When is the ‘Threshold Quantum’ in s.68(1)(a) CJA, to be determined?

Is it the time a claim is filed? Or after judgement? Eventually, the courts decided that the relevant quantum is at it was at the time its filing. Note that there is nothing logical about either of these positions.

How did the courts come to find themselves at this pass?

[1].   Did you know what happened to the MP Lim Guan Eng in 2012?

In 2012, Lim Guan Eng was the Chief Minister of Penang.1Utusan Malaysia (M) Bhd v Lim Guan Eng [2013] 3 MLJ 689 A local newspaper, Utusan Malaysia published an article on 20 December 2012.  It called it ‘Kebiadaban Guan Eng’.  ‘Biadab’ in Malay meant, ‘rude’. Lim sued the newspaper for libel and asked for general damages. The trial judge ruled that Utusan had defamed Lim and awarded Lim RM200,000.00 as damages.

Utusan, wishing to appeal, fell into a quandary. Did it require the Court of Appeal’s permission under sec 68(1)(a)?

Did sec 68(1)(a) activate itself –  and come alive – at the point the case was filed, or after judgement?

At which point did the judicial axe fall?

[2].  In the Malaysian system of civil appeals, any litigant has two avenues of appeal

Suppose you began a case in a subordinate court – the Magistrates or the Sessions Court – and if your case,2 either as plaintiff or defendant is dismissed, you can appeal directly to the High Court.3Order 55 of the Rules of Court 2012

If you are unhappy with the decision of the High Court you can appeal to the Court of Appeal.

Whether your right of appeal is automatic was determined by a quantum threshold.  It used to be much lower earlier, but over the years it has gradually increased to RM250,000.00.

[3].  But there is a catch–it is in s. 68(1)(a) CJA

It used to be thought that if a judge awarded you a judgement valued less than RM250,000.00, you needed to get the Court of Appeal’s permission to appeal.

The judges call this a ‘leave application’. ‘Leave’ means ‘permission’.

All this was because of a hurdle created by s. 68(1)(a) of the Courts of Judicature Act 1964. It reads:

‘Non-appealable matters 

(1):   No appeal shall be brought to the Court of Appeal in any of the following cases: …

(a) .   when the amount or value of the subject-matter of the claim (exclusive of interest) is less than two hundred and fifty thousand ringgit, except with the leave of the Court of Appeal;…’

We will refer to that hurdle sum as ‘the threshold quantum’.4 now it is set at RM250,000.00 or any like amount. The original provision was $500.00 (Revised 1972); then $2,500.00 (Act A279); then $10,000.00 (Act A530]); then RM100,000.00 (Act A606). It is now RM250,000.00 (Act A886).

However, if the quantum adjudged was RM250,000.00 or more, you had no problems. You could appeal directly to the Court of Appeal, without asking the Court of Appeal any permission.

[4].      At which point does the threshold quantum come into play?

We continue with Lim Guan Eng’s story.

[5].   It would be at the time the action was filed

In the Lim case, the Court of Appeal ruled that it ‘would be at the time of filing the claim.’

Utusan needed no permission at all to appeal.

In arriving at this decision, the court relied on a Federal Court case called Harcharan Singh.5 Harcharan Singhs/o Sohan Singh v Ranjit Kaur d/o S Gean Singh (sued as the administratrix of the estate of Bhagwan Singh s/o Sohan Singh, deceased) [2010] 2 MLJ 479, at Paragraph 21 of the judgement.

[6].  A pre-independence case comes to the same conclusion:

Before we examine Harcharan Singh, we need to travel back in time, well over 80 years.

Chan Kee Beng v Ramasamy Naidu [1939] MLJ 113 was a pre-Merdeka case from Johor.

There was a similar provision in sec.56 of the Johor Courts Enactment.

Section 56 stated that no appeal could be filed from the Magistrate’s Court of a judicial Commissioner unless the value of the subject-matter was $100.00, or more.

There the plaintiff had named $250.00 as his claim sum.

The judge had only awarded $100.00 as damages.

The question before the High Court was: when should the threshold quantum be determined?

