Summary of the Stone World Sdn Bhd v Engareh (M) Sdn Bhd [2020] 9 CLJ 358

The trial court granted the consequential order in order to give effect to its judgment that would otherwise be rendered nugatory. Stone World appealed to the Court of Appeal, which upheld the High Court order.

Stone World initiated a fresh suit in the High Court seeking to impeach the consequential order on the grounds that the High Court had no jurisdiction to grant such an order as it was at the time, functus officio.

This claim was dismissed both at the High Court and Court of Appeal.

Federal Court

Appellant : Stone World Sdn Bhd

Question : Whether the High Court, the original trial court was in fact functus officio and thus entitled to grant the consequential order, or whether the doctrine of functus officio simply did not come into play, as the order was necessary to give effect to the final judgment, and did not in any manner alter or affect the substance of the dispute adjudicated upon by the trial court.

Judgment (Nalini Pathmanathan FCJ)

When is a court rendered functus officio, as opposed to when it retains jurisdiction and/or remains empowered to grant consequential orders, subsequent to the grant of a final judgment or order.

The Law Relating to the Doctrine of Functus Officio

It is a settled law that once a court has pronounced a final order, it does not possess the authority to re-open, alter, amend and supplement the final order and judgment relating to the dispute it has adjudicated upon. The doctrine stems from the principle of finality in litigation. There wou ld be a great uncertainty and chaos if courts were permitted to review and reconsider final orders and judgments.

Case laws
Tenaga Nasional Bhd v Prorak Sdn Bhd & Anor (Gopal Sri Ram, JCA)

Affirmed the position in law that the rule of functus officio is a part of the broader doctrine of res judicata.

Limited and discrete situations where the court may make a further order subsequent to its previous sealed order.

1. An amendment of previous order to reflect the original intention of the court which is evident from the previous and original order , or the body of the judgment of the original order;
2. under the slip rule O 20 r 11 of the Rules of Court 2012 (‘the Rules’) to correct a clerical error or a similar form of slip;
3. the clarification, supplementing of or amendment of a previous order so as to give effect to the original order under the ‘liberty to apply’ provisions; and
4. if there is provision in the Rules to amend an original order so as to enlarge time specified.

It is the inherent jurisdiction of the court to amend or supplement the original sealed order. It is a necessary jurisdiction to enable a court to ensure that substantive justice between the parties is served, so as to give effect as to its primary decision, through the dispensing of procedural justice and to dispense ancillary or supplemental orders to augment or substitute the original relief or remedy so as to give effect to the intent and purpose of its original decision is not in doubt. The doctrine of functus officio does not encroach upon that jurisdiction.

Liberty to Apply

In Sungei Biak Tin Mines Ltd v Saw Choo Theng & Anor (No 2) [1970] 2 MLJ 226 a decision of the Federal Court, the practical application of the liberty to apply rule is clearly demonstrated. The facts, in summary, are that judgment had been given in favour of the defendant, the appellant in the case, to the effect that the defendant had not been guilty of a breach of a mining sublease.

Counsel for the appellant then applied for an order that the cancellation of its sublease be deleted and that the sublease be restored to the register of the land office. However the court made no decision on that application but advised the appellant to make a formal application. In the judgment of Suffian LJ (as he then was) it was held as follows:

… It is true that the order of the Federal Court has been perfected and that nowhere in it is mentioned liberty to apply, but in view of what happened immediately after delivery of our judgment it was the clear intention of this court to allow the defendant to make this application. In any event in every order of the court liberty to apply to the court is implied, without its being expressly reserved, Fritz v Hobson(1880) 14 Ch D 542.

The case is authority for the proposition that even where an order of the court has been perfected and does not contain any mention of liberty to apply, it is open to the party to make an application so as to give effect to the intention of the final order.

The court went on to examine the principle of finality and concluded that the application did not attract ‘the rule of res judicata and corollary to it the rule of issue estoppel and functus officio’. Importantly the court pointed out that the application for consequential orders was neither a rehearing nor a re-opening of the case. The judge cited Fritz v Hobson [1880] 14 Ch D 542 atp 561, which sets out the fundamental pr inciple expounded by Fry J at p 561 on liberty to apply in relation to orders of court. It bears repeating here:

‘In the next place, it is said that I have no jurisdiction to amend the judgment or to grant this application, because the Court has no jurisdiction to rehear an action. In my opinion I have jurisdiction to grant this application. In the first place, it is to be borne in mind that an order was made, although it was not drawn up, directing the motion in question to stand until the trial. According to my understanding of the practice (and this is confirmed by what the Master of the Rolls has said) all orders of the Court carry with them in gremio (in gremio legis is a Latin term which means ‘in the bosom of the law’) liberty to apply to the court’.

