- 被告与沙巴退休公务员协会（MAKSAK）签订了一项开发协议，以开发MAKSAK的土地。随后, 被告的股东发生了变化。
- 新股东接管后，他们发现原告曾针对被告提起了一项待决的诉讼。在该诉讼中，法院下令被告赔偿原告RM10, 301,791.40。 被告当时申请驳回有关判决，但未成功。
- 原告之后向被告提出清盘呈请。 被告别无选择，只能寻求协商的解决方式。 经过协商后，被告与原告于2012年5月28日签署了一份和解协议。 根据上述和解协议的条款，原告同意不执行之前判决中的任何和/或所有索偿要求，并撤回清算程序，以考虑到被告同意以现金和所建立的的不动产对价向原告支付RM11,627,834.76。
- 原告所依据的理由是，称被告违反了之前的和解协议，并且原告已于2018年1月10日终止了有关的和解协议。 被告并没有解释为什么要等6年以上才要求对方执行有关的庭令。
- 上诉法庭在判决中提到，由于原告无法解释为何延迟采取有关庭令， 仅凭此理由，法庭有足够的理由拒绝行使其酌处权。
- 法庭引用Turf Club Auto Emporium Pte Ltd and others v. Yeo Boong Hua and others  2 SLR 12的案例说明，上诉法院裁定，一项经过充分考量而订立的和解协议将取代原诉。
- 同时在Sambu (M) Sdn Bhd v. Stone World Sdn Bhd & Anor  2 CLJ 523的案例高等法院认为，如果当事人已经有了和解程序，此和解程序将终止诉讼程序。
- The Plaintiff filed an application under Order 46 rule 2 of the Rules of Court, 2012 (‘ROC 2012’) for leave to commence execution proceedings against the Defendant pursuant to a judgment of the High Court granted on 7.1.2011 and the order and judgment of the High Court granted on 28.9.2009 although six years had lapsed since the making of the judgment and order. The Deputy Registrar dismissed the application, but the High Court Judge allowed the application. Hence the Defendant filed this appeal in Court of Appeal.
- The Defendant entered into a development agreement with one, Majlis Kebajikan Dan Rekreasi Kakitangan Kerajaan (‘MAKSAK’), Negeri Sabah to develop MAKSAK’s land (‘the Project Land’).
- There was subsequently a change of shareholders in the Defendant.
- After new shareholders had taken over the full control and management of the Defendant, they discovered that there was a pending suit filed by the Plaintiff against the Defendant where a default judgment was entered on 28.9.2009 and the court assessed and ordered damages of RM10,301,791.40 on 7.1.2011 to be paid by the Defendant. The Defendant applied to set aside the default judgment and award of damages but were not successful.
- The Plaintiff then presented a Winding-Up Petition against the Defendant. The Defendant had no choice but to seek a compromised settlement. Following a series of discussions, the Defendant and the Plaintiff mutually entered into a Settlement Agreement dated 28.5.2012. Under the terms of the said Settlement Agreement, the Plaintiff agreed not to enforce any and/or all of its claims under the judgment and to withdraw the winding-up proceedings in consideration of the Defendant agreeing to pay the Plaintiff the sum of RM11,627,834.76 by way of cash payment and contra of properties which were being erected on the Project Land.
- Pursuant to the said Settlement Agreement, the Defendant made cash payment of RM5,000,000.00 plus accrued interest of RM244,494.89 to the Plaintiff. The Defendant had duly executed the relevant Sale and Purchase Agreements to convey the 10 units of the commercial lots in the Defendant’s development to the Plaintiff. The 10 units were under construction when the dispute arose. The Defendant alleged that they had fully carried out their part of the bargain under the Settlement Agreement.
- By Clause 10 of the Settlement Agreement, it is expressly provided that upon full settlement of the Settlement Sum there shall be no further and/or any claims against the Defendant under the Judgments dated 28.9.2009 and 7.1.2011 respectively.
- However, after a lapse of almost six years, the Defendant received a purported Notice of Termination dated 10.1.2018 in relation to the Settlement Agreement from the Plaintiff’s solicitors.
- The Plaintiff applied for leave under Order 46 rule 2 of the ROC 2012 to proceed with the execution of the judgments and order of the High Court dated 28.9.2009 and 7.1.2011.
