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Topic 9: Third Party Proceedings

 Introduction
o Defendant in any action who has entered appearance may issue an
appropriate 3rd party notice in the prescribed form against a person not
already a party to the action. Form 18/19 NOA + Claims
o PURPOSE: Shift liability to 3rd party. BUT MUST prove that 3rd party has liability
against him affecting the Plaintiff as well. Avoid multiplicity.
o CONDITION: 3rd party must be related to the cause of action brought by P.
o Burden of Proof – on Defendant.
o 3rd party proceedings will be heard first. 3rd party is required to enter his
memorandum of appearance (MOA) and Statement of Defence (SOD).
o 3rd party is to enter MOA within 14 days, failing which, D may apply for JID.
(O12 r 4) [What happens if JID is entered? Is D then solely liable to P?]
o BUT, if 3rd party has no good defence and only bare denial, D may file for
Summary Judgment.
o Avenue for D AFTER entering appearance
 Circumstances for Issuance of 3rd Party Notice [Order 16 Rule 1]
o Claiming any contribution or indemnity
o Relief claimed is related/connected or substantially the same with the relief
sought from plaintiff
o D requires question to be determined. Q on same subject matter between
parties and 3rd party.

- Application for Leave


o Might be automatic upon application for third party proceedings. [Debatable]

- Contribution or Indemnity
o Eastern Shipping Co v Quah Beng Kee
 A right to indemnity may arise from express or implied contract; it may
be implied from some principle of law other than contract; or it may
arise from statute.
 It exists where there is an obligation either at law or in equity upon one
party to indemnify the other.
o Bragg v Crossville Motor Services
 Order 10 prohibits a party who may be liable in the action (either as a
third party or one of two or more joint tortfeasors) who makes a
written offer to contribute to damages recovered in the action, from
notifying the judge of the offer made until all questions of liability and
amount of debt or damages have been decided.
o Scott v West Yorkshire Road Car Co Home Bakeries
 An example where a third-party proceeding had been initiated to seek
for contribution
 The case involved a road traffic collision between a motorcyclist (P), an
oncoming bus (D) and a parked van (3rd party). The P who was injured
in the accident brought an action against the D. The D in turn brought
third proceedings against the parked van, seeking contribution.
 H: A right to indemnity may arise from express or implied contract; it
may be implied from some principle of law other than contract; or it
may arise from some statute.
o Pacific Asia Leasing v Senanti Motors Sdn Bhd
 A 3rd party claim may be made for a potential right to contribution
o Zulklifie bin Sabarudin v Fauziah bt Arshad
 The duty on a defendant under this provision is onerous. It must be
proved to the court that the third-party notice was filed within the
scope of RC O 16 r 1 and that there is a question proper to be tried as
to the claim for contribution from the third party

- Relief sought substantially same


o Standard Securities v Hubbard
 Where the original subject matter of the action is a claim in tort for
damages in respect of personal injuries involving a motor accident and
the claim against the third party is a claim for breach of an oral
agreement to purchase a third party insurance policy for the car that
was involved in the accident and is founded on contract, the relief or
remedy claimed against the third party cannot be regarded as
‘substantially the same as some relief or remedy claimed by the
plaintiff’

- Q on same subject matter between parties and 3rd party


o Public Bank Bhd v Ng Chee Ping
 The defendant’s claim against the third party must be premised on a
cause of action, and a party must not be joined as a third party merely
to elicit evidence, which can be obtained by issuing a subpoena

**NOTE:

- Plaintiff does nothing until the 3rd party application is settled.

- Only after that is settled, P will know who will carry the burden.

- If Gana lost then Gana can apply for stay of execution and appeal

- If Poh lost then P can go on with full trial or execute judgment

 Issue of 3rd Party Notice


o Order 16 Rule 1(2)
o No need leave of court, unless:
 Government Proceedings [Order 73 Rule 8(1)] (Leave will not be
granted unless court is satisfied that the Government is in possession
of all information which it reasonably requires as to the circumstances
in which the Governments liability is alleged to have arisen and as to
the Governments departments and offices concerned.
 To issue 3rd party notice AFTER D has served defence
o Dato Seri Dr Mahathir v Derek Davies
 Court has a general discretionary power whether or not to allow a
third-party notice to be issued.
 TRhe defendant applied to bring in the Minister of Home Affairs and
the government of Malaysia as third parties on the ground that they
were necessary parties in an action by the plaintiff against the
defendant for libel where the defendant claimed that the publications
in question were released with the consent and acquiescence of the
two parties; the court held that they could not be brought in
as third parties as the senior officers were not, under the Printing
Presses and Publications Act 1984 (Act 301), under a duty to inquire
into or investigate any article which on the face of it does not
contravene the Act or law, and accordingly there was no nexus
between them and the plaintiff
o Swansea Shipping Co v Duncan
 Delay in prosecution of the main issue and prejudice to the plaintiff are
considerations to be taken into account
 Leave to Issue 3rd Party Notice
o Order 16 Rule 1(1)
o Made ex parte
o NOA + Affidavit
 the nature of the claim made by the plaintiff in the action;
 the stage the proceedings have reached;
 the nature of the applicant's claim or particulars of the question or
issue required to be determined and the facts on which the third-party
notice is based; and
 the name and address of the person against whom the third-party
notice is to be issued.

