Non-compliance with an Order (notwithstanding payment of a fine) will entitle a second round of committal

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The facts 

The Grounds of the CA are available here.

Syarikat Bintang Cable Technology Sdn Bhd (Bintang Cable) owned a parcel of valuable land. 

Lachemanan Sinnasamy (Father) entered into a Settlement Agreement with his 2 sons (Puganesvaran and Nagarajan). The settlement essentially stated that upon the land being sold, the sons would pay the father a sum of RM5.5m. 

The land was sold for RM8m. The sons failed to pay their father. 

The father initiated Shah Alam High Court vide action No. BA-22NCvC-544-12/2020 for the recovery of that sum. The father further filed for a mandatory injunction compelling the sons to deposit the sum of RM5.5m into a solicitors’ stakeholder account. 

The HC allowed the Mandatory Injunction Order on 21.06.2021. The sons were ordered to deposit the sum of RM5.5m by 28.06.2021 (the Initial Date). 

Non-compliance with the Order 

The Initial Date came and went. The 2 sons failed to comply with the order. 

The father took out committal proceedings against his sons. 

On 21.03.2023, the HC found the sons guilty. They were fined a sum of RM200,000, which was paid. 

The application for a new date for further compliance 

Notwithstanding the fine, the father, was dissatisfied that his 2 sons had not deposited the money. He filed an application in Encl 210 to set a new date for further compliance. This was granted by the HC on 25.10.2023 and a new date for compliance was set on 25.11.2023 (New Date). 

The sons, being dissatisfied, filed an appeal against the Order dated 25.10.2023, setting the New Date. They appealed and this was what was before the CA. 

High Court’s decision 

The HC read O. 45, r. 6 ROC 2012 and held that the Court has the necessary powers to extend timelines for compliance (see para. 12 of the CA’s GOJ). 

Decision of the CA 

At the CA, the High Court’s Order was affirmed. The Appeal was dismissed with costs of RM30,000. However, what was interesting would be the observations made by the CA. 

i. The Court cannot fix a new time for compliance under O. 45, r. 6 ROC 2012 unless it relates to the Initial Date 

Referring to O. 45, r. 6 read together with O. 42, r. 6 ROC 2012, the HC held that one could only utilise these Rules to effectuate a change to the Initial Date: 

24.The words “...requiring the act to be done within another time, being such time after service of that order, or such other time as may be specified there…” indicate that the time fixed specifically refers to the time stated in the original order and not a consequential order.

26. Order 45 Rule 5(1) refers to a situation where the person required to do an act refuses or neglects to do that act within the original time or within that original time that has been extended or abridged. The explicit words “extended or abridged” can only refer to the original date under the original judgment or order. This Court does not find those words refer to a fresh or new date for performance in addition to the original date.

28. Thus, having read Order 42 Rule 6 and Order 45 Rules 5 and 6 collectively, it is this Court’s view that the proper construction of Order 45 Rule 6(1) is that the fixing of another time for the doing of an act relates only to the performance of the original time in the original order which is still executory. Thus, Order 3 Rule 5 is confined only to the extension or abridgement of the original time which remains to be fulfilled. It does not extend to the fixing of a further and additional time for doing the act in addition to the original time which has since passed or expired.

ii. The Court can fix a new date for performance under its inherent jurisdiction 

Whilst the opening paragraphs seemed like a body-blow to the Father, the CA then went on to consider its inherent jurisdiction. 

The CA first noted that Court Orders are to be obeyed: 

33. Before dealing with that issue, it would be necessary first to state some basic and general matters relevant to the nature of a Court order. Firstly, an order of the Court must be obeyed and construed in accordance with its terms (see Tam Lye Chuian [supra] and MBf Holdings Bhd [supra]). Secondly, unless and until it is set aside every order or judgment of the Court remains valid and enforceable in accordance with its terms (see Lee Tain Tshung v Hong Leong Finance Bhd [2000] 3 MLJ 364). Thirdly, where an order has been perfected and no mention is made in it on the liberty to apply for further orders on the workings of the order then such liberty is to be implied (see Sungai Biak Tin Mines Ltd v Saw Choo Teng (No 2) [1970] 2 MLJ 226 and Credit Corp (M) Sdn Bhd v National Insurance Co Ltd [1975] 2 MLJ 104).