- The sole ground relied on by the Plaintiff was that the Settlement Agreement dated 28.5.2012 was allegedly breached by the Defendant and that the Plaintiff had terminated the said Agreement on or about 10.1.2018. There was no explanation why the Plaintiff had waited for more than 6 years to levy execution on the judgments and order as required by Order 46 rule 3(2)(b) of the ROC 2012. What was merely stated by the Plaintiff was that there are just circumstances meriting the application.
- In Public Bank Bhd v Seato Trading (M) Sdn Bhd & Ors  1 MLJ 165, the Court stated as that granting leave to execute judgment is a discretionary exercise by the Court. The Court accepts negotiations, settlements or part payments between parties as a valid reason for not executing judgments. However, when the negotiations, settlement or payments terminates or ceases then the Court would accept the above as valid reason for the delay and exercise discretion to grant leave to execute.
- In Affin Bank Bhd v. Wan Abdul Rahman Wan Ibrahim  1 CLJ 826 where the appellant as the Plaintiff in the Court below applied pursuant to Order 46 rule 2(1) of the old Rules of the High Court 1980 (in pari materia with O.46 r. 2(1) of the ROC 2012) for leave to commence execution proceedings against the Defendant after six years had lapsed from the date of judgment. The application was dismissed by the trial judge on the basis that the appellant failed to furnish cogent and acceptable reasons for the grant of leave.
- The Court could not find any explanation as to the reasons for the delay in enforcing the judgments and/or order offered by the Plaintiff. On this ground alone, there was sufficient ground for the learned JC to decline to exercising his discretion to grant leave to the Plaintiff to proceed with the execution against the Defendant. Since there was no explanation given by the Plaintiff for the delay, it is thus clear that the Plaintiff has failed to satisfy the requirements stipulated under Order 46 rule 3 ROC 2012.
- Another point is that the Court agreed the High Court Judge had failed to take into consideration that there is no longer any pending judgment and/or order of the court to be enforced as the said judgments and/or order have been superseded or extinguished by the Settlement Agreement. The Settlement Agreement constitutes a new and independent agreement for good consideration. Its effect in law is to supersede the original cause of action altogether and put an end to the proceedings, which are thereby spent and exhausted. The parties are therefore precluded from taking any further steps in the action.
- The position taken by the Plaintiff was that the Defendant had breached the Settlement Agreement in particular Clause 5 which stated that balance payment by the contra of and transferring of 10 units of clean and unencumbered properties under construction over the project land. The Plaintiff alleged that the Defendant had breached the said Settlement Agreement by wrongful taking a bridging loan and changing and encumbering the contra properties to the Bank.
- The Defendant submitted and to which we are in agreement with, that by taking a bridging loan to finance the project and to build the 10 property units does not amount to a breach of the said clause. The 10 units were still under construction and Clause 8 of the Settlement Agreement allowed the Defendant to charge the project land for bridging financing or loan.
- It is crystal clear to us from Clause 8 above that the Plaintiff had consented to the contra units to be assigned, transferred or charged to third party or third parties including the Bank for the purpose as collateral for the bridging loan. The issue of free from encumbrances raised by the Plaintiff was therefore a nonstarter and not a live issue.
- We further agreed with the Defendant that even if the Defendant had defaulted in the payments under the Settlement Agreement which is denied by the Defendant, the Plaintiff’s remedy is confined to taking a fresh action to enforce the Settlement Agreement and not by way to execute the judgments and/or order which was rendered otiose by the Settlement Agreement.
- In Turf Club Auto Emporium Pte Ltd and others v. Yeo Boong Hua and others  2 SLR 12 where the Court of Appeal held that a settlement agreement which had been entered into for good consideration had the following effects: (a) it would put an end to the proceedings, which would thereby be spent and exhausted; (b) it would preclude the parties from taking any further steps in the action, except where they had provided in the settlement agreement for liberty to apply, in the same action, for the purpose of enforcing the agreed terms; and (c) it would supersede the original cause of action altogether.
- In Sambu (M) Sdn Bhd v. Stone World Sdn Bhd & Anor  2 CLJ 523, High Court held that where the parties had settled or compromised pending proceedings, the settlement would put an end to the proceedings, preclude the parties from taking further steps in the action and supersede the original cause of action.
- The Court of Appeal allowed the appeal and set aside the decision of the High Court.
Source: Pacific Sanctuary Holdings Sdn Bhd v Masaland Construction Sdn Bhd  MLJU 89. Court of Appeal Putrajaya. Kamardin Hashim, Rhodzariah Bujang and Mohamad Zabidin JJCA.
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#后期合约超越之前的庭令 #settlement agreement supersedes court order/judgment