[GUAMAN SIVIL NO: 22NCvC-29-10/2011] ANTARA BARTER ORTUNE SDN BHD ! "LAINTI DAN MA#URAMA DEVELO"MENT SDN BHD ! DEENDAN CIVIL PROCEDURE: Judgments and orders - Consent judgment - Application for setting aside - Allegations of mutual common mistake, material and fundamental unilateral mistake, no consensus ad idem, unjust enrichment and fraud - Whether grounds to set aside consent judgment proved CONTRACT: Mistake - Mutual common mistake and material and fundamental unilateral mistake - Whether plaintiff through its director (PW1 and through its counsel kne! of the summar" judgment and that C#M$ !ould have to pa" if there !as no appeal - Whether implausi%le for plaintiff to contend the" !ere una!are C#M$ had paid the &M'1(k claim !hen it !as negotiating !ith defendant - Whether there !as a mistake and conse)uentl", consensus ad idem CONTRACT: *raud - Whether there !as active concealment or act of deceit %" defendant+s Chief *inancial Controller (,W1 - Whether PW1 and-or his counsel kne! of the summar" judgment o%tained against C#M$ and that C#M$ !ould have to pa" if there !as no appeal - Whet her ,W1+ s assumpt i on t hat t he" kne! !as f arf et ched - Whet her 1 ,W1 o%liged to inform PW1 that C#M$ had paid the &M'1(k claim in the course of discussions for settlement - Whether ,W1+s silence a fraudulent act CONTRACT: .njust enrichment - Pa"ment made to another !here it !as ine)uita%le for recipient to keep it - Whether there !as unjust enrichment ["$%&'(&)) *+ %,,$&-%(&.' /&+0&++1/ 2&(3 -.+(+4] C%+15+6 71)1771/ (.: Asean /ecurities Paper Mills /dn $hd v0 C1. #nsurance $hd 234456 3 M7J '41 (refd) *ernrite /dn $hd v0 Per%adanan 8asional $erhad 234116 9 C7J 1 (foll) :ong 7ee ;!a < Anor v0 Chin Ah =!i :ong Chong *ah v0 Chin Ah =!ai 21>516 3 M7J 5( (refd) ?ong :im v0 ;oo =ok Chong 2344(6 ( C7J 33> (refd) L18&+$%(&.' 71)1771/ (.: Contracts Act 1950, ss. 10, 14, 17, 21, 23 Rules of High Court1980, O. 14A O(317 +.97-15+6 71)1771/ (.: effre! "insler, @vidence, Advocac" and the 7itigation Process #$utter%orths 1992& 'age 8 /innadurai 7a! of Contract *ourth @dition Aolume Bne #(e)is *e)is 2011& 2 GROUNDS O #UDGMENT 14 "laintiff see+s to set asi,e a consent -u,g.ent it entere, into %ith ,efen,ant on 24/5/2011 arising fro. ci0il suit 12 22/255/2008 #2008 suit&. 3he ter.s of the consent -u,g.ent can 4e foun, in $, 121/122. 5t states essentiall! that 'laintiff %ho %as ,efen,ant 1 in 2008 suit %oul, 'a! ,efen,ant %ho %as 'laintiff in 2008 suit a su. of R6180,000.00 as full an, final settle.ent of all issues an, ,is'utes arising fro. the clai. an, counterclai. #settle.ent a.ount&. 5n 2008 suit the clai. %as for R6137,777.12 as late interest #R6137+ clai.& an, R6315,000.00 for 'rogressi0e 'a!.ent #R6315+ clai.& along %ith interests an, costs. 24 C56$ %as sue, as ,efen,ant 2 in 2008 suit 4! 0irtue of it gi0ing a 4an+ guarantee on the R6315+ clai. to secure such 'rogressi0e 'a!.ent. On 8/7/2009 su..ar! -u,g.ent un,er Or,er 14A of Rules of High Court 3 1980 #RHC& %as o4taine, against C56$ on the 4an+ guarantee #$, 38/43, su..ar! -u,g.ent&. :4 3he 4one of 'laintiff 8s co.'laint as gi0en in the e0i,ence of 6r 3ang 9ooi Chon, also referre, to as Cle.ent #"91, :irector of 'laintiff co.'an!