Mohd Noor Amin Bin Mohd Noor Khan v XXXX (W-02(IM)(NCC)-143-01/2024)

MOHD NOOR AMIN BIN NOOR KHAN

AZMI FAEZ BIN MOHD YUSOH

MOHAMED SHIHAB BIN KUNHI MOHAMED

DALJEET SINGH A/L KAPUR SINGH (NO. K/P BARU: 641219-05-5381) … PERAYU-PERAYU DAN MALAYSIA DEBT VENTURES BERHAD (NO. SYARIKAT: 578113-A) … RESPONDEN (Dalam Mahkamah Tinggi Malaya di Kuala Lumpur Bahagian Dagang No. Guaman: WA-24NCC-155-04/2016 Dalam perkara Revolving Project Loan berjumlah RM11,500,000.00 menerusi Surat Tawaran bertarikh 25.4.2006 (selepas ini dirujuk sebagai (“PL1”); Dan Dalam perkara Revolving Project Loan berjumlah RM2,800,000.00 dan RM6,000,000.00 menerusi Surat Tawaran bertarikh 6.4.2007 (selepas ini dirujuk sebagai (“PL2” dan “PL3”); Dan Dalam Perkara penghakiman muktamad bertarikh 12.10.2010; Dan Dalam Perkara Surat Ikatan Penyelesaian bertarikh 13.10.2010; Dan Dalam perkara emel-emel dan surat-surat bertarikh

21.12.2010; 16.8.2011; 18.8.2011;

14.2.2012; 28.2.2012; 26.12.2012;

7.5.2013;

9.9.2013;

25.09.2013;

10.10.2013;

8.1.2014;

3.9.2014;

9.9.2014; 13.10.2014; 26.10.2014;

27.11.2014; 26.11.2014; 2.12.2014;

30.1.2015; 12.2.2015; 29.5.2015;

5.6.2015;

28.7.2015;

7.8.2015;

12.8.2015; 14.8.2015; 15.9.2015;

22.9.2015; 16.10.2015; 12.11.2015;

23.12.2015; 28.12.2015; 26.1.2016;

29.1.2016; 10.2.2015; 3.12.2016; Dan Dalam perkara Aturan 4,7 dan 29 Kaedah-kaedah Mahkamah 2012; Dan Dalam perkara bidang kuasa Mahkamah yang Mulia.

ASCENDSYS SDN BHD

MOHAMED SHIHAB BIN KUNHI MOHAMED

MOHD NOOR AMIN BIN MOHD NOOR KHAN

AZMI FAEZ BIN MOHD YUSOH

DALJEET SINGH A/L KAPUR SINGH (NO. K/P BARU: 641219-05-5381) … PLAINTIF-PLAINTIF DAN MALAYSIA DEBT VENTURES BERHAD (NO. SYARIKAT: 578113-A) … DEFENDAN) CORAM RAVINTHRAN PARAMAGURU, JCA. AZHAHARI KAMAL BIN RAMLI, JCA. FAIZAH BINTI JAMALUDIN, JCA.

This is an appeal against the decision of the High Court to grant leave under Order 46 rule 2 of the Rules of Court 2012 to enforce a consent judgment after more than six years. Background facts

On 24 October 2016, the respondent entered into a consent judgment with all the appellants and the first plaintiff (Ascendsys Sdn Bhd). The appellants are the second to fifth plaintiffs. They were the directors of the first plaintiff at the material time and had guaranteed its debt. In the consent judgment, the appellants acknowledged owing a judgment debt of RM7,283,466.32 owing to the respondent that was entered via summary judgment much earlier. In the consent judgment, the respondent agreed to grant time to the appellants to repay. The appellants agreed to pay the said sum of RM7,283,466.32 by way instalments as full and final settlement of the debt. The consent judgment also provided that if the appellants and the first plaintiff defaults in paying any of the instalment amounts, the respondent is at liberty to enforce the consent judgment without further reference. Those are the essential terms of the consent judgment. A Draft Debt Restructuring Agreement (the DRA) was attached to the consent judgment. The said agreement was executed by the parties on 28 October 2016.

