Peka Pic Sdn Bhd v Louis Bin Md Zain (22NCC-148-05/2015)

The Plaintiff, having obtained leave to issue committal proceedings against the Defendant on 25.10.2017 filed the instant application to commit the Defendant to prison for contempt in refusing and/or failing to comply with the terms of a Consent Judgment dated 27.7.2015. I have dismissed the application. These are the full reasons for my decision.

The Plaintiff had filed an action against the Defendant claiming the transfer of 232,000 shares in Malayan Banking Berhad sold by the Defendant to the Plaintiff. The claims of the Plaintiff are as follows: i) The transfer of the said shares to the Plaintiff ; or ii) The return of the sum paid by the Plaintiff to the Defendant of RM 1,829,434.00; and iii) The Plaintiff’s loss of dividends and bonus as a consequence of the Defendant’s failure to transfer the said shares to be assessed by the Registrar.

The Defendant failed to file his Defence by the stipulated date and the Plaintiff filed a notice of application pursuant to Order 19 r 7 of the Rules of Court 2012 on 9.7.2015 for leave to enter judgment against the Defendant.

On 27.7.2015, the parties recorded a Consent Judgment to the effect inter alia that the Defendant shall transfer 232,000 shares in Malayan Banking Berhad purchased by the Plaintiff from the Defendant within 30 days from the date of the judgment; or the Defendant shall return the sum of RM 1,829,430.00 paid by the Plaintiff to the Defendant as the purchase price of the said shares within 30 days of the date of the Judgment. The Defendant was represented by his solicitors on the day that the Consent Judgment was recorded.

The sealed Consent Judgment was only extracted on 27.8.2015 and it was served on the Defendant’s solicitors by fax and by post on that day.

By letter dated 28.8.2015, the Defendant’s solicitors wrote to the Plaintiff’s solicitors to inform them that the Defendant was in the final stage of arranging the transfer of all the said shares and the Defendant asked for the name of the Plaintiff’s stock broking firm and the Plaintiff’s CDS account number.

By letter dated 15/9/2015, the Plaintiff’s solicitors wrote to the Defendant’s solicitors giving the particulars required and put the Defendant on notice that if the shares are not transferred by 29.9.2015, they have instructions to commence enforcement proceedings as per the judgment without further reference.

The Defendant did not comply with the terms of the Consent Judgment and by letter dated 8.8.2016 to the Defendant, the Plaintiff’s solicitors gave him notice that unless he complied with either terms of the Consent Judgment within 14 days thereof, they have instructions to commence execution proceedings against him without further reference.

Since the Defendant still did not comply with the Consent Judgment, save that he had made a part payment of RM300,000.00, the Plaintiff obtained leave to issue committal proceedings against the Defendant and filed an application to commit the Defendant to prison for contempt.

Prior to the hearing of the said proceedings on 7.7.2017, the Defendant through his solicitors proposed settlement of the sum of RM1,529,430.00 by instalments. The Defendant in the said letter said that he truly wanted to resolve the matter and sought an apology for not being able to honour his previous proposal. However, he was truly confident and shall take endeavours to ensure the payment terms under that proposal to be complied with. Further, the Defendant said that he was in severe financial difficulty and high commitments and had no means to make a lump sum settlement as such he sought the Plaintiff’s kind consideration to consider the said proposal.

By letter dated 9.6.2017 to the Defendant’s solicitors, the Plaintiff’s solicitors conveyed the Plaintiff’s acceptance of the Defendant’s proposal if the following conditions were met: i) The first payment of RM 382,357.50 shall be made on or before 31.7.2017; ii) The balance RM 1,147,072.50 was payable via 3 monthly equal payments commencing on or before 30.9.2017 and ending 30.11.2017; and iii) The proposal for settlement shall be recorded in court by way of an express undertaking by the Defendant to the Judge, that he will dutifully comply with the payment proposal and schedule. iv) That default in any payment shall be deemed as a contempt in the face of the court itself and punishable under Order 52 r 2A(4) of the Rules of Court 2012.

Although the Defendant agreed to the terms imposed by the Plaintiff, it appeared that the Plaintiff merely withdrew its application for committal with liberty to file afresh and there was no undertaking to pay given by the Defendant to the Court and recorded as such.

The Defendant did not pay any monies to the Plaintiff; neither did he transfer any shares to the Plaintiff.

Accordingly, the Plaintiff re-commenced committal proceedings against the Defendant. As set out previously, the Plaintiff obtained leave to issue committal proceedings and filed the present application to commit the Defendant to prison for contempt of court.

The Plaintiff acknowledges that the Consent Judgment was only served on the Defendant’s solicitors and not on the Defendant himself but submitted that the Defendant clearly had knowledge of the terms of the Consent Judgment. The Defendant clearly failed and refused to comply with the terms of the Consent Judgment and ought to be committed to prison for contempt of court.

