Ming Ann Holdings Sdn Bhd

[2002] MLRA v. Danaharta Urus Sdn Bhd i

MING ANN HOLDINGS SDN BHD

v.
DANAHARTA URUS SDN BHD
[2002] 1 MLRA 214

Court of Appeal, Kuala Lumpur

Abdul Hamid Mohamad, KC Vohrah JJCA, Faiza Tamby Chik J
[Civil Appeal No: W-02-698-2000]
18 June 2002

Civil Procedure: Stay of proceedings — Application for stay pending appeal — Test to
be applied — Special circumstances — Nugatory test — Whether appeal if successful
rendered nugatory if stay not granted — No evidence that respondent is not in a financial
position to repay applicant — Whether merits of appeal and validity of judgment to be
taken into consideration

Bank Bumiputra Malaysia Bhd (the former plaintiff) had commenced an

action in the High Court against the applicant claiming a certain sum and
costs. The action was based on a banking facility in the form of an ‘irrevocable
letter of credit’ given by the respondent to the applicant. The former plaintiff
applied for a summary judgment. The Senior Assistant Registrar allowed the
application and gave judgment for the former plaintiff. The applicant appealed
to the judge in chambers, who allowed the appeal. The matter was fixed for final
hearing and judgment was ordered against the applicant for the sum claimed.
The applicant appealed against the order. The applicant applied, by way of a
summons-in-chambers, to stay the execution of a High Court judgment against
its pending appeal. The grounds of the application were that there were special
circumstances, that there were merits in the appeal and also that if stay was
not granted, the appeal would be rendered nugatory. The application, however,
was dismissed. The applicant thus prayed to this court for an order to stay
the execution of the judgment of the High Court until the appeal against that
judgment is heard and decided upon.

Held (dismissing the application):

(1). Where the Court of Appeal or the Federal Court is concerned, the court that
sits to hear the stay application is only constituted to hear the stay application
and not the appeal. The appeal may not even be heard by the same panel of
judges. Further, the grounds of judgment and the appeal records are not usually
before the court. The court does not have the benefits of the argument on the
merits of the appeal. Thus, as a general rule, it is not only premature but it is
also unfair to the parties and wrong for the court, hearing an application for
a stay, to make a finding that the “appeal is doomed to failure”, without any
prospect of success”, “has no merits” and the like. (para 75)
 Ming Ann Holdings Sdn Bhd
ii v. Danaharta Urus Sdn Bhd [2002] 1 MLRA

(2) A successful litigant should not be deprived of the fruits of a judgment

obtained in his favour, unless there are special circumstances that justify a stay
of execution to be granted. 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 (or merits of
the appeal). (para 66)

(3) The applicant’s grounds were nothing more than ‘fear of losing'; fear of
losing business, fear of losing customers, fear of losing suppliers, fear of losing
goodwill, fear of not being able to collect its debts from third parties, in case the
applicant company is wound up. To avoid such ‘fears’, all the applicant has to
do is to settle the judgment debt. These factors are not ‘special circumstances’
nor do they show that the appeal, if successful, will be rendered nugatory.
Execution is a natural process after obtaining a judgment. (para 86)

(4) From the notes of proceeding, the respondent and the trial judge had
been very accommodative with the applicant. Even after a final date of
hearing, a number of postponements were granted to suit the applicant. In
the circumstances, this was not a case in which the court in the exercise of its
discretion should grant a stay. (para 87)

Case(s) referred to:

Ajaib Singh v. Jeffrey Fernandez [1970] 1 MLRH 480; [1971] 1 MLJ 139 (refd)
Alexander v. Cambridge Credit Corp Ltd [1985] 10 ACLR 42 (refd)
All Persons In Occupation of the House and the Wooden Stores Erected on a Portion of
Land Held Under Grant No 26977 for Lot 4271 in the Township of Johor Bahru, Johor
v. Punca Klasik Sdn Bhd [1996] 3 MLRH 641; [1996] 4 MLJ 533; [1998] 5 CLJ 49;
[1996] 2 AMR 1855 (refd)
Che Wan Development Sdn Bhd v. Co-operative Central Bank Bhd [1989] 1 MLRH
267; [1989] 1 CLJ (Rep) 366 (refd)
Dickson Trading (S) Pte Ltd v. Transmarco Ltd [1987] 2 MLRH 270; [1989] 2 MLJ
408 (refd)
Gentali (M) Sdn Bhd v. Kawasaki Sunrock Sdn Bhd [1996] 2 MLRA 369; [1996] 3
MLJ 597; [1997] 1 CLJ 70; [1997] 1 AMR 951 (refd)
Kerajaan Malaysia v. Dato’ Hj Ghani Gilong [1995] 1 MLRA 360; [1995] 2 MLJ 119;
[1995] 3 CLJ 161; [1995] 2 AMR 1465 (refd)
Kerajaan Malaysia v. Jasanusa Sdn Bhd [1995] 1 MLRA 213; [1995] 2 MLJ 105;
[1995] 2 CLJ 701; [1994] 1 AMR 560 (refd)
Leong Poh Shee v. Ng Kat Chong [1965] 1 MLRH 542; [1966] 1 MLJ 86 (refd)
Lim Joo Thong v. Koperasi Serbaguna Taiping Barat Bhd [1997] 2 MLRA 284; [1998]
1 MLJ 657; [1998] 1 CLJ 947; [1994] 3 AMR 1940 (refd)
Matang Holdings Bhd & Ors v. Dato’ Lee San Choon & Ors [1985] 2 MLRH 362;
[1985] 2 MLJ 406 (refd)
 Ming Ann Holdings Sdn Bhd
[2002] 1 MLRA v. Danaharta Urus Sdn Bhd iii

Mohamed Mustafa v. Kandasamy (No 2) [1979] 1 MLRA 304; [1979] 2 MLJ 126 (refd)
Monk v. Bartram [1981] QB 346 (refd)
Perwira Affin Bank Bhd v. KI Production Sdn Bhd [2000] 1 MLRH 639; [2000] 4 MLJ
652; [2000] 4 CLJ 482; [2004] 1 AMR 442 (refd)
Perwira Habib Bank Malaysia Bhd v. Syarikat Johore Tenggara Sdn Bhd & Ors [1989]
1 MLRH 626; [1989] 2 MLJ 476; [1989] 2 CLJ (Rep) 248 (refd)
Re Kong Thai Sawmill (Miri) Sdn Bhd; Ling Beng Sung v. Kong Thai Sawmill (Miri)
Sdn Bhd & Ors (No 2) [1974] 1 MLRA 77; [1976] 1 MLJ 131 (refd)
Salim Ismail & Ors v. Lebby Sdn Bhd (No 1) [1995] 2 MLRA 483; [1997] 1 CLJ 98;
[1997] 2 AMR 1110 (refd)
Sarwari Ainuddin v. Abdul Aziz Ainuddin [1995] 4 MLRH 388; [2000] 5 MLJ 391;
[1999] 8 CLJ 534 (refd)
See Teow Guan & Ors v. Kian Joo Holdings Sdn Bhd & Ors [1995] 2 MLRA 512;
[1995] 3 MLJ 598; [1997] 2 CLJ 299; [1996] 3 AMR 3733 (refd)
Serangoon Garden Estate Ltd v. Ang Keng [1953] 1 MLRH 690; [1953] 1 MLJ 116
(refd)
Syarikat Berpakat v. Lim Kai Kok [1982] 1 MLRH 863; [1983] 1 MLJ 406 (refd)
Lai Lai Yin v. MV “Yih Shen”, Owners of and Other Persons Interested [1985] 2
MLRH 108; [1986] 2 MLJ 65 (refd)
Tropiland Sdn Bhd v. DCB Bank Bhd & Anor [1999] 1 MLRA 615; [2000] 2 MLJ 65;
[2000] 1 CLJ 568; [2000] 1 AMR 766 (refd)
Wu Shu Chen v. Raja Zainal Abidin Raja Hussain & Anor [1995] 4 MLRH 45; [1995]
3 MLJ 224; [1996] 2 CLJ 353; [1995] 3 AMR 2313 (refd)

Legislation referred to:

Companies Act 1965, s 218
Rules of the High Court 1980, O 33 r 2, O 47 r 1, O 89

Other(s) referred to:

Mallal’s Digest, 4th edn, vol 2(2), para 4254

Counsel:
For the applicant/appellant: Richard Tee; M/s SK Lim & Assoc
For the respondent: N Chandran; M/s Albar & Partners
 Ming Ann Holdings Sdn Bhd
214 v. Danaharta Urus Sdn Bhd [2002] 1 MLRA