Tan Yeow Khoon & Anor v Tan Yeow Tat & Anor (No 2) [2000] 3 SLR 32

What can be taken away from Tan Yeow Khoon is the legal position that even if a consequential order or direction was to be regarded as a ‘variation’ it would still fall within the liberty to apply rule and not flout the functus officio rule, where it is given to provide ‘succour’ to the original order. Therefore parties who seek to avoid, undermine or evade an order or judgment of court cannot complain when the opposing party makes an application under the liberty to apply provision so as to give effect to the original order.

The net result is that Engareh was deprived of the fruits of its litigation, requiring it to procure a consequential order to give support to the final order so that it would not be rendered nugatory. As outlined above both in Sungai Biak Tin Mining, the court recognised that the doctrine of functus officio was not infracted when the order sought were purely to give effect to the original final order.

The Law On The Rule Of ‘Functus Officio’ In Other Jurisdictions

Law Clerks Association v Honourable Chief Justice LAWS(CAL)-2008-5-90 (unreported), a case from the High Court at Calcutta, the court pronounced usefully on this doctrine to state that:

… in every judgment there are two parts, one is the substantive portion and another is the procedural portion of the judgment. The procedural portion of the judgment could be the subject matter of modification or clarification application as the doctrine of functus officio has no applicability thereon but so far as the modification or clarification of the substantive portion of the order, it is hit by the principle of functus officio which means that a court ceases to exercise his jurisdiction once any appeal or application is disposed of.

Indian Supreme Court decision of Mahanth Ram Das v Ganga Das AIR 1961 SC 882 where the apex court of India held that the functus officio doctrine has no applicability when the modification of the judgment sought relates to the procedural portion of the judgment.

IMPEACHMENT OF THE CONSEQUENTIAL ORDER

A preliminary issue that requires comment is the nature of the relief sought in the impeachment suit by Stone World. It appears that it seeks to impeach solely the consequential order while presumably keeping the rest of Suit No 85 intact or restoring it to its original form. Generally any attempt to impeach a judgment will encompass the entire judgment, as the contention is that the illegality or lack of jurisdiction taints the entire proceedings, resulting in the entirety of the judgment in Suit No 85 being set aside. Here however Stone World appears to have concentrated on a piecemeal part of the suit, namely only the consequential order.

Does The Bare Assertion Of An Alleged Lack Of Jurisdiction Warrant Invoking Badiaddin’s Case And S44 Of The Evidence Act 1950 For The Impeachment Of A Judgment On The Basis Of Fraud And Collusion?

The answer is that s 44 of the Evidence Act 1950 recognises and gives effect to a cause of action founded on fraud, collusion or an absence of jurisdiction, the relief being an impeachment of such judgment. That such a cause of action subsists and is recognised in law is borne out by the case of Seruan Gemilang Makmur Sdn Bhd v Kerajaan Negeri Pahang Darul Makmur &Anor [2016] 3 MLJ 1; [2016] 3 CLJ 1.

Res Judicata And Issue Estoppel Vis A Vis Stone World In The Impeachment Suit

It will be recalled that after its grant, Stone World appealed against the order to the Court of Appeal which dismissed the same. There was no further application for leave to the Federal Court. The consequential order therefore became final and binding between Stone World and Engareh at that juncture (see Asia Commercial Finance (M) Bhd v Kawal Teliti Sdn Bhd [1995] 3 MLJ 189; Henderson v Henderson (1843) 3 Hare 100; and Greenhalgh v Mallard [1947] 2 All ER 255).

Additionally the fresh ‘impeachment suit’ on which this appeal is premised, is brought several years after the event, and after all avenues of appeal in Suit No 85 had been exhausted.

As stated at the outset, the overlying hurdle to Stone World’s impeachment suit is the fact that res judicata and issue estoppel are fully applicable to preclude it from prosecuting this suit.