Legal Case – The Cost of Frivolous Litigation in Sabah

 

 I am not a lawyer and this is not legal advice. Consult your lawyer for legal advice.

⚖️ Legal Case – The Cost of Frivolous Litigation in Sabah

In our previous post, we explored how a party may “win the battle but lose the war.” Today, we turn to a critical feature of Sabah’s civil litigation system: the English rule (“loser pays”), which ensures that the losing party bears the successful party’s reasonable legal costs. This principle applies uniformly across Malaysia, including the High Court of Sabah and Sarawak, and is designed to balance access to justice with deterrence against abuse.

 

🏛️ The Courts and Cost Framework

High Court of Sabah & Sarawak: Handles claims exceeding RM1 million.

 

Sessions Court: RM100,000–RM1 million.

 

Magistrates Court: Up to RM100,000.

 

Rules of Court 2012 & Courts of Judicature Act 1964: Provide the nationwide framework.

 

Ordinary cases see costs awarded on a standard basis (50–70% recovery after taxation). But when claims are frivolous, vexatious, or pursued in bad faith, courts have powerful tools to shift nearly all costs onto the losing party.

 

🔑 Key Mechanisms for Cost Recovery

1. Striking Out Frivolous Claims

Order 18, Rule 19, Rules of Court 2012 allows dismissal of claims that disclose no reasonable cause of action, are scandalous, frivolous, vexatious, or abuse the court’s process.

 

Costs can be awarded immediately, often on an indemnity basis.

 

Example: Sabah courts struck out claims by self-proclaimed Sulu heirs seeking to enforce foreign arbitral awards, dismissing them as baseless extortion attempts.

 

2. Costs on an Indemnity Basis

Order 59, Rules of Court 2012 permits nearly full recovery (90–100%) of reasonable costs.

 

Triggered by bad faith, harassment, dishonesty, or irrational conduct.

3. Inherent Judicial Powers

Courts of Judicature Act 1964 (Sections 3 & 25) grants High Courts authority to sanction misconduct.

 

Lawyers may even face personal liability if they knowingly advance frivolous cases.

 

Example: Maklin Masiau & Anor v Abdul Hadi Awang (2021) – suit dismissed as frivolous, each plaintiff ordered to pay RM50,000 in costs.

4. Specific Contexts

Industrial Court: Frivolous employment claims can trigger deterrent costs (e.g., RM3,000 in CSY v Lepcon Tools (M) Sdn Bhd [2024]).

Anti-SLAPP-like protections: Courts strike out suits aimed at silencing speech.

 

Fraud cases: Courts in Malaysia and Singapore impose heavy costs to deter deceit.

 

⚙️ Practical Recovery in Sabah

Process: After judgment, file a notice of taxation. The losing party may object, leading to a hearing.

 

Enforcement: Writ of execution (e.g., asset seizure) if unpaid.

 

Outcomes: In egregious cases, awards can reach six figures (e.g., sovereignty disputes).

 

Challenges: Proving bad faith requires evidence, and defendants must still bear upfront costs.

 

📌 Takeaway

Sabah’s civil litigation system strongly favors the innocent defendant when faced with frivolous claims. With tools like striking out and indemnity costs, courts send a clear message: abuse of process is a high-risk gamble.