To Appeal or Cross-Appeal? [Federal Court Case Update]
INTRODUCTION
What should a dissatisfied party do after a final court judgment is delivered?
Do they file:
- an appeal against the whole decision; or
- an appeal against only part of the decision; or
- a cross-appeal?
Actions taken by litigants after a court delivers its final judgment are critical because it determines what parties can and cannot argue in the future about what has been decided. After all, there should be finality in all court disputes.
In the recent decision of Douglas Ding Jangan & Ors. v Kerajaan Negeri Sarawak [2021] 4 MLJ 946; [2021] 7 CLJ 653 (hereinafter, "Douglas Ding") the Federal Court considered rules 5 and 8 of the Rules of the Court of Appeal 1994 [hereinafter, "the RCA"] that provide for the procedure for filing appeals and cross-appeals respectively.
The Federal Court held that a cross-appeal which was filed under rule 8 of the RCA is only for the purpose of varying the decision of the High Court that is appealed against by the appellant and not for the purpose of reversing or setting aside any decision of the High Court which no party to the action appealed against. To better understand this decision, we need to briefly consider the background facts.
SUMMARY OF BACKGROUND FACTS
The Appellants were the Plaintiffs in the High Court who claimed that since time immemorial, their ancestors, descendants and themselves have been occupying and practising native customary rights over the native customary rights ("NCR") land over an area of land marked in three community maps that were exhibited at trial.
The Plaintiffs claimed that the 4th Defendant's licence for planted forest and 5th Defendant's Provisional Lease that were issued by the State Government (1st Defendant) through its agents (2nd and 3rd Defendants) had encroached on their NCR land.
After trial over 22 days in the High Court, judgment was entered partially in favour of the Plaintiffs. The trial Judge ordered declarations that the Plaintiffs have acquired and/or created NCR and are still the lawful proprietors of the specific patches of specifically labelled/numbered cleared land areas (hereinafter, "cleared areas") and granted consequential orders to give effect to the declaration. However, the Judge did not allow the Plaintiffs' claim for the balance of the land areas that were outside of the said cleared areas.
Dissatisfied with the High Court's decision, the Plaintiffs appealed by filing a Notice of Appeal pursuant to rule 5 of the RCA against that part of the High Court judgment where the claim for the balance of the land areas was dismissed. The Plaintiffs did not appeal against any part of the decision that declared that they have acquired and/or created communal NCR and are still the lawful proprietors of the cleared areas, and the consequential orders thereto (hereinafter, "the favourable High Court decision").
The 1st to 5th Defendants did not appeal against any part of the favourable High Court decision by filing a Notice of Appeal pursuant to rule 5 of the RCA. Instead, the said Defendants applied for a variation of the High Court judgment by way of their respective Notices of Cross-Appeals under rule 8 of the RCA after the appellants had filed an appeal against that part of the decision of the High Court that dismissed their claim for the balance of the land areas.
Before the appeal and cross-appeals came up for hearing at the Court of Appeal, the 6th, 7th and 8th Respondents (hereinafter, "Interveners") applied to intervene and cross-appeal. The Interveners' application was allowed.
THE COURT OF APPEAL'S DECISION
At the Court of Appeal, the Plaintiffs (Appellants) raised a preliminary objection that the 1st to 5th Defendants' (1st to 5th Respondents) and Interveners’ (6th to 8th Respondents) cross-appeals, which sought to set aside the favourable High Court decision (in respect of the cleared areas) were incompetent as the setting aside or reversal of that decision could only be taken up by way of notices of appeal under rule 5 of the RCA. The objection was based on the Federal Court decision in Kabushiki Kaisha Ngu v Leisure Farm Corp Sdn Bhd & Ors [2016] 5 MLJ 557 ("Leisure Farm").
The Plaintiffs contended that all the cross-appeals sought to reverse or set aside the favourable High Court decision which was unrelated to their appeal which was only against that part of the decision of the High Court that dismissed their claim for the balance of the land areas.
The Court of Appeal decided as follows:
(a) the Plaintiffs' preliminary objection be dismissed because the cross-appeals were "connected to the substance of the plaintiffs’ appeal".
