A judgment can be superseded by subsequent settlement agreements, affecting the enforceability and limitation period for execution.

JUDGMENT

Ong Chee Kwan J:

[1] Can a plaintiff who has entered into a settlement agreement with a defendant in full and final settlement of a judgment obtained against the defendant apply for leave to execute the judgment upon the defendant's default of the settlement agreement? Is the judgment superseded by the settlement agreement? In an application under O 46 r 2(1)(a) of the Rules of 2012 for leave to enforce a judgment after more than 6 years have elapsed since the dateof the judgment, is s 6(3) of the Limitation Act 1953 ("the 1953 Act") relevant and does it constitute an absolute bar after the expiry of 12 years from the date of the judgment? These are the issues dealt with in this judgment.

Background Facts

[2] Enclosure 16 is the Plaintiff's Application filed on 15 March 2024 to obtain leave to execute a summary judgment dated 18 May 2010 made against, inter alia, the 2nd Defendant for various sums in respect of banking facilities granted by the Plaintiff to the 1st Defendant ("the Judgment").

[3] The 1st Defendant had been wound up on 9 July 2019. The 2nd and 3rd Defendants were guarantors for the banking facilities extended by the Plaintiff to the 1st Defendant.

[4] Enclosure 16 is filed pursuant to O 46 rr 2 and 3 of Rules of 2012 ("ROC 2012").

[5] After the Judgment was obtained on 18 May 2010, the Plaintiff commenced a petition to wind up the 1st Defendant on 8 August 2012 and also issued notice of bankruptcy against the 2nd Defendant simultaneously.

[6] The aforesaid actions resulted in a compromise agreement in late 2012 ("2012 Compromise Agreement") where time was given to the 2nd Defendant to settle the judgment sum. Following the 2012 Compromise Agreement, the Plaintiff with drew its winding up petition and the notice of bankruptcy against the 1st Defendant and the 2nd Defendant respectively in 2013.

[7] However, notwithstanding the 2012 Compromise Agreement, the judgment sum was not fully settled as the 2nd Defendant had defaulted in making the payments as promised. This led to the Plaintiff commencing a fresh notice of bankruptcy against the 2nd Defendant and the 3rd Defendant on 25 March 2015 and a fresh winding up petition against the 1st Defendant on 29 July 2015.

[8] The aforesaid led to the parties reaching another compromise agreement sometime on 15 February 2016 ("the 2016 Compromise Agreement") where further indulgence was given by the Plaintiff for the Defendants to settle the outstanding judgment sum. The winding up petition against the 1st Defendant filed on 29 July 2015 was withdrawn.

[9] Unfortunately, the 2016 Compromise Agreement also did not lead to a full settlement of the Judgment.

[10] On 7 November 2016, after more than 6 years had elapsed from the Judgment, the Plaintiff issued a letter to the 2nd Defendant agreeing to accept a sum of RM500,000.00 as settlement of his liability as guarantor and set out a schedule of payment for the RM500,000.00 ("the 2016 Settlement Agreement"). The Plaintiff also proceeded to withdraw its notice of bankruptcy against the 2nd Defendant on 29 December 2016 after the 2nd Defendant had made the first payment under the 2016 Settlement Agreement.

[11] However, the 2nd Defendant failed again to make further payments as agreed under the 2016 Settlement Agreement.

[12] By reason of the aforesaid, on 20 September 2018, the Plaintiff filed a notice of application under O 46 r 2 of the ROC 2012 for leave to execute the judgment since as alluded to above, more than 6 years had elapsed from the Judgment on 18 May 2010 ("the 1st Leave Application").

[13] On 9 October 2018, the Court granted an order in terms of the 1st Leave Application ("the 1st Leave Order").

[14] The Plaintiff filed a winding up petition against the 1st Defendant after obtaining the 1st Leave Order and on 9 July 2019, the Plaintiff obtained an order for the 1st Defendant to be wound up.

[15] The Plaintiff however did not proceed with any execution against the 2nd Defendant. Instead, the Plaintiff was contended