1
IN THE HIGH COURT OF MALAYA AT KUALALUMPUR
(COMMERCIAL DIVISION)
CIVIL SUIT NO: 22NCC-293-03/2013
BETWEEN
MAZIAH BINTI MUSA
...PLAINTIFF
AND
1. ZAINULABIDIN BIN MAT AKHIR, DATO’
2. AHMAD FIKHRI BIN ZAINULABIDIN
3. MUTIARA PROPERTY DEVELOPMENT (M)
SDN. BHD.
(previously known as
MUTIARA EFEKTIF (M) SDN. BHD.)
...DEFENDANTS
GROUNDS OF JUDGMENT
(Defendants’ application to stay execution of judgment after trial)
A.
Background
1.
The plaintiff (Plaintiff) has instituted this suit (This Action) against
the following persons:
(a) the first defendant (1st Defendant);
2
(b) the second defendant (2nd Defendant); and
(c) the third defendant company (3rd Defendant).
2.
The Plaintiff is the 1st Defendant’s former wife. The 2nd Defendant is
the 1st Defendant’s son from the 1st Defendant’s earlier marriage.
3.
The 1st Defendant is a director of the 3rd Defendant and is the
majority shareholder in the 3rd Defendant.
4.
In This Action, the Plaintiff alleged, among others –
(a) the Plaintiff was the legal and beneficial owner of 1.5 million
shares in the 3rd Defendant (Shares);
(b) the 1st Defendant had forged the Plaintiff’s signatures –
(i)
on the transfer form of the Shares and this had caused the
transfer of the Shares to the 2nd Defendant. The 2nd
Defendant is presently the registered owner of the Shares
and a director of the 3rd Defendant; and
(ii) which had caused the Plaintiff’s resignation as a director of
the 3rd Defendant; and
(c) after the aforesaid forgeries, the 1st and 2nd Defendants had
caused the 3rd Defendant to sell the 3rd Defendant’s landed
assets to various third parties (Third Parties).
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5.
This Action was tried before Datuk Nallini Pathmanathan J. Her
Ladyship allowed the Plaintiff’s claim (High Court’s Decision). In a
written judgment, the court made a finding of fact that the Plaintiff
had proven on a balance of probabilities that her signatures on the
relevant documents had been forged. The court made the following
orders in This Action (High Court’s Orders):
(a) a declaration that -
(i)
the Plaintiff is the lawful owner of the Shares;
(ii) any transfer of the Shares is null and void;
(iii) the Plaintiff’s resignation or removal as a director of the 3rd
Defendant is null and void;
(iv) the Plaintiff was a director of the 3rd Defendant at all
material times; and
(v) the sales, disposal and transfers of the 3rd Defendant’s real
properties listed in paragraph 12 of the Statement of Claim
are null and void
(Declaratory Orders);
(b) the 3rd Defendant’s register of members be rectified with the
deletion of the 2nd Defendant’s name or any other relevant
name and the Plaintiff’s name be inserted as the owner of the
4
Shares (Rectification Order of 3rd Defendant’s Register of
Members);
(c) the records of the Companies Commission of Malaysia (SSM)
regarding the 3rd Defendant’s directors be rectified with the
deletion of the 2nd Defendant as the 3rd Defendant’s director and
the insertion of the Plaintiff’s name as a director of the 3rd
Defendant (Rectification Order of SSM’s Records);
(d) the 1st and 2nd Defendants to pay damages as assessed by the
Court (Assessment Order); and
(e) costs to be paid by the 1st and 2nd Defendants (Costs Order).
6.
The 1st, 2nd and 3rd Defendants (collectively “Defendants”) have
appealed to the Court of Appeal against the High Court’s Decision
(Appeal). Pending the disposal of the Appeal, the Defendants have
applied for a stay of execution of the High Court’s Orders pursuant
to the court’s inherent jurisdiction (This Application).
B.
Grounds in support of This Application
7.
