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IN THE HIGH COURT OF MALAYA IN KUALA LUMPUR

IN THE FEDERAL TERRITORY, MALAYSIA

CIVIL SUIT NO. 22NCVC-371-2011

BETWEEN

AWINA CORPORATION SDN BHD PLAINTIFF

AND

1. SISTEM KAWALAN SEKUTU


SDN BHD

2. HSBC BANK MALAYSIA BERHAD

3. NIRWANA ACADEMY SDN BHD DEFENDANTS

JUDGEMENT

1. By the Summons in Chambers (Enclosure 31) together with the

Certificate of Urgency dated 27.7.2011 (Enclosure 33), the plaintiff

had applied for a stay of execution pending the plaintiffs appeal to

the Court of Appeal. The plaintiffs appeal is against the decision of

this court given on 10.8.2011 in respect of Enclosure 14 and

Enclosure 18 for which separate orders have been made. By

Enclosure 14, the second defendant (the bank) had obtained

summary judgment under O.14 r.2 of the RHC 1980 against the

plaintiff under the counter-claim for the following reliefs:-


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a. Private caveat vide Presentation No. 5291/2010 which
was entered by the plaintiff in respect of land held
under PN 4606 Lot No. 30837 in the Mukim of Petaling
District of Kuala Lumpur (the property) be cancelled

b. The Registrar of Title Wilayah Persekutuan do cancel


the said private caveat from the document of title
register and in any other record

c. Damages to be paid to the second defendant/ the bank


for any damages suffered as the result of the plaintiffs
refusal to withdraw the said private caveat

d. The plaintiff to deliver vacant possession of the


property within 7 days from the date of the order

2. Costs of the application be born by the plaintiff

3. Such other reliefs that this honourable court being


suitable and reasonable

2. The grounds of the application (Enclosure 14), briefly, is:-

i. the second defendant as the registered chargee of the


property is an aggrieved person in respect of the entry
of the said private caveat

ii. the second defendants registered interest as the


registered chargee takes priority over interest if any of
the plaintiff on the property

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iii. the plaintiff has no caveatable interest to maintain the
said private caveat as the property has been
successfully sold to the third defendant (Nirwana
Acedmy Sdn Bhd) through public auction

iv. the plaintiff has no defense to the second defendants


counter claim which has been filed in the civil suit.

3. By the Summons in Chambers (Enclosure 18), the second

defendant has also applied for the following orders:-

(1) the writ of Summons dated 6.5.2011 and the Statement


of Claim dated 5.5.2011 be struck out against the
second defendant in accordance with:-

(a) O.18 r .19 (1)(a) or (b) or (c) or (d) of


the RHC 1980; and/or
(b) under the inherent jurisdiction of the
court in accordance with O.92 r.4 of
the RHC 1980

(2) costs of the application borne by the plaintiff;

(3) such further orders that this honourable court deem


suitable and just

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4. The grounds of the application (Enclosure 18) is briefly:-

a. The writ of summons and the statement of claim does


not disclose any reasonable cause of action against the
second defendant

b. The Writ of Summons and the Statement of Claim is


scandalous, frivolous, vexatious and cannot be
sustained; and

c. The writ of summons and the statement of claim is an


abuse of the process of the court

5. On 10.8.2011, this court had granted summary judgement against

the plaintiff in the second defendants counter claim as prayed in

Enclosure 14. This court had also struck out the plaintiffs claim

against the second defendant as prayed in Enclosure 18. Hence, the

appeal by the plaintiff against the decision of this court given on

10.8.2011 and consequently this application for stay.

6. The grounds of the application for stay (Enclosure 31) is briefly:-

a. Sebagai kesan Penghakiman Terus, defendan


kedua kini bebas untuk mengendalikan hartanah
tersebut setelah pengeluaran kaveat
persendirian, iaitu untuk memindahkan hartanah
tersebut kepada defendan ketiga yang telah
membeli yang sama melalui lelongan. Sekiranya

