Ketua Pengarah Jabatan Penyiaran Malaysia & Anor v Vertex Blue Consulting Sdn Bhd [2025] MLJU 4014

Federal Court (Putrajaya) 

Civil Procedure — Unless orders — Failure to comply

1. The Respondent, Vertex Blue Consulting Sdn Bhd (“Vertex”), was appointed as an independent sales agent for advertising time slots of RTM pursuant to a tender exercise, and the parties entered into a Concession Agreement dated 4 July 2017 for a period of five years.
2. Vertex commenced proceedings in the High Court alleging that the Appellants wrongfully terminated the Concession Agreement and sought, inter alia, a declaration that the termination was unlawful and damages.
3. The Appellants denied liability and counterclaimed, contending that Vertex had breached the agreement by failing to pay the guaranteed minimum sum, thereby justifying termination.
4. During interlocutory proceedings, Vertex obtained orders for general and specific discovery. A further discovery application resulted in an unless order dated 12 October 2021, providing that failure to comply would result in the Appellants’ defence and counterclaim being struck out and judgment entered in favour of Vertex without further order of court.
5. Although further documents were produced, Vertex asserted that the Appellants had not fully complied. On the first day of trial, Vertex invoked the unless order and sought judgment in default based on non-compliance.
6. The High Court struck out the Appellants’ defence and counterclaim and granted, inter alia, a declaration that the termination of the Concession Agreement was unlawful, with damages to be assessed.
7. The Court of Appeal affirmed the High Court’s decision, holding that the unless order was self-executing and that the High Court was correct to enter judgment upon non-compliance.
8. Leave was granted to the Federal Court on a single question of law concerning whether the trial judge was bound by the unless order to enter judgment, notwithstanding its effect being akin to a default or summary judgment, without compliance with procedural requirements.

1. Whether the High Court was bound to enter judgment granting declaratory relief solely by reason of non-compliance with an unless order, without considering evidence on the merits, and whether such judgment was legally regular?

(1)  Whether the High Court was bound to enter judgment granting declaratory relief solely by reason of non-compliance with an unless order, without considering evidence on the merits, and whether such judgment was legally regular?

(a) The Federal Court answered this issue in the negative.

(b) The Federal Court stated that although an unless order may operate to strike out pleadings upon non-compliance, it does not compel the court to grant declaratory relief automatically, nor does it dispense with the court’s duty to consider the merits of the claim before exercising its discretion.

(c)  The Federal Court examined the nature of the relief granted by the High Court. The Court emphasised that the judgment entered pursuant to the unless order was not a standard default judgment for a liquidated sum, but a judgment granting a declaration that the termination of the Concession Agreement was unlawful. The Court held that declaratory relief is a form of specific relief which is discretionary in nature and ordinarily requires the court to be satisfied, on evidence, that the claimant’s case is a fit one for such relief. A declaration cannot properly be granted merely because the defendant is in default, without any evidential basis enabling the court to exercise its discretion judicially (paras 17–18).

(d) Furthermore, the Federal Court restated the applicable legal principle governing declaratory relief in default situations. Relying on Amalan Tepat Sdn Bhd v Panflex Sdn Bhd [2011] MLJU 507 FC and earlier authorities, the Court reaffirmed that it is a settled rule of practice that courts are slow to grant declarations in default of pleadings, as a declaration is a judicial act that should only be made where the court is satisfied, on evidence and argument, that the relief sought is appropriate. The absence of evidence renders a declaratory judgment irregular, as it amounts to declaring as fact matters that have not been tested or proved (paras 19–21).

(e)  The Federal Court addressed the effect of the unless order itself. While accepting that the unless order was self-executing in so far as it provided for the striking out of the defence and counterclaim upon non-compliance, the Court held that such an order does not bind the trial judge to grant declaratory judgment as a mechanical consequence. The court retains an overriding obligation to ensure that declaratory relief is granted only after proper scrutiny of the merits. In the present case, the High Court granted the declaration without the benefit of any evidence and therefore failed to exercise its discretion judicially (paras 21–22).

(f)   The Federal Court accordingly held that the judgment of the High Court was irregular, and that the Court of Appeal had erred in affirming it. In the absence of supporting evidence, the trial judge was not bound by the terms of the unless order to enter judgment granting declaratory relief solely on the basis of non-compliance. The leave question was therefore answered in the negative (paras 22–23).

1. The Federal Court allowed the appeal, set aside the decisions of the High Court and the Court of Appeal, and remitted the matter to the High Court for a full trial on the merits.

1. Declaratory relief is discretionary and cannot be granted as a matter of course in default or pursuant to an unless order without evidential scrutiny.
2. Unless orders, while capable of striking out pleadings, do not remove the court’s obligation to examine the merits before granting declarations.
3. A default judgment granting declaratory relief without evidence is irregular and liable to be set aside as of right.