The Defendant submits that the Consent Judgment was not served on him and that there was no penal notice endorsed on the Consent Judgment. The Defendant further submitted that the Consent Judgment does not contain any undertaking to the Court and is not enforceable by way of committal proceedings. The Defendant further submitted that if he was found guilty of contempt, he should only be punished by fine and not imprisonment as he is 73 years of age and not of good health and he did not deliberately flout the Consent Judgment but he is not employed and has no means or income and he could not liquidate his assets in sufficient time to enable him to comply with the Consent Judgment.

17.

Paragraph 6 of that rule empowers the court to dispense with service in certain circumstances in the case of an order requiring a person to abstain from doing an act. Paragraph 6 is not applicable because the order in this case is not one requiring a person to abstain from doing an act.

Paragraph 7 empowers the court to dispense with service of a copy of an order under that rule if it thinks it just to do so.

In the present case, the Defendant was required to either deliver shares to the Plaintiff or pay the Plaintiff a certain sum of money within 30 days of the Consent Judgment dated 27.7.2015. The deadline for complying with the Consent Judgment therefore expires on 26.8.2015. However, the Consent Judgment was only served on the Defendant’s solicitors by fax on 27.8.2015. The Consent Judgment was not served on the Defendant personally. Accordingly, not only has the Plaintiff failed to serve the Consent Judgment personally on the Defendant, it has failed to serve the Consent Judgment before the expiry of the time within which the Defendant was to comply with the Consent Judgment.

It cannot be denied that the provisions for personal service on the Defendant and for service to be effected prior to the expiry of the time by which he is to do an act is for the safeguard or protection of the rights of the Defendant. It is to ensure that the Defendant has knowledge of what he has to do under a court order before he is obliged to do the act.

In the case of Mok Kah Hong v Zheng Zhuan Yao [2016] 3 SLR 1, the Singapore Court of Appeal said this: “In BMP v BMQ… Lionel Yee JC held … that the court may only exercise its discretion to waive irregularities in committal applications in exceptional circumstances in the absence of the alleged contemnor‟s consent. We agree. A distinction is to be drawn between committal proceedings and other applications given that the liberty of the alleged contemnor is at stake in the former case. Consistent with the position on references that may be made to additional sources of information, a higher standard must therefore be observed as regards as applicant‟s compliance with the procedural rules and safeguards in the law of committal. We find it useful to refer to Nicholls LJ‟s observations in Harmsworth v Harmsworth… on the distinction between regular civil proceedings and committal proceedings: …But there is this difference between a committal application and other applications. Such is the importance which the law attaches to the liberty of the subject that normally the procedural rules must be strictly complied with in the case of a committal application, and it would only be in an exceptional case that in the absence of the consent of the respondent it would be just to waive an irregularity in a committal application. Hence it would be only be in an exceptional case that, in the absence of such consent, the court would exercise its discretion and waive such an irregularity. In this regard, provisions allowing the court to waive any irregularity or non-compliance in procedure, such as O 2 r 1(1) of the ROC, should be interpreted in the proper context and not be extended indiscriminately to committal proceedings. The court in BMP v BMQ further observed… that a distinction should be drawn between failure to observe procedural safeguards and mere technical irregularities. In contrast to the former, the court may waive irregularities but only if they are purely technical in nature: see also Arthur Lee Meng Kwang v Faber Merlin Malaysia Bhd [1986] 2 MLJ 193 and Lim Pang Cheong…We add the further caveat that the distinction is not premised on the harm or prejudice suffered by the alleged contemnor. Save for exceptional circumstances, it is therefore irrelevant whether harm has been occasioned to the alleged contemnor as a result of the applicant‟s failure to comply with the procedural rules.”

In the case of Capital Insurance Bhd v BS Sidhu [1996] 3 MLJ 1, the court order was for the plaintiff’s counsel to forthwith return the sum which had been deposited by the defendant’s counsel into his account earlier. The plaintiff’s counsel did not do so despite the fact that the defendant’s counsel had sent two reminders, calling for the return of that sum. The plaintiff’s counsel claimed that he did not disobey the order, but the fact was that the order was not served on him. On 13 October 1995, the defendant’s counsel served the order on the plaintiff’s counsel, who paid the sum on 14 October 1995. The defendant’s counsel submitted that the term ‘forthwith’ in the order meant ‘without delay or immediately’ and the delay of more than two months was unreasonable. He further alleged that it was unnecessary for him to serve the notice because the plaintiff’s counsel, who was present in court, was aware of the terms of the order and had a duty to obey them as an officer of the court. As such, he said that the plaintiff’s counsel had wilfully refused or neglected to pay the sum. The issue before the court was whether it was necessary to serve the order on the plaintiff’s counsel, who was present in court when the court pronounced the order.

It was held by the Court of Appeal that although the plaintiff’s counsel was present and heard the order directing him to refund the money deposited, nonetheless, he was required by O 45 r 7 of the RHC to be served with the order personally before he could be said to have wilfully disobeyed the order. Before contempt proceedings, which affect the liberty of a subject, can be enforced, there must be strict compliance with the rules that require the order of the court be served on the plaintiff’s counsel. The court made no distinction that he was then the counsel and was present to hear the order. If he had been served with a sealed copy of the order according to the rules and had disobeyed, then the court could say in law that it was contempt.