The Defendants’ learned counsel advanced the following grounds to
support This Application:
(a) the Third Parties were bona fide purchasers for valuable
consideration of the 3rd Defendant’s landed assets. Such a fact,
according
to
the
Defendants,
constituted
a
“special
circumstance” to stay the execution of the High Court’s Orders
5
because the High Court’s Orders directly and adversely affect
the Third Parties;
(b) if This Application is not allowed, the execution of the High
Court’s Orders would have an “irreversible” effect which in turn,
would render the Appeal nugatory. The Defendants relied on
the Court of Appeal’s judgment in See Teow Guan &Ors v
Kian Joo Holdings Sdn Bhd [1997] 2 CLJ 299;
(c) a stay of execution of the High Court’s Orders should be
granted to maintain the status quo pending the disposal of the
Appeal;
(d) the balance of convenience or the balance of justice is in favour
of This Application. lf there is no stay of execution of the High
Court’s Orders, the 3rd Defendant would breach the agreements
with the Third Parties and the 3rd Defendant would be subject to
irreparable loss in terms of money, reputation and goodwill;
(e) there are merits in the Appeal; and
(f)
the 1st Defendant is facing serious medical problems.
C.
Can declaratory orders be executed?
8.
Learned counsel for both sides have submitted on whether this court
should order a stay of execution of the High Court’s Orders,
including the Declaratory Orders. Before I decide this issue, I raise
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the question as to whether a declaration can be enforced or not? I
am unable to find any Malaysian case on this point.
9.
I am of the view that a declaratory order cannot be executed and
hence, the question of a stay of execution of a declaration does not
arise. I rely on 2 Indian cases as follows:
(a) in Prakash Chand v SS Grewal & Ors [1975] Cri LJ 679, at
684, the Full Bench of the Punjab and Haryana High Court held
as follows –
“A declaratory decree … cannot be executed as it only
declares the rights of the decree-holder qua the judgmentdebtor, and does not in terms, direct the judgment-debtor
to do or to refrain from doing any particular act or thing.
Since there is no command issued to the judgment-debtor
to obey, the civil process cannot be issued for the
compliance of that mandate or command.”
(emphasis added); and
(b) Prakash Chand has been affirmed by the Indian Supreme
Court in State of Madhya Pradesh v Mangilal Sharma AIR
1998 SC 743, at 746.
10. In respect of declaratory orders, Indian cases are highly persuasive
as Part 2, Chapter 6 (ss 41 and 42) of our Specific Relief Act 1950
(SRA) which provides for declaratory decrees, is based on the
Indian Specific Relief Act, 1877 (now the Indian Specific Relief Act
1963).
11. If a declaration cannot be enforced, then I cannot allow This
Application in respect of the Declaratory Orders.
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12. In case I am wrong and declarations can be enforced, I will discuss
below whether the execution of the Declaratory Orders should be
stayed or otherwise.
D.
Principles applicable to stay of execution of judgments and
orders after trial
13. I start with the Federal Court’s judgment in Kosma Palm Oil Mill
Sdn Bhd & Ors v Koperasi Serbausaha Makmur Bhd [2003] 4
CLJ 1 which authoritatively held as follows:
(a) the general rule is that an appeal shall not operate as a stay of
execution unless the court so orders (at p. 10);
(b) an applicant for a stay of execution of a judgment or order (Stay
Application) has the onus to prove special circumstances to
justify the Stay Application (at p. 10,17 and 18). Special
circumstances must be deposed in the affidavit in support of the
Stay Application;
(c) the special circumstances must relate to the enforcement of the
judgment or order in question (at p. 14 and 17);
(d) there
are
many
factors
that
may
constitute
special
circumstances. The fact that the appeal will be rendered
nugatory (Nugatoriness) is the “most common” special
circumstances. Special circumstances is the genus of which
Nugatoriness is a species (at p. 16). Nugatoriness as the sole
8
test to decide a Stay Application as laid down in See Teow
Guan, has been expressly rejected (at p. 111-16);
(e) the merits of a party’s case is not relevant in a Stay Application
(at p. 16-17);
(f)
a stay of execution is not granted to give the unsuccessful party
time to satisfy the judgment or to alleviate that party’s problems
(at p. 18);
(g) the court may refuse a Stay Application if there is a risk that if
the Stay Application is allowed, the appellant may dispose off
assets (at p. 18);
(h) a Stay Application may be allowed if the appellant can show on
affidavit evidence that if the appeal is allowed, the respondent is
unable to re-instate the appellant to his or her original position
(at p. 19); and
(i)
a Stay Application may be refused if the respondent is in a
position to pay damages to the appellant if the appeal is allowed
(at p. 19).