(b) the Plaintiffs’ appeal for the balance of the area claimed be dismissed upon applying the law in the Federal Court decision of TR Sandah [2017] 2 MLJ 281.
(c) set aside the whole order of the High Court.
(d) allowed the Respondents' respective cross-appeals in respect of the cleared areas which the appellants did not appeal against in their notice of appeal.
(e) allowed the Interveners' claim in their cross-appeal in respect of their alleged NCR over certain patches of the cleared areas which were already awarded by the High Court to the Plaintiffs and which the Plaintiffs did not appeal against in their notice of appeal.
The Court of Appeal found that Plaintiffs failed to establish not only their claim over the balance of the land areas but also their claim over the cleared areas which the High Court had decided in favour of the Plaintiffs. The Court of Appeal overturned the substantive finding of fact by the High Court that the Plaintiffs have established their claim over the cleared areas.
QUESTION OF LAW
The Plaintiffs were granted leave to appeal to the Federal Court against the Court of Appeal's decision on the following question of law:
"Whether the Court of Appeal acted within its jurisdiction when it set aside the whole of the order or decision of the High Court, including that part which decided that ‘the Plaintiffs have acquired and/or created communal native customary rights over the said land and are still the lawful proprietors of the same for the specific patches of cleared areas labeled as No. 4, 5, 9, 16, 25, 36, 37, 38 and 39 in exhibit D80 and the cleared area labeled as No. 27 in exhibit D81’ and which is not appealed against, in determining the cross appeals brought by the defendants and the interveners?"
The Plaintiffs/Appellants proffered two main reasons why the leave question ought to be answered in the negative as follows:
(a) the Court of Appeal’s jurisdiction in determining a cross-appeal under rule 8 of the RCA is restricted to the substance or point in issue in the primary appeal brought under rule 5 of the RCA; and
(b) all the cross-appeals sought to challenge and set aside that part of the decision of the High Court which was unconnected to the substance of the Plaintiffs/Appellants’ primary appeal and were therefore incompetent.
The Respondents took the position that the Court of Appeal had the jurisdiction to set aside the entire High Court decision which partially allowed the Plaintiffs' claim although the 1st to 5th Respondents did not file any appeal against the decision pursuant to rule 5 of the RCA.
THE FEDERAL COURT'S DECISION
The Federal Court unanimously allowed the appeal and answered the question of law in the negative namely, the Court of Appeal did not act within its jurisdiction when it set aside the whole decision of the High Court including that part of the decision in the Plaintiffs' favour.
Abdul Rahman Sebli FCJ delivered the judgment of the Court. In summary, the Federal Court held that:
(1) the law on cross-appeals and their restrictions have been laid down in Leisure Farm which held that it was incumbent on a dissatisfied party to independently file a separate notice of appeal under rule 5 of the RCA to rehear the issues that were not decided in its favour rather than to file a notice of cross-appeal under rule 8 of the RCA which did not provide for a complaint to be re-heard. A cross-appeal cannot be recast as an appeal in itself to set aside the judgment of the High Court. The RCA differentiates between appeals and cross-appeals and have different objects and court forms.
(2) The High Court's findings that the Plaintiffs have acquired NCR over the cleared areas of lands formed the basis for its decision to allow part of the Plaintiffs' claim and this was a finding wholly adverse to the 1st to 5th Respondents. It was incumbent on the said Respondents to file separate notices of appeal if they wanted the decision to be reversed or set aside. The decision cannot be reversed or set aside by way of cross-appeal under rule 8 of the RCA. It can only be done by way of a substantive appeal under rule 5 of the RCA.
(3) In considering whether there was any connection or link between the subject matter of the Respondents' cross-appeals with the subject matter of the Appellants' appeal, it was necessary to examine the reliefs sought by the Respondents in their cross-appeals with the reliefs sought by the Appellants in their Notice of Appeal.
(4) Even though the notices of cross-appeal sought for a variation of the High Court decision, the Respondents were actually seeking for the entire High Court decision to allow part of the Plaintiffs' claim be reversed or set aside. For all intents and purposes, the Respondents' notices were notices of substantive appeal under rule 5 of the RCA disguised as notices of cross-appeal under rule 8 of the RCA.