Since the rules mandating personal service on the Defendant of an order requiring him to do something prior to the expiry of the date on which he is to do the act is for the protection of the Defendant, I find that it is not appropriate for me to dispense with such service in this case. Furthermore, the Capital Insurance case which is binding on this Court shows the importance of personal service on the defendant where the order requires him to do a positive act. The breach of the Consent Judgment in this case is a once for all breach and by the time the Consent Judgment was served on the Defendant’s solicitors, the Defendant had already breached the Consent Judgment as he was supposed to comply with it by the 26.8.2015 and service on his solicitors was only effected on 27.8.2015. On this ground alone, I would dismiss the committal application against the Defendant. I do not agree with the contention of the Plaintiff that the Defendant has to raise such objections as these by way of an application to set aside the ex parte leave to issue committal proceedings and not in a committal application such as the present application. I am of the view that in the committal application, the Defendant can rely on all grounds to show why he ought not to be committed to prison for contempt of court and he may rely on the ground that the order in question was not served on the Defendant prior to the expiry of the deadline for complying with the order.

However, since the issue as to the enforceability of the Consent Judgment by way of committal proceedings has been raised, I will also deal with it. There are authorities to the effect that unless it contains an undertaking to the Court, a Consent Judgment is not enforceable by way of committal proceedings. The following passages in the judgment of Faiza Thamby Chik in the case of Lim Chau Leng v Wong Chee Chong [2005] 6 MLRH 661are pertinent: “[2] The terms of the decree nisi recorded by this court on 12 November 2003 were negotiated and agreed upon by the plaintiff and defendant before the matter was called up for full trial on 12 November 2003. As a result of the compromise reached by the parties out of court, the divorce petition was not contested and was disposed of without consideration and decision on merits. Clearly, the decree nisi by mutual consent of the parties recorded by the court was a contract between the parties with the sanction of the court superadded to it. In Tan Geok Lan v La Kuan @ Lian Kuan [2004] 1 MLRA 165; [2004] 3 MLJ 465; [2004] 2 CLJ 301; [2003] 4 AMR 475, Mohd Noor Ahmad FCJ delivering the judgment for the Federal Court said at p 472: On the first issue, which is related to question (1), a consent judgment or order is non the less a contract, and subject to the incidents of a contract, because there is superadded the command of the court, and its force and effect derivers from the contract between the parties leading to, or evidenced by, or incorporated in, the consent judgment or order. A consent order must be given its full contractual effect, even if it relates to an interlocutory step in the action (see para 390 at p 286, Halsbury‟s Law of England (4th Ed) Vol 37). We gather from this proposition that: (i) the agreement on the terms reached between the parties; and (ii) the consent judgment or order arising out of that contract is also a contract between the parties except that the latter is superadded by the command of the court. In short, there are two contracts, one, before the court makes the order and two, after the order is made. After the order is made the first contract is merged into the second contract. It is undisputed by parties that the decree nisi by consent dated 12 November 2003 was recorded by a court of competent jurisdiction. However what is in dispute is the consequence of breaching or disobeying the said decree nisi. Is the defendant guilty of contempt of court if he breaches or disobeys the said decree nisi? A perusal of the statement pursuant to O 52 r 2(2) of the Rules of the High Court 1980 accompanying the notice of motion (encl 40) stipulates three purported breaches of the terms in the decree nisi. These are the charges levied at the defendant. They are found at paras 5, 6 and 7. It is important that I reproduce below the relevant terms of the decree nisi dated 12 November 2003 as marked as encl (30) which are said to have been breached or disobeyed by the defendant:

Para (d) – Responden membayar nafkah bulanan sebanyak RM650 mulai dari bulan Januari 2001 sebagai peruntukan kewangan untuk anak Timothy Wong Chee Kang pada tiap-tiap 1 haribulan dan peruntukan ini berterusan sehingga Timothy Wong Chee Kang mencapai umur 18 tahun;

(ii) Para (e) – Responden perlu membuat peruntukan kewangan selanjutnya untuk menanggung perbelanjaan pendidikan dengan penuh untuk Timothy Wong Chee Kang dari tadika sehingga pengajiannya ke Kolej dan Universiti;

