A consent judgment is binding unless vitiated by grounds affecting free consent; the doctrine of frustration does not apply where no unforeseen circumstances are recognized in the agreement.

JUDGMENT

Ahmad Murad Abdul Aziz JC:

The Plaintiff filed an originating summons to vary the terms of a consent judgment dated 4 December 2019 ("the consent judgment") in suit no. JA-22NCVC-168-10/2019.

Background Facts

[1] The Defendant filed proceedings against the Plaintiff in suit no. JA-22NCVC-168-10/2019 for the recovery of RM2,531,550.00 in unpaid invoices for the sale and delivery of goods to the Plaintiff.

[2] On 4 December 2019, the parties agreed to record consent judgment before the learned Judicial Commissioner. The terms of the consent judgment are as follows:-

i. Defendan bersetuju untuk membayar kepada Plaintif wang berjumlah RM2,531,550.00 sebagai penyelesaian penuh dan muktamad berhubung dengan tindakan ini, yang mana jumlah tersebut akan dibayar seperti jadual berikut:-

ii. Sekiranya Defendan gagal dan/atau mungkir untuk membuat mana-mana pembayaran kepada Plaintif menurut jadual pembayaran seperti yang telah dinyatakan di atas, maka keseluruhan jumlah RM2,531,550.00 (tolak apa-apa pembayaran yang telah dibuat oleh Defendan) akan menjadi terhutang dan kena dibayar dengan serta-merta oleh Defendan kepada Plaintif dengan faedah di atas jumlah yang tertunggak tersebut pada kadar 1.5% sebulan dari tarikh kemungkiran sehingga penyelesaian penuh; dan

iii. tiada perintah terhadap kos.

[3] The Plaintiff made three (3) payments to the Defendant being the instalments for December 2019, January 2020 and February 2020, amounting to RM1,312,620.00. However, the Plaintiff then defaulted in its payments for the subsequent three (3) instalments for the months of March, April and May 2020.

[4] From 18 March 2020 until May 2020, the Government of Malaysia declared a Movement Control Order ("MCO") and Conditional Movement Control Order ("CMCO") as precautionary measures to prevent the spread of the COVID-19 disease in Malaysia.

[5] On 17 March 2020 and 21 May 2020, respectively, the Plaintiff, through its solicitors, wrote to the Defendant's solicitors requesting for an extension of time to settle the balance three (3) outstanding instalments. These requests were rejected by the Defendant vide its solicitors on 28 March 2020 and 24 June 2020 respectively.

[6] The Plaintiff subsequently filed this action to vary and/or amend the consent judgment as follows:-

a) instead of making full settlement towards the consent judgment by 15 May 2020, to extend the period of payment for a further nine (9) months; and

b) instead of paying a monthly instalment of RM406,310.00 until 15 May 2020, to vary and/or amend each monthly instalment amount to a lesser sum of RM101,577.50 for such extended period.

[7] In essence, the Plaintiff's grounds to vary the consent judgment are that due to the effects of the MCO and CMCO, the Plaintiff's business suffered financially and in order for the Plaintiff to sustain its business, an extension of time with regard to the instalment payments is required. Hence, variation of the terms of the consent judgment are crucial and necessary.

[8] The Plaintiff also contends that the sudden slowdown of its business has affected its ability to pay the Defendant in accordance with the terms of the consent judgment since the Plaintiff has to cover other liabilities as well.

Consent Judgments - The Law

[9] The law on the effect of a consent judgment/order is well settled.

Raja Azlan Shah, CJ (as he then was) in the case of Ganapathy Chettiar v. Lum Kum Chum & Ors And Another Appeal, 1981 MarsdenLR 290 held as follows:

"(1) an order by consent is evidence of a contract between the parties and is binding on all parties to the order all the more so, where there is not the slightest question of any mistake as to facts or law;

(2) since there had been no mistake on the part of anyone when the consent order for the sale by public auction was made, the only possible way in which this could be altered would be by the consent of all the parties;"

[10] The grounds on which a consent order can be set aside was laid down in the Federal Court case of Badiad