(iii) That the Kuala Lumpur High Court Companies (Winding-Up) Petition No. 28NCC-198-04/2017 and Kuala Lumpur High Court Companies (Winding-Up) Petition No. 28NCC-199-04/2017 be restored. [7] The plaintiff’s main consternation was with clause 8 of the consent judgment, where it was agreed that Sin Kiong Fatt would withdraw all police reports lodged against the third defendant. Sin Kiong Fatt was the third defendant’s fellow shareholder in the first and second defendants. [8] The complaint lodged through the police report relates to a suit that had been commenced by the plaintiff against the third defendant, in suit no. WA-22NCC-359-09/2017, filed at the High Court at Kuala Lumpur. It was alleged in the police report that the third defendant had siphoned money from the plaintiff between March 2014 and February 2016. This suit had been withdrawn in accordance with the consent judgment. Grounds for the application [9] The plaintiff claimed that the main consideration for the consent judgment was the withdrawal of the police report, and that this was unlawful and against public policy. The plaintiff submitted that the consent judgment was therefore void, as the consideration for it was unlawful. 8 [10] The plaintiff contended that it had a responsibility to pursue the police report, as it pertained to an alleged crime committed by the third defendant against it. [11] The plaintiff also submitted that it had every right to apply for the consent judgment to be set aside, even though it was not a party to the consent judgment. The plaintiff stated that it was affected by the consent judgment, as the police report lodged on its behalf was to be withdrawn. [12] The plaintiff also claimed that the beneficial owners of the shares in the plaintiff and the second defendant are investors by the name of Ali Yunus, Yudi Prawira and Low Teck Huat. The plaintiff alleged that these investors were not aware of the consent judgment, and that their rights were affected by it. The third defendant’s response [13] The third defendant contended that the withdrawal of the police report was not the main consideration for the consent judgment. The third defendant highlighted that clause 8 was merely an ancillary clause, as the essence of the consent judgment was the buying out of the third defendant’s shares in the first and second defendant, and other related companies. 9 [14] Noting that the plaintiff’s main issue was with clause 8, the third defendant submitted that clause 8 can be severed from the rest of the consent judgment. He does not seem to have any issue with this being done. [15] The third defendant also pointed out that some of the terms in the consent judgment had already been complied with, particularly the ones that required the third defendant’s action. He contended that it would be unfair to set aside the consent judgment, when the other parties had already benefitted from his actions. Findings [16] I would firstly disregard the plaintiff’s claim that the beneficial owners of the shares in the plaintiff and the second defendant are investors by the name of Ali Yunus, Yudi Prawira and Low Teck Huat. I agree with the third defendant’s contention, that this issue was never raised in the plaintiff’s affidavits, and nor was it stated as a ground in the originating summons. The plaintiff is therefore precluded from now raising it. [17] I now come to clause 8 of the consent judgment where Sin Kiong Fatt was to withdraw all police reports lodged against the third defendant in connection with suit WA-22NCC-359- 09/2017 filed in the High Court at Kuala Lumpur. 10 [18] A police report sets out the complaint by the accuser against the accused. The complaint may pertain to a matter that is criminal in nature or civil, but it is just that, a report containing allegations. [19] A police report does not make the matter alleged conclusive. It is merely an allegation which obliges the police to investigate. It is then for the public prosecutor to decide whether any further action is to be taken. A police report cannot be taken to conclude that the accused has committed a crime. [20] Lodging a police report with the knowledge or belief that the report is false, with the intention for the police to act on it however is a crime. This is provided under s. 182 Penal Code. Once a police report is lodged, it is the prerogative of the authorities whether to take any further action. A police report cannot be withdrawn. The complainant can merely request that no further action be taken in respect of the report, but the prerogative remains with the authorities. [21] That the stifling of prosecution as the main consideration for an agreement is deemed void under the Contracts Act 1950 is settled law. The Supreme Court in Charles Ooi Kiah Inn & Anor v Kukuh Maju Industries Sdn Bhd (formerly known as Pembinaan Muncul Hebat Sdn Bhd) [1993] 3 CLJ 199 (SC) held:- 11 “Such a contract to stifle prosecution was unlawful because the charges agreed to be withdrawn related to cheating which being a non-compoundable offence with the Court having no discretion to compound the same, the consideration or object was against public policy and was caught by the second limb of s. 24(e) of the Act”. [22] A consent judgment, similar to any agreement, is liable to be set aside on the same grounds that an agreement can be set aside such as illegality; Khaw Poh Chhuan v Ng Gaik Peng [1996] 1 MLJ 761 (FC). [23] I am constrained to follow settled authorities, that an agreement that leads to stifling a criminal investigation is void, as it runs contrary to public policy. In my view, clause 8 is such a clause. [24] The central issue is whether the consent judgment here should be set aside due to clause 8, or whether it can merely be severed. [25] I agree with the third defendant’s contention that clause 8 was not the main consideration for the consent judgment. It was merely an ancillary clause. It is clear that the main objective of the consent judgment was to end the third defendant’s relationship with his adversaries, by selling of his shares in the companies concerned, and relinquishing his roles in them. It was plainly a commercial agreement. 