Case Spotlight: Validity of Online Hearings during the MCO

The High Court in the case of SS Precast Sdn Bhd v Serba Dinamik Group Bhd & Ors [2020] MLJU 400 recently discussed the novel issue of the validity of online hearings and the use of unaffirmed affidavits for court proceedings during the Movement Control Order (“MCO”).

Brief Facts

1. The Plaintiff commenced action against 10 Defendants in the suit.
2. The MCO was implemented effective 18.03.2020, which resulted in the closure of non-essential businesses.
3. On 28.03.2020, the Plaintiff obtained judgment in default for the sum of RM 14,020,601.56 against the first to sixth Defendants (“D1 to D6”) for their failure to file a defence (“Judgment”).
4. On 14.04.2020, D1 to D6 proceeded to file two applications with a certificate of urgency to the High Court to set aside the Judgment (“D1 to D6’s Application”). Both applications were supported by an unaffirmed affidavit from representatives of D1 to D6.
5. On 16.04.2020, the Plaintiff filed an ex parte application to the High Court for a court order to freeze 2 bank accounts of the first Defendant and 1 bank account of the fifth Defendant. This ex parte application was filed with a certificate of urgency by the Plaintiff’s solicitors and is supported by an unaffirmed affidavit by the Plaintiff’s representative (“Plaintiff’s Application”).
6. After receiving both the D1 to D6’s Application and the Plaintiff’s Application, the High Court inquired from both parties if they were agreeable to hear D1 to D6’s Application by way of a video conference through Skype (“VC”). Both parties agreed for VC to be held on 17.04.2020 at 10.00 am and the High Court ordered for a Consent Order between parties to be recorded (“Consent Order”).
7. During the VC session, the High Court granted a stay of execution of the Judgment (“Stay Order”) on the condition that D1 to D6 shall deposit RM 500,000.00 in a stakeholder’s interest-bearing bank account in the sole name of the Plaintiff’s solicitors.
8. However, the Plaintiff’s representative, who was dissatisfied with the Stay Order, wrote a letter to the Plaintiff’s solicitors and lodged a police report. Among other things, the Plaintiff’s representative alleged that the High Court did not have the power to hear D1 to D6’s Application through VC, that the Plaintiff did not consent to the VC, and the High Court could not consider unaffirmed affidavits.

Court’s Findings:

Validity of Online Hearing

The High Court held that the Plaintiff is bound by the conduct of its counsel and its solicitors. It was clear that the Plaintiff consented to the VC as at no point did the Plaintiff’s counsel object to the VC. In fact, the Plaintiff’s counsel actively participated in the VC. As such, the Plaintiff was e-stopped from denying the validity of the VC.

The High Court went on further to state that even if only one party applied to the court for VC, the High Court has discretion under the Rules of Court 2012 (“RC 2012”) to order the hearing to be heard by VC, as D1 to D6 have a fundamental right under Article 5(1) of the Federal Constitution to have access to justice.  As it was not possible for the High Court to hear D1 to D6’s Application in chambers due to the MCO, D1 to D6’s Application had to be heard by way of VC in the interest of justice.

Unaffirmed Affidavits

The High Court held that the rules pertaining to sworn affidavits in the RC 2012 should be administered with regard to the “overriding interest of justice and not only to the technical non-compliance” with the RC 2012.

In light of the MCO, affidavits cannot be affirmed before the Commissioner for Oaths. The High Court decided that the High Court has a discretionary power under the RC 2012 to allow a party to use an unaffirmed affidavit provided that the party gives a Counsel’s Undertaking to the court that:

• the unaffirmed affidavit (with the same contents) will be affirmed before a Commissioner for Oaths after the MCO is lifted; and
• the affirmed affidavit will be refiled through the court’s E-Filing System.

Commentary

The above case demonstrates the readiness of civil courts in Malaysia to accept the use of electronic communication in ensuring that parties have adequate access to justice, especially given the current COVID-19 situation when physical attendance may not be practicable or even possible.

The High Court held:

“If I have decided that the court cannot hold a VC if a party (X) applies for the VC and the opposing party does not consent to the VC, this will not only cause an injustice to X but will also render illusory X’s fundamental right under Article 5(1) FC [Federal Constitution] to have access to justice”

Proposed amendments to the RC 2012 are currently being discussed, with new provisions on proceedings being conducted through remote communication technology. If the proposed amendments are adopted, this would mean that more court matters may be heard online through remote communication technology.

Though the courts have reopened and hearings are resumed in stages, court proceedings and the landscape of litigation in Malaysia has been irrevocably changed due to the pandemic, requiring everyone to re-look at the “usual” way of doing things. Time will tell whether court proceedings conducted through remote communication technology will be the new norm of the judicial process in Malaysia.

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This article was written by Donovan Cheah and Natalie Ng (Legal Manager). Donovan is an advocate and solicitor of the High Court of Malaya. He is a Fellow at the Singapore Institute of Arbitrators, the Malaysian Institute of Arbitrators, and the Asian Institute of Alternative Dispute Resolution. He is also a registered foreign lawyer with the Singapore International Commercial Court.  

 Donovan & Ho is a law firm in Malaysia. Our practice areas include employment law, dispute resolution, tax advisory and corporate advisory.  Have a question? Please contact us.