Contempt proceedings require clear evidence of willful non-compliance with court orders, and a failure to comply with procedural safeguards can render applications fatally flawed.

Ong Chee Kwan JC:

Introduction

[1] This is the judgment of the court in respect of the applicant's application under O 52 r 4 of the Rules of 2012 ("the Rules") seeking an order that the respondents be committed for contempt of court for non-compliance of the consent order dated 25 October 2019 ("consent judgment"). The applicant had obtained leave from this court to proceed with the committal application pursuant to O 52 r 3 of the Rules on 3 December 2020.

[2] The non-compliance is in relation to the failure to make payment within the time stipulated by the consent judgment.

Background Facts

[3] By a share purchase agreement dated 17 May 2017 ("share purchase agreement"), the applicant agreed to purchase from the first respondent and the first respondent agreed to sell to the applicant 6,300,000 shares ("the sale shares") in one ARL Homecomm Sdn Bhd ("ARL Homecomm"), a private limited company incorporated under the laws of Malaysia.

[4] At all material times, the first respondent is the legal and beneficial owner of the sale shares and the second respondent, a solicitor from Tetuan Abu Talib Shahrom had represented the first respondent in the share purchase agreement as the vendor's solicitors. The applicant, in turn, was represented by its solicitors, Messrs TS Liew, Nurzila & Co ("Messrs TSLN & Co"). The second respondent is also a director of the first respondent.

[5] Pursuant to the share purchase agreement, the applicant had paid:

(i) a sum of RM2,000,000 upon the execution of the share purchase agreement under cl 2.2.1(a) therein to the first respondent on or around 15 May 2017 to 17 May 2018; and

(ii) a sum of RM3,000,000 as part payment of the purchase consideration under cl 2.2.1(b) of the share purchase agreement by way of instalments as was mutually agreed between the first respondent and the applicant.

[6] On 18 May 2018, the applicant via Messrs TSLN & Co issued a notice of termination ("the notice of termination") to the second respondent (as solicitors for the first respondent) stating, amongst others:

(i) the applicant was unable to proceed with the share purchase agreement and gave notice to the first respondent that the share purchase agreement was terminated forthwith; and

(b) in accordance with cl 8.3(a)(i) of the share purchase agreement, the applicant offered the first respondent the right to forfeit the sum of RM200,000 which was paid under cl 2.2.1(a) thereto as agreed liquidated damages.

[7] The parties thereafter entered into the consent judgment in Suit No WA-22NCC-378-08-2018 ("suit 378") as full and final settlement of all claims and/or action which arose from and/or concerning the action and/or the share sale agreement. It was an agreed term of the consent judgment that a sum of RM1,800,000 is to be paid by the first respondent to the applicant in one lump sum ("settlement sum") within a period of three months from the date of the consent judgment ("the settlement period"). In the event the first respondent fails to pay the settlement sum within the settlement period, a further extension of time of three months shall be granted to the first respondent ("the first extended settlement period").

[8] In accordance with the consent judgment, the applicant withdrew its action against the first respondent and second respondent in its entirety with no order as to costs and without liberty to file afresh. The first respondent and the second respondent also withdrew their respective counterclaims against the applicant in its entirety with no order as to costs and without liberty to file afresh.

[9] On 10 February 2020, the first respondent through its solicitors sent a letter to the applicant's solicitors invoking the relevant term of the consent judgment in respect of the first extended settlement period. According to the first respondent, they were taking all the necessary steps to pay the settlement sum to fulfil its obligation under the consent judgment and would do so within the first extended settlement p