JUDGMENT
Abdul Hamid Mohamad JCA:
[1] In this notice of motion the applicant prays for an order to stay the
execution of the judgment of the High Court dated 11 August 2000 until the
appeal against that judgment is heard and decided upon. We dismissed the
application.
[2] An action was commenced in the High Court at Kuala Lumpur (Civil Suit
No D6-22-1211-97) by Bank Bumiputra Malaysia Berhad, (the former plaintiff)
against the applicant claiming a sum of RM1,137,997.79 and costs. The action
was based on a banking facility in the form of an “Irrevocable Letter of Credit”
given by the respondent to the applicant.
[3] The former plaintiff applied for a summary judgment. The senior assistant
registrar allowed the application and gave judgment for the former plaintiff.
The applicant appealed to the judge in chambers. On 31 March 1999, after
hearing the appeal, the learned judge made the following order:-
Court:-
I have read the written submission and there appears to be an issue as to who
and on whose authority the lien of RM1,046,200/- was released to third party
and whether the person giving the instruction is an authorised person. The
court requires evidence to be tested at the trial.
I accordingly allow the appeal with costs of RM1,800 all-in.

[4] On 3 November 1999, the case came up for a date of hearing to be fixed.
Counsel for the former plaintiff was present. Counsel for the applicant was
absent. The court fixed 21 January 2000 for the hearing of the case with a note
“(No postponement) one day.”
[5] On 21 January 2000, counsel for both parties were present. Respondent’s
counsel informed the court that the debt of the applicant company had been
taken over by the respondent and that both parties were negotiating a settlement
of the debt and applied for a mention date in two months.
[6] The notes of proceedings recorded by the learned judge reads as follows:-
If the matter cannot by then be settled, then the parties have decided to go
under O 33 r (2) on the question whether the ” lien"was intended to be a
specific charge over the facility, or was of a general nature; and that by itself
would decide the outcome of the liability on the quantum.

[7] It must be emphasised that on that day the counsel for the applicant was
present.
[8] The learned judge adjourned the case to 1 March 2000 for mention.
[9] On 1 March 2000, counsel for both sides appeared before the learned judge.
The notes recorded by the learned judge reads:-
 Ming Ann Holdings Sdn Bhd
[2002] 1 MLRA v. Danaharta Urus Sdn Bhd 215

Solicitors inform that no settlement reached and have decided to make a

written submission on the point of law under O 33 r 2 as to whether the lien
given in favour of the Plaintiff was a general or specific in nature; and which
would decide the issue on liability. Mr Loy needs two weeks to have another
round with his client towards settlement.

[10] Again, the court adjourned the case to 22 March 2000 for mention.
[11] On 22 March 2000, counsel for the respondent was present. The applicant’s
counsel was represented by a “pupil in chambers” who informed the court that
the applicant’s counsel wanted to discharge himself and required time to file
the necessary papers.
[12] The learned judge recorded as follows:-
To 27th April 2000 (H) Final and also the discharge application to be heard
on the same date.

[13] On 27 April 2000, respondent’s counsel appeared in court. The applicant

company was not represented by counsel. A director of the applicant company
appeared. He applied for postponement because the applicant’s counsel had
discharged himself. The counsel for the respondent had no objection. The
court again postponed the case to 9 May 2000, again for mention to enable the
applicant to engage another counsel and to fix a date of hearing.
[14] On 9 May 2000, the respondent’s counsel was present in court. The
applicant was represented by a newly appointed solicitor, Mr Richard Tee. This
is what the learned judge recorded:-
Mr Vijay Kumar for the Plaintiff.
Mr Richard Tee for the Defendant the newly appointed solicitors, who
undertake to file a written submission for a point under O 33 r 3, whether the
lien given to the Bank was a general or specific lien.

COURT: To 3rd July 2000 (H) (Directions given). (No postponement).

And this is what happened on 3 July 2000:-

3 JULY 2000
Perbicaraan
Mr Richard Tee together with Miss YH Chin for the Defendant.
Miss Phang Sweet Ping for the Plaintiff.
Mr Richard Tee wants postponement to amend his pleadings.
Miss Phang objects says ready to proceed as the solicitors had on 21st
January 2000, and 1 March 2000, agreed to proceed only on a point of law
under O 33 r 2 of the Rules of the High court; and should be estopped from
going back to the writ and amendments.

