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Case Update: Fresh action is necessary if the relief sought in the same proceedings was not a mere enforcement of the agreed terms in a consent order

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15 March 2022

CIVIL PROCEDURE
Consent Order – Breach – Non-Compliance -  Fresh Action – Originating Summons – Striking Out – Appeal – Relief – Not Identical

Mega Palm Sdn Bhd & Anor v Hun Tee Siang & Ors
Civil Appeal No: W-02(IM)(NCvC)-1557-08/2021 | Court of Appeal
- see the grounds of judgment here

Facts Hun Tee Siang & Ors (“Respondents”) had sued Mega Palm Sdn. Bhd & Anor (“Appellants”) in an action which was filed in 2015. The suit was resolved after intense negotiations. This resulted in the parties recording a consent order in 2017. Pursuant to the consent order, the Appellants had undertaken that they would attend to and perform all their obligations as stipulated therein. However, the terms of consent order were not honoured. The Respondents commenced committal proceedings in the 2015 suit against the Appellant and two of their directors. The High Court held that there were substantial breaches or non-compliance with the consent order and that the Appellants and their directors were therefore guilty of contempt. Fast-forward to 2021, the Respondents filed a fresh action which is the subject matter of the present appeal, ostensibly to enforce the consent order and to obtain various other reliefs which h have been described as consequential reliefs. The Appellants applied to strike out the fresh action contending that the High Court had no jurisdiction to entertain the fresh action and that any enforcement must be pursued in the original 2015 action. It is also contended that the reliefs sought in the fresh action are in fact a unilateral variation of the terms of the consent order. The Judicial Commissioner declined to strike out and dismiss the Originating Summons (OS). The Judicial Commissioner took the position that the High Court had the requisite jurisdiction and that it was not fatal for the Respondents to have pursued the enforcement action via the OS or to seek consequential reliefs. Hence, this appeal.

Issue Whether a party which seeks to enforce and/or apply for consequential orders or reliefs under a consent order, must do so in the original action where the consent order was recorded, or whether it must do so by way of a fresh action?

Held In dismissing the appeal, the Court of Appeal held that a consent order operates as a contract and that if it is sought to be impugned, then a fresh action has to be filed for that purposes. Further, the court held that in so far as any variation of a Consent Order is concerned, it was also trite that the only possible way in which a consent order could be altered/varied would be by the consent of all the parties. The Court is also not at liberty to vary any of the agreed terms unless with the mutual consent of the parties. The Court of Appeal took the view that since the terms of the Consent Order were not entirely identical to the reliefs sought in the original suit, the Consent Order is one which went beyond the scope of the action per the original suit and as such, a fresh or independent action was necessary. In essence, a fresh action is warranted if the relief sought by an application in the same proceedings was not a mere enforcement of the agreed terms but to modify them to give effect to the original intention in changed circumstances.

Zul Rafique & Partners
{15 March 2022}

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