(iii) Para (g) – Responden dihalang sama sekali pergi atau hadir di Unit 06C, Type No C, Floor 13A, Block B, Accessory Parcel No 1-113, Pelangi Indah Condominium, Batu 4 1/2 , Kuala Lumpur ataupun berada di mana-mana berhampiran hartanah tersebut dalam lingkungan 200m tetapi hanya untuk mengambil Timothy Wong Chee Kang dari pondok pengawal hartanah tersebut dan juga responden dilarang sama sekali menalipon, mengugut dan atau melakukan sebarang tindakan kekacauan ke atas dan terhadap pempetisyen. It is worth to note at this juncture that the decree nisi dated 12 November 2003 states, „MAKA DENGAN INI ADALAH DIHAKIMI SECARA PERSETUJUAN‟ and goes on to enumerate the terms agreed upon. [3] It is argued by Mr Paari Perumal, counsel for the defendant husband that there is no use of the word „undertake‟ in any of the three terms referred to here above. The court also cannot construe the decree nisi itself and the terms therein as an implied undertaking given by the defendant. To support his contention Mr Paari Perumal quoted the following cases: Nisha Kanto Roy Chowdhury v Smt. Saroj Bashini Goho AIR (35) 1948 Calcutta 294 is a case where the suit was not contested when the parties came to an agreement. The compromise was presented to the court and a decree was passed in terms of the compromise. The terms of the decree on which the respondent applied to commit the appellant for contempt of court read, „The defendant hereby undertakes to remove...‟, it did not state that the defendant undertook to the court to do so. The defendant refused to remove the item in question. Gentle J, the learned single judge decided there was contempt by a breach of an undertaking to the court. On appeal, the Letters Patent Bench dismissed the application for committal as there was no contempt. At para 13, Harries CJ delivering the leading judgment said, „It therefore follows that if the ordinary meaning is given to the word „undertake‟ para 6 should read: the defendant hereby formally promises or pledges to remove the said Kali image...‟. What the respondent urges us to do is to read into para 6 the words „undertakes to court‟. The words are not there. At para 14, the learned CJ stated, „It must be remembered that this compromise agreement was negotiated between the parties outside court. They were agreeing to certain terms and amongst other things the defendant promised or undertook to remove this image when called upon to do so. The agreement he made was not with the court, but with the plaintiff respondent, and prima facie he undertook to remove this image with the plaintiff respondent.‟ At para 18, the learned CJ said, „It must be remembered that a compromise decree is nothing more than an agreement of the parties with the sanction of the court superadded. It has really no greater sanctity than the agreement itself. It certainly cannot mean anything more than the agreement itself‟. Finally at the end of para 20, the judge says, „In the present case, it appears to me on a true construction of para 6 of the compromise, that there was nothing more than a solemn promise by the defendant to the plaintiff and the nature of that promise or undertaking could never be changed by reason of the compromise being accepted by the court and a decree passed in its terms‟. It is observed that the above case is one where the word „undertake‟ was used in the consent order recorded by the court. In this case, there is no use of the word „undertake‟ at all in any of the three terms which the plaintiff alleges the defendant has breached. Bukhtiarpur-Bihar Light Rly Co Ltd v State of Bihar & Ors AIR (38) 1951 Patna 231 is a case where a consent order was passed and it recites the agreement arrived at between the parties. The consent order begins thus, „This application is disposed of on the following consent order agreed to by the parties‟. There was no use of the word „undertake‟ anywhere. Justice Das at para 21 said as follows: „...I agree with his (referring to his learned brother Reuben J) conclusion that that agreement was a contract between the parties and not an undertaking to the court. The distinction between an agreement with the sanction of the court superadded to it, and an undertaking to the court on the faith of which the court sanctions a particular course of action or inaction is not easy to define or determine; much will depend on the circumstances in which the agreement is made, and the words in which it is expressed to embody the intention of the parties (see Nisha Kanto‟s case). The agreement in this case did not result in any order of the court, except disposal of the application without consideration of merits....‟ Further on in the same pare 21 the learned judge states: „...Of course, the formal order of disposal is there, but that does not convert the agreement into an undertaking to this court. It is worthy of note that the order of 22 June 1950, as recorded, states clearly „it is agreed to by the parties etc.‟ There is nothing to suggest that there is an undertaking given to the court on the faith of which the court is sanctioning a particular course of action or inaction. Mr Das has contended that on the basis of the agreement within the category of an undertaking on the faith of which the court sanctioned a particular course of inaction, that is, refrained from deciding the case on merits. I agree that the court refrained from deciding the case on merits; but that does not necessarily mean that the court did so on the faith of undertaking given to the court. If Mr Das‟s contention is correct, then every action which is dismissed on compromise, without decision on merits, will give rise to a proceeding in contempt on a breach of a term of the compromise. I do not think that that is correct in law‟. In this case, I think even assuming for one moment that there has been a breach of the terms of the decree nisi as contended by the plaintiff, then that does not constitute contempt of court. This is fortified by the view of Das J at para 24 where his Lordship states, „My view, therefore, is that there has been in law a breach of the agreement of 23 June 1950 but it is not a breach of an undertaking to this court nor does it constitute contempt of this court‟. Badri Dass v Labhu Mal AIR 1959 Punjab 322 is a case where the defendant agreed to pay the plaintiff‟s claim in instalments and further undertook not to alienate any part of his immovable property till the entire amount was paid as agreed upon by the parties. The suit was decreed on those agreed term. The defendant alienated the shop which the plaintiff‟s sought to attach in breach of his undertaking. The learned Justice GL Chopra applying the principles enunciated in Bakhtiarpur Bihar Lighr Rly‟s case said at para 3: „The statement of the defendant read as a whole leaves no doubt in my mind that it was based upon a private compromise arrived at between the parties outside the court. Instead of presenting a written composition deed the defendant detailed the terms of the compromise in his statement and a decree on the basis of it was passed. The undertaking was thus not given to the court but to the plaintiff. It was no more than a solemn promise by the defendant to the plaintiff and the nature of that promise or undertaking could never be changed by reason of the compromise being accepted by the court and a decree passed in its terms. The principle