COURT:
 Ming Ann Holdings Sdn Bhd
216 v. Danaharta Urus Sdn Bhd [2002] 1 MLRA

Request for postponement is granted conditionally upon the payment of the

sum of RM1,137,997.79 sen into court; or to produce an irrevocable Demand
Bank guarantee in favour of the Plaintiff within 14 days of today’s date
undertaking to pay the sum only upon a final Judgment. It is further ordered
that if the sum or guarantee as the case may be is not deposited into Court
within the 14 days; then default Judgment shall forthwith be entered against
the Defendant.
COURT: To 19 July 2000 (Mention).

[15] The court again postponed the case to 19 July 2000 for mention.
[16] This is what happened on 19 July 2000, as recorded by the learned judge:-
19 JULAI 2000
Kandungan (1).
Mr Vijay Kumar for the Plaintiff.
Mr Richard Tee for the Defendant.
The Court directed the Defendants at the last hearing date on 3rd July
2000, to deposit the sum or to produce a Bank guarantee as a pre-condition
in favour of the Plaintiffs within 14 days of 3rd July ie by 17 July 2000.
Mr Tee informs Court that his clients have attempted to obtain the Bank
guarantee; but the Bank requires more time to process the application and
or take counter security as a consideration for the loan and thus needs
extension of time of two weeks to finalise.
Mr Vijay says his clients object to this request because Danaharta is
involved.
COURT: Further time of 14 days granted. Court to 11 August 2000 (Final)
Mention.

[17] On 11 August 2000, counsel for both parties were present. Counsel for the
respondent had already filed his written submission as directed by the learned
judge. Counsel for the applicant failed to do the same. The court made the
following order:-
... maka Mahkamah memutuskan bahawa lien yang diberikan oleh Defendan
kepada Plaintif adalah secara am iaitu lien secara am, pihak Plaintif
mempunyai hak untuk menolak (“set-off ”) lien am tersebut atas jumlah
yang tertunggak dan kena dibayar oleh pihak Defendan DAN SETELAH
MENDENGAR Encik V Vijakumar peguam bagi pihak Plaintif dan
Encik Richard Tee Sze Ping peguam bagi pihak Defendan DENGAN INI
ADALAH DIPERINTAHKAN bahawa Defendan membayar kepada pihak
Plaintif jumlah wang sebanyak RM1,137,997.79 setakat 31 Ogos 1997 dan
faedah selanjutnya ke atas jumlah tersebut pada kadar 5% setahun atas Kadar
Asas Pinjaman (BLR) iaitu 9.65% setahun dari 1 September 1997 sehingga
tarikh penyelesaian penuh dan kos RM20,0000.00.

[18] The applicant appealed against the order The applicant then filed a
summons in chambers to stay the execution of the judgment. The application
was dismissed. Hence, the applicant made the present application in this court.
 Ming Ann Holdings Sdn Bhd
[2002] 1 MLRA v. Danaharta Urus Sdn Bhd 217

[19] In an affidavit in support of the application, the director of the applicant