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yang sama dilakukan, kesemua hak plaintif yang
didapati secara betul melalui Pinjaman Jual Beli
Berarikh 10.12.2009 (PJB) (antara
plaintif/pembeli dan defendan pertama/penjual)
akan digagalkan secara tidak adil, dan menjadi
sia-sia. Ini akan konsisten, dan akan
membenarkan defendan pertama Berjaya dalam
membenarkan melemahkan kuasa secara salah
dan mengelakkan SPA;

b. Notis Rayuan plaintif masing-masing terhadap


Penghakiman Ringkas jika berpihak kepadanya
akan menjadi sia-sia;

c. Guaman perlaksanaan spesifik plaintif/penjual


melalui Guaman Sivil di Mahkamah Tinggi Kuala
Lumpur No. S-22-666-2010 akan turut menjadi
sia-sia;

d. Kehilangan yang dialami plaintif tidak boleh


dikuantifikasikan kerana ianya adalah kehilangan
yang tidak bioleh diremedikan berikutan dengan
sekiranya operasi Institut Teknologi Jaya Sdn Bhd
(IT) di atas hartanah tersebut ditutup, antra
lainnya adalah seperti berikut:-

i. Plaitif telah memohon dan


mendapatkan kebenaran untuk
mengendalian pelbagai kursus Sijil
Kemahiran Malaysia yang
melibatkan membangunkan
sukatan pelajaran, menggaji ahli

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fakulti, menyusun lawatan bagi
pihak berkuasa Kerajaan.
Selanjutnya, ITJ juga telah
menempatkan, membuat bayaran
pendahuluan untuk asrama
pelajar, kemudahan pengangkutan
dan lebih lagi

ii. Berikutan dengan kebenaran


tersebut, satu kumpulan besar
pelajar Bumiputera (dari segenap
Malaysia) telah berpindah dari
kampung halaman mereka untuk
mendaftarkan diri di ITJ bagi
memulakan kelas mereka.

(e) Sekiranya pergantungan tidak dibenarkan ia akan jauh


melebihi sebarang prejudis yang akan dideritai oleh
defendan kedua. Reputasi plaintif, perniagaan dan hak-
haknya untuk menentukan dengan alternative akan
dikalahkan, dan diletakkan pada akhiran, sekiranya
pergantunggan tidak dibenarkan.

7. Learned counsel for the plaintiff had, inter alia submitted that:-

1. the plaintiff has been operating an Educational


Institute on the property and if stay is not granted and
if the appeal to the Court of Appeal is allowed in favour
of the plaintiff, it will become nugatory and it is not
reversible.

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2. Monies were spent in advertising and promoting the
college

3. Time, costs and effort were spent to reset and clean up


the equipments for the laboratories

4. The plaintiffs reputations, business and rights to have


its contentions determined affirmately will have been
defeated and put nought, if a stay is not granted

5. The learned counsel for the plaintiff did not refer to


any authorities.

8. On the other hand, learned counsel for the second defendant, had,

inter alia submitted that the plaintiff has not disclosed any special

circumstances to justify a stay. In the event and if the appeal to the

Court of Appeal is allowed in favour of the plaintiff, the plaintiff can

be compensated with damages which are quantifiable.

9. In support of the submissions, learned counsel for the second

defendant had referred to the following cases:-

1. Kosma Palm Oil Mill Sdn Bhd & Ors v Koperasi


Serbausaha Makmur Bhd (2004) 1 MLJ 257

2. Institut Teknologi Federal Building Society Bhd v


IIUM Education Sdn Bhd (2007) 7 MLJ 23

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3. Univein Sdn Bhd v Malaysia Building Society (2003)
4 MLJ 618

4. Tropiland Sdn Bhd v DCB Bank Bhd & Ors (2000) 2


MLJ 65

10. The brief facts of the present case, is as follows:-

1. The first defendant as the registered owner had


charged the property to the second defendant (bank)
as security for banking facilities

2. The second defendant as chargee of the property was


duly registered vide presentation No. 2616.2003 on
26.2.2003 by the Registrar of Titles Wilayah
Persekutuan

3. As the first defendant (chargor) had defaulted to pay


the banking facilities, the second defendant had
applied vide Originating Summons No. 24-2391-2008
filed on 6.11.2008 for an Order for Sale of the property

4. On 2.6.2009 the High Court Kuala Lumpur granted the


Order for Sale of the property

5. The first auction date scheduled on 16.12.2009 did not


proceed. The reserved price was RM5,650,000.00
million.

6. On 9.12.2009, the first defendant (chargor) had


entered into a private treaty (Sale and Purchase
Agreement). The plaintiff was to redeem the property.

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In the meantime, the plaintiff had entered a private
caveat on 31.3.2010 on the property

7. As the chargor had failed to redeem the property, the


bank had applied for a new auction date. Accordingly,
by Order of Court dated 28.2.2011 a new auction date
was fixed on 13.4.2011 at the reserved price of
RM5.4 M.