12 [26] It is quite likely that parties would still enter into the consent judgment, even if they could not agree to exclude clause 8. The objective of the consent judgment could still be met without clause 8. [27] I also took cognisance of the fact that the parties have already taken proactive steps to comply with most of the terms in the consent judgment. It is far too late in the day for parties to now resile from complying with the consent judgment, having benefitted partially. [28] The Court of Appeal in Lau Chee Ching v Niah Native Logging Sdn Bhd [2002] 4 MLJ 8 (CA), held that whether a clause could be severed would depend on the facts and circumstances of each case. The pertinent passage is as follows:- “Mr Chong, learned counsel for the plaintiff, submitted that cl 3(a) which was on withdrawal of the Police report was independent of the rest of the deed. He contended that cl 3(a) is severable. Having regard to the words 'any of the instalments' as stated in cl 4(a) of the deed, it seems to suggest that the plaintiff is entitled to enforce the deed and to insist on full payment of RM2,585.828.01 less the amount paid, in the event that the defendant defaulted payment of any of the instalments. In construing the words 'any of the instalments' in cl 4(a), 13 it appears that cl 4(a) also applies to cl 3(a) which is the illegal part of the deed. On the question of whether cl 3(a) is severable, it would depend on the facts and circumstances of each case. In this regard, it is pertinent to refer to Pollock & Muller on Indian Contract and Specific Relief Acts (10th Ed) at p 289 which states: “A promise made for an unlawful consideration cannot be enforced, and there is not any promise for a lawful consideration if there is anything illegal in a consideration which must be taken as a whole. On the other hand, it is well settled that if several distinct promises are made for one and the same lawful consideration, and one or more of them be such as the law will not enforce, that will not of itself prevent the rest from being enforceable. The test is whether a district consideration which is wholly lawful can be found for the promise called in question. The general rule is that, where you cannot sever the illegal from the legal part of a covenant, the contract is altogether void;…..” (Emphasis added) [29] Across our causeway, the Singapore High Court in Kay Lim Construction & Trading Pte Ltd v Soon Douglas (Pte) Ltd and another [2013] 1 SLR 1, dealt with an offending clause in the rental agreement between the plaintiff and defendant. The clause concerned was an indemnity clause, where it stated that the plaintiff would need to indemnity the defendant against loss, actions, claims, demands and proceedings whether criminal or civil. 14 [30] The court in holding that it was against public policy for one to indemnify another against the consequences of a crime, had to consider whether the whole clause became void, as it was perfectly permissible for a party to indemnify the other party for civil claims. [31] The court considered the cases of Man Financial (S) Pte Ltd v Wong Bark Chuan David [2008] 1 SLR(R) 663 and CLAAS Medical Centre Pte Ltd v Ng Boon Ching [2010] 2 SLR 386, where the underlying considerations were that the offending clause could only be severed, if it does not render the agreement senseless, and without the court having to rewrite it. The court there came to the conclusion that the offending part of the clause, “whether criminal or civil”, could be severed without altering the remaining indemnity clause, or rendering it grammatically senseless. [32] I am of the view that clause 8 can be severed from the consent judgment. It is clearly a clause that is independent from the other clauses in the consent judgment. Severing clause 8 will not impair the consent judgment and nor would it have to be rewritten. [33] Clause 8 was merely an ancillary clause, and not the main consideration for the consent judgment. The terms of the consent judgment could still be performed without the existence of clause 8, as the main objective of the consent judgment was to end the third defendant’s participation in the companies concerned for a price to be determined. 15 Conclusion [34] The plaintiff’s prayer under paragraph 1 of the Originating Summons for a declaration that the consent judgment dated 28 January 2018 is null and void, is only allowed in respect of paragraph 8, which reads “Sin Kiong Fatt will immediately withdraw all police reports lodged against the Petitioner in connection with Suit 359 and will deem that the matter has been resolved between the parties”, excluding paragraph 8.1. Prayers 2 and 3 of the Originating Summons are dismissed. [35] The plaintiff is ordered to pay the third defendant costs of RM10,000.00 Dated: 6 March 2019. -sgd- (Mohamed Zaini Mazlan) Judge High Court of Malaya (Commercial Division) Kuala Lumpur Counsel for the plaintiff R.K Sharma (Messrs Amrit & Company) Counsel for the third defendant Lavinia Kumaraendran and Jessica Leong Mei Ling (Messrs Thomas Philip)