14. In my earlier judgment in Universal Trustee (M) Bhd v Lambang
Pertama Sdn Bhd & Anor, Kuala Lumpur (Commercial Division)
Civil Suit No. 22NCC-623-10/2013, [2014] AMEJ 904, I stated as
follows:
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“11. Section 73 of the Courts of Judicature Act 1964 (CJA) provides
as follows:
“An appeal shall not operate as a stay of
execution or of proceedings under the decision
appealed from unless the court below or the
Court of Appeal so orders and no intermediate act
or proceeding shall be invalidated except so far as
the Court of Appeal may direct.”
(emphasis added).
12. Rule 13 of the Rules of the Court of Appeal 1994 states “An appeal shall not operate as a stay of
execution or of proceedings under the decision
appealed from unless the High Court or the Court
so orders and no intermediate act or proceeding
shall be invalidated except so far as the Court may
direct.”
(emphasis added).
13. The above 2 statutory provisions (2 Statutory Provisions), in
my view, provide the statutory jurisdiction for the High Court and
Court of Appeal to stay –
(a)
execution of any order or judgment; and
(b)
proceedings
-
pending disposal of an appeal to the Court of Appeal.
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14. The wording of the 2 Statutory Provisions indicate that the
general rule is that an appeal to the Court of Appeal does not
stay –
(a)
execution of an order or judgment which is the subject
matter of the appeal; and
(b)
proceedings in the High Court.
15. In view of the wording of the 2 Statutory Provisions, stay of
execution and stay of proceedings pending appeal to Court of
Appeal should be the exception and not the norm. If otherwise,
the opening words in the 2 Statutory Provisions (appeal shall
not operate as a stay of execution or of proceedings) will be
undermined, if not rendered redundant.
16. As there are clear statutory provisions conferring an exceptional
jurisdiction on the High Court and Court of Appeal to stay
execution and to stay proceedings pending appeal to the Court
of Appeal, there is no need to resort to the court’s inherent
jurisdiction – Federal Court’s judgment in Majlis Agama Islam
Selangor v Bong Boon Chuen [2009] 6 MLJ 307, at 320.”
15. Universal Trustee (M) Bhd concerned an application to stay
proceedings (not to stay the execution of a judgment or order) but s
73 of the Courts of Judicature Act 1964 and rule 13 of the Rules of
the Court of Appeal 1994 (collectively referred in this judgment as “2
Statutory Provisions”) also provide for the court’s power to stay the
execution of a judgment or order. In view of the 2 Statutory
Provisions, there need not be resort to the court’s inherent
jurisdiction or Order 92 rule 4 of the Rules of Court 2012 (RC) to
support a Stay Application.
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16. I pause here to refer to rule 40.8A of the English Civil Procedure
Rules (CPR) which reads as follows:
“Stay of execution and other relief
40.8A
Without prejudice to rule 83.7(1), a party against whom a
judgment has been given or an order made may apply to
the court for—
(a)
a stay of execution of the judgment or order; or
(b)
other relief,
on the ground of matters which have occurred since the
date of the judgment or order, and the court may by order
grant such relief, and on such terms, as it thinks just.”
17. It is clear that the 2 Statutory Provisions are different from rule 40.8A
CPR. Accordingly, English cases on rule 40.8A CPR may not apply
here.
18. As stated in Universal Trustee (M) Bhd, whether the court grants a
Stay Application is an exercise of that court’s judicial discretion
which is dependent on the particular facts adduced in that case. I
refer to the following judgment of the Court of Appeal in Structural
Concrete Sdn Bhd v Wing Tiek Holdings Bhd [1997] 1 CLJ 300,
at 306 -
“Exercises
of judicial discretion are not judicial precedent because
they are only authority for the facts of the particular case.”
E.
Should there be a stay of execution of Declaratory Orders
against Third Parties?
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19. At the outset of the hearing of This Application, I asked the
Defendants’ learned counsel why the Third Parties did not intervene
in This Action (1st Question) and had the Defendants, in particular
the 3rd Defendant (the vendor of the sale of 3rd Defendant’s real
properties to Third Parties), informed the Third Parties of the High
Court’s Decision (2nd Question).
