Tetuan Azwan Roslee & Co v Mbn Enterprise Sdn Bhd (MA-24NCvC-480-11/2025)

This is a peculiar case where solicitors for a party, initiated this action in its own name on behalf of its client who was a party to a property transaction.

The Plaintiff, a firm of solicitors acting for the vendor, has commenced this Originating Summons against the Defendant, the purchaser in a sale and purchase transaction, for penalties and late payment charges for the delayed completion of the said transaction. Facts

The facts in this case revolves around a Sale and Purchase Agreement dated 19.08.2022 between the Defendant and the Plaintiff's client, namely Koperasi Polis Diraja Malaysia (KPDM).

Disputes arose between the Defendant and KPDM which culminated in a civil suit vide Originating Summons No. MA- 24NCVC-392-09/2024 in the Malacca High Court ("The Original OS").

The Original OS was resolved by way of a Consent Order dated 23.01.2025, putting an end and providing a measure of finality to the property transaction which involved 8 pieces of land.

What then is the Plaintiff's claim in this action?

At first glance, one may assume that as solicitors, the Plaintiff was initiating an action akin to an interpleader summons for monies being held as stakeholders within the mechanism and procedures usually associated with a property transaction. However, that is not the case here. What lies herein is a claim for penalty and late payment charges under the said transaction. The Issues

A perusal of the cause papers revealed the following issues for this Court's consideration: - i. Whether the Plaintiff has the necessary locus standi to commence this action? ii. Whether the subject matter of this action, having been decided in the Original OS, is res judicata? iii. Whether this action is an abuse of process. The Plaintiff's case

The Plaintiff in this action has prayed for the following orders thru the Originating Summons filed herein. The prayers sought, inter alia, are: -

Suatu Deklarasi bahawa Perjanjian Jual Beli bertarikh 19.08.2022 telah pun disempurnakan pada 23.01.2025;

Suatu Deklarasi bahawa kelewatan Defendan dalam menandatangani dan menyempurnakan Surat Perjanjian Bersama untuk Senarai Inventori telah menyebabkan kelewatan dalam pelepasan baki harga belian sejumlah RM2,575,000.00 kepada Penjual;

Suatu Deklarasi bahawa Defendan menanggung penalti pada kadar 12% p.a dari tarikh klarifikasi dari Plaintif kepada peguamcara Defendan iaitu 20.03.2024 sehingga Perintah Persetujuan bertarikh 23.01.2025;

The reasons for the filing of the said Originating Summons provided were: - i. The Plaintiff was the solicitor in charge, acting on behalf of KPDM in the said property transaction with the Defendant; ii. A sum of RM2,575,000.00 had been deposited with the Plaintiff as stakeholders on 25.07.2023, and that the Defendant delivered vacant possession of the relevant properties on 01.08.2023; iii. Disputes arose between KPDM and the Defendant in August 2023 which resulted in the filing of the Original OS. This was in respect of the division and distribution of items (furniture and fittings) in the inventory list in relation to the said properties; iv. The inventory list was resolved pursuant to the said Consent Order, which was only finalised on 23.01.2025, i.e the date of the Consent Order; v. When the inventory list was finalised and annexed to the Consent Order, the release of the stakeholder's sum of RM2,575,000.00 held by the Plaintiff was allegedly delayed; vi. Hence, the Plaintiff is claiming for late delivery penalty from the Defendant at the rate of 12% per annum, from the date of 20.03.2024, which the Plaintiff alleges to be the date of a particular letter of clarification in relation to the inventory issued to the Defendant's solicitors, until the date of the said Consent Order of 23.01.2025. vii. The Plaintiff contends that it would have to pay KPDM if it does not claim the alleged late payment penalty from the Defendant. (However, as at the date of filing of the Originating Summons and throughout this proceeding, there is no claim by KPDM.) The Defendant's Case

It is the Defendant's main submission that all contentious matters in relation to the said sale and purchase agreement had been resolved amicably based on the terms and conditions as contained in the said Consent Order.

The defendant further submitted, inter alia, that the Plaintiff ought not be allowed to re-litigate matters in relation thereto.

In any event, the Plaintiff started this action merely based on a speculation and is not supported by any term within the said sale and purchase agreement.

Finally, the Defendant submitted that the Plaintiff is not a party to the said sale and purchase agreement and has no locus to make a claim for anything pursuant to the same. The Analysis of Cause Papers and Issues Issue No.1: Whether the Plaintiff has the necessary locus standi to commence this action?

The Plaintiff is a firm of solicitors, acting on behalf of KPDM, the vendor in the property transaction. The prayers allegedly are reliefs claimed on behalf of KPDM, against the Defendant as the purchasers.

The Plaintiff is NOT the contracting party in this case. Clearly, if there was any claim under the property transaction, the cause of action lies with KPDM.