& is that %hen ,iscussing settle.ent %ith ,efen,ant on the .orning of 24/5/2011 %hen 2008 suit ca.e u' for hearing he %as not a%are C56$ ha, settle, the su. of R6315,000.00. 5n his %itness state.ent #"1& "91 states ,iscussions %ere hel, %ith 6r (a. Hoi ;hong #:91, Chief <inancial Controller, ,efen,ant co.'an!& in res'ect of R6315+ clai. onl! an, none on R6137+ clai. as it ha, al.ost a co.'lete ,efence for R6137+ clai.. 5n the circu.stances he offere, 50= of R6315,000.00 %hich %as R6157,000.00 to settle the .atter. :91 re>ueste, a higher su. an, ha, to contact one other ,irector. :91 ca.e 4ac+ %ith his counsel 6r 9ong 1uo $in #:93& %hereu'on the! 'ro'ose, a su. of R6200,000.00 %hich "91 ,i, not agree. :93 %his'ere, to :91 an, then :93 'ro'ose, R6180,000.00 %hich "91 acce'te, in goo, faith as full an, final settle.ent of 2008 suit %ith no or,er as to costs. "laintiff8s counsel 6r Ah.a, <ari, 4in ?a+aria #"92& -oine, the ,iscussions an, a ,raft consent -u,g.ent %as 're'are, an, signe, 4! all 'arties #$, 120&. Refer to @AA 5 of "1. (ater on the sa.e ,a! "91 contacte, C56$ to infor. of the consent -u,g.ent an, %as infor.e, C56$ ha, settle, the su. of R6315.000.00. "92 sai, he ,i, not +no% the su. ha, 4een 'ai, until after the consent -u,g.ent %hen "91 tol, hi.. ;4 3he a''lication to set asi,e the consent -u,g.ent %as %ith,ra%n as t he seal e, or,er ha, 4een e)t ract e,. Hence t he 'resent cl ai .. 5n t he 4 state.ent of clai. the groun,s to set asi,e the consent -u,g.ent are .utual co..on .ista+e #'aragra'h 23 an, 24&&, .aterial an, fun,a.ental unilateral .ista+e #'aragra'h 25&, no consensus ad idem #'aragra'h 27&, un-ust enrich.ent #'aragra'h 27 an, 28#a&& an, frau, #'aragra'h 28#4&&. :efence is that 'laintiff coul, not ha0e 4een un,er an! .ista+e of fact as at all .aterial ti.es it %as un,er a,0ice of its la%!er %ho %as 'resent %hen consent -u,g.ent %as recor,e, on 24/5/2011 an, %hen su..ar! -u,g.ent %as o4taine, against C56$ on 8/7/2009 an, if there %as an! .ista+e on 'laintiff8s 'art it is insufficient in la% to in0ali,ate the consent -u,g.ent #'aragra'h 5 of ,efence&. :efen,ant further ,enies the allegations of un-ust enrich.ent an, frau, an, 'uts 'laintiff to strict 'roof #'aragra'h 7 of ,efence&. G7.9'/+ ).7 +1((&'8 %+&/1 <4 A consent -u,g.ent once 'erfecte, cannot 4e set asi,e in the sa.e 'rocee,ings %hich in our case is 2008 suit. 5t can onl! 4e ,one 4! %a! of fresh 'rocee,ings. Refer to :ong 7ee ;!a < Anor v0 Chin Ah =!i :ong Chong *ah v0 Chin Ah =!ai B1971C 2 6( 75. =4 3he groun,s to set asi,e are si.ilar to the groun,s to set asi,e an agree.ent. 2ection 10 of Contracts Act 1950 BAct 137C 'ro0i,es inter alia all agree.ents are contracts if the! are .a,e 4! the free consent of 'arties co.'etent to contract. 2ection 14 states %hat free consent is an, the instances %here rele0ant to our case are %hen it is not cause, 4! frau, #as ,efine, in section 17& or .ista+e #su4-ect to sections 21/23&. 5 5%6 M&+(%>1 ?4 2ection 21 of Act 137 'ro0i,es %here 4oth 'arties to an agree.ent are un,er a .ista+e as to a .atter of fact essential to the agree.ent, the agree.ent is 0oi,. 