The respondent granted time to the first plaintiff and the appellants to pay the agreed settlement sum and did not insist on strict compliance with the repayment schedule prescribed in the DRA. However, on 28 February 2022, the first plaintiff was wound up by a third-party. As at 23 October 2022, the remaining balance due under the consent judgment was RM1,359,073.32 as reflected in the respondent’s Certified Statement of Accounts.

On 7 March 2023, the respondent filed the application in question pursuant to Order 46 rule 2 of the Rules of Court 2012 for leave to enforce the consent judgment dated 24 October 2016, as more than six years had elapsed since its entry. The respondent wanted to enforce the consent judgment by instituting bankruptcy proceedings against the appellants.

The appellants objected to the application on two grounds; that the consent judgment had been superseded by the DRA entered into by the parties after the judgment and because there is insufficient or lack of cogent reasons to warrant the exercise of the court’s discretion.

The learned High Court Judge rejected the first ground because the DRA was expressly provided for under the terms of the consent judgment. The second ground did not commend itself to the learned High Court Judge as well for the following reasons. The respondent had in its affidavits explained how the debt of RM7,970,000.00 was reduced to RM1,359,073.32 because of the “indulgences and flexibility of time afforded” to the appellants to pay their debts. Evidence of the requests for time and negotiations to pay was tendered together with actual receipts. The argument of the appellants that the respondent should have proceeded to enforce the judgment earlier was rejected as there was no complete cessation of payments by the first plaintiff. The learned High Court Judge concluded that since the appellants benefited from the indulgences granted, it was “disingenuous” for them to oppose the respondent’s application to enforce the judgment now. Furthermore, there was no evidence that the respondent sat on the judgment.

For the above reasons, the High Court granted the application. Issues in the appeal

As argued by the parties, the main issues before the High Court and before us are whether the consent judgment has been superseded by the DRA and whether the learned High Court Judge wrongly exercised his discretion to grant leave for its enforcement after a lapse of six years. Whether judgment has been superseded?

The argument of the appellants is that since the DRA was entered into after the consent judgment, it was superseded and therefore it no longer exists. The date of the judgment predates the DRA by four days.

The main authority relied on by the appellants to support their argument is the case of Pacific Sanctuary Holdings Sdn Bhd (formerly known as Ideal Prestige Sdn Bhd) v. Masaland Construction Sdn Bhd [2020] 3 MLJ 692 (the Pacific Santuary case). In paragraph 27 of the judgment of that case, the Court of Appeal referred to the following passage from Halsbury’s Laws of England Vol 37 (4th Ed) at para 391 which was earlier quoted with approval by the Singapore Court of Appeal in Indian Overseas Bank v Motorcycle (1973) Pte Ltd and others [1992] 3 SLR (R) 841: Where the parties settle or compromise pending proceedings, whether before, at or during the trial, the settlement or compromise constitutes a new and independent agreement between them made for good consideration. Its effects are (1) to put an end to the proceedings, for they are thereby spent and exhausted; (2) to preclude the parties from taking any further steps in the action, except where they have provided for liberty to apply to enforce the agreed terms; and (3) to supersede the original cause of action altogether ...

The learned High Court Judge in the instant case found that the principle stated in the above-mentioned passage does not apply because the DRA or the settlement agreement was specifically provided for in the consent judgment. His Lordship said as follows: [6] With respect to learned counsel for the 2nd to the 5th Plaintiffs, the facts in the present case, however, are distinguishable from the facts in Pacific Sanctuary. [7] In our present case, the Settlement Agreement that the parties had entered into was an agreed arrangement expressly provided for under the terms of the Judgment. More specifically, prayer 8 of the Judgment stipulates that the Plaintiff and the Defendant would enter into the Settlement Agreement and further provided that in the event of any default by the Plaintiff in respect of any of the terms of the Judgment and or the Settlement Agreement, the Defendant shall be at liberty to enforce on the Judgment. [8] Accordingly, unlike Pacific Sanctuary, not only is the Judgment not superseded and or extinguished by the Settlement Agreement, the same in fact preserves the Defendant's right to enforce the Judgment in the event the Plaintiff defaults in its obligations under the Settlement Agreement.

