Is a Consent Order/Judgment the same as a Judgment in Malaysian Court?

Situation 1

Adira and Shaan are involved in a divorce proceeding. Consequently, they agreed to sort out the terms of the divorce including division of assets, child custody and spousal maintenance. The terms of the settlement were recorded in a consent order.

Situation 2

Saleem sued Valer in court for a sum of money owed from a friendly loan. Valer agreed to settle the debt in five monthly instalments. They entered into a consent order to this effect.

These two situations concern different issues of the law but there is one thing that all parties have done, they have all entered into an agreement / contract known as a Consent Order.

What is a Consent Order?

A Consent Order is a form of settlement entered into between two consented parties in a legal action filed in court to resolve a dispute by satisfying certain arrangements without admission of guilt or liability.

Although it is normal for parties to discuss and agree on terms independently, there are situations in which parties are asked by the court, to write up an agreement between themselves.

Difference between a court judgement and consent order

While a court judgement would mean that a judge has decided on a particular issue and subsequently orders the parties to follow the terms set out by the court, consent orders differ in terms of the role our courts play in influencing that particular order. It is important to realize that the terms of consent orders regarding a particular issue are discussed independently without the court’s intervention. This is like having settlement agreements signed by solicitors and all parties.

The difference between these two can also be seen by its effects.

It is normal for court judgements to involve admissions of guilt and the consequences would most likely favour the innocent party. Be that as it may, consent orders are normally created to avoid any liability, and would be able to create a win-win situation for all parties.

Nature of consent order

In the case of Abdul Razak Sheikh Mahmood & Ors v. Amanah Raya Bhd & Ors And Another Appeal [2018] 5 CLJ 273, the Court of Appeal held:

“The law on setting aside consent judgment is more than settled and it is this. A consent judgment is only recorded when the respective litigants had agreed in writing as to how to resolve a legal suit. Once the consent judgment had been perfected, the parties are bound by it and the Court is duty bound to enforce the agreed terms of the same. The Court cannot vary any of the agreed terms unless with the mutual consent of the parties. Hence, one can say that the Court is functus officio or in other words, the Court is bereft of jurisdiction to entertain any request to set aside such judgment.”

Additionally, the case of Ng Say Chuan v. Lim Szu Ling [2010] 10 CLJ 371, particularly Yeoh Wee Siam J held that as a general rule, consent orders even in divorce matters, must be rarely disturbed unless there are exceptional circumstance that warrant the intervention of the court.

Setting Aside a Consent Order

As consent orders are built upon the element of consent, parties take part in negotiation processes and come up with various agreed terms before recording a consent order for the court to enforce. Hence consent orders should be given the full effect of any contractual agreement. It follows that grounds to set aside a Consent Order would include factors which would exclude the element of free consent. In Badiaddin Mohd Mahidin & Anor v. Arab Malaysian Finance Bhd [1998] 2 CLJ 75; [1998] 1 AMR 909, the Federal Court held:

“The grounds referred to for setting aside a consent order of a judgement by consent are grounds which basically relate to consensus ad idem of parties to a binding agreement or contract. It is elementary that if it is proved that there are grounds which vitiate such free consent, the agreement is not binding. If the agreement upon which a consent order or judgement by consent is based, is vitiated by elements, such as fraud, mistake, total failure of consideration, then such a perfected consent order or judgement by consent could be set aside in a fresh action filed for the purpose.”

Courts may also decide to not enforce consent orders, if such agreement is unfair and there is a specific provision, allowing for the courts to interfere. In Lau Hui Sing v. Wong Chou Yong [2008] 5 MLJ 846 , the issue revolved around Section 83 of Law Reform (Marriage and Divorce) Act 1976, a provision that essentially provides power for the court to vary, or rescind, any subsisting order for maintenance. Here, the court decided that:

“After looking at the consent order which was expected to include terms relating to maintenance, took the view that the consent order is not only oppressive against the ex-wife, but one that is an abuse of process and warrants the court to initiate contempt proceeding on its own motion, as such non-disclosure of assets as well as the application without justifiable reasons attempts to undermine the dignity of the court and court proceedings. Here, despite there being no issue regarding consent, the fact that the terms of the order were clearly against the wife’s favour allows the court to intervene.”