8. On 11.4.2011, the plaintiffs solicitors, had served an


application on the second defendants solicitors to
intervene in the Foreclosure proceeding and to stay the
auction of the property

9. On 12.4.2011 when the matter was heard before His


Lordship, John Louis Ohara J, the plaintiffs counsel
made an oral application for an interim stay of the
auction pending the disposal of the plaintiffs
application for stay and the application to intervene.
The application for interim stay was dismissed with
costs. There is no appeal by the plaintiff against the
decision.

10. On 13.4.2011, the public auction proceeded. The


property was successfully sold to the third defendant
as the successful bidder at the price of RM13.8M.

11. On 6.5.2011, the plaintiff had commenced the present


action against the chargor (first defendant), the
chargee-bank (second defendant) and the successful
bidder in the public auction (third defendant). The
plaintiffs claim against the three defendants, inter alia
and briefly is as follows:-

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i. The plaintiff has a prior legal interest in
the property vis--vis the successful
bidder by reason of the sale and
purchase agreement dated 9.12.2009
(the private treaty) entered into between
the chargor (first defendant) and the
plaintiff

ii. The plaintiff has sought a declaration


that the chargor (first defendant) and/
the bank (second defendant) had acted
fraudulently and/or unconscionably
and/or in bad faith

iii. The plaintiff has also sought for a


declaration that the Order for sale dated
30.6.2009 and the two orders for
summons for directions dated
15.10.2009 and 28.2.2011 and the
auction of the property on 13.4.2011 are
bad in law and is of no effect against the
plaintiff and an injunction to restraint the
second defendant/ bank in removing the
caveat.

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DECISION

11. Upon reading and considering the summons in chambers

(Enclosure 31) the affidavit in support of the plaintiff,

(Enclosure 32) the affidavit in reply of the second defendant

(Enclosure 40), the submission of both parties and considering the

settled principles for stay pending an appeal, the decision of this

court is:-

12. The statutory power relating to stay of execution in respect of

appeals from the High Court to the Court of Appeal are found in

S. 73 of the Courts of Judicature Act 1964 and Rule 13 of the

Rules of the Court of Appeal 1994.

S. 73 of the Court of Judicature Act states:-

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. [As amended by Act
A886 with effect from June 1994]

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Rule 13 of the Rules of the Court of Appeal 1994
which has the same effect 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 [of Appeal] so orders and
no intermediate act or proceeding shall be
invalidated except so far as the court may
direct.

13. It is clear that S. 73 and Rule 13 clearly confer on the court judicial

discretion to grant orders for stay of execution of orders or

judgment. However, the discretion must of course be exercised in

accordance with established judicial principles having regard to all

the circumstances of the case.

In Attorney General v. Emerson [1890] 24 QBD 56,


Lord Esher MR at p. 58 said:-

The real question is, what is the


construction of this rule? It says: 'An appeal
shall not operate as a stay of execution or of
proceedings under the decision appealed
from, except so far as the court appealed
from or any judge thereof or the Court of
Appeal, may order; and no intermediate act
or proceeding shall be invalidated , except
so far as the court appealed from may
direct'. In all the rules, the word 'may' has
been held to mean 'may or may not'. It has

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been held to give a discretion, which is
called a judicial discretion, but is still a
discretion.

14. In order for this court to consider the application (Enclosure 31)

for stay against the enforcement of the said orders pending the

plaintiffs appeal to the Court of Appeal, it is trite law that the

plaintiff must show 'special circumstances' for the court to stay the

enforcement of the said order and special circumstances must

relate to the enforcement of the judgment or order. However, this

court has an absolute and unfettered discretion to grant or refuse

stay of the enforcement of the said order pending an appeal and

may also upon terms grant the stay. Nevertheless, special

circumstances must be deposed in an affidavit.

15. The onus is on the applicant to demonstrate the existence of special

circumstances to justify the grant of a stay of execution. The

reasons must relate to the enforcement of the judgment. They

must be deposed in the affidavit filed in support of the application.

Where it is alleged that there is a danger of the successful party not

being able to reinstate in its original position if the appeal is

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successful for any reason like, for instance, the insolvency of the

adversary, this must be shown in the affidavit. (see Syarikat Berpakat

v. Lim Kai Kok [1983] 1 MLJ 406). (Emphasis by this court).