However, counsel for the appellants argued as follows. The DRA employed the language of a contractual agreement rather than that of a judgment and therefore it intended to supersede the consent judgment. In particular, it used the term “Agreed Settlement Sum” rather than the term “judgment debt”. It said that the terms are “binding” as if it was a contractual agreement. It provided for a “Repayment Schedule” which is the language of a contractual agreement. It also contemplated that future loans are to be “subordinated to the Agreed Settlement Sum and the terms of the Consent Judgment”. Counsel also pointed out that the terms of the DRA treat previous rights that merged into the consent judgment as if they continue to exist. He submitted that this is inconsistent with the execution of a consent judgment. Furthermore, clause 10 states the DRA constitutes the entire agreement between the parties.

In our view, as correctly found by the learned High Court Judge, there was no supersession of the consent judgment by the DRA. We also find that neither the Pacific Sanctuary case or the passage quoted from Halsbury’s Laws of England in that case are applicable here. Our reasons are as follows.

The Pacific Sanctuary case concerned a settlement agreement that was signed by parties after the entry of a default judgment. It was not part of the default judgment. It was an independent agreement. In that agreement, the parties specifically agreed not to enforce the default judgment. Therefore, the only course available to the plaintiff, in the event of a breach of the settlement agreement, was to commence to action upon the default judgment. To put in another way, the default judgment in the Pacific Sanctuary case had been superseded and, for all intents and purposes, no longer subsisted.

However, in the instant case, the DRA and the consent judgment specifically entitled the respondent to enforce the consent judgment in the event of default of payment. Therefore, it cannot be said that the consent judgment had been superseded and had ceased to exist.

Furthermore, as observed by the learned High Court Judge, prayer 8 of the consent judgment stipulated that the parties have to enter into the DRA after the judgment and furthermore the rights under the consent judgment has been preserved under it. Prayer 8 reads as follows:

The Plaintiffs and the Defendant have agreed to enter into a Settlement Agreement with further terms and conditions which is appended hereto as Appendix “B”, wherein the Plaintiffs shall execute the same and provide the remaining 6 post dated cheques (as stated in para 4.3.2) to the Defendant on a forthwith basis. The Plaintiffs agree that in the event of a breach or non-compliance of any of the agreed terms in this Consent Judgment and/or in the Settlement Agreement, the Defendant shall be at liberty to enforce this Consent Judgment without any reference to the Plaintiffs.

As for the argument that the language of a settlement agreement or contractual language has been used in the DRA, we do not think that it is so material that it has the effect of superseding or setting aside the consent judgment. It is only to be expected that a debt restructuring agreement would use contractual language as opposed to the imperative language characteristic of a court order or judgment. However, it is important to note, as rightly pointed out by counsel for the respondent, that the consent judgment and the DRA are not in conflict; rather, they reflect the parties’ agreement concerning the payment of the judgment debt, as well as the manner in which such payment is to be made.

We also find no merit in the res judicata argument as the respondent is seeking to enforce what is found in the consent judgment which is a final order. It must also be noted that the draft DRA was annexed to the consent judgment and the consent judgment itself was annexed to the DRA that was executed subsequently. Thus, as we said earlier, the DRA is not a new and independent agreement.

For all the above reasons, we find that the learned High Court Judge correctly found that the consent judgment had not been set aside or superseded by the DRA. Whether High Court wrongly exercised its discretion?

Under section 6(3) of the Limitation Act 1953, an action upon a judgment becomes statutorily barred only after 12 years. In the instant case, the 12-year limitation period had not set in as yet. However, under Order 46 rule 2 leave of court is required to enforce a judgment if six years had elapsed since the date of the judgment.

In the case of Tio Chee Hing v. Chung Khiaw Bank Ltd [1981] 1 MLJ 227, the former Federal Court had occasion to consider a similar application under Order 42 rule 23 of the old Rules of Supreme Court 1957. Chang Min Tat FJ who delivered the judgment of the court said that it is matter of discretion of the court after having regard to the causes of delay. This old authority was followed in the more recent cases of Public Bank Bhd v. Seato Trading (M) Sdn Bhd & Ors [1996] 1 MLJ 165 and in Bank Kerjasama Rakyat Malaysia Berhad v. Pertama Perdagangan Sdn Bhd & 3 Ors [2019] CLJU 1784 as noted by the learned High Court Judge in this case.

