The Federal Court has allowed an investment holding company to appeal the High Court’s refusal to strike out a lawsuit, in a landmark decision concerning the interpretation of Section 68 of the Courts of Judicature Act 1964 (CJA).
Azinal Sdn Bhd had applied to the High Court to strike out a lawsuit filed by three plaintiffs in an inheritance dispute, arguing that the claim was barred by res judicata — the legal doctrine that prohibits the re-litigation of matters already adjudicated in a prior suit.
The application was dismissed by the High Court, and the company’s appeal was rejected by the Court of Appeal on grounds that it ran afoul of Section 68(1)(f).
Section 68(1)(f) prohibits litigants from appealing to the Court of Appeal from the dismissal of an application to strike out a lawsuit.
Delivering the unanimous decision of a three-member bench, Justice Nallini Pathmanathan noted that, when read literally, Section 68(1)(f) appears to impose a blanket ban on all such appeals.
“We are of the view that the construction to be accorded to Section 68(1)(f) is not as straightforward as adopting a literal and grammarian approach,” Nallini wrote in a 92-page judgment, adding that it may otherwise result in grave injustice.
The judge said a “purposive” approach would give rise to a different construction.
“The appellant (Azinal) argues that the respondents (the plaintiffs in the suit) are bound by an earlier Federal Court decision, which covers the same ground such that the present suit should be struck out,” she said.
Nallini said the High Court’s refusal to strike out the suit was not a “ruling made in the course of a trial or hearing” as it finally disposed of the company’s right not to be sued a second time.
Therefore, the order was not a “decision” within the meaning ascribed to the term in Section 3 of the CJA, and was not caught by Section 68(1)(f).
“Where a Court has made an order in the course of a trial or hearing which does finally dispose of the rights of the parties, it is appealable,” the judge said.
Also on the panel hearing the appeal were Justices Rhodzariah Bujang and Hanipah Farikullah.
The dispute stems from Azinal’s acquisition of 180 acres of land from Pasla Holdings Sdn Bhd, an asset-holding company established by Indian-born businessman AS Dawood.
Dawood, who migrated to Malaya at age 13, died leaving four wives — Patama @ Amajibibi Daud Sah, Ameena Beevi, Maimoon Beevi and Aishah Beevi — and 20 children.
The children of the fourth wife filed a lawsuit in 2013 claiming that the land sale to Azinal was illegal as the property was held in trust by Patama.
In March 2017, the High Court ruled in their favour, but the decision was overturned by the Court of Appeal in October of the following year.
In 2022, the Federal Court affirmed the appeals court’s decision, ruling that Dawood had not established a family trust when apportioning his shares in Pasla Holdings.
In 2017, the three plaintiffs, linked to Dawood’s second and third wives, commenced the present suit against 11 defendants, including Azinal.
In 2022, Azinal filed an application to strike out the suit, leading eventually to the present appeal.
The Federal Court ordered the appeal to be reinstated and heard in full before the Court of Appeal.
Lawyers M Pathmanathan, Rutheran Sivagnanam, Shirin Pathmanathan and Chong Yi Zhen represented Azinal while Austen Pereira and Zulaikha Aini Khair Johari appeared for the three plaintiffs.