says that the applicant’s appeal has merits because the learned judge only heard
and decided the claim by the respondent on issues of law without hearing
evidence of witnesses. According to him, there are issues of facts which can
only be decided after hearing evidence of witnesses. He also avers that there are
special circumstances (“fakta-fakta luarbiasa”) to support the application. The
“special circumstances” are that there are other companies that depend on the
applicant company to obtain the supply of traditional medicines from China.
The execution of judgment by way of company’s winding-up by the respondent
will cause the applicant company to lose its ability to continue to trade and
the goodwill that has been established between the applicant company, the
supplier and the consumers. That loss, according to the applicant, cannot be
compensated with money. The business started in 1987 and has continued
without any disturbance (“tanpa gangguan”) until now. If it is wound up, its
business might be seized (“dirampas”) by others. A winding-up order will also
affect the applicant’s ability to collect its debts from its debtors. He says that if
the stay is not granted then the appeal will be rendered academic and nugatory.
He says that as proof that it is never the applicant’s intention to escape from its
responsibility, the applicant has offered a piece of land in Johore belonging to
a third party to be charged to the respondent as security but it was not accepted
by the respondent. The respondent has on 18 January 2001 issued a notice
under s 218 of the Companies Act 1965 demanding payment. The respondent
has on 2 April 2001 filed the petition of appeal and served it on the applicant
on 15 May 2001. The date of hearing was fixed on 12 July 2001.
[20] In its affidavit in reply, the respondent through its General Manager, inter
alia, denies that the learned judge had unilaterally directed that the trial be a
trial on issues under O 33 r 2, Rules of the High Court 1980. Referring to the
notes of evidence, he says that it was agreed to by the former counsel for the
applicant. He also says that the new counsel for the applicant had, on 9 May
2000 agreed to and undertook to file written submission but failed to do so. He
referred to the various postponements and indulgence of the respondent and the
court, all of which I have narrated earlier and will not repeat. The respondent
says that it is a money judgment, and there are no special circumstances that
warrants a stay of execution to be granted.
[21] It was not my intention, at first, to review the law on the subject of stay
of execution pending appeal. However, in view of the judgment of this court
in See Teow Guan & Ors v. Kian Joo Holdings Sdn Bhd & Ors [1995] 2 MLRA 512;
[1995] 3 MLJ 598; [1997] 2 CLJ 299; [1996] 3 AMR 3733, I think it is time that
the authorities be reviewed. I only hope that I am not causing further confusion
on the subject.
[22] I shall take the cases in chronological order
[23] Serangoon Garden Estate Ltd v. Ang Keng [1953] 1 MLRH 690; [1953] 1 MLJ
116, though only a judgment of the High Court (Singapore), is perhaps the
most quoted case on the subject. That case is an appeal from the District Court
 Ming Ann Holdings Sdn Bhd
218 v. Danaharta Urus Sdn Bhd [2002] 1 MLRA

against an order granting a stay of execution in a case where an “order for

possession” had been made. The subject matter was an illegal pig-sty. It must
be noted that when the application was made, not at the conclusion of the case
but subsequently, no affidavit in support was filed. This is what Brown J says
in his judgment:-
The learned District Judge had a discretion to grant a stay of execution. And
I should not think it right to interfere with the exercise of his discretion if I
was satisfied that he had exercised it on correct principles. There is no rule
of practice limiting the exercise of his discretion. But it is a clear principle
that the Court will not deprive a successful party of the fruits of his litigation
until an appeal is determined, unless the unsuccessful party can show special
circumstances to justify it. The only ground, so far as appears in the written
grounds for granting this stay, is that if the defendant succeeded in his appeal
he could not be restored to the same position as before because the plaintiffs
would have removed his pig-sty. That ground, standing alone, in my opinion
cannot be a sufficient ground on which to grant a stay of execution. It seems
to me that to hold otherwise would be to establish a precedent, and in effect
to lay down a rule of practice, that in all cases where the defendant cannot
be restored to his original position if his appeal succeeds, a successful litigant
is to be deprived of the fruits of his litigation until such time as the appeal
is determined. Such a ground might well be an important factor to take into
consideration if there were other grounds. If, for example, another ground
had been that there were merits in the appeal, that fact coupled with the fact
that the defendant, if successful, could not be restored to his original position
might well have afforded special circumstances to justify the learned District
Judge in exercising his discretion to grant a stay; and I should not have thought
it right to interfere.

[24] The following points emerge from that judgment:-

(1)granting a stay pending appeal is an exercise of discretion;
(2)there is no rule of practice limiting the exercise of the discretion;
(3)it is a clear principle that the court will not deprive a successful party of the
fruits of his litigation until the appeal is determined unless there are special
circumstances;
(4)the ground that, if the defendant is successful in his appeal, he cannot
be restored to the same position as before, standing alone, is not a sufficient
ground on which to grant a stay, however, it is “an important factor” to take
into consideration, if there are other grounds, for example merit of the appeal.
Both grounds, together, may well amount to “special circumstances.”