 3RD Party Directions


o Order 16 Rule 4
o Pacific Asia case
 Delay in taking out 3rd party proceedings by D may constitute special
circumstances to dismiss it

 Failure of 3rd party to Enter Appearance


o Order 16 Rule 5
Dispute between Faz and Poh. But troubles happened because of Gana.

Poh wants to include Gana as a third party

Gana has the liberty to enter a defence

If Gana doesn’t reply, Poh can enter JID

Should Poh file in 3rd party notice before or after he files defence? NOT AN ISSUE

E.G. – Accident case [Negligence]

P  sue Defendant claiming damages

D enter appearance. On first mention date, he wishes to apply for 3rd party notice. [3rd party notice can be
filed before or after DEFENCE]

Court: You have 14 days to put in defence to P as well as application for 3rd party proceedings

Poh: The reason I hit P’s car is because I swerved trying to avoid a motorcyclist (Gana).

E.G. – Contract Developer

P Suing Developer for cracked house

Developer take 3rd party (Contractor)


Topic 10: Interpleader

- Both parties can apply.

- Interlocutory application

- Interpleader has no interest in your case until subject matter has been resolved. But
must have interest in subject matter

- Subject Matter must have monetary value. i.e. Property, deed, will, trust

- E.G. Stakeholder
o Property dispute. Title holder decides to vest title in the court.

- Bailiff can apply for interpleader

- Interpleader has no interest in the subject matter. Just acts as a stake holder

- The conflict between the claimants must be real in the sense that each claim, if proven,
would give a good cause of action against the applicant, so that where the applicant
is not under any obligation to one of the claimants, or where he can, without incurring
any liability, pay the subject matter of the claim to one of the claimants, he is not
entitled to relief of interpleader.
 Nature of Interpleader
o Watson v Park Royal Caterers
 Essential that before the applicant is granted relief, he is, or genuinely
expects to be, sued by two or more persons, and there must be some
real foundation for the said expectation. A mere anticipation, without
any intimation having been received is not sufficient.
o Order 17 Rule 1 – 2 classes of cases
 Stakeholders interpleader
 Sheriff’s Interpleader
o Order 17 Rule 1(1)(a) – Stakeholders Interpleader
 relief is available in a situation where the applicant is under a liability
in respect of a debt, or in respect of any money, goods or chattels, and
he is, or expects to be, sued for in respect of that debt or money, or
those goods or chattels by two or more persons making adverse claims
thereto.
o Order 17 Rule 1(1)(b)
 relief is available to a sheriff (The Registrar of the High Court is a Sheriff.
Other officers of like nature appointed include bailiffs, process servers
and subordinate officers) where a claim is made by any person, other
than the person against whom the process is issued, to any money,
goods or chattels taken, or intended to be taken, by a sheriff in
execution under any process or to the proceeds or value of any such
goods or chattels.
 Procedure for Stakeholder’s Interpleader
o Order 17 Rule 3
o 3 conditions
 Claims no interest in the subject matter in dispute other than for
charged or costs
 Does not collude with any of the claimants to that subject matter
 Is willing to pay or transfer that subject matter into court or to dispose
of it as the Court may direct
o Order 17 Rule 4
o Tan Kim Khuan v Tan Kee Kiat
 On the issue of whether at the hearing of an interpleader summons,
the respondent judgment creditor has to lead evidence to show that
the goods seized are the properties of the judgment debtor.
 The court held that the burden of proof was on the claimant unless the
judgment creditor has been made the plaintiff
o RHB Bank Bhd v Comax SB
 The 1st defendant raised a preliminary objection to the application on
the grounds that the plaintiff had failed to comply with the pre-
conditions in O. 17 r. 3(3) of the Rules of the High Court, 1980.

 High Court held that plaintiff has no interest in this subject matter
because O 17 is a strict requirement and if one of the conditions is not
fulfilled especially about the interest over the property, the court is
therefore unable to afford the plaintiff the relief sought for.
 Hearing of Summons

o Order 17 Rule 5
o Order 17 Rule 6
o Order 17 Rule 7
o Order 17 Rule 8