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2024 MarsdenLR 2937
HIGH COURT MALAYA KUALA LUMPUR
YUSRIN FAIDZ YUSOFF, JC
SMALL MEDIUM ENTERPRISE DEVELOPMENT BANK MALAYSIA BERHAD – Appellant
Versus
ASCENDSYS SDN BHD & ORS – Respondent
[Suit No: WA-22M-156-09/2016]
The court affirmed that a plaintiff's reasonable delay in executing a judgment due to negotiations with the defendant does not negate the right to seek execution beyond the statutory limitation period.
Headnote:(A) Rules of Court 2012 - Order 46, Rule 2(1)(a) - Limitation Act 1953 - Execution of Consent Judgment - Plaintiff sought leave to execute a Consent Judgment dated 16 March 2017 after the 6-year limitation period had lapsed, citing negotiations and circumstances as reasons for delay. (Paras 1, 4, 12, 28, 39)
(B) The court held that the Plaintiff had taken active steps to recover the judgment sum and should not be penalized for granting the Defendants leeway in repayments. (Paras 29, 31, 39)
Facts of the case:
The Plaintiff recorded a Consent Judgment against the Defendants for RM5,490,109.87, which included terms for repayment. The Defendants defaulted, leading to a winding-up petition. The Plaintiff applied for leave to execute the judgment after the 6-year period expired. (Paras 4, 5, 8, 9)
Findings of Court:
The court found that the Plaintiff had provided reasonable explanations for the delay and had not relinquished their right to execute the judgment. (Paras 39, 40)
Issues: Whether the Plaintiff satisfied the conditions for leave to execute the judgment beyond the 6-year period. (Paras 20, 21)
Ratio Decidendi: The court emphasized that negotiations and leniency shown by the Plaintiff towards the Defendants should not preclude execution of the judgment, aligning with the principles established in previous cases. (Paras 31, 32)
Result: Application allowed with no order as to costs. (Para 41)
Introduction
[1] This decision arises from the Plaintiffs application for leave to execute a consent judgment dated 16 March 2017 ("the said Consent Judgment") eventhough 6 years or more has lapsed since the date of the judgment. The Plaintiffs notice of application in end 24 is supported by an affidavit in end 25.
[2] The Senior Assistant Registrar had previously allowed end 24 on 10 May 2023 ("the Initial Extension Order"). However, following an appeal by the Second, Third, Fourth, and Fifth Defendants (D2, D3, D4 & D5), the Order dated 10 May 2023 was set aside by me on 21 August 2023. In my ruling, I mandated arehearing of the application. This is so as I found that although the Plaintiffintended end 24 to be an inter-parte application, they had failed to serve it on the Defendants' solicitors. Consequently, I directed that end 24 be served onto the current solicitors of the Defendants and that the Defendants be granted the opportunity to submit the necessary affidavit in opposition (duly filed in end 69). Similarly, the Plaintiff was granted the liberty to file their affidavit in reply (duly filed in end 70). On 24 July 2023 I additionally allowed an ad interim stay of the extension order of thesaid Consent Judgment pending the disposal of end 24.
[3] During the rehearing of end 24, the issues for determination were with regards to the power of this Court to allow for such leave made pursuant to O 46 r 2(1)(a) of the Rules of 2012 ("the Rules").
Background
[4] On 16 March 2017, the Plaintiff recorded a Consent Judgment against the Defendants wherein the Defendants had jointly and severally agreed to pay the sum of RM5,490,109.87 as at 31 July 2016 with 1% ta'widh (compensation) per annum with effect from 1 August 2016, together with costs of RM9,000.00. The said sum which is based on Islamic banking facilities granted to D1 is to be paid by wayof the monthly instalments of RM300,000.00 commencing January 2017 till realization. It is agreed that in the event that the Defendants default in the said installments, the Plaintiff would be at liberty to demand immediate payment of the outstanding sum. (exh SME-1 of end 25)
[5] As the Defendants defaulted in their installments, the Plaintiff filed a winding up petition against D1 at the Shah Alam High Court (Petition No BA-28NCC-186-04/2021 (exh SME-3 of end 25)). Based on the statutory notice dated 25.06.2020 issued pursuant to s 465(1)(e) & s 466(1) of the Companies Act 2016,the outstanding sum stood at RM2,658.858.69 as at 31 May 2019. The winding-up Petition was postponed as further negotiations towards settlement and partial payments were issued up till 11 November 2021.
[6] However, on 28 February 2022, D1 was wound up by another creditor, V Network System Sdn Bhd, which prevailed in their winding-up petition via Shah Alam Companies Winding Up Petition No BA-28NCC-521-11/2021 (exh SME-3 of end 25).
[7] On 22 December 2022, the Plaintiff successfully obtained order absolute in a garnishee proceeding against the bank accounts of D2, D3 & D4 via a Writ of Execution No: WA-37G-164-08/2022. Nevertheless, only the aggregate sum of RM32,186.19 was able to be recovered from this execution process, (exh SME-5 ofend 25). The said sum was received by the Plaintiff on 15 March 2023.
[8] The Plaintiff intended to file bankruptcy proceedings against D2, D3, D4 & D5. Nevertheless, whilst preparing the cause papers they realized that the 6-year period for them to do so have expired on 15 March 2023. (Paragraph 11 of Enc 25).
[9] On 12 April 2023, the Plaintiff applied for leave to execute the said Consent Judgment via end 24. At the time of filing end 24, the Defendants still owed the Plaintiff RM2,659,652.33. According to the Plaintiffs certificate of indebtedness, the Defendants had made payments totaling RM1,702,105.66 to the Plaintiff (exh SME-2 of end 25). This amount equates to the completion of 6 outof the 19 agreed-upon installments.
Counsels' Contentions
[10]