16. The discretion to be exercised must be according to established

judicial principles and within the confines of the law. However, the

category of special circumstances is not closed and it will depend

on the facts, background and circumstances of each case provided

they have a bearing to the enforcement of the judgment or order. A

stay of execution only operates to prevent the judgment creditor, in

the instant case, the second defendant putting into operation the

legal process of the machinery of procedural law of enforcement of

the said order but it does not affect or invalidate the judgment or

extinguish the judgment or their existing rights under the

judgment. (see Clifton Securities Ltd. v. Huntley And Others [1948] K.B.D.

283 at p.284).

17. The need to establish the existence of special circumstances to

enable this court to consider a stay of execution has been well

established in this jurisdiction. It is therefore clear beyond doubt

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that there are many factors that may constitute special

circumstances and the fact that an appeal would be rendered

nugatory if stay was refused is the most common one. It is an

example of special circumstances. In other words special

circumstances is the genus of which nugatoriness is a species.

If it has been shown that an appeal would be rendered

nugatory if stay was refused what it means is that a special

circumstance has been established. Thus they cannot be treated

as separate heads and one cannot be an alternative to the other.

Neither can one be accepted or rejected in favour of the other as

they are inter-related (See Teow Guan & Ors v. Kian Joo Holdings Sdn

Bhd & Anor [1997] 2 CLJ 299) could have withstood scrutiny if it had

merely referred to nugatoriness without rejecting special

circumstances. As nugatoriness is a species of special

circumstances a mere reference to it is sufficient to convey the

correct legal impression. Any attempt to restrict the grant of a

stay to nugatoriness, quite apart from its impropriety, will severely

restrict the grounds on which an applicant may rely. Learned

counsel for the applicants is therefore wrong in submitting that the

nugatory approach is not a matter for consideration in this case as

what is relevant is only the special circumstances. He would have

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been correct if he had said that he was not relying on nugatoriness

but on some other species of special circumstances. (Emphasis by

this court).

In Lee Sian Hee v. Oh Kheng Soon [1992] 1 SLR 77 at


p. 78 the Court of Appeal has stated:-

While the court has power to grant a stay,


and this is entirely in the discretion of the
court, the discretion must be exercised in
accordance with well established principles
(Lee Kuan Yew v. JB Jeyaretnam). First, as a
general proposition, the court does not
deprive a successful litigant of the fruits of
his litigation, and lock up funds to which
prima facie he is entitled, pending an appeal
(The Annot Lyle at p. 116). However, when
a party is exercising his undoubted right of
appeal, the court ought to see that the
appeal, if successful, is not nugatory (Wilson
v. Church (No. 2) at p. 458-459). Thus, a
stay will be granted if it can be shown by
affidavit that, if the damages and costs are
paid, there is no reasonable probability of
getting them back if the appeal succeeds
(Atkins v. Great Western Rly Co.). (see also
Wu Shu Chen v. Raja Zainal Abidin Bin
Raja Hussin & Anor. [1996] 2 CLJ 353;
[1995] 3 MLJ 224 at p. 228).

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18. In the circumstances and considering the grounds advanced in the

Affidavit in Support (Enclosure 32) for the stay and applying the

principles adumbrated in Kosma Palm Oil Mills Sdn. Bhd. & Ors., this

court is of the considered view that the plaintiff had failed to show

any special circumstances which requires this court to exercise its

discretion in favour of the plaintiff in granting the stay.

In Leong Poh Shee v. Ng Kat Cheong [1966] 1 MLJ 86,


Raja Azlan Shah J (Presently DYMM Sultan Of Perak)
has interpreted special circumstances as:-

Special circumstances, as the phrase


implies, must be special under the
circumstances as distinguished from
ordinary circumstances. It must be
something exceptional in character,
something that exceeds or excels in some
way that which is usual or common"

In Ming Ann Holdings Sdn Bhd v. Danaharta Urus


Sdn Bhd [2007] 3 CLJ 380, Abdul Hamid Mohamed CJA
(Later C.J Malaysia) said:

'The weight of authorities appears to me to


say that the special circumstances must be
special, not ordinary, common or usual
circumstances and that go to the execution
of the judgment and not to the validity or
correctness of the judgment.

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In Monk v. Bartram [1891] 1 Q.B 346,:-

"It is impossible to enumerate all the


matters that might be considered to
constitute special circumstances; but it may
certainly be said that the allegations that
there has been a misdirection, that the
verdict was against the weight of evidence,
or that there was no evidence to support it,
are not special circumstances on which the
court will grant a stay of execution. (See Wu
Shu Chen v. Raja Zainal Abidin bin Raja
Hussin [1995] 3 MLJ 224).