20. The Defendants’ learned counsel was “unable” to answer the 1st
Question. In respect of the 2nd Question, the Defendants replied that
the Third Parties had not been informed of the High Court’s Decision
(Defendants’ Response).
21. The Plaintiff’s learned counsel contended as follows:
(a) section 42 SRA provides that a declaration “is binding only on
the parties to the suit”. Hence, the Plaintiff submitted that the
Declaratory Orders do not affect the Third Parties; and
(b) in view of the learned trial judge’s finding of fact that the
Plaintiff’s signatures had been forged, if the execution of the
High Court’s Orders was stayed, there was a risk that the 1st
and 2nd Defendants would continue to cause the 3rd Defendant
to dispose off illegally all the assets of the 3rd Defendant. In
such an event, the 3rd Defendant would become an empty shell
and the Plaintiff would only have a paper judgment.
22. I accept the above contentions by the Plaintiff. As held in Kosma
Palm Oil Mill Sdn Bhd, at p. 18, This Application should be refused
if there is a risk that upon a stay of execution of the High Court’s
13
Decision, the 1st and 2nd Defendants may cause further disposal of
the 3rd Defendant’s assets which would not only render the Shares
worthless but would also subject the 3rd Defendant to further
liabilities to Third Parties.
23. In addition to the above, the following reasons militate against This
Application:
(a) the Third Parties would not be adversely affected by the High
Court’s Decision without being given a right to be heard. Order
44 rule 3(1) and (5) RC provide as follows:
“3(1) Where in an action for …
(c) the sale of any property,
the Court gives a judgment which affects the rights or
interests of persons not parties to the action or directs any
account to be taken or inquiry made, the Court may when
giving the judgment or at any stage of the proceedings
under the judgment direct that a notice of the judgment to
be served on any person interested in the estate or under the
trust or in the property, as the case may be; and any person
duly served with a notice of the judgment in accordance
with this rule shall, subject to paragraph (5), be bound by
the judgment to the same extent as he would have been if
he had originally been made a party to the action.
…
(5) A person served with notice of a judgment may, within
one month after service of the notice on him, and
without entering an appearance, apply to the Court to
discharge, vary or add to the judgment.”
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(emphasis added).
In this case, the learned trial Judge has not directed pursuant to
Order 44 rule 3(1) RC for a notice of the High Court’s Orders to
be served on the Third Parties. Even if such a direction has
been given, the Third Parties have a right under Order 44 rule
3(5) RC to apply to court to “discharge, vary or add” to the High
Court’s Orders. It is therefore clear under Order 44 rule 3(1)
and (5) RC that the Third Parties have a right to apply to
discharge or vary the High Court’s Orders;
(b) the following Federal Court cases have held that a third party
purchaser of land or interest in land has the legal burden to
prove that he or she is a bona fide purchaser of that land or
interest in land for valuable consideration without notice of any
fraud or circumstances which may vitiate his or her title or
interest –
(i)
Tan Ying Hong v Tan Sian San [2010] 2 MLJ 1, at 8; and
(ii) Ong Chat Pang & Anor v Valliappa Chettiar [1971] 1
MLJ 224, at 227.
Since the onus is on the Third Parties to establish that they are
bona fide purchasers of the 3rd Defendant’s landed assets for
valuable consideration without actual notice of the Plaintiff’s
claim, I do not think I should grant a stay of execution of the
High Court’s Orders; and
(c) in view of the Defendants’ Response, I am concerned about the
bona fides of the Third Parties. I refer to the Court of Appeal
case of Tradium Sdn Bhd v Zain Azahari bin Zainal Abidin
& Anor [1995] 1 MLJ 668, where a property development
company (Proposed Intervener) knew about judicial review
proceedings in the High Court to quash Dewan Bandaraya
Kuala Lumpur’s (DBKL) approval for the Proposed Intervener’s
property development project (DBKL’s Approval) and yet the
Proposed Intervener did not intervene in the High Court
15
proceedings. The High Court issued a certiorari order to quash
DBKL’s Approval and DBKL appealed to the Court of Appeal
against that order. The Proposed Intervener only applied to
intervene in the appeal but this application was disallowed by
the Court of Appeal, at 673-674, on the following grounds “Continuing with his argument, Hj Sulaiman [first respondent’s
learned counsel] submitted that it was a matter of discretion and
that several factors weighed heavily against the applicant
[Proposed Intervener]. These included, but were not limited to
the following: (1) the applicant's failure to apply at the earliest
opportunity to be added as a party; (2) the availability of the
alternative course of applying to intervene in the second
respondent's appeal, subject, of course, to the exercise of
discretion of this court in such event; (3) the delay in coming
before us; and (4) the making of a conscious election to make a
limited intervention instead of choosing to play the role of an
added respondent to the substantive motion.