(5) It is not correct in law for the Respondents to mount such collateral attack on the decision of the High Court without filing notices of appeal of their own under rule 5 of the RCA. A cross-appeal under rule 8 of the RCA is only for the purpose of varying the decision of the High Court that is appealed against by the appellant and not for the purpose of reversing or setting aside any decision of the High Court which no party to the action appealed against.
(6) The cross-appeal must relate to the appeal brought by the appellant and not otherwise and no variation order under rule 8 of the RCA can be made in respect of a non-existent appeal. There was nothing to vary in terms of rule 8 of the RCA in respect of the High Court's decision to allow part of the Plaintiffs' claim for the cleared land areas because the Plaintiffs'/Appellants’ appeal was only against the High Court decision to dismiss their claim for the balance of the land areas.
(7) The words "hearing of the appeal" in rule 8(1) of the RCA refer to the hearing of the appeal filed by the appellant and the words "decision of the High Court" in the same sub-rule refer to the decision of the High Court that is appealed against by the appellant. The decision of the High Court that was appealed against by the appellants in the present case was the decision to dismiss their claim for the balance of the land areas, and not the decision to allow part of their claim for the cleared land areas.
(8) By not appealing against the High Court's decision to grant part of the Plaintiffs' claim for the cleared areas of land, the Respondents must be deemed to accept the High Court’s substantive finding of fact that the Plaintiffs have acquired and/or created communal NCR over the cleared areas. This substantive finding of fact cannot be reversed or set aside without being re-heard by way of a substantive appeal under rule 5 of the RCA. By not appealing against the decision, the Respondents are estopped from contending that the decision is wrong and ought to be reversed or set aside.
(9) Section 69(5) of the Courts of Judicature Act 1964 which relates to hearing of appeals cannot be interpreted to mean that the appellate jurisdiction of the Court of Appeal extends to the setting aside of the decision of the High Court that is not the subject of an appeal by the appellant.
(10) The Respondents’ cross-appeals were therefore incompetent as they were directed at the decision of the High Court which the Plaintiffs/Appellants did not appeal against pursuant to rule 5 of the RCA.
(11) As for the Interveners, they were in a worse position than the 1st to 5th Respondents as they were not even parties to the High Court action, either as defendants or as interveners. It would be grossly unfair to the appellants if a decision is made in the 6th to 8th Respondents’ favour when their claim for NCR rights over certain parts of the cleared areas, which had been decided in the Plaintiffs' favour after a full trial, was not even adjudicated upon by the High Court.
THE EFFECT OF FC'S DECISION ON FUTURE APPEALS
The Federal Court's decision has further clarified the distinctions between rules 5 and 8 of the RCA that was set out in Leisure Farm.
What is noteworthy is the approach to take when examining whether or not a cross-appeal is incompetent, in that it exceeded the scope of the appeal that was filed by an appellant. It can be seen that the first step is to identify the decision appealed against in the primary appeal that was filed by the Appellant. This is done by examining the reliefs sought by the Appellant in their Notice of Appeal and the reliefs sought by the Respondent in their Notice of Cross-appeal.
This method prevents any attempts by Respondents to appeal against substantive parts of the decision which was not appealed against under rule 5 of the RCA under the disguise of cross-appeals. It did not matter that the words "vary" the decision was used in the notice of cross-appeal as the Federal Court examined what was the true intent, purpose and relief sought in the cross-appeal.
The approach of first identifying the decision appealed against in the primary appeal also prevents any misconceptions that may arise from arguments that the cross-appeal raises a point that "affects" the Appellant generally. The test is not whether or not the Appellant is affected generally by the cross-appeal but whether the cross-appeal is on the same subject matter as the decision that is being appealed against. An examination that starts on whether the Appellant is affected by the cross-appeal in general may lead to error as it could always be cleverly argued that the Appellant is somehow afflicted by the cross-appeal since they are adversarial proceedings.
Following this decision, there should now be greater finality at the end of every judgment as any parts of the judgment that were not appealed against cannot be re-opened by cross-appeal. Litigants will have to decide vigilantly whether to pursue any appeal when judgments are delivered or forever hold their peace. Appeals will be more focused and confined to the real issues that are to be decided.