Interim Payment under Order 22A of the ROC

A. Introduction

Order 22A rule 3 of the Rules of Court 2012 (“ROC“) provides for interim payment in respect of damages. This rule reads:

"(1) If, on the hearing of an application under rule 2 in an action for damages, the Court is satisfied that-
(a) the defendant against whom the order is sought has admitted liability for the plaintiff's damages;
(b) the plaintiff has obtained judgment against the defendant for damages to be assessed; or
(c) if the action proceeded to trial, the plaintiff would obtain judgment for substantial damages against the defendant or, where there are two or more defendants, against any of them,
the Court may, if it thinks fit and subject to paragraph (2), order the defendant to make an interim payment of such amount as it thinks just, not exceeding a reasonable proportion of the damages which in the opinion of the Court is likely to be recovered by the plaintiff after taking into account any relevant contributory negligence and any set-off, cross-claim or counterclaim on which the defendant may be entitled to rely."

The High Court in its recent decision of Tiew Sai Hong v Pantai Medical Centre Sdn Bhd & 2 Ors allowed interim payment of part of the outstanding medical bills owed by the Plaintiff. The High Court dissected Order 22A rule 3(1)(c) of the ROC where interim payment was allowed as the Court was of the opinion that the 1st Defendant would obtain judgment for substantial damages against the Plaintiff if the counterclaim proceeds to trial.

B. Background Facts

The Plaintiff is a patient at Gleneagles KL Hospital, which is owned and operated by Pantai Medical Centre Sdn Bhd, the 1st Defendant. In January 2021, the Plaintiff, through his wife, filed a medical negligence suit against the Defendants. In the meantime, the Plaintiff remained being treated at the same hospital.

The 1st Defendant filed a counterclaim against the Plaintiff and his wife for outstanding medical bills in the sum of RM1 million. The 1st Defendant applied for an interim payment of RM1 million pending the disposal of the counterclaim.

C. The Law

The Court held that Order 22A rule 3(1)(c) of the ROC can be dissected into two parts.

First, the determination on whether the plaintiff would be awarded substantial damages for the outstanding medical bills if the counterclaim goes to trial.

Second, the determination on the quantum of interim payment, where this takes into consideration any possible set offs, counterclaims or contributions.

The Court referred to a recent decision by Aliza Sulaiman J in MRA International Sdn Bhd v SPC Diatech, Llc [2022] MLJU 1215, which in turn referred to the Court of Appeal decision of Josu Engineering Construction Sdn Bhd v TSR Bina Sdn Bhd [2016] 1 CLJ 1. Her Ladyship in MRA International held that the underlying purpose of Order 22A is to provide an interim payment to alleviate a plaintiff’s hardship pending conclusion of the trial. Further, it was also held that it is not necessary for the plaintiff to show that he would suffer prejudice if he did not obtain an interim payment. What the plaintiff needs to prove is that on balance of probabilities, the plaintiff’s claim would succeed if it goes to trial.

D. The High Court’s Decision

On the issue of liability for interim payment, the Plaintiff argued as follows:

(a) First, there was a written agreement and/or an agreement by the 1st Defendant’s insurer in which the 1st Defendant agreed to defer all claims for medical bills until the conclusion of the medical negligent suit.

(b) Second, there is no conclusion to the medical negligence suit for the 1st Defendant to set off the outstanding medical bills.

The High Court took the view that the Plaintiff’s arguments pose no challenge on his liability to pay the outstanding medical bills. The arguments only aim to show that the liability is postponed until much later, and the issue of set off only comes to play in determining the quantum payable by the Plaintiff. In any event, the High Court held that Order 22A allows for interim payment even when liability is yet to be determined. Further, there is no evidence to show the alleged agreement to defer the collection of the outstanding medical bills.

The High Court’s determination on the issue of quantum is interesting, where the High Court looked at the period when the Plaintiff was capable of being transferred to another hospital for continued treatment. This is critical to prevent the 1st Defendant from facing continuous hardship of bearing medical expenses pending the disposal of the medical negligence suit.

The High Court only allowed partial interim payment of the outstanding medical bills in the sum of RM200,000.00. This is after taking into account the Plaintiff’s own set of predicaments and probable damages to be paid by the 1st Defendant in the medical negligence suit. The High Court arrived at the sum of RM200,000.00 as only RM400,000.00 out of the medical bills were incurred from when the Plaintiff had the option to be transferred to another hospital. This was when his vital signs were normal and condition was stable. The High Court also took the view that parties’ liabilities are at a 50-50 chance in the medical negligence suit. As such, the High Court only allowed 50% of RM400,000.00, which is RM200,000.00 to alleviate the 1st Defendant’s hardship from aggravation of medical bills and to insulate both parties from aggravation of damages beyond what is truly necessary and justified.

E. Conclusion

This decision serves as a guideline for future cases, especially in the determination of quantum of interim payment. In such cases, the Courts retain wide discretionary power to ensure that hardships on parties are alleviated pending the disposal of trial.

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