Introduction
In MT Ventures Sdn Bhd & Anor v QM Print Sdn Bhd and another appeal (“MT Ventures”),[i] the Federal Court clarified the effect of Section 68(1)(f) of the Courts of Judicature Act 1964 (‘CJA’). The case addresses an important question, whether the dismissal of a striking-out application is appealable, following the 2022 introduction of Section 68(1)(f) CJA, which generally bars any appeal against the dismissal of a striking-out application.
Whilst the Federal Court did not answer the leave questions posed, the Federal Court held that Section 68(1)(f) of the CJA, when construed holistically and harmoniously with Section 67 and Section 3 of the CJA was only applicable to cases where the High Court had determined that further oral evidence is required in order that it can arrive at a decision which finally disposes of the parties’ rights. In such instances, there is no right of appeal because the parties’ rights have not been finally disposed of or fully adjudicated upon. As such, the court effectively defers the final determination in these cases to enable the adducing of further oral evidence. However, where striking out is targeted at a specific point of law which has the effect of determining the entire cause of action, the right of appeal accrues or vests at that point.
The Federal Court’s decision strikes a balance between the legislative intent to reduce unnecessary appeals and the need to preserve appellate oversight over matters which finally dispose of parties’ rights.
This article will analyse the case of MT Ventures and discuss the Federal Court’s interpretation of the effect of Section 68(1)(f) of CJA, its interplay with Sections 3 and 67 of CJA, and the circumstances under which dismissals of striking-out applications remain appealable.
Facts
There were two appeals before the Federal Court:
In MT Ventures Sdn Bhd & Anor v QM Print Sdn Bhd [Civil Appeal No. 02(i)-6-03/2024(W)], the appellants applied to strike out the writ and pleadings on the ground that the respondent lacked locus standi.[ii] The High Court dismissed the striking-out application. On appeal, the respondent successfully struck out the appeal on the ground that the dismissal of a striking out application was non-appealable pursuant to Section 68(1)(f) of the CJA.
In Azinal Sdn Bhd v Jannath Gani & Ors [Civil Appeal No. 02(i)-17-06/2024(W)], the appellants applied to strike out the respondents’ claim on the ground of res judicata.[iii] The High Court dismissed the application. On appeal, the Court of Appeal upheld the respondents’ preliminary objection that the decision was non-appealable pursuant to Section 68(1)(f) of the CJA.
Federal Court’s Decision
Briefly, the Federal Court held that the effect of Section 68(1)(f) of the CJA is not to exclude all appeals against dismissal of striking out applications in that a party may appeal against the dismissal of a striking out application where such dismissal finally disposes of the rights of the parties, and that such dismissal would cause grave prejudice to the rights of the parties.
In doing so, the Federal Court began by emphasising that Section 68(1)(f) must be read in harmony with Sections 3 and 67 CJA. Section 3 defines a “decision” as meaning “judgment, sentence or order, but does not include any ruling made in the course of a trial or hearing of any cause or matter which does not finally dispose of the rights of the parties” and Section 67 confers general jurisdiction upon the Court of Appeal to determine appeals from “any judgment or order”. When read together, these provisions demonstrate Parliament’s intention to curtail interlocutory appeals that cause delay, notwithstanding that the parties’ rights, which remained intact, would be adjudicated upon a later date.
The introduction of Section 68(1)(f) of the CJA simply clarified what has always been the correct reading of the law i.e. dismissal of a striking-out application is generally not appealable because it merely defers the decision in Section 3 of the CJA. However, Section 68(1)(f) of the CJA does not apply to decisions where the striking out of a writ or pleading finally disposes of the rights of the parties.
In reaching this conclusion, the Federal Court, at paragraph [60], referred to Kempadang Bersatu Sdn Bhd v Perkayuan OKS No 2 Sdn Bhd [2019] 4 MLJ 614, which underscored that Section 67 of the CJA cannot be read in vacuo but must be construed with Section 3 of the CJA.
The Federal Court, at paragraphs [155] – [158], also cited Asia Pacific Higher Learning Sdn Bhd v Majlis Perubatan Malaysia & Anor [2020] 2 MLJ 1, noting that not every interlocutory ruling amount to a “decision” for purposes of appeal under Section 3 of the CJA. A ruling qualifies as a “decision” only if it is made in the course of a hearing and finally determines the rights of the parties. Where the ruling merely postpones the issue for determination at trial, it does not finally dispose of rights and therefore is not appealable.
Further, the Federal Court referred to Orchard Circle Sdn Bhd v Pentadbir Tanah Daerah Hulu Langat & Ors [2021] 1 MLJ 180 at para [50] where the Federal Court held that statutes must be interpreted to promote their purpose under Section 17A of the Interpretation Acts 1948 and 1967. This was echoed in Detik Ria Sdn Bhd v Prudential Corporation Holdings Ltd & Anor [2025] MLJU 575 at para [29] and Bursa Malaysia Securities Bhd v Mohd Afrizan bin Husain [2022] 3 MLJ 450 at para [77].