is well settled that the breach of such an undertaking or promise does not amount to contempt of court‟. Babu Ram Gupta v Sudhir Bhasin & Anor AIR 1979 Supreme Court 1528 is an appeal by the appellant to the Supreme Court against the decision of the Division Bench of the Delhi High Court which convicted the appellant and sent him to detention in civil prison. The High Court held that the conduct of the appellant was unrelenting and inexorable and he had wilfully disobeyed the order of court passed with his consent. The Supreme Court eventually quashed the decision and acquitted the appellant. Justice Fazal Ali while speaking for the Supreme Court stated at para 7: „....Although the High Court observed that the consent order extracted above had been passed on the basis of various undertakings given by the contemnor, we are unable to find any material on record which contains such undertakings. It seems to us that the High Court has construed the consent order itself and the directions contained therein as an implied undertaking given by the appellant. Here the High Court has undoubtedly committed an error of law. There is a clear cut distinction between a compromise arrived at between the parties or a consent order passed by the court at the instance of the parties and a clear categorical undertaking given by any of the parties. In the former, if there is violation of the compromise or the order no question of contempt of court arises but the party has a right to enforce the order or the compromise by their executing the order or getting an injunction from the court‟. At para 10 the learned judge goes on to say: „...What the High Court appears to have done is that it took the consent order passed which was agreed to by the parties and by which a receiver was appointed, to include an undertaking given by the contemnor to carry out the directions contained in the order. With due respect, we are unable to agree with this view taken by the High Court. A few examples would show how unsustainable in law the view taken by the High Court is. Take the instance of a suit where the defendant agrees that a decree for Rs10,000 may be passed against him and the court accordingly passes the decree. The defendant does not pay the decree. Can it be said in these circumstances that merely because the defendant has failed to pay the decretal amount he is guilty of contempt of court? The answer must necessarily be in the negative. Take another instance where a compromise is arrived at between the parties and a particular property having been allotted to A, he has to be put in possession thereof by B. B does not give possession of this property to A. Can it be said that because the compromise decree has not been implemented by B, he commits the offence of contempt of court? Here also the answer must be in the negative and the remedy of A would be not to pray for drawing up proceedings for contempt of court against B but to approach the executing court for directing a warrant of delivery of possession under the provisions of the Code of Civil Procedure. Indeed, if we were to hold that non-compliance of a compromise decree or consent order amounts to contempt of court, the provisions of the Code of Civil Procedure relating to execution of decrees may not be resorted to at all. In fact, the reason why a breach of clear undertaking given to the court amounts to contempt of court is that the contemnor by making a false representation to the court obtains a benefit for himself and if he fails to honour the undertaking, he plays a serious fraud on the court itself and thereby obstructs the course of justice and brings into disrepute the judicial institution. The same cannot, however, be said of a consent order or a compromise decree where the fraud, if any, is practised by the person concerned not on the court but on one of the parties. Thus, the offence committed by the person concerned is qua the party not qua the court, and therefore, the very foundation for proceeding for contempt of court is completely absent in such cases. In these circumstances, we are satisfied that unless there is an express undertaking given in writing before the court by the contemnor or incorporated by the court in its order, there can be no question of wilful disobedience of such an undertaking. Therefore I am of the opinion that this decision clearly illustrates why the defendant in the matter before me is not in contempt of court‟. In Abdul Kareem v Iswarappa & Ors 1983 Cri LJ 114, the consent order upon which contempt proceedings were instituted read as follows: „As agreed to by both the parties it is hereby directed that...‟. Justice GN Sabhahit said at para 2, „Thus it becomes clear that there is no order of the court as such and the agreement of the parties is recorded and nothing more. No undertaking as such is taken by the court. In such cases it is obvious that contempt proceeding cannot lie.‟ Further at para 3, the learned judge stated the following applying the principles in Babu Ram‟s case, „Contempt proceedings are mainly to uphold the dignity and decorum of the court and not to vindicate the rights of the parties‟. In this case before me, the decree nisi dated 12 November 2003, reads, „MAKA DENGAN INI ADALAH DIHAKIMI SECARA PERSETUJUAN‟ which is similar to what the consent order read in Abdul Kareem‟s case. In Ladlay Mohan Mathur v RS Bhatnagar 1985 All LJ 17, a consent decree was passed and in one of the clause the tenant gave an undertaking to vacate premises in dispute as per the terms recorded therein. The tenant disobeyed the undertaking given and the landlord initiated civil contempt proceeding which was consequently rejected. The court ruled that, „In cases of violation of compromise or order, no question of contempt of court arises but party has right to enforce the order of compromise by either executing the order or getting an injunction‟. [4] In his well researched work titled, The Law and Practice of Compromise (5th Ed, 2002), David Foskett QC had this to say at p 194: It should clearly be understood that an order for committal can be made only where there has been an undertaking to the court: In Marchant v Marchant, H and W compromised proceedings brought by W against H on the basis of alleged wilful neglect to provide her with reasonable maintenance. The compromise consisted of a withdrawal of the summons on terms which included an undertaking by H „not to resort to the matrimonial home as from 31 July 1964 or to molestW‟, the words „liberty to apply‟ also being incorporated. The Court of Appeal held that W could not apply to commit H to prison for an alleged breach of the undertaking because it was not an undertaking to the court. [5] It is argued by the plaintiff that since she has been granted leave to take out committal proceedings the defendant cannot raise the present objection. I think the granting of leave does not amount to a finding of contempt. That can only happen at the hearing of the substantive motion upon proof beyond reasonable doubt. The objection raised is not procedural but substantive in nature. It goes to the root of the cause. The plaintiff argued that the defendant should have applied to set aside the leave order dated 26 January 2005 instead of raising this objection. It is not disputed that the leave order (obtained ex parte) was served together with encl (45) only on 17 March