I think that there is merit in the submission made on behalf
of the first respondent. The applicant admittedly did not
wish to face an order for costs. Nevertheless, while
enjoying that protection, it attacked the first respondent's
arguments before the judge. In my view, the applicant was
no better than a sniper who, whilst concealed and
protected by the foliage in which he hides, proceeds to
take pot-shots at his unsuspecting opponent. He was not
prepared to take on all the risks of a full battle and, when
the event went against him, decided to change his role.
Ought he to be permitted to do this? I think not: for both
principle and authority are against him.”
(emphasis added).
24. I hold that even if the Declaratory Orders affect the Third Parties,
such a fact in itself does not constitute a special circumstance to
allow This Application. This is because following Kosma Palm Oil
Mill Sdn Bhd, at p. 14 and 17, the special circumstances must
relate to the enforcement of the Declaratory Orders. There is nothing
exceptional about the enforcement of the Declaratory Orders to
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warrant a stay of execution of the Declaratory Orders. To the
contrary, as I have stated above, the Third Parties have a right
under Order 44 rule 3(5) RC to apply to court to challenge or vary
the Declaratory Orders. Accordingly, I hold that the Defendants have
failed to discharge the onus placed on them to justify a stay of
execution of the Declaratory Orders.
F.
Would Appeal be rendered nugatory if This Application is
dismissed?
25. The Defendants relied on the Court of Appeal’s judgment in See
Teow Guan to advance the Nugatoriness argument.
26. It is pertinent to note that in See Teow Guan –
(a) the second to fourth respondents applied to the High Court to
strike out a prayer in a winding up petition for a distribution in
specie of the shares of the first respondent company
(Impugned Prayer) (at p. 302-303);
(b) the High Court allowed the application of the second to fourth
respondents and struck out the Impugned Prayer (Striking Out
of Impugned Prayer) (at p. 303);
(c) the appellants appeal to the Court of Appeal against the
Striking Out of Impugned Prayer and pending disposal of this
appeal, the appellants applied for a stay of winding up
proceedings (at p. 303); and
(d) the Court of Appeal relied on s 44(1) CJA to stay the winding
up proceedings pending the disposal of the appeal (at p. 306307 and 312). The Court of Appeal held as follows –
17
“In my judgment, the paramount consideration governing an
application for a stay, whether of execution or of
proceedings, or, in the case of an application for some
other form of interim preservation of the subject-matter of
an appeal, such as the grant of an injunction or other
appropriate relief under s. 44(1) of the Courts of Judicature
Act 1964, is that the appeal to this Court, if successful,
should not be rendered nugatory. If upon balancing all the
relevant factors, this Court comes to the conclusion that an
appeal would be rendered nugatory without the grant of a
stay or other interim preservation order, then, it should
normally direct a stay or grant other appropriate interim
relief that has the effect of maintaining the status quo.
But cases may arise where, in determining the critical
question whether an appeal would be rendered nugatory,
this Court comes to the conclusion that the point
concerned in the pending appeal is obviously unarguable.
In such cases it would not, as I perceive the law, be a
proper exercise of discretion for this Court to shut its eyes
to the practical realities of the situation and to nevertheless
proceed to grant a stay.
Take this very case. It is clear from the authorities that the
substantive appeal, based upon a single point of
interpretation, lacks all merit and is doomed to failure. In
this state of affairs, would it be a proper exercise of
discretion to permit a stay and cause a delay in the
prosecution of the petition? I think not.”
(emphasis added).
27. Section 44 CJA provides as follows:
Section 44. Incidental directions and interim orders.
(1) In any proceeding pending before the Court of Appeal any
direction incidental thereto not involving the decision of the
proceeding, any interim order to prevent prejudice to the claims
of parties pending the hearing of the proceeding, any order for
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security for costs, and for the dismissal of a proceeding for
default in furnishing security so ordered may at any time be
made by a Judge of the Court of Appeal.