2ection 23 'ro0i,es a contract is not 0oi,a4le .erel! 4ecause it %as cause, 4! one of the 'arties to it 4eing un,er a .ista+e as to a .ista+e of fact. @4 5t is 'laintiff8s contention it ,i, not +no% R6315+ clai. ha, 4een 'ai, 4! C56$ %hen it %as ,iscussing to settle %ith ,efen,ant through :91 an, :93. 3his accor,ing to the. a.ounts to a .ista+e essential to the consent -u,g.ent or at the 0er! least a unilateral .ista+e on 'laintiff8s 'art. :efen,ant counters there %as no .ista+e %hether co..on or unilateral as 'laintiff %as legall! re'resente, at 2008 suit an, +ne% of su..ar! -u,g.ent o4taine, against C56$. 94 "918s e0i,ence is that %hen 2008 suit %as going on it he ,i, not contact C56$ although he ,i, sa! it %oul, ha0e 4een 'ru,ent to ,o so. He ,isagree, it %as a .ista+e not to 0erif! %ith C56$ as the! still ha, the .ain case. On the su..ar! -u,g.ent o4taine, against C56$ the e0i,ence is clear 'laintiff an, its counsel %as a%are of ,efen,ant8s a''lication an, the or,er o4taine,. 3his is a''arent fro. the or,er %here the 'resence of 'laintiff counsel "92 is recor,e,. Although "92 e)'laine, he %as 'resent 4ecause ,efen,ant8s a''lication un,er Or,er 14 RHC %as also fi)e, to 4e hear, on the sa.e ,a!, it ,oes not ,etract fro. the fact 'laintiff through its counsel +ne% of the su..ar! -u,g.ent o4taine, against C56$. <urther 'laintiff trie, to sta! the su..ar! -u,g.ent #$, 44/45& an, "91 affir.e, 7 an affi,a0it in su''ort ,ate, 18/7/2009 #$, 47/118&. 3his is confir.e, 4! "91 %ho state, the! ,i, the sta! a''lication an, C56$ ,i,n8t as+ the. to ,o so. "92 state, the a''lication for sta! %as %ith,ra%n as ,efen,ant ha, o4-ecte, to their locus standi. $oth sai, if there %as no a''eal against the su..ar! -u,g.ent C56$ %oul, ha0e to 'a!. "92 also state, after the su..ar! -u,g.ent there %as no ,iscussion %ith C56$ or its solicitors. 3he! ha, no interest in the 'rogress of the C56$ .atter as C56$ ha, its o%n solicitors. As to ho% the clai. against C56$ %oul, affect the clai. against 'laintiff he re'lie, 'laintiff %oul, ha0e to 'a! for the guarantee. 9hen as+e, if he ha, a,0ise, 'laintiff to ta+e an interest in the C56$ 'rocee,ings he state, he tol, the. to see the 4an+, a''eal or sta!. 104 5n a,,ition :93 infor.e, the court 'rior to the hearing of 2008 suit he ha, 'ro'ose, to "92 to %ith,ra% R6315+ clai. as it ha, 4een 'ai, 4! C56$ an, that 'laintiff8s counterclai. 4e %ith,ra%n. 3his %as colla4orate, 4! 6r Chan 2Du <u #:92& %ho .entione, 2008 suit on :938s 4ehalf on 27/4/2011. 3here are also the ,ocu.ents :4 an, :5. Although "92 ,enies such a 'ro'osal an, that the 'ro'osal %as in res'ect of ,ro''ing the interest on R6315+ clai. an, R6137+ clai. the e0i,ence of :92 an, :93 on this score is .ore 'ro4a4le. 114 :91 in @AA 7 of his %itness state.ent #:3& sai, there %as no co..on .ista+e %hen 'arties entere, the consent -u,g.ent as ,efen,ant +ne% R6315+ clai. ha, 4een 'ai, in 2e'te.4er 2009. 