It is also not disputed that on 17 March 2005 when the leave order was served, encl (45) was already fixed to be heard on 31 March 2005. In this instance, it was only prudent that the defendant takes all objections at the hearing of the motion and have it disposed once and for all instead of filing interlocutory applications to set aside the leave order and protract the hearing of encl (45). [6] I must reiterate that it is not that committal proceedings cannot be instituted based on a decree nisi by mutual consent. That would amount to stating a general proposition of law. That is not intended here. I am confining to the decree nisi dated 12 November 2003 in this case. The decision by the Federal Court in Tan Geok Lan (see above) is simple to understand. If there is a consent order or judgment, what happens is that there will be two contracts, one, before the court makes the order and two, when the order is made. After the consent order is made the first contract is merged into the second contract. On the facts of Tan Geok Lan, there was no consent order because the court in that case did not order for a consent order to be recorded. So what remained there is the first contract the binding effect of which had to be based on incidents of a contract, i.e. offer, acceptance, consideration, etc. In our case, we have the consent order dated 12 November 2003 and as stated in Tan Geok Lan, it has taken the place of the initial agreement (arrived at by the negotiations of both parties out of court) by merger. What is meant by „the legal effect is not derived from the agreement but from the court order‟ is that once a consent order is made, the incidents of a contract (offer, acceptance, consideration, etc) need not be proven. The wronged party may take out enforcement proceedings for a breach on the basis that there is a valid contract. The legal effect of an agreement incorporated in a consent order is derived from the consent order itself and not from the agreement of the parties made before the consent order is made. What is the consequence of breaching the consent order dated 12 November 2003? Can the plaintiff take out committal proceedings for its breach? The answer is that it depends. The decree nisi dated 12 November 2003 particularly the terms said to be in breach does not give rise to a proceeding in contempt. Contempt of court is a legal concept which only the court as the aggrieved party can make a finding of fact. And the indorsement of the penal notice is a procedural requirement by the Rules of the High Court 1980 if a party wishes to take out committal proceedings. It is not part of the substantive law of contempt of court. Justice Fazal Ali of the Supreme Court of India put it aptly and neatly in Babu Ram Gupta when his Lordship said: There is a clear cut distinction between a compromise arrived at between the parties or a consent order passed by the court at the instance of the parties and a clear and categorical undertaking given by any of the parties. In the former, if there is violation of the compromise or the order no question of contempt of court arises but the party has a right to enforce the order or the compromise by their executing the order or getting an injunction from the court. [7] In this case, the defendant at all times maintain that he has an agreement with the plaintiff to perform the terms of the decree nisi dated 12 November