…
(3) Every order made under subsection (1) may, upon
application by the aggrieved party made within ten days after
the order is served, be affirmed, varied or discharged by the
Court.”
(emphasis added).
28. I am of the following respectful view regarding See Teow Guan:
(a) See Teow Guan concerned an application to stay winding up
proceedings and did not involve an application to stay the
execution of a judgment or order after trial. For reasons stated
in Universal Trustee (M) Bhd, I am of the view that the court
should be less inclined to stay court proceedings vis-à-vis an
application to stay execution of a judgment or order after trial.
More importantly, as explained by Abdul Hamid Mohamad JCA
(as his Lordship then was) in the Court of Appeal case of MarilRionebel (M) Sdn. Bhd. v Perdana Merchant Bankers Bhd.
[2001] 3 CLJ 248, at 268-269, winding up petitions should be
disposed of expeditiously and hence, the winding up court
should not readily stay winding up proceedings under s 221(1)
of the Companies Act 1965;
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(b) an order made by a Judge of Court of Appeal under s 44(1)
CJA is only interim in nature as is clear from s 44(3) CJA and
the “shoulder note” (also known as “side note” and previously
referred to as “marginal note”) to s 44 CJA (“interim orders”). In
Lim Phin Khian v Kho Su Ming [1996] 1 MLJ 1, at 28-29, the
Federal Court referred to the side note of s 17 of the Courts of
Judicature (Amendment) Act 1995 in the interpretation of that
provision;
(c) the Federal Court in Kosma Palm Oil Mill SdnBhd, at p. 1116, has expressly rejected Nugatoriness as the sole test to
decide a Stay Application;
(d) See Teow Guan did not refer to, let alone discuss, the 2
Statutory Provisions;
(e) section 44 is placed in Part 3 of CJA under the heading
“General” whereass73 CJA is placed in the same part under the
heading “Appellate Jurisdiction – Civil Appeals”.
Part 1 of the Interpretation Acts 1948 and 1967 (IA) applies to
CJA which has been revised in 1972 (please see s 2(1)(b) IA).
Section 16 IA (in Part 1 IA) provides that the division of an Act
of Parliament into parts and the particulars of such a division
“shall … be taken notice of in all courts and for all purposes
whatsoever”.
Based on the placement of ss 44 and 73 CJA coupled with the
fact that s 73 CJA is a specific provision for stay of execution of
20
High Court’s judgments and orders while s 44(1) CJA is a
general provision, s 73 CJA should be preferred vis-à-vis s
44(1) CJA in respect of applications to stay execution of High
Court’s judgments and orders. My opinion is based on the
application of canon of construction generalia specialibus non
derogant as applied by the Court of Appeal in Luggage
Distributor (M) Sdn Bhd v Tan Hor Teng & Anor [1995] 3
CLJ 520, at 550, as follows –
“There is another compelling reason for holding that the
respondents have no caveatable interest in the land. It lies in
the
rule
of
construction
expressed
in
the
maxim
generalibus specialia derogant. Where there are two
provisions of written law, one general and the other
specific, then, whether or not these two provisions are to
be found in the same or different statutes, the special or
specific provision excludes the operation of the general
provision.”
(emphasis added);
(f)
if s 44(1) CJA is given a wide interpretation as held in See
Teow Guan, this may undermine, if not emasculate, the general
rule expressly provided in the 2 Statutory Provisions that an
appeal does not operate as a stay of execution of a judgment or
order. As ruled in Kosma Palm Oil Mill Sdn Bhd, at p. 13 –
“Firstly, since the general rule is that a stay should not be
granted any exception carved out of it certainly requires
something more than an ordinary reason. This interpretation is
consistent with established rules of construction. It is obvious
21
that an exception to a general rule cannot be interpreted so
as to nullify or destroy the rule itself (see DesuRayudu v AP
Public Service Commission AIR 1967 AP 353). It cannot
swallow the general rule (see Shree Swamiji v State of
Mysore (1963) 2 SCR 226). The grant of a stay for any
ordinary reason will have just that effect and destroy the
general rule that there shall be no stay.”