124 3he net effect of the e0i,ence is that 'laintiff through "91 an, through its counsel +ne% of the su..ar! -u,g.ent an, that C56$ %oul, 7 ha0e to 'a! if there %as no a''eal. 3hat 4eing the case 5 ,o not thin+ it 'ossi4le for 'laintiff to no% sa! the! %ere not a%are C56$ ha, 'ai, the R6315+ clai. %hen it %as negotiating %ith ,efen,ant. <urther if all the %hile ,uring 2008 suit "91 ha, ne0er 4een in contact %ith C56$ the >uestion arises as to %h! he %oul, ha0e foun, it necessar! to contact the. %hen the consent -u,g.ent %as entere, into. 1:4 5t is thus .! fin,ing there %as no .ista+e 4e it co..on or unilateral an, arising therein there %as consensus ad idem. 1;4 E0en if it can 4e sai, 'laintiff ,i, not +no% C56$ ha, 'ai, the R6315+ it coul, ha0e a0aile, itself to such infor.ation .ore so %hen it ha, the o''ortunit! fro. the ti.e su..ar! -u,g.ent %as o4taine, till the consent -u,g.ent %as recor,e,. 3here %as nothing to sho% C56$ %oul, not ha0e ,isclose, the infor.ation. 1<4 "laintiff also sa!s :91 +ne% or ought to +no% "91 %as not a%are C56$ ha, settle, R6315+ clai.. 3his %as 4ecause "91 ha, initiall! offere, 50= of R6315,000.00 an, this %as higher than R6137+ clai. an, no one %oul, offer a higher su. than this clai.. 1=4 5n cross e)a.ination :91 sai, as at 24/5/2011 he +ne% C56$ has settle, R6315+ clai. %ith interest an, cost. 9hen as+e, if that ha, 4een settle, the onl! clai. is R6137+ clai. he re'lie, Fon 4oth our clai. of R6315+ an, R6137+ an, the counterclai.G. 3o the >uestion that since the! ha0e reco0ere, the full 'a!.ent of R6315+ clai. coul, he 'rocee, against 'laintiff for R6315+ his ans%er %as FnoG. 9hen offere, 50= of 8 R6315+ he as+e, for .ore as he too+ into consi,eration late interest until settle.ent ,ate an, legal costs on the 2 clai.s an, counterclai.. 1?4 A series of >uestions %ere 'ut to :91 thatH/ #a& %hen "91 'ro'ose, 50= of R6315,000.00 an, !ou agree, to R6180,000.00 !ou +ne% that "91 ,i, not +no% C56$ ha, 'ai, to ,efen,antI ans%er/not a%are of thatI #4& no one %oul, agree to a settle.ent of higher su. than %hat %as clai.e,I ans%er/5 %oul,n8t +no%I #c& Jou ,i, not ,isclose the fact that 'a!.ent .a,e 4! C56$I ans%er/5 ,i,n8t. 5 assu.e 'laintiff is a%are. 9hen as+e, %hen "91 initiate, settle.ent 4! 'ro'osing 50= of R6315+ clai. he shoul, ha0e ,ra%n to "918s attention that the re.aining clai. is R6137+ clai. :91 re'lie, the settle.ent is for entire clai. an, counterclai.. He ,enie, since he +no%ingl! ,i, not infor. "91 of 'a!.ent recei0e, fro. C56$ an, re.aining clai. is R6137+ clai. he ha, 4een ,ishonest. 1@4 5n @AA 4 he ,isagree, %ith the allegation 'laintiff %as onl! ,iscussing to settle R6315+ clai.. 3his %as 4ecause the trial %as for ,efen,ant8s clai. an, 'laintiff8s counterclai. an, settle.ent has to 4e a4out the entire suit. <urther ,efen,ant %oul, not 4e ,iscussing onl! on R6315+ suit %hen C56$ ha, 'ai, the a.ount. 5n @AA 5 :91 e)'laine, R6315+ clai. coul, 4e %ith,ra%n on con,ition 'laintiff8s counterclai. %as 9 %ith,ra%n. 2ince 'laintiff ,i, not %ith,ra% its counterclai. ,efen,ant ,i, not %ith,ra% R6315+ clai.. 194 <ro. the e0i,ence :91 %oul, not +no% or %oul, not ought to ha0e +no%n "91 ,i, not +no% C56$ ha, 'ai, the R6315+ clai.. As to the offer 4eing initiall! 