Setting Aside a Judgment obtained by Fraud via Impeachment Proceedings: How Far is this Possible?
by Sheryn Yong ~ 13 January 2021
Section 44 of the Evidence Act 1950 recognises and gives effect to a cause of action instituted to impeach a judgment on grounds of fraud or collusion. That such a cause of action subsists and is recognised in law is borne out by the Federal Court case of Seruan Gemilang Makmur Sdn Bhd v. Kerajaan Negeri Pahang Darul Makmur & Anor  3 MLJ 1.
In this case, the respondents initiated a fresh suit against the appellant to impeach and set aside the judgment obtained by the appellant on the grounds of fraud and perjury committed by the appellant’s witness during the earlier trial.
The suit was filed after the respondents’ appeal to the Court of Appeal and Federal Court was dismissed.
The appellant later filed an application to strike out the respondents’ claim by relying on the principle of res judicata as found in S.40 of the Evidence Act 1950.
The trial judge dismissed the striking out application of the appellant and decided that the issue of res judicata did not arise and that the impugned judgment could be impeached or set aside. The appellant did not succeed in its subsequent appeal and therefore applied for and obtained the leave of the Federal Court to proceed with the appeal.
The Court, in dismissing the appeal with costs, held the following:
1. The court has jurisdiction to set aside a judgment obtained by fraud in a subsequent action brought for that purpose. Such impeachment action must be by way of fresh action, and not in the same action where the impugned earlier judgment was made;
2. The doctrine of res judicata is not applicable in an action to impeach or to set aside an earlier judgment which has been obtained by fraud. It is settled law that since the doctrine of res judicata as designed to achieve justice, a court could decline to apply it, if its application would lead to an unjust result.
However, there are several hurdles to overcome before any judgment could be set aside on grounds of fraud:
- The Plaintiff must show that evidence indicative of fraud could not possibly have been adduced with reasonable diligence at the original hearing;
- Particulars of the fraud allegation must be given and established by the strict proof that such a charge requires; and
- The fraud must be actual positive fraud, a meditated and intentional contrivance to keep the parties and the court in ignorance of the decree by that contrivance.
Such requirements are subsequently followed and adopted in K Ramalingam a/l Krishnamoorthy & Ors v Mohammad Razin bin Abdullah & Anor  3 MLJ 103, where the court reiterated that fraud is a matter to be established at trial.
Nevertheless, there have been instances in which the court had allowed striking out application against the Plaintiff’s impeachment suit where the grounds of complaint in the previous action have already been addressed and adjudicated to its finality or after hearing of the merits upon full trial.
These examples can be seen in the case of Datuk Hj Ishak bin Ismail v Kenanga Investment Bank Bhd & Ors  7 MLJ 840 and Lim Sue Beng v Maybank Investment Bank Berhad (formerly known as Asseambankers Malaysia Berhad pursuant to Vesting Order dated 21.5.2007) & Ors  MLJU 1576.
In the latter case, the court stated that:
“…the court must be vigilant to ensure that such complaints do not become prevalent by freely allowing litigants to have a second bite of the cherry and flooding the court with suits upon suits against his or her adversary to take vengeance or to prevent a litigant who had obtained a valid judgment from enforcing the same.”
The same consideration was echoed in the recent case of Pembangunan Tanah dan Perumahan Sdn Bhd v Raja Qahaarruddin Raja Abdul Aziz  2 CLJ 519, where the court struck out a suit filed to impeach a judgment in default allegedly obtained by fraud and conspiracy after the Plaintiff had failed to set aside the default judgment with no appeal therefrom. Suffice to quote the following from the same case:
“Such a contumelious conduct … cannot be condoned and indeed, has to be censured in the strongest terms…
Whilst tenacity and perseverance is a virtue, it becomes toxic and an abuse of the court’s process in the face of repeated resurrecting of the same matter that had been finally concluded with no appeal from [the Defendant]. There must be an end to all litigation involving the same issue either because the affected party had not exercised its right of appeal or that it has exhausted all avenues of setting aside the impugned judgment…”
In other words, the principle of res judicata may still be applicable to preclude a Plaintiff from seeking an impeachment proceeding to ensure that the process of the court is not abused.