(emphasis added); and
(g) the interim powers under s 44(1) CJA can only be exercised by
a Judge of the Court of Appeal. The High Court has no power to
make any interim order under s 44(1) CJA. Consequently, I
have no power to grant This Application pursuant to s 44(1)
CJA.
29. The above view that s 73 CJA and not s 44 CJA should govern a
Stay Application is supported by a recent Court of Appeal’s
judgment in Tamabina Sdn Bhd & Anor v Nakamichi Corp Bhd
[2014] 4 MLJ 613, at para 16, as follows:
“In our judgment it is crystal clear in the present case that the
application is in the nature of a stay of execution. Mr Gideon
Tan does not appear to dispute this fact. And this being the
case, the application then ought to have been made pursuant to
s 73 [CJA], read with s 43 [CJA]. The application should not
have been made pursuant to s 44 [CJA]. To having made the
application purportedly pursuant to s 44 [CJA] is an abuse of
that section.”
(emphasis added).
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30. If I do not allow This Application, the Defendants can still proceed
with the Appeal. If the Appeal is allowed, the Court of Appeal may
set aside in toto the High Court’s Orders.
31. Assuming the Defendants have suffered any loss or damage due to
the Plaintiff’s execution of the High Court’s Orders, in particular the
Rectification Order of 3rd Defendant’s Register of Members and the
Rectification Order of SSM’s Records, the Defendants may apply to
the Court of Appeal for a consequential order of assessment of
damages against the Plaintiff. The Court of Appeal has wide
appellate powers under s 69(1), (4) and (5) CJA as follows:
“(1)
… the Court of Appeal shall have all the powers and
duties, as to amendment or otherwise, of the High Court
…
…
(4)
The Court of Appeal may draw inferences of fact, and
give any judgment, and make any order which ought
to have been given or made, and make such further or
other orders as the case requires.
(5)
The
powers
aforesaid
may
be
exercised
notwithstanding that the notice of appeal relates only
to part of the decision, and the powers may also be
exercised in favour of all or any of the respondents or
parties although the respondents or parties have not
appealed from or complained of the decision.”
(emphasis added).
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32. The Assessment Order and the Costs Order are purely monetary in
nature. There is no affidavit evidence to show that the Plaintiff would
be unable to repay the sum of damages which may be ordered by
the learned Senior Assistant Registrar or the Deputy Registrar after
assessing the damages to be paid by the Defendants to the Plaintiff.
In other words, there is no affidavit evidence to show that if the
Appeal is allowed, the Plaintiff is unable to re-instate the Defendants
to their original position.
33. In view of the above reasons, I am unable to accept the Defendants’
contention that if This Application is dismissed, the Defendants
would suffer “irreversible” effect and the Appeal would be rendered
academic. Accordingly, I reject the Nugatoriness argument in this
case.
G. Whether court should preserve status quo pending disposal of
Appeal?
34. In respect of the Defendants’ submission that This Application
should be allowed to preserve the status quo pending disposal of
the Appeal, I am not able to accept this contention. My reasons are
as follows:
(a) the Plaintiff has obtained judgment after trial and should be
allowed to enjoy the fruits of her litigation; and
(b) the Defendants have the burden to justify This Application by
showing special circumstances which must relate to the
enforcement of the judgment or order in question – Kosma
24
Palm Oil Mill Sdn Bhd, at p. 14 and 17. This onus to show
special circumstances should not be circumvented by a plea to
maintain the status quo pending disposal of the Appeal. In
Kosma Palm Oil Mill Sdn Bhd, at p. 7, the applicant advanced
the argument that the execution of the High Court’s order
should be stayed so as to preserve the status quo which did not
prejudice any party and yet, the Federal Court dismissed the
stay application in that case.
H.
Can court consider balance of convenience in a stay
application?