The plaintiff on the other hand flatly denied that there is any agreement between her and the defendant. The plaintiff is saying that the decree nisi dated 12 November 2003 entered by consent is not an agreement but an order of the court to do or not to do certain acts. Authorities have clearly shown that for there to be contempt of court based on a consent order, the consent order must contain an express undertaking to the court. The defendant has at all times maintained that he has not given any undertaking to the court. Clearly, the defendant is absolved of being guilty of contempt of court. It is interesting to note that by the plaintiff denying any agreement, it would not be entitled to claim anything from the defendant under the consent order dated 12 November 2003 as there is no collateral bargain between the parties (the plaintiff denies there is any agreement) which might have given rise to a debt recoverable at law. That would be the outcome of the plaintiff going on record denying that any agreements exist between the plaintiff and the defendant. [8] It is noted that the decree nisi dated 12 November 2003 (consent order) entered by consent with the plaintiff is an embodiment of the terms agreed between them before the trial of the divorce petition. But, it is not an order of the court in the true sense with directions. The court did not decide anything on merits. In Pulavarthi Venkata Subba Rao & Ors v Valluri Jagannadha Rao (deceased, by his heirs and legal representatives) & Ors AIR (54) 1967 Supreme Court, Justice Hidayatullah speaking for the Supreme Court of India stated as follows: The compromise decree was not a decision by the court. It was the acceptance by the court of something to which the parties had agreed. It has been said that a compromise decree merely sets the seal of the court on the agreement of the parties. The court did not decide anything. Nor can it be said that a decision of the court was implicit in it. In our case, no decision or direction was made by the court on the hearing of the divorce petition on 12 November 2003. In fact, as stated in the foregoing case cited, the court merely recorded the agreement of the parties and set the seal of the court on it. This is evident if one peruses the decree nisi dated 12 November 2003. In Dashwood v Dashwood (1927) WN 276, the question was whether, when an order was made by consent staying an action on terms set out in a schedule to the order, and one of the parties failed to comply with the terms, the remedy of the injured party was for contempt by way of motion for attachment or committal, or whether his proper course was first to take proceedings either independently or in the action to enforce the terms by obtaining against the offending party an order for specific performance or an injunction restraining him from breaking the terms. Tomlin J said: It seems to follow that the terms in the schedule were not an order of the court which ought directly to be enforced by proceedings for contempt. In Dashwood v Dashwood, the terms which were broken were embodied in a schedule to the order made by consent. It nevertheless is a court order. And if the plaintiff is correct in her contention that all court are orders of the court, the court should and would have decided that it is proper to take out committal proceedings for contempt of court. The above case is an example for the proposition that not all court orders are coercive orders of the court, a breach of which will attract punishment for contempt of court. Another example is a declaratory order. This again is a court order and if the plaintiff is correct in her contention then a breach or non-compliance of a declaratory order should be punishable for contempt of court. But as highlighted by Mr Paari Perumal in the case of Webster v Southward London Borough Council [1983] QBD 698, the court held that as the order was declaratory and not coercive, the refusal of the local authority to comply with its terms did not amount to a contempt of court. [9] I am of the opinion that had the divorce petition been heard on 12 November 2003 on its merits and the court had come to a finding of fact on all issues after having taken evidence and ordered the defendant to do all that is now found in the decree nisi dated 12 November 2003, then that would be an order of the court which is in coercive terms and a breach of which would attract committal proceedings for contempt of court. I think it is not the spirit and intent of the law of contempt to punish a party who enters into a bargain with another and formalized before a judge, if that party subsequently fails to fulfil the terms of the bargain. The failure to carry out the terms, although a breach, is not susceptible to contempt proceedings. This is because as Justice Fazal Ali stated in Babu Ram Gupta: Take the instance of a suit where the defendant agrees that a decree for Rs10,000 may be passed against him and the court accordingly passes the decree. The defendant does not pay the decree. Can it be said in the circumstances that merely because the defendant has failed to pay the decretal amount he is guilty of contempt of court? The answer must necessarily be in the negative. The rationale for holding thus is because the affront by breach is not to the court but the party to the compromise or consent order. The offence if any is committed by one party against the other and not the court which negates the very foundation for proceeding for contempt of court. [10] What is important here is that the terms agreed upon came from the parties to the court and not from the court to the parties. It was never denied that the consent order dated 12 November 2003 with the seal of the court affixed to it made it a court order. But is it an order of the court with imperative direction or coerciveness. It lacks coerciveness taking into account the manner the consent order came about. I can only re-quote the passage from Badri Dass v Labhu Mal AIR 1959 Punjab 322 which reads: The statement of the defendant read as a whole leaves no doubt in my mind that it was based upon a private compromise arrived at between the parties outside the court. Instead of presenting a written composition deed the defendant detailed the terms of the compromise in his statement and a decree on the basis of it was passed. The undertaking was thus not given to the court but to the plaintiff. It was no more than a solemn promise by the defendant to the plaintiff and the nature of that promise or undertaking could never be changed by reason of the compromise being accepted by the court and a decree passed in its terms. The principle is well settled that the breach of such an undertaking or promise does not amount to contempt of court. [11] So, what we have in our case is a set of promise made by the defendant to the plaintiff to do or not to do an act. That is all. There are no promises made to the court by the defendant. The court merely acknowledged this agreement by affixing its seal which brought the suit to an end. The defendant by making these promises (and the plaintiff accepting them) did not hoodwink the court into bringing the suit to an end. The decision to compromise and to end the suit was entirely by the parties. The law of contempt of court does not envisage institution of committal proceedings for a breach of a term agreed by parties merely because it is embodied in a court order. If one spouse wishes to commit the other, than he or she or their legal advisers must procure an undertaking to the court to be incorporated in the consent order. In this judgment I dealt only with a preliminary issue of whether a breach of the consent order dated 12 November 2003 can attract committal proceeding. The issue of whether there is in fact a breach and all other defences available to oppose encl (45) was reserved till my decision on the preliminary issue. “