Mills J ruled that ‘the determining factor is not the amount or value of the subject matter of the appeal, but the value of the subject-matter of the civil suit.’ Because the plaintiff had ‘claimed’ for $250.00–which was more than $100.00–the court ruled that the appeal was competent: no ‘leave’ was necessary.

So, the quantum awarded by the trial judge was not a determining factor.

[7]. 50 years later, a collision course in Johore…

In1996, a lorry collided into a car. A man named Yai Yen Hon was a passenger in it.  Injured, Yai filed a claim totalling over RM 4.0 million. The court ruled that the defendants were liable, but the total damages he granted was in the sum of RM62,400.00.6Yai Yen Hon v Teng Ah Kok & Sim Huat Sdn Bhd & Anor [1997] 1 MLJ 136.

The defendant’s appeal against the decision met with the respondent’s objection. He complained that the threshold quantum of $100,000 had not been crossed. He insisted the appeal was incompetent.7 At that time it was RM100,000.00, and afterwards it was raised to RM250,000, on 24 June 1994, by s.19 of the Courts of Judicature (Amendment) Act 1994, Act A886

[8].  If we back up a bit, we discover that before 1987, the words in s.68(1)(a) were different: ‘at the trial’

The words in the previous s.68(1)(a) were couched in this way:

‘No appeal shall be brought to the Supreme Court in any of the following cases: (a) when the amount or value of the subject-matter of the claim at the trial (exclusive of interest) is less than one hundred thousand ringgit, except with the leave of the Supreme Court…’.8 Sec.4 of the Courts of Judicature (Amendment) Act 1987, Act A670

In 1987, Parliament removed the words ‘the trial’.9 See the dicta of Chong Siew Fai CJ (Sabah and Sarawak) in Yai Yen Hon supra, at 139. 

So it became impossible to fix the time at which the quantum had to be determined to any point at or after the trial. The Federal Court judges in Yai and Harcharan Singh were alive to this distinction.

Therefore, what quantum of damages a trial judge awarded a litigant, or what the quantum in dispute was at the final court, was no longer relevant.

Chong Siew Fai CJ concluded that ‘in construing… section 68, what is material is the significance attached to the word ‘claimed’.  He made this point because he was influenced by an old English case over 143 years earlier: Dreesman v Harris [1854] 9 Exch 485.

Dreesman was  a breach of contract case.

The plaintiff had lodged it in the English County Court.

In his claim, the plaintiff had demanded more than £20.00; but the judge only gave a judgement for £12.00.

Was leave required?

If the value of the goods in question fell below £20.00, an appellant required the permission of the judge.10Section 105(a) of the County Courts Act 1959

The Court of Appeal in England made two rulings: first, the word ‘claimed’ in s.105(a) applied not only to the ‘claim’ made by the plaintiff; but also to any counterclaim made by any defendant.

Second, the determinative point was the value of the claim.

In Dreesman, the respondent complained that such an interpretation would lead to mischief.

The Respondent argued that the threshold quantum should not be determined at the time the writ was filed:  this was because a party might by artifice reserve to himself the right of appeal in all cases by exaggerating his claim to a sum exceeding the threshold quantum (more than a century later, 132 years to be precise, NH Chan JCA would raise an identical complaint. We will come to that in a moment).

In Dreesman, this objection was rejected.

The English judges took a similar position in a series of cases from 1896 onwards.11 Smith v Gill [1896] 2 QB 166 per Cave and Wills JJ. In 1945, in Brett v Thrower[1945] 2 All ER 284, the UK Court of Appeal ruled that it is the quantum made at the time the claim was made that was significant: see p.285.

[9].  Were there contrary views?

There were, and the judges expressed them in powerful language.

One Supreme Court case moved the determinative time forward to the time of judgement.

In 1991, in Yap Fook Cheong & Anor v Burkill (Malaya) Sdn Bhd & Anor [1991] 3 MLJ 160 a similar question arose. The Supreme Court held that ‘the court does not merely look at the relief sought but also considers the value of the judgement if it can be ascertained.’12 Hashim Yeop A Sani CJ (Malaya)

[10].  What is wrong with this view?

