Interim Payment, Offer to Settle, Party Proceedings, Interpleader
Interim Payment and Offer to Settle
Interim Payment (Order 22A)
Deals with interim payments.
Previously, there was a "payment into court" under the old rules of the High Court.
After amendments, Order 22A (interim payment) and Order 22 (offer to settle) were introduced.
What is Interim Payment?
A forward or advance payment of damages or debt.
Made by the defendant to the plaintiff.
Made at any time before the conclusion of the trial.
Purpose of Interim Payment
To alleviate the plaintiff's hardship during the trial period.
Landmark case: David Chalaya v Monorail Malaysia.
Provides interim relief to alleviate the plaintiff's hardship between the commencement and conclusion of the trial.
Plaintiff must show a strong case and financial hardship.
The law aims to prevent plaintiffs from waiting until the end of a lengthy trial process.
Procedure for Interim Payment
Begins with Order 22A Rule 2(1).
Application via Notice of Application.
Notice of Application (Form 33) supported by affidavit (Rule 2(2)).
Application can be made after the writ has been served on the defendant and the time for appearance has expired (Order 22A Rule 1).
Affidavit Requirements
Must comply with Order 22A Rule 2(3).
State the amount of damages or debt claimed.
Include grounds for the application.
Supported by exhibits (documentary evidence).
If the application is under the Civil Law Act (fatal accident), include full particulars of the person for whom the action is brought and the nature of the claim in respect of damages.
Service
Serve the Notice of Application and affidavit on the defendant (Order 22A Rule 2(4)).
Must be served not less than fourteen days from the return date (date of hearing).
Service is done via ordinary service (Order 62).
Hearing
Plaintiff must convince the court they deserve the interim payment.
The court uses Order 22A Rule 3(1) as guidance:
Defendant admitted liability.
Plaintiff has obtained judgment, but damages are to be assessed.
The court believes the plaintiff will likely get a substantial amount of damages (refer to David Chalaya case).
Order 22A Rule 3(2) applies specifically to personal injury (PI) cases.
Considers if the defendant is insured, a public authority, or has the means to pay.
Order 22A Rule 11: No interim payment can be obtained against the government.
Offer to Settle (Order 22B)
Both defendant and plaintiff can offer to settle.
Defendant in a claim or plaintiff in a counterclaim can make an offer to settle.
Must use Form 34 (Order 22B Rule 1).
Offer can be made at any time before the court disposes of the matter (Rule 2).
The offer is not filed in court (Order 22B Rule 5(1)). It is done in secrecy to avoid tainting the mind of the court.
Acceptance of Offer
Order 22B Rule 3(1) guides the time for accepting the offer.
If a time is specified in Form 34, it must be accepted by that time, or it lapses. Lapsing is equivalent to the offer being withdrawn.
If no time is specified, the plaintiff can accept at any time before the court disposes of the matter.
Acceptance is done using Form 36 (Order 22B Rule 6(1)) and served on the party who made the offer, before the offer lapses.
Form 36 is also not filed (done in secrecy).
If the offer is accepted, the court can incorporate the terms into a judgment (Order 22B Rule 6(2)).
To withdraw an offer, use Form 36 (Order 22B Rule 3(3)).
Confidentiality
All this is done in secrecy, without prejudice.
Nondisclosure is important. Offer to settle is deemed to be made without prejudice except as to costs (Order 22B Rule 4).
The offer to settle should not be filed, and the statement that an offer was made should not be put into pleadings or affidavits (Rule 5(1), 5(2)).
The court cannot be informed until liability and relief are sorted out.
Persons Under Disability
Order 22B Rule 7 addresses persons under disability (minors or those of unsound mind).
They cannot accept an offer to settle, unless it has been approved under Order 76 Rule 10.
Issues of Contribution, Counterclaim, Party Claims
Important to know the application.
Order 22B Rule 10: Where two or more defendants are jointly and severally liable.
If made by the plaintiff, it applies to all defendants.
If made by the defendant to the plaintiff, the defendant must agree to pay the cost of all other defendants or offer made to settle the claim against all defendants.
Rules 10, 11, and 12 need to be read and understood.
Effect on Costs
Governed by Order 22B Rule 9.
If the offer to settle has been accepted (Rule 9(1)), and it does not provide for costs, each party bears their own costs.
If the terms of the offer provide for costs, then those terms are followed.
If the offer is not accepted (Rule 9(2)):
If the plaintiff obtains a judgment not more favorable than the offer, the plaintiff is entitled to costs until the date of offer, and the defendant is entitled to costs after that date.
If failing to comply with the accepted offer to settle (Order 22B, rule 8):
The other party can apply to the judge for judgment in terms of the accepted offer.
Or the party can continue proceedings as if there had been no acceptance of the offer.
Party Proceedings (Order 16)
Deals with when a party proceeding can be brought.
Distinguish from intervener.
Defendant brings a party proceeding.
Done when the: defendant is liable to a plaintiff in an action and the third party is liable to contribute, indemnify, or satisfy the plaintiff's claim.
Avoids multiplicity of suits.
Example: Plaintiff awards contract to Defendant, who subcontracts to a Third Party. Plaintiff sues Defendant for negligence.
Order 16 Rule 1(1): Defendant claims contribution or indemnity.
Claim for Contribution
Cases of trustees sued for breach of trust.
Joint tortfeasors.
Multiple insurance companies covering the same risk. Sue one insurer, it can bring in the others for contribution.
Claim for Indemnity
Principal debtor and a surety.
Banker can go after the party who is the guarantor for the loan.
