Justice Choo Kah Sing ordered Michael Chua, his wife and mother to pay Mudajaya Corporation Bhd the judgment sum after the trio admitted to owing the construction firm RM65 million in a settlement arrangement.

The judge also ordered that Chua, his wife Tan Kah Luan, and mother Yeo Siok Boi, pay interest on the judgment sum calculated at the rate of 5% per annum, and costs of RM500,000.

The judgment sum took into account RM21,452,717.81 generated from the sale of various properties recovered from the trio as part of the settlement terms.

Mudajaya had sued Chua, Tan and Yeo to recover RM72,195,919.86 in secret profits allegedly received by them without the company’s knowledge.

In his judgment, Choo said the secret profits received by the trio must have come from overpayments made by Mudajaya to its subcontractors.

He said the excess sums were channelled to Chua and his family members without Mudajaya’s knowledge.

However, the judge said the actual sum received by them could not be ascertained.

“The plaintiff’s evidence (showed) there were unauthorised payments and misappropriation of secret profit, but the full amount asserted was not supported by evidence,” Choo said in a 42-page judgment released last week.

Despite this, the judge noted that Chua, Tan and Yeo had admitted a debt of RM65 million to Mudajaya in a series of property transfer documents they executed.

“When there exists a written document between two parties, the court must uphold the bargain between (them) unless there are reasons to vitiate the validity of the agreement,” the judge said.

Choo said there was no evidence to support Chua’s defence that he had not voluntarily executed the property transfer documents.

“There is no evidence to suggest that the testimonies of the three lawyers (who attended to the preparation and execution of the documents) were incredible or untruthful,” the judge said.

Choo also dismissed suggestions that the property transfer documents were executed by Chua, Tan and Yeo under coercion, duress or undue influence.

He likewise rejected another of the trio’s contentions that the documents they executed did not specify the value of the debt.

“No one would be so naive to agree to transfer away his properties, not one but 22 properties, without first questioning the amount that has to be paid off,” the judge said.

Consequently, the court dismissed the defendants’ counterclaim seeking to invalidate the transfer of the subject properties.

Mudajaya was the main subcontractor for a RM720 million power plant project in Manjung, Perak.

It appointed a spun piling contractor, and paid against invoices which had been marked up.

The spun piling contractor in turn invoiced three subcontractors engaged by Mudajaya for sums determined by Chua.

“In a nutshell, all the progress claims submitted by the subcontractors to the plaintiff (Mudajaya) were not according to the actual works done, but were inflated amounts, either by adjusting the rates or the quantity so as to deceive the plaintiff.

“The excess money (termed ‘off-book’ funds) was paid to (Chua) or third parties under (his) instruction,” said Choo.

The judge also found no evidence to support Chua’s defence that he had returned the excess monies collected to Mudajaya.

Both Mudajaya and the defendants have filed appeals to the Court of Appeal.

Lawyers Conrad Young, Mark Lau and Kristen Tan represented the company, while S Selvi, Lim Wei Qi, Ho Zhi Qian and Belinda Low acted for the defendants.