The court ruled that repayment obligations in a consent judgment are independent of the fulfillment of a joint venture agreement.

Introduction

[1] The appeal before us emanates from two appeals before the Court of Appeal involving three suits filed at the High Court. The first was Suit No: 22NCC-375-2009 (Suit 375) between the plaintiffs (Abdul Razak Sheikh Mahmood, Kamil Azman Abd Razak, Kalsombi VK Majid and Excel Beat Sdn Bhd) and the defendants (Amanah Raya Berhad, Amanah Raya Capital Sdn Bhd and Amanah Raya Investment Management Sdn Bhd). Parties had agreed to settle their disputes in Suit 375 which culminated in a Consent Judgment recorded on 28 July 2010.

[2] The same plaintiffs then filed Suit No: 22NCC-650-04-2012 (Suit 650) against the same defendants for alleged breaches of the Consent Judgment. The defendants counterclaimed for a declaration to be released from any obligation to enter into a joint venture agreement (JV Agreement) pursuant to the Consent Judgment, and for the refund of purchase consideration made to the plaintiffs for two pieces of land. The claim of the plaintiffs was dismissed and the counterclaim was allowed by the High Court. The plaintiffs lodged an appeal in Appeal No: W-02(NCC)(W)-547-04-2015 (Appeal 547) against the decision in Suit 650, at the Court of Appeal.

[3] Amanah Raya Capital Sdn Bhd (ARC) had also filed Suit No: 22NCC-1471-10-2012 (Suit 1471) against Abdul Razak Sheikh Mahmood (Abdul Razak) and Kamil Azman Abdul Razak (Kamil Azman) for payment of the loan facilities granted to them. Suit 1471 and Suit 650 were heard together. The High Court had allowed the claim of ARC in Suit 1471 against Abdul Razak and Kamil Azman for the repayment of the loans. Abdul Razak and Kamil Azman had lodged an appeal at the Court of Appeal in Appeal No: W-02(NCC)(W)-541-04-2015 (Appeal 541).

[4] Both appeals 547 and 541 were heard together before the Court of Appeal. In both appeals, the decisions of the High Court in Suit 650 and Suit 1471 were affirmed by the Court of Appeal. Before us, the appeal was lodged by the plaintiffs as the appellants who had obtained leave on three questions of law.

The Background Facts

[5] By way of background, pursuant to a trust deed dated 13 October 2006, Abdul Razak (now deceased) created the ARSM Trust and appointed Amanah Raya Berhad (ARB) as its Trustee.

[6] About one year later on 19 October 2007 and 17 September 2007 respectively, Amanah Raya Capital Sdn Bhd (ARC) granted a loan of RM5,000,000.00 each, individually to Abdul Razak and Kamil Azman pursuant to two sets of agreement known as Moneylending Agreement (Secured Loan). Amongst the securities provi'ded for the loan was the Guarantee Agreement executed by Kamil Azman, to personally guarantee on demand against all sums of money owed by Abdul Razak to ARC.

[7] It was later agreed between Abdul Razak, Kamil Azman and ARB in the year 2008 that greater profits would be obtained by way of development of one of the trust properties held under H.S. (D) 406, PT No. 287B, Section 41 Bandar Kuala Lumpur (PT 287B). For that purpose, an adjoining land held under H.S. (D) 95437, Lot No.1396A (Lot 1396A) was acquired by the plaintiffs through Excel Beat Sdn Bhd (Excel Beat) with a view of undertaking a joint venture development. Both PT 287B and Lot No 1396A were then sold to Amanah Raya Development Sdn Bhd (ARD) at a price consideration of RM2,895,000.00 and RM2,905,000.00 respectively.

[8] In October 2009, Abdul Razak, Kamil Azman, Kalsombi, and Excel Beat, sued ARB, ARC, Amanah Raya Investment Management Sdn Bhd (ARIM), and ARD in Suit 375, for breach of trust and or fiduciary duties on their part including various breaches of duties by ARB as trustee. Pursuant to Suit 375, the plaintiffs were seeking for a declaratio