Applying these principles, the Federal Court confirmed the general rule in which a dismissal of a striking-out application is ordinarily non-appealable because there is generally no final disposal of the parties’ substantive rights and does not usually prejudice the parties in any material manner. However, the Federal Court carved out a critical exception where the dismissal of a striking out will cause grave prejudice to the parties’ rights, namely where the dismissal relates to threshold conditions which has the effect of finally disposing of the parties’ rights — such as challenges to locus standi, state immunity, jurisdictional objections and res judicata.
This is because dismissals on such grounds have the consequence of finally determining the parties’ rights. Otherwise, the parties would be forced to proceed to trial unnecessarily, even though the threshold issue could and should have been determined at the preliminary stage. The Federal Court explained by example of a derivative action where the threshold requirement was not met for instance and the court nonetheless does not strike out the claim, determining that a full hearing of the dispute on the merits is necessary. If an appeal against the dismissal of such a striking out application is not allowed premised on a literal reading of Section 68(1)(f) of the CJA, then this in turn would result in a trial which in no way assists the court in adjudicating upon the threshold requirements or merits of the derivative action. To deny an appeal in those circumstances would necessitate a pointless trial, contrary to the objective of the CJA. Most importantly, a rigid bar would also run contrary to Sections 3 and 67 of the CJA, since the rights of the parties would have been finally disposed of on an adjudication of the preliminary threshold point.
|
[166] This is evident for instance where the threshold requirements for a derivative action are not met and the court nonetheless does not strike it out, determining that a full hearing of the dispute on the merits is necessary. If an appeal against the dismissal of such a striking out application is not allowed premised on a literal reading of section 68(1)(f) CJA, then this in turn would result in a trial which in no way assists the court in adjudicating upon the threshold requirements or merits of the derivative action. The oral evidence would not assist in determining whether the preliminary point of the threshold requirement for bringing a derivative action has been met. In such an instance, the hearing would prolong rather than expedite the disposal of the matter. [167] But most importantly a reading of section 68(1)(f) CJA in that fashion would run contrary to sections 3 and 67 of the CJA. This is because the rights of the parties would have been finally disposed of on an adjudication of the preliminary point. Therefore, the right of appeal would have accrued at the point when the court determined the preliminary point of law relating to whether the threshold for a derivative action had been met. This means in practice that the right of appeal would have accrued on the dismissal of the striking-out application. |
For clarity, the foregoing exceptions are to be contrasted with striking out applications which are dismissed due to a need for further evidence and can only be resolved by way of viva voce evidence, in which case there is no right of appeal.
Accordingly, Section 68(1)(f) of the CJA cannot reasonably apply to every dismissal of a striking out application and adopting such an interpretation would deny a party its substantive right of appeal, even where it conclusively determines the parties’ rights.
Alternative approach
The Federal Court went on to also consider the parties’ submission in an alternative approach to the resolution of the appeals. In both appeals, the original proceedings were commenced prior to the introduction of Section 68(1)(f) of the CJA and the question posed was whether the Macnaghten test, namely that a right of appeal vests in the litigant at the time the original proceedings is instituted and not only when an adverse decision against the putative appellant is made applies.
The Federal Court decided that Section 68 of the CJA should not be read as displacing the Macnaghten presumption or as operating retrospectively to take away the vested right of appeal that both parties possessed.
| [226] Therefore, section 68 CJA should not be read as displacing the Macnaghten presumption or as operating retrospectively to take away the vested right of appeal that both parties possessed in the present case. In other words, even if one reads section 68(1)(f) CJA literally so as to remove the parties’ rights to appeal the dismissal of a striking-out application, this cannot apply so as to remove the vested rights of the parties. Therefore, even under this alternative ground, the Appellants possess a right to appeal the dismissal of their striking-out applications. |
As such, even adopting this alternative approach, the Appellants in both appeals possessed a right to appeal against the decision dismissing their striking out applications.
Conclusion
The Federal Court has restated the position in law and clarified that where the dismissal of the striking-out application involves threshold conditions that finally dispose of parties’ rights, Section 68(1)(f) of the CJA does not preclude a party from appealing against the decision.
Despite not answering the leave questions, the Federal Court allowed both appeals and directed the appeals to be heard by the Court of Appeal.
This article contains general information only and it does not constitute legal advice and should not be relied upon as such. Should you require any legal advice regarding your legal matters, please do not hesitate to contact us.
| Andrew Fernandez Partner – Dispute Resolution d +603 2691 3991 (ext 196) e andrewfernandez@cheangariff.com |
This Case Update is contributed by the Contact Partner listed above, with the assistance of Janet Sim (Associate, Cheang & Ariff).
[i] [2025] MLJU 2835
[ii] MT Ventures Sdn Bhd & Anor, at [179].
[iii] MT Ventures Sdn Bhd & Anor, at [186].
