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2023 MarsdenLR 1662
COURT OF APPEAL PUTRAJAYA
STONE MASTER CORPORATION BERHAD – Appellant
Versus
DATO KOH MUI TEE & ORS – Respondent
[Civil Appeal No: W-02(NCC)(W)-1802-10-2019]
A consent judgment is considered a contract and can only be set aside on grounds applicable to contracts, such as fraud or new evidence, which must be clearly demonstrated.
Headnote:(A) Evidence Act 1950 - Sections 40 to 43 - Consent Judgment - Appellant's appeal against the dismissal of the application to set aside a consent judgment of RM18 million - The court affirmed that a consent judgment is akin to a contract and can only be set aside on grounds applicable to contracts - The Appellant alleged fraud in obtaining the consent judgment but failed to provide sufficient evidence to substantiate this claim. (Paras 36-88)
(B) Consent Judgment - Legal principles - A consent judgment is a contract that carries the court's command, and cannot be varied or set aside except under specific circumstances, such as fraud or new evidence. (Paras 36-40)
(C) Appellate Intervention - An appellate court will not intervene unless the trial court's decision is plainly wrong. (Paras 87)
Facts of the case:
The Appellant entered a consent judgment with the 4th Respondent for RM18 million, which the Appellant later sought to set aside, alleging fraud and irregularities in the process leading to the judgment. (Paras 1-35)
Findings of Court:
The appeal was dismissed, and the High Court's decision was affirmed, with costs awarded to the Respondents. (Paras 88)
Issues: Whether the consent judgment should be set aside due to alleged fraud and irregularities; whether findings from a separate case could be used as evidence in this case. (Paras 36-70)
Ratio Decidendi: The court ruled that the consent judgment was valid and could not be set aside without clear evidence of fraud or illegality, which was not demonstrated by the Appellant. (Paras 36-82)
Result: Appeal dismissed with costs.
| Table of Content |
|---|
| 1. appellant's appeal against consent judgment. (Para 1 , 2 , 4 , 5 , 6) |
| 2. details of loan agreements and corporate actions. (Para 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17) |
| 3. legal issues surrounding corporate actions. (Para 19 , 20 , 21 , 22 , 23) |
| 4. consent judgment recorded and implications. (Para 25 , 26 , 27 , 28 , 29 , 30) |
| 5. arguments regarding fraud and illegality. (Para 35 , 46 , 48 , 49) |
| 6. law on setting aside consent judgments. (Para 36 , 37 , 38 , 39 , 40) |
| 7. admissibility of previous judgments as evidence. (Para 47 , 51 , 52 , 56 , 60) |
| 8. court's findings on the validity of consent judgment. (Para 73 , 76 , 78 , 80) |
| 9. conclusion on the appeal's merit. (Para 87) |
Introduction
[1] This is the Appellant's appeal against the decision of the learned High Court Judge ("HCJ") who had dismissed the Appellant's application to set aside a consent judgment dated 30 May 2017 ("the Consent Judgment") between the 4th Respondent as the plaintiff and the Appellant as the defendant in Kuala Lumpur High Court Civil Suit No: WA-22(NCC)-195-05-2017 ("Suit 195").
[2] In Suit 195, the 4th Respondent claimed a total sum of RM18 million due and owing by the Appellant under two separate loan agreements, dated 14 January 2016 and 19 January 2016, respectively, the details of which shall be discussed later in this judgment.
[3] On 29 May 2017, the 4th Respondent filed a notice of application, praying for several orders including restraining the Appellant from removing, dealing, or disposing of its assets up to RM18 million.
[4] On 30 May 2017, the Appellant and the 4th Respondent recorded the Consent Judgment before the High Court through their respective solicitors. It was agreed and recorded between the parties in the Consent Judgment, among others, that the Appellant was to pay RM18 million to the 4th Respondent.
[5] On 19 June 2017, the Appellant filed a fresh suit to set aside the Consent Judgment through Kuala Lumpur High Court Civil Suit No: WA-22(NCC)-232-06-2017 ("Suit 232"). Suit 232 was heard before the learned HCJ below.
[6] On 22 August 2017, an order was obtained to stay the execution of the Consent Judgment pending the disposal of this action.
[7] On 18 September 2019, after a full trial, the learned HCJ dismissed the Appellant's claim with costs. Dissatisfied, the Appellant filed this appeal against the decision of the learned HCJ.
Factual Background
[8] The Appellant was a public company listed in Bursa Malaysia at the material time. The 1st Respondent was appointed as the Appellant's Executive Director on 8 December 2014 and subsequently became the Appellant's Managing Director on 14 July 2015. The 2nd Respondent was appointed as the Appellant's Executive Director on 15 December 2014. The 3rd Respondent was one of the Appellant's Directors up until 30 March 2017. The 3rd Respondent was also the Director and shareholder of the 4th Respondent. The 4th Respondent was the Appellant's creditor, the plaintiff in Suit 195, and the beneficiary of the Consent Judgment. The 3rd Party was the Appellant's Executive Director from 1 August 2014 until 29 March 2019.
[9] On 8 January 2016, through a circular resolution, the Appellant's Board of Directors resolved that its Directors be authorised to source for and procure loans to the extent of RM2.5 million since the Appellant needed substantial funds to carry out certain proposed corporate exercises. The Appellant's financial obligation then included disbursements, professional consultation fees, and follow-up works concerning the carrying out of due diligence concerning 23 vendors from the People's Republic of China ("PRC"). The Appellant's Directors signed this resolution, including Dato' Eii Ching Siew @ Yii Ching Siew ("Dato' Eii") and the 3rd Party. The 3rd Respondent did not sign this resolution.
[10] On 14 January 2016, the Appellant signed a loan agreement with the 4th Respondent ("1st Loan Agreement"). Through this agreement, the 4th Respondent agreed to is