In Annamalai A/L Subramaniam v Muthusamy & Tan (sued as a firm) [2000] 7 MLJ 541, Jeffrey Tan J (as he then was) when faced with similar circumstances in respect of which party can place reliance on an agreement, held at page 545: - It should be said, at the onset, that the question is not whether the agreement had or had not been terminated. The sole question for determination is whether the defendant may successfully resist the plaintiff's claim for the title (Samat Din & Partners (disaman sebagai sebuah firma) lwn Bank Pembangunan (M) Bhd [1997] 3 MLJ 542). In that connection, the mandate to the defendant is infinitely relevant. Anyway, it was not for the defendant, a non-contracting party, to say that the agreement had not been terminated. Also, it was most improper of the defendant, who were solicitors for both vendor and purchasers and so should remain neutral, to take the side of one against the other. Indeed, it was totally wrong of the defendant to take up the cudgel for the purchasers who themselves had not challenged the termination of the agreement, or for the sub-purchasers who themselves had not contracted with the plaintiff, against the plaintiff.

In Samat Din & Partners v Bank Pembangunan (M) Bhd [1997] 3 MLJ 542, the Court of Appeal even went to the extent of holding that it is axiomatic and no citation of authorities is required for the proposition that a solicitor acting as a stakeholder has no claim whatsoever to the subject matter of the stake holding.

It is this Court's considered view that on this issue alone, which is answered in the negative, the action must fail. The Plaintiff has no business making this claim at all, purportedly for and on behalf of KPDM. Issue No.2 : Whether the subject matter of this action, having been decided in the Original OS, is res judicata?

The Consent Order is plain and unambiguous. KPDM and the Defendant had disputes, the matter was litigated. Thereafter, the parties agreed to resolve their disputes by entering into a consent order to finally resolve all matters in relation to the inventory list.

For all intents and purposes, the ultimate effect of the said Consent Order in its plain language meant that the parties had resolved all disputes in relation thereto and the parties had no further claims against each other.

The Consent Order, inter alia, provided that, apart from resolving the issues between the parties, a further definitive order that prescribed: - "Dengan penandatangani (sic) Surat Perjanjian Bersama untuk Senarai Inventori tersebut,Perjanjian Jual Beli bertarikh 19.08.2022 akan dianggap telah disempurnakan dan pihak-pihak tiada ada sebarang tuntutan antara satu dengan yang lain.." (emphasis added)

The said "Senarai Inventori" was executed by both parties and was annexed to the said Consent Order. In my mind, this occasion had the effect of resolving the disputes between KPDM and the Defendant.

Further, the phrase "..pihak-pihak tiada ada sebarang tuntutan antara satu dengan yang lain.." in its plain language can only mean that there will be no further claims against each other, and that being the contracting parties of the contract, i.e. KPDM and the Defendant.

In Perspective Management Services Sdn Bhd v Seganom Sdn Bhd [2004] 4 CLJ 466, at page 487, in respect of a consent order, the Court of Appeal held: - "...we are of the view that since the consent order was a compromise, those claims and relief in the first suit not stated in that order, are deemed to have been abandoned. If any issue or claim or relief was reserved to be litigated later, it must be clearly shown in the order such as the parties be given liberty to do so. We could not find any reservation or liberty in respect of those claims against the appellant being given in that consent order. For that reason, we are of the view that res judicata and estoppel applies to the present suit..."

In Mayban Allied Bhd v. Kenneth Godfrey Gomoz & Anor [2010] 9 CLJ 702, the Court of Appeal in precise and simple terms described a consent order: - "...[23] It is trite that a consent order could give rise to a plea of res judicata. There are a number of authorities on this point. Among them are: Palmer & Anor v. Durnford Ford (a firm) & Anor [1992] 2 All ER 122; Cohen v. Fonesco [1926] 1 KB 119, Re South American & Mexican Co. ex p. Bank of England[1895] 1 Ch 37; and Malaysian National Insurance Sdn. Bhd. v. Lim Tiok [1997] 2 CLJ 351. [24] The consent order in the present case is founded on a contract or agreement between the parties based on both parties' willingness to submit to the discontinuance of the 1st suit on certain terms. Once the appellant and the respondents took the matter beyond contract and recorded a consent order then they must accept all the implications of a court judgment or order. In this sense the court now cannot vary the terms of the order.

Hence, issue No.2 is answered in the positive. Res judicata applies in this case. Issue No.3 : Whether this action is an abuse of process?

Having answered the earlier issues in favour of the Defendant, this Court can only come to the conclusion that the Plaintiff's action herein constitutes an abuse of process.

The glaring and obvious reasons are: - i. The Plaintiff was not a contracting party. They were merely solicitors acting on behalf of KPDM. They had no right instituting this action. They were merely stakeholders of the sum of RM2,575,000.00 which they are legally compelled to release to the client KPDM upon the conclusion of the transaction with the Defendant. a. If KPDM wanted to claim for any alleged penalty for delay or any other matter in relation thereto against the Defendant, over and above the terms of the Consent Order, it was for them to commence the action, not the Plaintiff. ii. In any event, the Consent Order was clear and unambiguous. The matter had been resolved and the inventory list had been executed. Conclusion

Based on the circumstances of the case, the cause papers and the submissions of the respective parties, the Originating Summons in Enclosure 1 is dismissed with costs of RM10,000 subject to allocatur. Dated 30th June 2026 MALACCA For the Plaintiff : Thulasi a/p Ramadass M/s Thulasi Ramadass For the Defendant: Aiden Chan Yee Yuan Mohammad Faiz bin Abu Hanifah M/s W K Chan & Co.