34. Thus the Injunction Order in this present Application is an Order that must be obeyed especially when the Order remains valid and enforceable. It behoves therefore upon the Defendants to obey it unless it has been set aside

Paying a fine does not absolve you from compliance

The CA then determined as follows:

35. Now, since the Defendants have committed an earlier breach and consequently fined pursuant to a committal proceeding, are they now released from further complying with the Injunction Order? In this Court’s view, they are not.

36. Since the Injunction Order remains to be performed, they cannot be released from the obligations therein until they are fully and completely performed. It is clear from the decisions in T.O. Thomas [supra], Golden Star [supra], Thiruchelvasegaram A/L Manickavasegar v. Mahadevi A/P Nadchatiram [1998] 4 CLJ 883 and Hup Soon Omnibus Co Sdn Bhd & Anor v. Lim Chee @ Lam Kum Chee [2018] 1 CLJ 641 that a party is not excused from complying with a Court order for as long as it remains valid, enforceable and unperformed. That means a finding of guilt and payment of fine in a prior committal proceeding does not serve to release the Defendants from performing the Injunction Order. The prior committal order should serve to remind and hasten them to comply with the Order instead of finding ways to avoid it.

The CA then observed that the payment of the one-off fine does not negate one’s obligations to obey the Mandatory Injunction Order:

37. For those reasons, this Court does not agree with the Defendants that the Injunction Order in this Application is a one-off Order that expires with the lapse of time and payment of a fine. The terms of the Order are not couched in that fashion. It states that the monies must be paid to the Solicitors’ Fixed Deposit Client’s Account by 28.6.2021 but did not state that the Order will expire and become unenforceable once the time expires due to non-compliance, whether or not committal proceedings will follow. To construe the Order in that manner is to provide an escape route for the Defendants to deliberately and indefinitely neglect to perform the Order. That could not have been the underlying tone and intention of the Injunction Order.

38. As stated earlier, an Order remains valid and enforceable until set aside but it cannot be enforced if there is no time fixed for doing the act. Since the Injunction Order here only stated one date for performance, then the Order ends only as far as the date for performance is concerned without affecting the substratum of the Injunction Order, which is to deposit the monies. Therefore, to enable the Plaintiff to continually enforce the Order, he must apply to fix another date for performance.

39. The Order is therefore not rendered spent merely by the fact that the Order does not expressly provide for the liberty to apply for further orders or by the fact of the Defendants’ committal from continue pursuing performance of the Order. To hold otherwise is to frustrate the administration of justice and due process of law.

The CA then held that as the Initial Date had lapsed, the Court could only resort to its inherent jurisdiction to enable the New Date for compliance to be ordered (para. 43).

The CA also held that the HC was not functus officio (para. 45).

What should an impecunious Defendant do?

The CA also noted that if the Defendants were truly impecunious, they should have applied to vary the HC Order (para. 46-47). However, the Defendants’ conduct was far from noble. They appealed against the Mandatory Injunction Order and steadfastly refused compliance.

Discussion on double jeopardy

The Appellants also argued that a further committal application would be in breach of the double-jeopardy rule enshrined in Art. 7(2) of the Federal Constitution. The CA gave this short shrift:

49. To add, we do not find any merit in the argument that the Consequential Order infringes the rule against double jeopardy under Article 7(2) of the Federal Constitution. The Consequential Order fixes a new date for performance of the Injunction Order and any failure to perform the Order by the New Date will be a distinct and separate breach of the Order. Thus, any subsequent proceedings following that breach will be premised on a distinct and fresh breach and not based on the first breach.

The appeal was dismissed with costs of RM30,000.

Key takeaways

This Judgment serves to clarify several key concepts in law. It further emphasises that mere payment of a fine does not absolve a party from complying with a Court Order. If the date for compliance has come and gone without compliance (and committal proceedings are taken-out), then the party can apply for a further date for compliance.

The Contemnor will have to move the Court to vary the Order, if they are so impecunious.

The CA issued a very important decision and a brilliant distillation of the law. It also serves as a useful guide to practitioners who routinely handle committal applications.

GAVIN JAYAPAL

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