Courts aren’t rubber stamps for consent orders, says Court of Appeal

Courts do not merely act as a “rubber stamp” to record consent judgments and orders, the Court of Appeal has reminded litigants and lawyers.

The appellate court said parties should first ensure that the court has the necessary jurisdiction and power before asking it to record a settlement.

The reminder came in a judgment delivered by Justice Wong Kian Kheong, who sat with Justices Firuz Jaffril and Leonard David Shim, on an appeal by Noble Energy Construction Sdn Bhd against a High Court order to wind up the company.

Sim Soon Construction & Trading had petitioned for Noble Energy to be wound up over an unpaid construction debt of RM864,218.63.

The High Court subsequently ordered Noble Energy to be wound up and appointed the official receiver as liquidator.

During the appeal, however, both sides reached a settlement under which Noble Energy would pay Sim Soon RM420,000 as full and final settlement of their dispute.

The parties then asked the Court of Appeal to record the consent order.

The court declined, ruling that it had no power to record a monetary consent order in an appeal against a winding-up order.

In his judgment, Wong said the High Court itself had no power under Section 469 of the Companies Act 2016 to make a monetary order in winding-up proceedings.

He said the winding-up process was a statutory procedure for dealing with, among other things, commercially insolvent companies, not a mechanism for debt collection.

The court also held that Section 69 of the Courts of Judicature Act 1964 did not give the Court of Appeal power which the High Court itself did not possess.

The bench therefore declined to record the RM420,000 settlement and ordered Noble Energy’s appeal to proceed on its merits.

Asmawi Ismail and Nur Asnani Basharuddin appeared for Noble Energy while Kenneth Liew represented Sim Soon.