di-Pertuan Agong, the Sessions Courts then have the same local
(territorial) limits of jurisdiction as the High Courts which mean the Sessions Courts just like
the High Courts enjoy concurrent and co-ordinate jurisdiction of each other.

2) What is the "forum conveniens" of this case: whether it is the Shah Alam, Selangor Sessions
Court or the Butterworth, Penang Sessions Court.
The defendant contends that the "forum conveniens" to try the said case is the Butterworth, Penang
Sessions Court and not the Shah Alam, Selangor Sessions Court.
Before delving into this issue, the section that gives jurisdiction to a Sessions Court to transfer a case
to another Sessions Court is found in section 99A, Part X of the SCR 1946. Section 99A states:
"Further powers and jurisdiction of courts".

99A. In amplification and not in derogation of the powers conferred by this Act or inherent in any
court, and without prejudice to the generality of any such powers, every Sessions Courts and
Magistrates' Court shall have the further powers and jurisdiction set out in the Third Schedule.
The Third Schedule which is relevant to this appeal is in paras 2 and 3 which states:
"Stay of proceeding"
 2.Power to stay proceedings unless they have been instituted in the District in which-
o (a)the cause of action arose, or
o (b)the defendant resides or has his place of business, or
o (c)one of several defendants resides or has his place of business, or
o (d)the facts on which the proceedings are based exist or are alleged to have
occurred, or
o (e)for other reasons it is desirable in the interests of justice that the proceedings
should be had.
"Transfer of proceedings"
3.
 (1)(Repealed)
 (2)Power, on application or of its own motion, to transfer any proceedings to another court
of co-ordinate jurisdiction.

Therefore the Sessions Court has the power to transfer the said case to another Sessions Court
which is of co-ordinate jurisdiction. The question is whether from the facts of the case, it meets the
criteria as specified in paras 2 and 3 and the principle or doctrine of "forum conveniens".
What is the principle or doctrine of "forum conveniens"?
"Forum conveniens" or also termed as "forum non conveniens" as defined by Black's Law Dictionary,
Seventh Edition by Bryan A.Garner are defined as below:
"forum conveniens" means [Latin: "a suitable forum"] The court in which an action is most
appropriately brought, considering the best interests and convenience of the parties and witnesses.
Cf. FORUM NON CONVENIENS.
"forum non conveniens" means [Latin: " an unsuitable court"] Civil procedure. The doctrine that an
appropriate forum - even though competent under the law - may divest itself or jurisdiction if, for
the convenience of the litigants and the witnesses, it appears that the action should proceed in
another forum in which the action might originally have been brought. Also termed forum
inconveniens.

"Forum non conveniens allows a court to exercise its discretion to avoid the oppression or vexation
that might result from automatically honoring plaintiffs forum choice. However, dismissal on the
basis of forum non conveniens also requires that there be an alternative forum in which the suit can
be prosecuted. It must appear that jurisdiction over all parties can be secured and that complete
relief can be obtained in the supposedly more convenient court. Further, in at least some states, it
has been held that the doctrine cannot be successfully invoked when the plaintiff is resident of the
forum state since, effectively, on e of the functions of the state courts is to provide a tribunal in
which their residents can obtain an adjudication of their grievances. But in most instances a
balancing of the convenience to all the parties will be considered and no one factor will preclude a
forum non conveniens dismissal, as long as another forum is available. Jack H. Friedenthal st al, Civil
Procedure S 2.17, at 87-88 (2d. 1993)".

Therefore the terms are used interchangeably and it means, in brief, a most suitable or appropriate
forum which take into consideration the best interests and convenience of the parties and
witnesses.

In the case of American Express Bank Ltd v Mohamed Toufic Al-Ozier & Anor [1995] 1 MLJ 160, the
Supreme Court held that the word "conveniens" in forum non conveniens meant suitability or
appropriateness of the relevant jurisdiction in the interests of all the parties and for the ends of
justice and not one of convenience. The said court also held that the onus Is on the applicant to
satisfy the court that some other forum is more appropriate. The court stated:

The doctrine of forum non conveniens appears to have originated in Scotland and has finally found
full acceptance by the House of Lords inSpiliada Maritime Corp v Cansulax Ltd (The Spiliada) [1987]
AC 460; [1986] 3 All ER 843; [1986] 3 WLR 972 after a series of decisions, as described and set out so
well in that very interesting and readable joint article by RH Hickling and Wu Min Aun, 'Stay of
Actions and Forum Non Conveniens' [1994] 3 MLJ xcvii.