In Walter a/l Pathrose Gomez & Ors v Sentul Raya


Sdn Bhd [2005] 6 MLJ 5555, His Lordship, Malik bin
Ishak J (Now JCA said at p.---

"The court has an absolute and unfettered


discretion as to granting or refusing a stay
and it will, as a rule, only grant a stay if
there are special circumstances, which must
be deposed to on an affidavit. The justice of
the case on stay is usually arrived at by
striking a judicious and equitable balance
between the principle that the successful
party in the litigation ought be allowed to
reap the fruits of his litigation and not
obtain a mere barren success, and the
countervailing principle that should the
unsuccessful party in litigation be
ultimately successful in his appeal, he ought

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not be deprived of the fruits of his litigation
due to the result of his appeal being
rendered nugatory. Yet, it must always be
borne in mind that a successful party in
litigation has acquired a vested interest in
the outcome of the case whereas the other
party who appeals only has an interest
contingent upon a successful outcome of his
appeal. And, it is primarily for this reason
and the implied caveat that the courts
should discourage parties who lose their
cases upon merits, from wrenching the
fruits of litigation from the successful
parties - by keeping the litigation alive
through spurious appeals without any real
prospect of success and simply in the hope
of gaining some respite against immediate
execution upon the judgment, that the
courts have been and are only moved to
grant such a stay upon a set of certain
requirements which, for want of a more
appropriate term, the courts have been
driven to use, quite rightly, the oft-quoted
expression "special circumstances". Now,
the term "special circumstances" is a term
to denote a combination of certain
determining factors that are usually
demonstrated by affidavit evidence in order
to persuade the court that it is a just and an
appropriate case to grant a stay in the
circumstances".

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19. It is also an established rule via plethora of authorities that the

court will not deprive a successful party of the fruits of its litigation

until an appeal is determined or disposed off unless the

unsuccessful party can show special circumstances to justify the

stay. In the present case, this court is of the considered view that

the grounds advanced by the plaintiff for the stay is not related to

any special circumstances. The plaintiffs grounds seem to suggest

that the plaintiff is seeking the sympathy of this court to grant the

stay. In other words, the plaintiff is looking towards this court to

exercise it discretion on compassionate ground and grant the stay.

In any event, and even if the plaintiff is able to succeed in the

appeal, this court is satisfied that the plaintiff will not be left

without any remedy as the plaintiff is entitled to claim for damages

which is quantifiable and is an adequate remedy. The second

defendant, a Bank, will be in a financial position to satisfy any

damages that may be ordered in favour of the plaintiff. This court

wishes to reiterate that the plaintiff has been unable to satisfy this

court of any special circumstances other than to raise matters

which are personal in nature to the plaintiff which was created by

the plaintiff.

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20. In so far as any detriment that may be caused to the plaintiff, the

plaintiff must be prepared to accept the consequences as the

plaintiff had taken a great risk by:-

a. First, entering into possession of the property

when he knew or ought to have known that the

property has been ordered by the court to be

sold at the public auction and the plaintiff has

not been able to satisfy the redemption sum or

the balance of the purchase price to the

defendant.

b. Secondly, the plaintiff took the risk of

expanding monies to operate the college when

the property had been charged to the second

defendant and an order for sale has been

granted by the court. The plaintiff should have

instead paid the second defendant to redeem

the property and proceed to complete the

private treaty with the first defendant.

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c. Thirdly, the plaintiff has not been candid when

they said that the plaintiff was not aware of the

auction when the evidence produced shows

otherwise

21. Therefore, the plaintiff must take sole responsibility for exposing

themselves to any incoherent embarrassment and to pay any

damages or compensation to third parties. The second defendant is

under no legal obligation to wait for the plaintiff to exhaust his

rights of an appeal to the Court of Appeal. In fact when this court

had asked learned counsel for the plaintiff during the submissions

in this stay application as to whether the plaintiff has raised the

money to redeem the property, learned counsel for the plaintiff,

with respect, was unable to response positively which means that

the plaintiff could not raise the money to redeem the property.

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22. In the circumstances, and in accordance with the rules of reason

and justice, the plaintiffs application in Enclosure 31 is dismissed

with costs.

Dated 26th day of August 2011

(Dato V.T SINGHAM)


Judge
High Court of Malaya
Kuala Lumpur

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