A consent judgment is a contract binding only on the parties thereto and cannot bind a third party who enters a transaction based on a clear land register without actual or constructive notice of such judgment.

JUDGMENT

Choong Yeow Choy J:

Introduction

[1] This action concerns a residential development undertaken on a parcel of vacant agricultural land in Seberang Perai Utara, Pulau Pinang, and raises fundamental questions as to whether a licensed developer, who acted in reliance on the land register and the representations of the registered proprietor, may later be drawn into a dispute arising from a private consent judgment to which it was never a party and of which it had no notice.

[2] At all material times prior to July 2023, the land register reflected the First Defendant as the registered proprietor of the said Land, free from encumbrances or caveats in favour of the Plaintiffs. Acting on that footing, the Second Defendant entered into a joint venture with the First Defendant and proceeded to incur costs and make payments towards development. It was only years later that the Plaintiffs sought to assert claims founded on a Consent Judgment entered into between themselves and the First Defendant in earlier proceedings.

The Essential Issues

[3] Amongst the issues to be tried, as couched and agreed by the parties, are:

First, whether the Consent Judgment under Civil Suit No: 21NCVC-13-04/2015 dated 18 February 2016 is still valid and binding upon the Plaintiffs and the First Defendant;

Second, whether the First Defendant is required to pay the Plaintiffs 50% of the proceeds from the sale of the land pursuant to the terms of the Consent Judgment under Civil Suit No: 21NCVC-13-04/2015 dated 18 February 2016;

Third, whether the First Defendant is obliged to pay 50% of the proceeds from the sale of the land based on the current market value pursuant to the joint venture agreement dated 27 October 2018 and the Supplemental Agreement dated 10 April 2023;

Fourth, whether the Plaintiffs are the beneficial owners of the said Property;

Fifth, whether the Second Defendant is required to transfer to the Plaintiffs 50% of five (5) semi-detached housing units upon completion of the housing development project.

Sixth, whether the Second Defendant was privy to the Consent Judgment at or before the signing of the joint venture agreement dated 27 October 2018;

Seventh, whether the First and Second Defendants conspired and committed fraud in entering into the Supplemental Agreement dated 10 April 2023; and

Eighth, whether the offer for settlement made by the First Defendant through Messrs Effendi & Co to the Plaintiffs was made without prejudice.

[4] This Court is therefore called upon to determine whether, in the circumstances of this case, liability may properly be visited upon a developer who acted in reliance on the land register and the representations of the registered proprietor, or whether the Plaintiffs' claims are undermined by delay, the absence of notice, and the limits of the Consent Judgment upon which they rely.

The Parties And Background Facts

[5] At all material times, the First Defendant was reflected in the land register as the registered proprietor of Geran Mukim 3564, Lot 10239, Mukim 02, Daerah Seberang Perai Utara, Pulau Pinan