Post by : Rohit Dhiman

The High Court in Melaka has refused to immediately record a proposed RM1.7 million settlement in a negligence lawsuit arising from a serious motorcycle accident, ruling that the agreement must first receive formal court approval. Judicial Commissioner K Raja Segaran said the court could not simply endorse a settlement reached between the parties because the accident victim, Sultan Nur Mohamad, had been left permanently disabled and was unable to manage his own affairs. The case concerns a road accident settlement following a collision involving two motorcycles on March 2, 2024. Sultan suffered severe traumatic brain injuries in the crash, resulting in permanent disabilities. He subsequently pursued the legal action through his wife, Sharifah Nizamuddin, who was appointed as his litigation representative. 

Sessions Court Had Earlier Awarded RM1.87 Million

The dispute began after the Sessions Court found motorcycle rider Nafie Iman Hanafi Zainuddin fully responsible for the accident. The registered owner of the motorcycle, Shar Kawi Hazim Shafie, was also held vicariously liable. In its earlier decision, the Sessions Court awarded Sultan approximately RM1.87 million in damages, interest and costs. His wife, Sharifah, was separately awarded RM5,000. The defendants subsequently challenged both the finding of liability and the amount awarded by filing an appeal. While the appeal was still pending, both sides agreed to settle the matter instead of continuing with the litigation. Under the proposed agreement, the appellants would pay RM1.7 million as a full and final settlement, together with an additional RM170,000 in legal costs.

Why Did the Judge Reject the Immediate Consent Order?

K Raja Segaran explained that the court needed more than confirmation that both sides had agreed to the deal.  Under Order 76 Rule 10 of the Rules of Court 2012, a compromise involving a claim made on behalf of a person under disability requires court approval before it can become valid. The judge stressed that the consent of the person's litigation representative is necessary, but it does not by itself provide sufficient authority to conclude the settlement. The court therefore wanted detailed evidence explaining why RM1.7 million was considered an appropriate amount and whether accepting the settlement was in Sultan's best interests. Among the issues that need to be examined are the medical condition of the victim, his future care and financial requirements, the strength and risks of the pending appeal, and the way the settlement funds would be protected and managed for his benefit.

Court Questions RM170,000 Cost Figure

Another issue raised by the judge involved the proposed RM170,000 payment for costs. The Sessions Court had previously awarded only RM40,608 in costs. Raja Segaran therefore said the lawyers would need to explain why the proposed settlement included a substantially higher amount. The court also found problems with the draft consent judgment submitted by the parties. According to the ruling, the document contained incomplete and inconsistent provisions concerning matters such as the withdrawal of the appeal, deadlines for payment, enforcement of the settlement and how the earlier Sessions Court judgment would be dealt with. Because of these issues, the judge said the proposed order could not simply be entered into the court record in its existing form.

Court Says It Must Protect the Accident Victim

The ruling highlights the special responsibility of courts when a legal dispute involves a person who cannot independently protect his or her own interests. Raja Segaran made clear that the court's role is not simply to register an agreement reached between lawyers and the parties. He said the court must independently consider whether the proposed settlement protects the interests of the person who lacks capacity. The judge also rejected the argument that the earlier order appointing Sharifah as Sultan's litigation representative amounted to approval for any future settlement. He similarly found that the Sessions Court's earlier judgment did not remove the need for separate approval of the proposed compromise. This means the Malaysia High Court must now assess the proposed settlement before it can become enforceable.

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What Happens Next?

The respondents were directed to submit a proper application seeking approval of the settlement. The matter has been fixed for hearing on September 17. Importantly, the judge clarified that the appellants' agreement to settle remains binding while the approval process is pending. If the court ultimately approves the agreement, the proposed consent order can be formally perfected and the case can be settled according to its terms. If approval is refused, the pending appeal will continue and the parties will have to pursue the legal dispute through the normal appellate process. The ruling therefore does not finally cancel the RM1.7 million settlement. Instead, it places the agreement under judicial scrutiny to ensure that the proposed compensation and other terms are appropriate for a victim who has suffered permanent disabilities.

What did the Malaysian court decide?

The Melaka High Court refused to immediately record the RM1.7 million settlement because the accident victim lacks the capacity to manage his own affairs. The judge said court approval is required before the compromise can take effect.

Where did the case take place?

The case was heard at the High Court in Melaka, Malaysia. The underlying accident occurred on March 2, 2024, and involved two motorcycles.

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