50= of R6315,000.00 an, this %as higher than R6137+ clai. :91 ha, e)'laine, he consi,ere, the ele.ent of late interest until settle.ent ,ate. 3he e0i,ence also sho%s the ,iscussions .ust ha0e 4een on the clai. an, counterclai. as the 2008 trial %as to 'rocee, on that 4asis. 204 <urther the ter.s of the han,%ritten ,raft settle.ent #$, 120& signe, 4! 4oth counsels sho% the settle.ent a.ount to 4e Fas full an, final settle.ent of all issues an, ,is'utes arising herein on the 'laintiff8s clai. an, the 1 st ,efen,ant8s counterclai. %ith no further recourse to relitigate on such issues an, ,is'utesG. $oth "91 an, :91 confir.e, the ter.s. Acce'ting the e0i,ence of "92 he %as not in0ol0e, in the ,iscussion the fact of hi. signing the ,raft settle.ent sho%s 'laintiff ha, legal a,0ice at all rele0ant ti.es. 5A6 7%9/ 214 As 'er section 14 of Act 137 consent is free %hen it is not cause, 4! frau, as ,efine, in section 17. 2ection 17 la!s ,o%n the ,ifferent acts %hich .a! constitute frau, of %hich the rele0ant acts are the acti0e conceal .ent of a fact 4! one ha0i ng +no%l e,ge or 4el i ef of t he fact 10 #'aragra'h 4& an, an! other act calculate, to ,ecei0e #'aragra'h ,&. 3he 'ro0ision e)'lains furtherH/ FE)'lanation/6ere silence as to facts li+el! to affect the %illingness of a 'erson to enter into a contract is not frau,, unless the circu.stances of the case are such that, regar, 4eing ha, to the., it is the ,ut! of the 'erson +ee'ing silence to s'ea+, or unless his silence is, in itself, e>ui0alent to silence.G. 224 On the 4ur,en of 'roof of frau,, ?ong :im v0 ;oo =ok Chong B2005C 5 C( 229 an, Asean /ecurities Paper Mills /dn $hd v0 C1. #nsurance $hd B2007C 2 6( 301 ha0e hel, it to 4e 4e!on, reasona4le ,ou4t. 6! attention %as ,ra%n to a 'assage in /innadurai 7a! of Contract *ourth @dition Aolume Bne #(e)is *e)is 2011& %here it rea,s as follo%sH/ F5t therefore a''ears that 4oth ?ong :im v0 ;oo =ok Chong an, Asean /ecurities Paper Mills /dn $hd v0 C1. #nsurance $hd %ere ,eci,e, per incuriam on the issue of the stan,ar, of 'roof for frau, in ci0il 'rocee,ings. As 'ointe, out in 7em%aga =emajuan :anah Persekutuan (*@7,A < Anor v0 A!ang /oh %in Mamat < Brs B2009C 4 6( 710H/ 5n ?ong :im v0 ;oo =ok Chong the <e,eral Court lai, ,o%n the stan,ar, of 'roof for frau, in ci0il 'rocee,ings as 4e!on, reasona4le ,ou4t. Ho%e0er this case .a,e no reference to an earlier authorit! 4! the sa.e court in Ang ;iok /eng C Ang ?eok /eng v0 ?im ?ut =iu (personal representative of the estate of Chan Weng /un, deceased B1997C 2 6( 45. As such the correct 'osition of the la% see.s to 4e that %hich is state, in Ang ;iok /eng C Ang ?eok /eng v0 ?im ?ut =iu ...G. 11 2:4 5n Ang ;iok /eng (supra the court state, at 'ages 59 an, 70H/ F<ro. the %i,e ,efinition of frau, un,er s 17 of Contracts Act 1950 as %ell as lea,ing authorities on the su4-ect, %here the allegation of frau, in ci0il 'rocee,ings concerns cri.inal frau, such as cons'irac! to ,efrau, or .isa''ro'riation of .one! or cri.inal 4reach of trust, it is settle, la% that the 4ur,en of 'roof is the cri.inal stan,ar, of 'roof 4e!on, reasona4le ,ou4t, an, not on the 4alance of 'ro4a4ilities. 5t is no% %ell esta4lishe, that an allegation of cri.inal frau, in ci0il or cri.inal 'rocee,ings cannot .erel! 4e 4ase, on sus'icion or s'eculation. ... B9( 23171 (31 %$$18%(&.' .) )7%9/ 444 &+ 1'(&71$B ).9'/1/ .' % -&v&$ )7%9/ - %'/ '.