UNIVERSITI TUN HUSSEIN ONN MALAYSIA v ASIA PACIFIC FLIGHT TRAINING SDN BHD (Dalam Likuidasi)

Case Significance

Illustrates the enforceability of an oral settlement agreement where its terms and breach are proved on the balance of probabilities, and the recovery of fees paid where the agreed consideration of flight training was not supplied.

This High Court decision at Kuala Lumpur concerns a claim for breach of an oral settlement agreement in the context of a failed flight-training arrangement. The plaintiff, Universiti Tun Hussein Onn Malaysia, brought the action against the defendant, Asia Pacific Flight Training Sdn Bhd (in liquidation), alleging that the defendant had breached an oral settlement agreement (Perjanjian Penyelesaian Lisan) by failing to supply the flight training that had been agreed. The plaintiff sought the repayment of RM3,766,400 in course fees it had paid to the defendant between 2014 and December 2016, a further RM1,231,559 said to have been advanced to another flight-training institution, interest at 8% per annum on the total, and costs. The matter proceeded to trial, at which the plaintiff called five witnesses and the defendant called one. The issues for the court were whether an oral settlement agreement had been concluded on the terms alleged, whether the defendant had breached it by failing to provide the agreed training, and whether the plaintiff had proved its resulting loss to the civil standard. Applying the burden of proof on the balance of probabilities and weighing the evidence and submissions, the court found that the defendant had breached the oral settlement agreement and was liable for that breach, and that the plaintiff had succeeded in proving its claim. It allowed the plaintiff's claim with costs, and provided for interest in accordance with the relevant provisions of the Rules of Court 2012. The judgment is a useful illustration of the enforceability of an oral settlement agreement, provided its terms and breach are proved, and of the recovery of sums paid where the agreed consideration, here flight training, is not supplied. The judgment also illustrates that a defendant's liquidation does not, of itself, defeat a claim to establish the defendant's liability, and that a plaintiff who has paid for a service that was never delivered may recover the sums paid once the agreement, the breach and the resulting loss are proved to the civil standard on the evidence adduced at trial.