Consent judgments are binding and enforceable, preventing re-litigation of settled issues while requiring compliance with procedural rules for appeal.

Evrol Mariette Peters JC:

Introduction

[1] This is an appeal ("this Appeal") by the Judgment Debtor ("JD") against the decision of the Senior Assistant Registrar ("SAR") on 27 April 2021 dismissing the JD's application to set aside the Creditor's Petition.

The Factual Background

[2] Cosmic Master Development Sdn Bhd ("Cosmic") owed a sum of money in the amount of RM779,797 to the Judgment Creditor ("the JC") for goods sold and delivered for a construction project ("the Project"). The JD was a director and shareholder in Cosmic.

[3]In lieu of such sum owed, four apartments in the Project were offered to the JC vide four sale and purchase agreements ("SPAs"), wherein the JC signed as the purchaser, one Syarikat Perumahan Negara Berhad ("SPNB") signed as Vendor/Developer, and Haluan Menang Sdn Bhd ("Haluan Menang") signed as the Land Proprietor for the Project. Cosmic acted for SPNB and Haluan Menang vide a power of attorney, and the JD had signed on behalf of Cosmic.

[4] However, there was a failure to deliver vacant possession of the four apartments within 36 months as stipulated in the SPAs.

[5] The JC then brought an action in Court against SPNB, Haluan Menang and Cosmic in Civil Suit No: JA-22NCVC-194-09-2017 ("the First Suit"). After mediation sessions, a consent judgment ("the Consent Judgment") was reached wherein Cosmic was to pay RM1 million ("the Judgment Sum") to the JC within six months from the date of the Consent Judgment, with a payment guarantee of such sum by the JD, vide a letter of guarantee dated 6 June 2018 ("Letter of Guarantee"). It was agreed that the JC would transfer to Cosmic the rights and obligations in the four apartments only after the Judgment Sum had been paid.

[6] Both Cosmic and the JD failed to pay the Judgment Sum, and as a result thereof, the JC instituted Civil Suit No: JA-22NCVC-7-01-2019 ("the Second Suit'") against the JD. On 29 May 2019, the JC obtained summary judgment ("Summary Judgment") against the JD. Since the JD had failed to comply with the Order granting Summary Judgment, the JC proceeded to file bankruptcy proceedings against the JD.

[7] The JD filed an application to set aside the Bankruptcy Notice, which was dismissed by the Senior Assistant Registrar ("SAR") in February 2020. In September 2020, the JD's appeal to the High Court against such decision was also dismissed. The JD had also filed an application to stay the bankruptcy proceedings which was dismissed by the Court on 29 June 2020.

[8] In July 2020, the JC filed a creditor's petition ("Creditor's Petition") against the JD. In response, the JD filed an application to set aside the Creditor's Petition, which was dismissed by the SAR. As a result thereof, the JD appealed to this Court. This appeal was dismissed for the following reasons.

[9] For ease of reference Diagram A below is produced for a macroscopic view of the intertwining applications and appeals filed by the JD.

Contentions, Evaluation, And Findings

Whether The Consent Judgment Was Being Re-Litigated?

[10] The JD contended that the Creditor's Petition should have been struck out since he had, in July 2020, applied to set aside the Consent Judgment in the First Suit, as alluded to in Diagram A.

[11] It must be noted however, that the JD's application to set aside the Consent Judgment had been already struck out in February 2021 by the High Court pursuant to the JC's application. At this juncture, it is important to bear in mind the legal implications of a consent judgment.