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2021 MarsdenLR 3862
HIGH COURT MALAYA KUALA LUMPUR
OME RESOURCES SDN BHD – Appellant
Versus
BONANZA AYCEL MINING SDN BHD (ENCL 44) – Respondent
[Civil Suit No: WA-22NCVC-320-06/2018]
A Consent Judgment must be enforced strictly as written, without extending obligations to non-parties, and no claims for payment outside the agreement's terms are sustainable.
Headnote:(A) Rules of Court 2012 – Order 45 – Consent Judgment – Compliance – Plaintiff sought enforcement of a Consent Judgment regarding share transfer against defendant, with claims for payment of USD2.5 million for delayed transfer – Court found no provisions for monetary payment or actions against non-parties – Cited principles of separate legal personality and specific contract terms throughout judgment. (Paras 8, 31, 42, 46)
Facts of the case: Dispute arose over non-compliance with a Consent Judgment by the defendant regarding the transfer of 20% shares of a company, originally part of a Joint Venture Agreement with the plaintiff. (Para 6)
Findings of Court: The court dismissed most prayers of the plaintiff except for the transfer of shares, agreeing to facilitate it, as other claims were not supported by the Consent Judgment. (Para 61)
Issues: The primary issues included the interpretation of the Consent Judgment, the nature of share ownership and obligations of directors and shareholders. (Para 9)
Ratio Decidendi: The court emphasized that a party cannot benefit from its own failure to uphold the terms of a consent agreement and must adhere strictly to its terms as established in contract law. (Paras 26, 60)
Result: Application allowed in part; share transfer facilitated; most other claims dismissed with costs.
JUDGMENT
Introduction
[1] This is an application by the plaintiff under O 45 r 5(1) (a), (b), r 5(1) (B) and O 45 r 9 of the Rules of 2012 ("the RC 2012") for certain orders against the defendant to comply and give effect to a consent judgment entered into between the parties. At the conclusion of the hearing, which was conducted via the platform of zoom video technology, I dismissed most of the prayers and highlighted the primary grounds for the same. This judgment contains the full reasons for my decision.
Key Background Facts
[2] On 3 March 2010, Perbadanan Pembangunan Ladang Rakyat Negeri Kelantan entered into an Exploration and Mining Agreement with the defendant and granted the latter exclusive rights to undertake exploration activities on five pieces of land in Mukim of Lubok Bongor, District of Jeli.
[3] The defendant then entered into a Joint Venture Agreement dated 16 March 2012 ("the JVA") with the plaintiff for purposes of exploration, development and operation of mines to produce any types of minerals or ores within the identified exploration areas.
[4] Pursuant to the JVA, the defendant held 40% participating interest in the initial project share of the JVA, with the remaining 60% owned by the plaintiff. It was also further agreed that the joint venture capital would be utilised towards carrying out the mining exploration activities.
[5] The plaintiff also became the manager of the joint venture and had responsibility for the management, direction and control of the operations of the joint venture. In the course of its duties, the plaintiff also had to compile various information and reports as specified in the JVA.
[6] After several years, the parties got into a dispute on the further financing of the exploration activities. The defendant then terminated the JVA. This led the plaintiff to file an Originating Summons No: WA-24NCVC-1637-10/2016 at Kuala Lumpur High Court seeking certain declarations and orders. The High Court on 17 March 2017 ruled in favour of the defendant. However on appeal, the Court of Appeal remitted the matter to High Court and directed that the proceedings to be converted to a writ action. A writ action was filed as a result.
[7] However, on the day of the trial on 24 July 2019, the plaintiff and the defendant entered into a Consent Judgment, on the following terms:
(a) The defendant shall transfer 20% of its existing share, equivalent to 100,000 unit shares to the plaintiff or its nominee;
(b) The plaintiff or its nominee shall have at least one (1) board representative and/or in proportion to the defendant's shareholdings in the defendant company;
(c) The pending legal suit namely the writ action no: WA-22NCVC-74-08/2017 shall be withdrawn with no order as to cost and with no liberty to file afresh;
(d) The JVA is mutually terminated by this Consent Agreement and neither party shall have any claim against each other;
(e) The defendant shall have the first right of refusal to purchase the plaintiff's shares at the same terms and conditions as offered by the plaintiff to a third party;
(f) The disposal price of all of the plaintiff's shares shall remain at the value of USD2.5 million;
(g) The defendant will finance operational expenses up to RM500,000.00 where required. These advances will not be converted into equity and shall be repaid via income derived from the defendant's mining activities;
(h) The defendant is to transfer the shares free of encumbrances within fourteen (14) working days from the date of the extraction of the sealed Consent Judgment; and
(i) The plaintiff's shares shall not be diluted below 5% of the total shareholding of the defendant company.
Present Application
[8] That was the Consent Judgment. But adherence to its terms proved elusive. On 4 November 2020, the plaintiff filed a notice of application in encl 44 inter alia, for the following orders:
(i) An order that the defendant, the directors of the defendant and shareholders of the defendant jointly and/or