The relevant passage in the judgment of Chang Min Tat FJ, that gives guidance on the exercise of the discretion, is as follows: Where six years have elapsed, Order 42 rule 23 Rules of the Supreme Court 1957 (with certain differences that are of no materiality in the application for leave, now Order 46 rule 2, Rules of the High Court 1980) requires leave of the court to be obtained. The court has a discretion in the matter and may exercise its discretion in favour of the applicant if satisfied that he is entitled to issue execution and with the cause or causes of the delay. (emphasis supplied)

Chang Min Tat FJ then considered the reasons for the delay in the following passage: The reasons for the delay were given by one Mr. Wong Theen Fook, the manager of the respondent Bank's Branch at Sandakan, in his affidavit in support of the application for leave. It was explained that after judgment had been entered, there were negotiations for settlement by arrangement. At that time, the appellant was making substantial payment by instalments towards another judgment sum in Civil Suit No. 260 of 1968 and clearly any further pressure on him would jeopardise the settlement of this debt without producing any favourable result in the satisfaction of the new claims. The Bank, perhaps not unreasonably, had hoped that so long as the appellant would be making his monthly or periodical payments, it might be in its own interests to give him time to pay off his debts to the Bank. Insofar as the land charged to the Bank was concerned, it was thought that sale by private treaty would fetch a higher sum, especially as the land was without potential for development. But as events showed, other creditors had also obtained various judgments against the appellant and had taken execution proceedings. It was time for the Bank to act in respect of these two judgment sums which had been entirely unsatisfied.

In the instant case, the learned High Court Judge after quoting the above-mentioned passage, proceeded to consider the reasons for the delay in the instant case and said as follows: [13] In the present case, the Defendant has via its affidavits in Enclosure 13 and 19 explained the events that had transpired from the date of the Judgment and how the original judgment sum of RM 7,970,000.00 was reduced to RM 1,359,073.32 as a result of the indulgences and flexibility of time afforded to the Plaintiffs to pay their debts. [14] The Defendant also adduced evidence to show the requests by the Plaintiffs for more time and flexibility to complete settlement of the sum due to the Defendant. Such active negotiations coupled with actual receipts by the Defendant of parts of the settlement sums, to my mind, constitute cogent grounds for this Court to exercise its discretion to grant the leave applied for by the Defendant.

In our view, there is no error in the High Court’s exercise of discretion in granting leave for the reasons set out in the foregoing passages. The appellants, being directors of the first plaintiff, derived benefit from the indulgences extended, as no action was taken against them, notwithstanding delays in payment in breach of the consent judgment and the DRA. The fact that the learned High Court Judge mentioned that the appellants were guarantors is also not a misdirection as it is not a fact that can be disputed with respect to the original debt. In any event, the learned High Court Judge decided the matter on principles applicable to Order 46 rule 2 of the Rules of Court 2012.

We agree with the learned High Court Judge that the respondent had not been lackadaisical in enforcing the judgment, as payments were made from time to time, notwithstanding various delays arising from negotiations and further indulgences extended by them. Moreover, the action on the judgment is not, as yet, barred by limitation.

It is well established that where discretion is conferred upon a court of original jurisdiction, such discretion may only be disturbed by an appellate court if it has been exercised injudiciously or on erroneous principles of law. As we are satisfied that the learned High Court Judge correctly directed himself on the law in exercising his discretion and provided cogent reasons for granting leave, we consider that interference with his decision is not warranted.

The appeal is accordingly dismissed with costs of RM10,000.00 subject to allocatur. Dated: 26th August 2025 SGD (RAVINTHRAN PARAMAGURU) JUDGE COURT OF APPEAL MALAYSIA PUTRAJAYA Parties Appearing: For the Appellants : Liew Teck Huat Ong Kang Nyong [Messrs Zaid Ibrahim Suflan T H Liew & Partner] For the Respondent : Ramesh Gopal Sharon Juliat Selvanathan [Messrs Rajes Hisham Rahim &