( A%+1/ .' % -7&0&'%$ -.'/9-( .7 .))1'-1 - (31 -&v&$ A97/1' &+ %,,$&-%A$144 GI an, at 'age 73H/ F3he ,efinition of Ffrau,G, rea, in con-unction %ith the authorities, lea,s us to the conclusion that %here the frau, allege, in ci0il 'rocee,ings is 4ase, on a cri.inal offence, the cri.inal 4ur,en of 'roof 4e!on, reasona4le ,ou4t .ust 4e a''lie,. B9( 23171 (31 )7%9/ %$$181/ &+ ,971$B -&v&$ &' '%(971, (3171 &+ '. 71%+.' 23B (31 -&v&$ A97/1' +3.9$/ '.( %,,$B.G. #e.'hasis a,,e,& 2;4 Hence in this case %here the frau, allege, is a ci0il frau, the ci0il 4ur,en is a''lica4le. 3he e0i,ence outline, a4o0e sho% there %as no acti0e conceal.ent or act of ,eceit 4! :91. "91 an,Kor his counsel +ne% of the su..ar! -u,g.ent o4taine, against C56$ an, that the natural course of e0ents if there %as no a''eal %oul, 4e for C56$ to 'a!. 5n the 12 %or,s of :91 F5 assu.e, the! +ne%G an, this assu.'tion is not farfetche,. <ro. the e)'lanation to section 17 .ere silence is not frau,. 5n Sinnadurai Law of Contract Tird Edition 5L1C&+N1C&+ B9((172.7(3+6 it is state, at 'age 228 'aragra'h 5.07 that Fillustration #4& co0ers the for.er situationG ie, the first situation %hile Fillustration #c& co0ers the latterG ie, the secon, situation. :918s silence is not frau, as a''arent fro. the e)'lanation to section 17. U'D9+( 1'7&-301'( 2<4 On the allegation of un-ust enrich.ent :91 sai, it %as not so %hen the 2008 suit %as settle, at R6180,000.00 an, this %as a reasona4le su. for R6137+ clai. an, interest an, costs. 3here has 4een no un-ust enrich.ent %ithin the .eaning of 'a!.ent .a,e to another %here it is ine>uita4le for the reci'ient to +ee' it as 'er *ernrite /dn $hd v0 Per%adanan 8asional $erhad B2011C 7 C( 1. D9(B (. /&+-$.+1 2=4 5 a,, it ,oes not lie on ,efen,ant through :91 to infor. "91 that C56$ ha, 'ai, the R6315+ clai. in the course of ,iscussions for settle.ent. 5n this regar, 5 agree %ith ,efen,ant8s su4.ission there is no such o4ligation on ,efen,ant to ,isclose ,ue to the a,0ersarial nature of our 6ala!sian legal s!ste.. Refer to #1))71B "&'+$17 &' E!idence, A/v.-%-B %'/ (31 L&(&8%(&.' "7.-1++ 5B9((172.7(3+ 19926 %here at 'age 8 is state,H/ 13 F ...the Fa,0ersarialG ... 'rocess, %hich characteriDes the co..on la% -uris,ictions an, a''lies in ... 6ala!sia, in0ol0es a situation in %hich the -u,ge has a .ore 'assi0e role in the 'rocee,ings an, the 'arties a corres'on,ingl! .ore acti0e one. 5n fact, it is the 'arties, through their a,0ocates, %ho .ust ta+e the res'onsi4ilit! of in0estigating the facts an, of ensuring that their res'ecti0e cases are co.'rehensi0el! an, effecti0el! 're'are, for an, 'resente, at trial.G. C.'-$9+&.' 2?4 <or the reasons gi0en a4o0e 'laintiff8s clai. is ,is.isse, %ith costs. 5S11 M11 C39'6 "esuruh-a!a ;eha+i.an 6ah+a.ah 3inggi Alor 2etar D%(1/: 23 A"R5( 2012 C.9'+1$: *or the plaintif - M =anesanD M-s M =anesan < Associates "egua.4ela ,an "egua.cara *o. 2 / C, 2olo+ 3a0o! 10500 "ulau "inang *or the defendan - *ahri AEEatD M-s AEEat < #EEat "egua.4ela ,an "egua.cara *o. 32, alan "L 7K17 6utiara :a.ansara 47800 "etaling a!a 2elangor :arul Ehsan 14