35. In Universal Trustee (M) Bhd, I stated the following in respect of
the court’s discretion to stay proceedings pending an appeal –
“23. In deciding whether proceedings can be stayed pending the
disposal of an appeal, the following factors should be
considered:
(a)
whether the applicant can show special circumstances –
[Jagdis Singh Banta Singh v Outlet Rank (M) Sdn Bhd
[2013] 1 CLJ 47], at p. 58. An applicant can demonstrate
special circumstances when his or her appeal to the Court
of Appeal will be rendered redundant if proceedings in the
High Court are not stayed;
(b)
in Chinese Chamber Realty Pte Ltd &Ors v Samsung
Corp (No 2) [2003] 4 SLR 313, at para 3, the Singapore
High Court considered the balance of convenience (now
popularly known as balance of justice), namely a
comparison of the existence, nature and extent of
25
prejudice which may be suffered by the parties if
proceedings are stayed or otherwise; …”
36. In respect of an application to stay the execution of a judgment or
order, Kosma Palm Oil Mill Sdn Bhd, at p. 14 and 17, requires the
applicant to demonstrate on affidavit evidence special circumstances
which must relate to the enforcement of the judgment or order in
question. Accordingly, the balance of convenience should not be
taken into account. It is to be noted that before Kosma Palm Oil Mill
Sdn Bhd, the Court of Appeal considered the balance of
convenience in a Stay Application in Univein Sdn Bhd v Malaysia
Building Society Bhd [2003] 3 AMR 181, at 185.
37. If balance of convenience can be considered in a Stay Application,
this will undermine the general rule explicitly provided in the 2
Statutory Provisions that an appeal does not operate as a stay of
execution of a judgment or order - Kosma Palm Oil Mill Sdn Bhd,
at p. 13.
38. If I am wrong in construing Kosma Palm Oil Mill Sdn Bhd and the
balance of convenience may be considered in This Application, I
hold that in this case, the balance of justice is in the Plaintiff’s favour.
I decide as such because –
(a) as explained above, the Appeal would not be rendered
nugatory if I dismiss This Application;
(b) if This Application is allowed, there is a real concern that the 1 st
and 2nd Defendants would cause the 3rd Defendant to dispose
off all the assets of the 3rd Defendant. In such an event, the
26
Plaintiff would suffer irreparable loss in the form of a paper
judgment and the 3rd Defendant would just be an empty shell;
and
(c) Datuk Nallini Pathmanathan J has already given her written
grounds of judgment in This Action. As such, all the parties can
endeavour to fix an early hearing date of the Appeal in this
case.
I.
Court cannot consider merits of Appeal
39. It is clear from Kosma Palm Oil Mill SdnBhd, at p. 16-17, that the
merits of the Appeal should not be considered in This Application.
40. Jagdis Singh Banta Singh v Outlet Rank (M) Sdn Bhd [2013] 1
CLJ 47 is a case concerning stay of proceedings and not stay of
execution of a judgment or order. Nonetheless, I am of the view that
the following dicta of the Court of Appeal in Jagdis Singh, at p. 59,
is relevant to applications to stay the execution of a judgment or
order:
“Of course, we have to look into grounds of judgment of the [Judicial
Commissioner]. But this however, should not extend to deciding the
pending appeal, as it will be premature at this stage to do so. It is not
for the court deciding the application for stay to declare that the
grounds of appeal are frivolous or not arguable. This is to avoid a
situation where the court be accused of descending into the arena
even before the appeal is argued.”
27
41. If the above is accepted, the court should not dismiss a Stay
Application on the ground that the appeal in question “lacks all
merits and is doomed to failure” as stated in See Teow Guan, at p.
313. Based on Kosma Palm Oil Mill Sdn Bhd and Jagdis Singh,
the court hearing a Stay Application should not express any
comment in respect of the merits of the appeal so as to preserve the
integrity of that appeal.
J.
Court cannot consider 3rd Defendant’s loss and 1st Defendant’s
medical problems
42. Kosma Palm Oil Mill SdnBhd, at p. 18, has clearly held that the
execution of a judgment or order should not be stayed so as to
alleviate the unsuccessful party’s problem. Hence, I cannot consider
the 3rd Defendant’s loss and the 1st Defendant’s medical problems.
K.
Court’s decision
43. Premised on the above reasons, I dismiss this Application with
costs.
WONG KIAN KHEONG
Judicial Commissioner
High Court (Commercial Division)
Kuala Lumpur
DATE: 28 AUGUST 2014
For the Plaintiff:
Encik Zainur Zakaria, Hanif Abdul Rahman & Nor Azlan Sherin with him
(Messrs. Hanif Abdul Rahman & Associates)
For the Defendants:
Cik Jasmine (Messrs. Jahaberdeen & Co.)