[25] Leong Poh Shee v. Ng Kat Chong [1965] 1 MLRH 542; [1966] 1 MLJ 86 is a
judgment of the High Court. The plaintiff had obtained a judgment in default
of appearance for the land in question to be transferred to him. The defendant
applied for a stay of execution. The relevant part of the judgment of Raja
Azlan Shah J (as he then was) reads as follows:-
Although the court has an unqualified discretion to grant a stay it has never
been the practice to do so unless it is supported by an affidavit of special
 Ming Ann Holdings Sdn Bhd
[2002] 1 MLRA v. Danaharta Urus Sdn Bhd 219

circumstances. The law on the point is well settled. I quote a passage from
Halsbury’s Laws of England, 3rd edn, Volume 16, para 51 at p 35:-
The court has an absolute and unfettered discretion as to the granting or
refusing a stay, and as to the terms upon which it will grant it, and will, as a
rule, only grant it if there are special circumstances, which must be deposed
to on affidavit unless the application is made at the hearing.
I would also adopt a passage in Mallal’s Supreme Court Practice at p 573 where
the learned author said:-
A stay will not be allowed unless there are special circumstances.
The substantial question now to be posed, as I see it, is whether the allegation
that the land office might take three years to sub-divide the land in question
affords special circumstances for a stay. 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.
For the land office to sub-divide a piece of land is common or usual. For it to
do so for a period of one, two or three years is usual or common. It is nothing
distinctive or out of the way and therefore, to my mind, that by itself does not
constitute special circumstances to persuade the court to stay the execution.

[26] In Ajaib Singh v. Jeffrey Fernandez [1970] 1 MLRH 480; [1971] 1 MLJ 139,
Yong J referred to a number of cases, including a Privy Counsel judgment from
India and concluded:-
After consulting these and other authorities up to the present day I am of the
opinion that an application for stay of proceedings should be made promptly,
and it must be proved to the satisfaction of the court that special circumstances
exist such as if the stay was not granted serious or irreparable injury would
result to the party applying.

[27] It is to be noted that the court considered the fact whether the application
was made promptly was also relevant. This is understandable in an exercise of
a discretion. Secondly, the learned judge treated “serious or irreparable injury”
as an example of special circumstances.
[28] Re Kong Thai Sawmill (Miri) Sdn Bhd.; Ling Beng Sung v. Kong Thai Sawmill
(Miri) Sdn Bhd & Ors (No 2) [1974] 1 MLRA 77; [1976] 1 MLJ 131 is a judgment
of the Federal Court. In that case the first respondent applied to the then Federal
Court for leave to appeal to the Yang DiPertuan Agong (Privy Council) and
for a stay of execution. Lee Hun Hoe CJ (Borneo), in his judgment referred to
a number of English cases and held that no special circumstances were shown
to support the application for stay of execution and dismissed the application.
This is what the learned Chief Justice (Borneo), inter alia, said in his judgment:-
It is my view that where stay of execution has previously been refused by
this court after a hearing of an appeal lasting over a week, an application
made to the same court for stay pending an appeal must be supported by
special circumstances. Allegations that there has been misdirections that the
verdict of judgement was against the weight of evidence, or that there was no
 Ming Ann Holdings Sdn Bhd
220 v. Danaharta Urus Sdn Bhd [2002] 1 MLRA

evidence to support the verdict or judgment, are not special circumstances on

which the court will grant the application. See Monk v. Bartram [1981] QB 346.
Those are matters to be decided in the proper forum.

[29] Mohamed Mustafa v. Kandasamy (No 2) [1979] 1 MLRA 304; [1979] 2

MLJ 126 is a judgment of the Federal Court consisting of Lee Hun Hoe CJ
(Borneo), Wan Suleiman FJ and Abdul Hamid J (as he then was). It was an
application for leave to appeal to the Yang DiPertuan Agong and for a stay
of execution. The court granted both applications, the stay being granted “to
maintain status quo.”
[30] The judgment of the court was delivered by Abdul Hamid J (as he then
was).
[31] On the question of stay this is what the learned judge (as he then was)
said:-
On the question of stay of execution it is I think settled law that the granting of
such a stay is a matter of the court’s discretion, and it is true that the exercise
of such discretion must be founded upon established judicial principles.
One of the determining factors that calls for consideration is whether by
not making an order to stay of the execution it would make the appeal if
successful, nugatory in that it would deprive an appellant of the results of
the appeal. How pertinent that factor would be may vary according to the
circumstances of each particular case.

[32] No reference was made to earlier decisions, local or otherwise. No mention

was made about “special circumstances” or “merits of the appeal”, but the
“nugatory test” was used in the sense that “it would deprive an appellant the
results of the appeal.”
[33] In Syarikat Berpakat v. Lim Kai Kok [1982] 1 MLRH 863; [1983] 1 MLJ 406,
Hashim Yeop A Sani J (as he then was) held:-
Held: as a rule the court will only grant a stay if there are special circumstances.
In this case no special circumstances had been shown to justify a stay.