In the subsequent case of Bee Ah Nya v Ooi Ah Yan [2013] MLRHU 1, Nantha Balan JC (as he then was) held that not all consent orders are incapable of being enforced through committal proceedings. It all depends very much on the nature and effect of the terms of the consent order. Thus in some cases, breach of consent orders have resulted in successful enforcement via committal proceedings. This was in cases of well defined and precisely worded consent orders, that is, where there is an undertaking that had been given to the court or where the consent order is otherwise of a coercive nature, the breach of such a consent order would constitute an act of contempt of court.

The Consent Judgment in this case did not contain any undertaking to the Court. However, there is a provision in the Consent Judgment to the effect that if any of the terms thereof are not complied with, then the Plaintiff is entitled to enforce the terms of the Judgment including the commencement of committal proceedings against the Defendant to apply for an order of civil imprisonment against him. With this provision, I find that the Defendant is estopped from contending that the Consent Judgment cannot be enforced by way of committal proceedings. Incidentally because of that provision in the Consent Judgment, I am of the view that it is not necessary for the Plaintiff to insert the penal endorsement on the Consent Judgment as the provision in question is equivalent to if not more effective than a penal endorsement.

There is the further issue as regards the means or ability of the Defendant in complying with the Consent Judgment. The Defendant submitted that he is aged (he is 73 years old) and is not gainfully employed and could not liquidate his assets in time to enable him to comply with the Consent Judgment.

In the case of Mok Kah Hong v Zheng Zhuan Yao [2016] 3 SLR 1 the Singapore Court of Appeal dealt with the case of an impecunious judgment debtor as follows: “92 We should make it clear that not every default in the payment of a monetary sum pursuant to a judgment or order should give rise to committal proceedings. In PJ Holdings Inc v Ariel Singapore Pte Ltd [2009] 3 SLR (R) 582 (“PJ Holdings”), Choo Han Teck J made the following observations on the availability of committal proceedings vis-a-vis impecunious judgment debtors (at[7]): What happens then to an impecunious judgment debtor, as the defendant in the present case depicts itself as? In my view, under such circumstances, committal proceedings should still not issue. My reasosn are as follows. Order 45 r 5(1)(a) applies only when „a person required by a judgment or order to do an act within a time specified in the judgment or order refuses or neglects to do it‟ ... The key words here are „refuse‟ and „neglect‟. In Re Quintin Dick [1926] Ch 992, Romer J held that the term „refuse or neglect‟ was not equivalent to „fail or omit‟, and that the former implied a conscious act of volition whereas the latter did not. In Ng Tai Tuan v Chng Gim Huat Pte Ltd [1990] 2 SLR(R) 231, Chao Hick Tin JC (as he then was) expressed the view that the word „neglect‟ necessarily implies some element of fault. He cited the case of in re London and Paris Banking Corporation

LR 19 Eq 444 where Sir G Jessel MR said, at 446: ... the word “neglected” is not necessarily equivalent to the word “omitted”. Negligence is a term which is well known in law. Negligence in paying a debt on demand, as I understand, is omitting to pay without reasonable excuse. Mere omission by itself does not amount to negligence.... The word „refuse‟ has also been similarly defined. In DP Vijandran v Majlis Peguam [1995] 2 MLJ 391, the court noted that „(t) the ordinary meaning of the word refuse is to decline to give‟, and that „failure is not synonymous with refusal‟. Similar sentiments were also expressed by the tribunal in Lawson v Percy Main & District Social Club & Institute Ltd (1979) ICR 568. I agree with the foregoing cases. In the premises, this means that an impecunious debtor would be outside of the scope of O 45 r 5 as such a person cannot be said to have „refused or neglected‟ to obey an order directing them to make payment. The combined effect of the fact that an impecunious debtor would be outside of the scope of O 45 r 5 as such a person cannot be said to have „refused or neglected‟ to obey an order directing them to make payment. The combined effect of the fact that an impecunious debtor is outside the scope of committal proceedings and the principle that such proceedings are remedies of the last resort would mean that in the vast majority of cases, committal proceedings would not apply to an order or judgment for the payment of monies. In most instances, a person would ordinarily be regarded as impecunious if he is unable to satisfy the judgment debt upon the conclusion of the various execution proceedings. The logical ending point in such cases should be a winding-up order or a bankruptcy order, as the case may be. In the present case, the burden was on the plaintiff to prove beyond a reasonable doubt that Ariel Singapore had neglected to make payment. Having examined the documentary evidence, it was clear that Ariel Singapore, which is now in liquidation, was in no position to make payment during the material period.”

In the present case, I find that it would not be appropriate to commit the Defendant to prison for contempt without clear proof that he was able to pay the sum stipulated in the Consent Judgment. Since the Plaintiff has not shown beyond reasonable doubt that the Defendant was able to pay the sum stipulated in the Consent Judgment, I would have dismissed the committal application against the Defendant on that ground also.

In the circumstances of the case, I dismiss the committal application with no order as to costs. Wong Chee Lin Judicial Commissioner Kuala Lumpur High Court Commercial Division Dated: 30th May 2018 Solicitors for the Plaintiff Mohd Khalil B Tajuddin Messrs Nazri Azmi Islinda Advocates & Solicitors No. 17-1, Jalan Dwitasik 2 Dataran Dwitasik Bandar Sri Permaisuri 56000 Kuala Lumpur Tel : 03-9191 0011 / 91910033 Fax: 03-9191 0022 Solicitors for the Defendant Nanthini Nair A/P Ramakrishnan Messrs Idris & Partners Advocates & Solicitors No. 4-B, Jalan BRP ½