In the recent decision of Lim Koo Tiek v Tan Bak Lee (Practise Under the Name of Messrs Tan Bak Lee & Co) and Another Appeal [2026] MLJU 2846, the Court of Appeal addressed several fundamental issues, including the strict prohibition against “trial by affidavits” in writ actions and the law on set-off in Malaysia. Notably, the Court of Appeal handed down a vital reminder that a court order against a defendant or respondent which is served on any third party cannot, in itself, amount to a libel of the defendant/respondent.
BACKGROUND
The Plaintiff engaged the Defendant, an Advocate and Solicitor, to handle the sale of the Plaintiff’s land. The Defendant received the balance proceeds of the sale on the Plaintiff’s behalf. However, when the Plaintiff attempted to cash a post-dated cheque for this sum, he discovered that the Defendant had instructed the bank to stop payment.
The Plaintiff sued for the money and obtained an ex parte Mareva injunction to freeze the Defendant’s assets and served this injunction on 14 banks. Although the Plaintiff eventually obtained summary judgment for the full sum (which was affirmed on appeal), the High Court later set aside the Mareva injunction and ordered an assessment of damages for any loss the Defendant suffered due to the injunction. The Defendant also filed a counterclaim against the Plaintiff, alleging that the service of the Mareva injunction on the 14 banks constituted libel against him.
The High Court Judge tried the libel counterclaim based solely on affidavit evidence and allowed the counterclaim, assessing damages at RM330,000 to be set-off against the Plaintiff’s summary judgment. Hence, the 2 appeals filed by the Plaintiff (against the High Court’s decision on libel and its assessment).
ISSUES
In allowing the appeal, the Court of Appeal decided the matter on the following 3 issues:
- 1. could the service of the Mareva Injunction libel the Defendant?;
- 2. whether the High Court Judge could order or direct a trial of the counterclaim for libel based solely on affidavits; and
- 3. could the High Court Judge set off the damages sum for libel against the High Court’s Summary Judgment sum?
Question 1: Could the Service of the Mareva Injunction libel the Defendant?
No – and the Court of Appeal reached this conclusion with “no hesitation”. The reasoning rests on an interpretation of Sections 7(2), 14(2) and 4 of the Courts of Judicature Act 1964 (“CJA 1964”):
- 1. Section 7(2): All orders issued by the authority of the Court “shall have full force and effect and may be served … anywhere within Malaysia” – Service of the Mareva injunction on the banks was therefore statutorily authorised.
- 2. Section 14(2): No person bound to execute the lawful orders of any Judge “shall be liable to be sued in any civil court for the execution of any … order“. This, the Court held, gave the Plaintiff a complete defence to the counterclaim.
- 3. Section 4: Where the CJA 1964 conflicts with any other written law (other than the Federal Constitution), the CJA prevails — a point confirmed by the Court of Appeal in Shilashshree Shirley Gomez v Raymond Shilendran a/l Simon [2024] 5 MLJ 308.
This is because when the service of the Mareva Injunctions was effected, the same were still in force and had not been set aside by the Defendant.
Question 2: Whether the High Court Judge could order or direct a trial of the counterclaim for libel based solely on affidavits
The libel counterclaim was decided on affidavit evidence alone – the Court of Appeal held that this could not lawfully be done. As suit was begun by writ, the counterclaim could only be disposed of by way of oral evidence, as provided below:
- 1. Sections 59 and 60(1)(a)-(d) of the Evidence Act 1950 (“EA 1950”) require facts to be proven by direct oral evidence, and use the mandatory term “shall”.
- 2. Order 38 rule 1 of the Rules of Court 2012 expressly stipulates that it is subject to the EA 1950 (and in particular, Sections 59 and 60(1)(a)-(d) EA 1950) and requires facts at the trial of a writ action to be proven by examination of witnesses in open court.
The Court’s finding was pointed – if affidavit disposal were permissible, all writ actions and counterclaims could be disposed of without trial. Credibility can only be tested by cross-examination, and a paper trial deprives the court of the audio-visual advantage of assessing witnesses.
On the issue of consent, the Defendant argued that both parties had agreed to the affidavit procedure – an argument which was rejected by the Court on the basis that parties cannot consent to waive the imperative effect of mandatory written law, and equitable estoppel — a creature of case law — cannot bar the operation of a statute.
Question 3: Could the High Court Judge set off the damages sum for libel against the High Court’s Summary Judgment sum?
On the third question, the Court restated the position in Permodalan Plantations Sdn Bhd v Rachuta Sdn Bhd [1985] 1 MLJ 157: Malaysian law knows no legal or statutory set-off — only equitable set-off, received through s 3(1) of the Civil Law Act 1956.
Equitable set-off requires that the nature and quality of the cross-claim (a) constitutes a defence to the claim and is not a matter separate from it, and (b) makes it unjust for the claimant to proceed without accounting for the claim.
The Court held that the libel counterclaim failed both limbs – the original action arose from the Defendant’s role as the Plaintiff’s solicitor holding the Plaintiff’s money; the counterclaim arose from service of an injunction. The two were entirely separate, and it was not inequitable for the Plaintiff to press a claim that had already been vindicated by summary judgment and affirmed on appeal.
KEY TAKEAWAYS FOR PRACTITIONERS
- 1. Immunity of Process: Practitioners can take comfort that the bona fide service of a valid court order on necessary third parties is protected by the CJA 1964 and does not expose the lawyer nor client to defamation claims.
- 2. No Shortcuts to Trial: In actions begun by writ, the court cannot—even with the parties’ consent—dispense with oral evidence. A “trial by affidavit” is a jurisdictional error that renders the resulting judgment a nullity ab initio.
- 3. Statutory Supremacy: Equitable doctrines like estoppel cannot be used to bypass mandatory statutory requirements found in the Evidence Act and the CJA. The Court of Appeal’s judgment reinforces the sanctity of the trial process: the weight and credibility of evidence in a writ action must be tested through cross-examination in open court, not merely through the exchange of printed affidavits.
Disclaimer: This article is for general information only and does not constitute legal advice or legal opinion. It should not be relied upon as a substitute for specific legal advice. No person should act (or refrain from acting) based on this article without obtaining advice on the specific facts and circumstances. Halim Hong & Quek does not accept responsibility or liability for any loss or damage arising from reliance on this article. Halim Hong & Quek reserves the right to update, amend or withdraw this article at any time. All rights reserved.
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About the authors
Siva Kumar Kanagasabai
Senior Partner
Head of Dispute Resolution Practice Group
Halim Hong & Quek
kumar@hhq.com.my
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Hannah Choong
Associate
Dispute Resolution
Halim Hong & Quek
hannah@hhq.com.my