Nothing really. Yet, that view was inconsistent with the 1987 amendment.

Then came the 1996 case of  Amer Mohideen Dawood v Sneh Bhar W/O Ter Binder Singh [1996] 2 MLJ 329. NH Chan JCA, writing for the Court of Appeal asserted that,

‘If ‘the amount of the claim’ or ‘the value of the subject-matter of the claim’ is to be based on the claim as pleaded in the statement of claim and not in the judgment, then the purpose of s 68(1)(a) of the Act could be circumvented easily by claimants merely stating in their pleadings, in every case, that they are claiming for more than RM250,000. This easy way to get around the need to obtain leave makes the entire provision of s 68(1)(a) of the Act superfluous.’

NH Chan JCA based his reasoning on the judgement of Mr Justice Shanker JCA in Monohary Teresa & Anor v Tan Ah Lek.13 [1995] 3 MLJ 365.

It is noteworthy that the Court of Appeal in Manohary comprised in NH Chan, Mahadev Shankar and VC George JJCA.

In 1999, Suriyadi J in the High Court took the same position.14 Lein Tiam Hock v. Arumugam A/L Kandasamy [1999] 6 MLJ 129

[11].   While one view is no better than the other, modern authorities militate against Manohary

To the extent Amer Mohideen, Yap Fook Cheong, Manohary and Lein Tiam Hock decided that the threshold quantum must be determined at the time of the judgement, neither the 1987 parliamentary intent, nor modern caselaw, lend support to any such view.

Indeed the Federal Court in Yai Yen Hon and Harcharan Singh  as well as the Court of Appeal decision in Utusan Malaysia in 2013, all point to the opposite direction: that it is the quantum of the claim at the time of the filing that is relevant.

[12]. The Court’s recommendation to Parliament

The court of Appeal in Manohary felt that section 68(1)(a), ‘as it stands is unsatisfactory because it is not precise’.

The court thought that the best way to determine the threshold quantum would be to utilise the judgement sum.

Unusually, they recommended to the legislature that it is ‘preferable that s.68(1)(a) should be reworded to provide that no appeal should be brought without leave where the judgment appealed against is for the payment of a monetary sum which is less than RM250,000 – exclusive of interest and costs.’

That is a good suggestion: whichever of the two positions the courts too, there was no greater logic favouring the one argument over the other. Thus, if so reworded, then s.68(1)(a) would cast off its lexical ambiguities.

Alas, since 1995, Parliament has been far too busy to pay attention to this reasonable suggestion.

[13].  Should Practice Direction No.1/ 2017 be amended?

Despite all this, an inadvertent error persists. In  2017, the President of the Court of Appeal 15 acting under his or her powers under Rule 77 of the Rules of the Court of Appeal 1994 issued a Practice Direction No.1 of 2017.

Paragraph 18 of the Direction states that certain appeals do not require any leave.

This is how the relevant part of the Practice Direction appears:

‘18.      Matters that do not require leave to appeal are –

(a).  certiorari;

(b).  declaration;

(c).  Injunctions (except for action which originates from Sessions Court);

(d).  bankruptcy proceeding;

(e).  matters relating to matrimonial proceedings and the Law Reform (Marriage and Divorce) Act 1976;

(f).  company winding-up petitions; and

(g).  Judgement for unliquidated damages/unliquidated amount.’

The word ‘judgement’, in paragraph 18(g), is misconceived.

The proper word that should have been used is the word ‘claim’.

Paragraph 18(g) should read ‘claims for unliquidated damages/unliquidated amounts.’

That would bring Practice Direction No.1/2017 in line with s.68(1)(a) and the dicta of the Federal Court in Yai Yen Hon and Harcharan Singh, as well as the Court of Appeal decision in Utusan Malaysia v. Lim Guan Eng.

Over to you then, my Lady, the President of the Court of Appeal!

 

[The author wishes to express his gratitude to Miss KN Geetha, Mr. JP Prabh, Mr. GS Saran, Cik Wan Salena Wan Abdullah, and En. Samad Hassan Al Muthalib]

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