Case: Zhi Hai Tong Bank v Rambler Cycle Company Limited.
Defendant claims for any remedy, any relief from the third party, which is in actual fact substantially the same relief or remedy that is claimed by the plaintiff against the defendant.
Where the defendant needs a question or issue related to the original subject matter to be determined.
Procedure
Issue a party notice (Form 18 or Form 19).
Form 18: Contribution and indemnity.
Form 19: Contribution, indemnity, questions to be determined.
If issued before serving his defense, no need to get leave of court.
If issuing a notice after serving defense, or against the government (Order 73 Rule 8), leave of court is needed.
Serve every party personally with the party notice, copy of the writ, and pleadings (Order 16 Rule 3(2)).
Third party must enter appearance (Form 21) within fourteen days after being served (Order 16 Rule 4(1)).
If the third party fails to enter appearance or defense, judgment can be entered against the party.
Leave Requirement
Order 16 Rule 1(2), Order 73 Rule 8, Rule 3(2), Rule 4(1).
Application for leave supported by affidavit.
Application is by ex parte notice of application in Form 20 supported by affidavit.
Affidavit must state:
Nature of the claim.
Progress of case.
Nature of Defendant’s claim against Party.
Address and name of the party.
Leave is at the discretion of the court.
Summons for Direction
Defendant must apply for direction by notice of application (Form 57) within seven days after the third party entered appearance.
If the defendant fails, the third party may apply or set aside the party notice.
Orders the Court Can Make
Can be dismissed if it doesn't fall within Order 16 Rule 1(1)(a, b, or c).
Plaintiff or Third party can show special circumstances why the direction should not be given.
Case: Pacific Asia v Senanti Motors.
Refer to Rule 4(3) & 4(4) for orders the court can make.
Plaintiff Obtaining Judgment Against the Party
Case: Kayla Beverly Hills v Quantum Far East.
Order 16 Rule 4(4): The rule allows court to give direction to the third party to defend an action.
If the plaintiff wants to obtain judgment, go by Order 15 Rule 6 and make the third party a co-defendant.
Party's Counterclaim
If the party has a claim against the plaintiff, apply to be added as a party to the suit.
Order 16 Rule 5(1)(a).
Third Party's Failure to appear
If the third party doesn't enter an appearance, they are deemed to have admitted the claim and are bound by the judgment.
Limitation Against Party
Case: Government of Malaysia v Taiping Hospital.
The rule of limitation applies to party proceedings.
Time does not begin to run until the defendant is made liable to the plaintiff, because third party claim is actually between the defendant and the third party.
Interpleader Proceedings
Two types: Stakeholders' and Sheriff's interpleader.
Almost all questions will be on Stakeholders' interpleader. Look for situations involving a competing claim over some sort of property or money.
Answers must be precise.
Stakeholders’ Interpleader
Involve one person holding property, but not claiming it. Two or more people claim the property.
They have either threatened to sue or have already commenced an action against the person holding the property.
Overseas Investment against O'Brien.
Courts have got power, have got jurisdiction to decide on interpleader proceedings, right, under your court of CGA, under your court of judicature act.
Two Types One is Stakeholder. One is Sheriff's interpleader.
Case: Against Case.
Two or more Persons having sued that person or will sue for the property and all that.
Order 17 rule one, sub rule one a.
Sheriff's Interpleader
Order 17 Rule 1(b).
Sheriff has execution process of the court.
Involves goods seized by the sheriff.
Somebody other than the judgment debtor and judgment creditor claims interest in the goods.
Sheriff is given duty. He has been entrusted, charged with the execution of execution process of the court.
Example: Wife claims right to the property seized from husband's house.
Sheriff's Interpleader Procedure
Parties claiming seized property must give notice in Form 24.
Judgment creditors are informed that they are other claimants.
Sheriff will initiate interpleader proceedings and issue Form 27 (Order 17 Rule 3(1)).No need to be supported by Affidavit (Order 17 Rule 3(2)).
Court will make an order to come to hearing (Form 29).
Everyone must be served with Form 29. The order which the court give you (Order 17 Rule 4(1)). Seven Days before hearing.
Service is ordinary service (Order 62 Rule 6).
Court can order claimant and judgment creditor to become plaintiff and defendant.
They can order for sale.
An execution creditor is someone who is owed money by another person or entity and has gone to court to get a judgment against them
Stakeholders Interpleader Procedure (Order 17)
If action has already commenced:
Apply for interpleader proceedings by notice of application supported by affidavit (Form 28) – (Order 17 Rule 3(1)).
You must say You Don’t Have The Interest In The Thing, I don’t collide with anybody, and I am ready and willing to transfer, right, whatever things, money or whatever!
If there’s no pending action:
* Your commence our interpleader proceeding by way of originating summons in Form 5 (Order 17 Rule 3(1)).Court must make an order to come to hearing (Form 29). Rule 4.
Service on Everyone Seven Days before hearing. The Service has to be ordinary.
The court have a power to hear and then decide on the hearing.
Court then has the power to order the claim the claimant and the judgment basically to become a plaintiff and also a defendant. (17 Rule 5 Subrule 1)
If the Claimant is just able to come and say all this and Does Not Appear…Then HE is deemed to have WAIVED his, Claim against the applicant and he also barred for ever from making a claim against the applicant (Order 17 rule, five, subrole 3).
Both, if action already commenced or no pending action, both, Order 24 (discovery) and 26 (interrogatories) shall with the necessary modifications apply in relation to any Interpolator issue as they apply in relation to any other pause matter (Order 17 rule 10).