See Teow Koon v Kian Joo Can Factory Bhd & Ors [2022] MLJU 3546

Federal Court (Putrajaya)

Power of Court to review cases under rule 137 of the Rules of the Federal Court 1995 

1. On 3 May 2018, the Applicant obtained leave to appeal under paragraph 96(a) of the Courts of Judicature Act 1964 [Act 91]. He then filed a Notice of Appeal on 16 May 2018, followed by the record of appeal, memorandum of appeal, and other required documents for the substantive hearing.
2. On 25 June 2018, the Respondents filed a motion under rule 137 of the Rules of the Federal Court 1995 and the Court’s inherent jurisdiction, seeking to strike out both the order granting leave to appeal and the Applicant’s Notice of Appeal. They argued that the Applicant’s acceptance of the judgment sum with interest amounted to full satisfaction of the judgment, thereby rendering the appeal redundant and extinguishing his right to pursue it. Both parties filed affidavits in response to the motion.
3. On 12 March 2019, the Federal Court, by majority, allowed the Respondents’ motion. The striking-out application was heard together with the substantive appeal, and the Applicant was present during the proceedings. Dissatisfied, the Applicant sought to review the Federal Court’s decision and to reinstate Federal Court Civil Appeal No. 02(f)-46-06/2018(W) for hearing.
4. In his review motion, the Applicant contended that whether he had compromised his right to appeal was a factual matter that could not be conclusively determined based solely on affidavits, especially in light of his clear denial. He argued that the Respondents had waived their right to object to his acceptance of partial payment and maintained that, since he had only received RM2,848,956.03 out of the total judgment sum of RM9,599,271.38, he could not be deemed to have waived his entitlement to the remainder. He further submitted that the Federal Court erred by making findings on disputed facts summarily rather than directing the issue for full hearing. According to him, the striking-out order was unjustified and denied him the opportunity to have his appeal determined on its merits. He also alleged that the Federal Court’s handling of the case deprived him of a fair hearing and due process as guaranteed under Article 8 of the Federal Constitution, and that the absence of written reasons from the majority further highlighted a miscarriage of justice. He emphasised that filing this review motion was his only available remedy.
5. In response, the Respondents argued that the review application was misconceived and failed to satisfy the strict threshold for review. They asserted that none of the grounds raised qualified under the limited scope of the Federal Court’s review powers. Furthermore, they contended that the issue of whether the applicant had compromised his right to appeal, by accepting RM2,528,556.72 with interest in satisfaction of the Court of Appeal’s order, was a question of law rather than fact. The respondents also maintained that the application was baseless and amounted to an abuse of court process.

Issue

Whether the Applicant had established exceptional or rare circumstances that would justify the Federal Court’s use of its very limited review power under rule 137

Ratio

Whether the Applicant had established exceptional or rare circumstances that would justify the Federal Court’s use of its very limited review power under rule 137

(a) The Federal Court reaffirmed that its power of review under rule 137 of the Rules of the Federal Court 1995 is highly restricted and may only be exercised in rare and exceptional situations to prevent a miscarriage of justice or an abuse of process.

(b) The Federal Court emphasized that the power of review is not an avenue to re-argue the merits of a decided case or to question the correctness of an earlier decision, whether on facts or law. Instead, it exists solely to correct clear procedural injustices apparent on the face of the record. It reiterated that this review jurisdiction does not function as an appellate mechanism. The Federal Court cited Ng Hoe Keong & Ors v OAG Engineering Sdn Bhd & Ors [2022] 3 MLJ 641, confirming that the purpose of rule 137 is to preserve justice and finality in litigation, not to reopen concluded matters.

(c)  Regarding the Applicant’s contention that the earlier panel erred in accepting affidavit evidence concerning the alleged compromise of his appeal rights, the Federal Court held that the prior panel was fully entitled to evaluate the affidavit evidence and to prefer the Respondents’ version. It was not a case where factual disputes required a full trial, as argued by the Applicant based on Gurbachan Singh Bagawan Singh v Vellasamy Pennusamy [2012] 2 CLJ 663 and Tay Book Choon v Tahansan Sdn Bhd [1987] 1 MLJ 433. The earlier Federal Court had properly exercised its discretion after hearing both parties and considering the material before it.

(d) The Federal Court further clarified that rule 137 does not create inherent powers but merely recognizes the Federal Court’s pre-existing authority derived from the judicial power of the Courts under the Federal Constitution. This was explained in Munawar Ahmad Anees v Public Prosecutor [2009] 2 MLJ 1 and Tan Sri Eric Chia Eng Hock v Public Prosecutor (No 1) [2007] 2 MLJ 101, where Augustine Paul FCJ observed that the phrase “hear any application” is of broad significance and is not limited to review applications. Therefore, the Federal Court may entertain an application to strike out an appeal or order if doing so is necessary to prevent injustice or misuse of judicial process.

(e)  The Federal Court also addressed the Applicant’s argument that rule 137 does not permit the striking out of an appeal. It disagreed, holding that the provision authorizes the Court to act in any manner necessary to safeguard the integrity of its proceedings. The principle of finality in litigation, being essential to the rule of law and public confidence in the judicial process, must be preserved.

(f)   Lastly, the Federal Court dismissed the contention that the absence of full written grounds from the previous bench constituted a breach of natural justice. Referring to Lim Lek Yan @ Lim Teck Yam v Yayasan Melaka & Anor [2010] 1 MLJ 173, the Court held that the lack of comprehensive written reasons does not invalidate a judgment, especially when the parties were aware of the rationale behind the decision.

The Federal Court concluded that none of the Applicant’s grounds met the threshold of exceptional circumstances required for review. The application was therefore dismissed with costs.

Key Takeaway

The Court clarified that rule 137 does not create new powers but merely acknowledges the Court’s inherent jurisdiction, which stems from its constitutional status as the apex court. This inherent power allows the Court to act to prevent injustice or abuse of process but it is to be used sparingly.