The main judgment in The Spiliada was delivered by Lord Goff, who adopted the dictum of Lord
Kinnear in Sim v F Robinow (1892) 19 R (Ct of Sess) 665 at p 668 being the fundamental principle in
regard to this doctrine, ie that 'there is some other tribunal, having competent jurisdiction, in which
the case may be tried more suitably for the interests of all the parties and for the ends of justice'.
Lord Goff cautioned that the word 'conveniens' in forum non conveniens meant suitability or
appropriateness of the relevant jurisdiction and not one of convenience. We are in entire agreement
with the fundamental principle so expressed.

In our view, where an application by a defendant for stay of proceedings is concerned, in applying
the said doctrine, the defendant would have to satisfy the court that 'some other forum is more
appropriate' per Lord Templeman in The Spiliada.
Therefore, has the defendant satisfy this court that the Butterworth, Penang Sessions Court is more
appropriate or suitable in the interests of all the parties and for the ends of justice and not one of
convenience than the Shah Alam, Selangor Sessions Court?

In the case of Bank Utama (M) Bhd v Perkapalan Dai Zhun Sdn Bhd [2003] 5 MLJ 40, the court held
that:

"The doctrine of forum convenience calls for the matter to be heard by a court which is more
accessible and appropriate in the interest of all parties and for the ends of justice, notwithstanding
that other courts also have territorial jurisdiction pursuant to s 23(1) of the Act (see Malacca
Securities Sdn Bhd v Loke Yu [1999] 6 MLJ 112 at p 120)."

And in the case of Khor Seow Kee v Boon Hock Sawmill Sdn. Bhd. (1993) 4 CLJ 365 Abdul Malik, JC, (as
he then was), said at page 366:
"The legislature in creating a branch of the High Court in Malaya in each State, must have thought of
bringing the High Court closer to the rakyat. Easy accessibility of the High Court would lessen the
inconvenience of travelling (the amount of costs would not outweigh the inconvenience caused) and
the incurring expense that would flow from it. This would, in turn, facilitate the disposal of cases and
ease the backlog to a certain extent. This argument would likewise apply, with equal force, to the
Sessions Court."

Therefore, is the Butterworth, Penang Sessions Court more accessible and appropriate for the
parties in the circumstances?
In our instant case, the cause of action clearly arose in Petaling Jaya where all the transactions for
the professional services rendered by the plaintiff were done in Petaling Jaya. The defendant himself
had opted to open a case with the plaintiff, a legal firm situated in Petaling Jaya, to deal with his
case. It is therefore unreasonable if the said case was to be transferred from Shah Alam to
Butterworth since the plaintiffs witnesses, especially the plaintiffs staffs are located in Shah Alam.

Furthermore the expenses incurred for the witnesses and the plaintiff's staffs to attend the
Butterworth Sessions Court would be far higher compared to the defendant's expenses to attend the
Shah Alam Sessions Court. Therefore, I am of the view that the said case is more suitable and
appropriate in the circumstances to be heard in Shah Alam, Selangor Sessions Court. In this regard,
the case of Malacca Securities Sdn Bhd v Loke Yu [1999] 6 MLJ 112, is of great assistance where it
was held by Augustine Paul J, (as he then was), at p 127 as follows:
"In a contract for the payment of money the breach occurs when there is a failure to pay the sum
promised. This is logical as the meaning of 'cause of action' is the act on the part of the defendant
which gives the plaintiff his cause of complaint (see Jackson v Spittall (1870) LR 5 CP 542). The failure
to pay will be the cause of complaint That breach will have to be at the place where the payment is
to be made and the cause of action will therefore accrue in that place. (see Bank Bumiputra (M) Bhd
v Melewar Holdings Sdn Bhd & Ors [1990] 1 CLJ 1246. Where there is no agreement as to the place
where the payment should be made then the payment should be made at the place where the
plaintiff lives."

Therefore, the forum conveniens is the Shah Alam, Selangor Sessions Court for the following
reasons:
 (a)the defendant himself had opted to open a case with the plaintiff, a legal firm situated in
Petaling Jaya, to deal with his case.
 (b)the plaintiff practice as an advocate and solicitor of the High Court of Malaya at No. 705
Blok E, Phileo Damansara 1, No. 9, Jalan 16/11, 46350 Petaling Jaya, Selangor Darul Ehsan.
 (c)the Plaintiff also lives in the State of Selangor;
 (d)the witnesses which includes the plaintiff's staffs are from or near Shah Alam, Selangor.
 (e)the cause of action accrued in Selangor. ( Malacca Securities Sdn Bhd v Loke Yu [supra]
refers.