Be cautious in litigation

It is common for lawyers to encounter clients who want everything done yesterday. Clients are naturally concerned about their disputes, and hence oftentimes urge lawyers to quickly respond either to the clients themselves, or to the other side. In the rush to get things done, lawyers who are already flustered can easily overlook the bigger picture.

Consider the recent Court of Appeal case of Boo Are Ngor v Chua Mee Liang. In this case, Chua Mee Liang took out a suit against Boo Are Ngor, but the suit was struck out due to Chua Mee Liang's failure to comply with directions of the Court. Chua Mee Liang did not appeal, but instead started a second suit against the same party.

In response, Boo Are Ngor's lawyers defended the second suit, and it was not until nearly 4 years later that they applied to strike out the second suit for being an abuse of process of Court. The reason, it was asserted, was that since Chua Mee Liang's first suit was struck out for failure to comply with Court directions, Chua Mee Liang should not be granted the indulgence to commence a second suit.

Unfortunately for Boo Are Ngor, the Court of Appeal held that since he has taken action to defend the second suit, he is no longer entitled to strike out the suit for abuse of process of Court. One can only imagine what a difference it would have made for Boo Are Ngor if the application to strike out was made in the first instance. That, however, could only happen, if lawyers are allowed to do their jobs, sometimes a little slower than clients would like.

Lawyering remains that one unique profession where client service is not always the most important consideration, and the client is definitely not always right.

Contracts without good faith

Can a contract be entered into without good faith? One would think logically not, but apparently the Court of Appeal does not agree. In the case of Seven Seas Industries Sdn Bhd v Philips Electronic Supplies (M) Sdn Bhd & Anor, the Court of Appeal was asked to read into the contract an implied term that parties are to act in good faith, with honesty, and in a reasonable manner. One would assume these are very self-evident implied terms. Unfortunately, the Court of Appeal held otherwise. According to the learned judges, a Court would not read any implied terms into the contract if the contractual terms are clear as of themselves. This is even so despite the terms sought to be read into the contract being so basic and fundamental.

This new decision shows all the more why it is so necessary to ensure contracts are properly drawn up in the first place. Otherwise, even very basic issues may be overlooked, causing much more substantial losses at the end of the day.

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If you have any questions or comments, email me at khenghoe@mycounsel.com.my.