[34] The learned judge (as he then was) referred to Serangoon Garden Estate Ltd
v. Ang Keng [1953] 1 MLRH 690; [1953] 1 MLJ 116 and Monk v. Bartram [1891]
QB 346.
[35] In Matang Holdings Bhd & Ors v. Dato’ Lee San Choon & Ors [1985] 2 MLRH
362; [1985] 2 MLJ 406, there was an application for a stay of the order of
dissolution of injunction pending appeal to the higher court. Yusoff Mohamed
J (as he then was) referred to Leong Poh Shee [1965] 1 MLRH 542; [1966] 1 MLJ
86, Serangoon Garden Estate Ltd v. Ang Keng [1953] 1 MLRH 690; [1953] 1 MLJ
116 and Ajaib Singh v. Jeffrey Fernandez, all mentioned earlier and held held:-
There are no special grounds in this application except the appeal pending the
merits of which have been discussed above.
In my view, the application should be dismissed.
 Ming Ann Holdings Sdn Bhd
[2002] 1 MLRA v. Danaharta Urus Sdn Bhd 221

[36] The “Yih Shen": Lai Lai Yin v. MV “Yih Shen”, Owners Of And Other Persons
Interested [1985] 2 MLRH 108; [1986] 2 MLJ 65 is a judgment of Mohamed
Dzaiddin J (as he then was). That was an application for a stay of execution
of an order for the vessel “YIH SHEN” to be appraised and sold pendente lite.
The grounds were, first, the defendants intended to appeal against the said
order and, secondly, unless restrained, the vessel, if sold prior to the appeal will
render the appeal, if successful, nugatory. The learned judge (as he then was)
dismissed the application. The learned judge (as he then was), inter alia, said:-
This is a case where the Court has an absolute and unfettered discretion to
grant or refuse the stay. Halsbury’s Laws of England,4th edn, Vol 17, para 455
states as follows:-
The court has an absolute and unfettered discretion as to the granting or
refusing of a stay, and as to the terms upon which it will grant it, and will,
as a rule, only grant a stay if there are special circumstances, which must be
deposed to on affidavit unless the application is made at the hearing.
Thus, it is incumbent upon the defendant in this case to show from the affidavit
the special circumstances to enable this court to grant a stay of execution.
Examples of “special circumstances” are many and are enumerated at the
footnote of Halsbury’s Laws (supra). However, the leading authority relied
upon by the defendant is Wilson v. Church (No 2) where Cotton LJ laid down
the principle at p 458 ”... when a party is appealing, exercising his undoubted
right to appeal, this Court ought to see that the appeal, if successful, is not
nugatory.” This principle was applied in Orion Property Trust Ltd v. Du Cane
Court Ltd; and in the local case of Re Kong Thai Sawmill (Miri) Sdn Bhd.
From the affidavit of Mr Chan and the submission of counsel I cannot find
anything which would amount to being nugatory in the event the appeal
(Supreme Court Civil Appeal No 173 of 1985) being successful.
I should also add that the fact that the defendants believe they have a reasonable
chance of success in the appeal is no ground for granting a stay. See: Atkins v.
Great Western Railway Co, where the English Court of Appeal held that strong
grounds of appeal are not sufficient to grant the application.

[37] In Perwira Habib Bank Malaysia Bhd v. Sunny Travel & Tour Sdn Bhd & Ors,
Mallal’s Digest 4th edn, vol 2(2) para; 4254, in a judgment dated 13 August
1988, Siti Norma Yaakob J (as she then was) held:-
(1) courts have an inherent jurisdiction to stay proceedings but only on
grounds which are relevant to a stay. It does not extend to grounds which are
properly matters of defence of law or relief in equity, for these must be raised
in the action itself. Special circumstances must be shown which must relate
to the enforcement of the judgment and not those which go to its validity or
correctness;

[38] In Perwira Habib Bank Malaysia Bhd v. Syarikat Johore Tenggara Sdn Bhd & Ors
[1989] 1 MLRH 626; [1989] 2 MLJ 476; [1989] 2 CLJ (Rep) 248, Gunn Chit
Tuan J (as he then was), in setting aside an order for a stay of execution, held
that in hearing commercial cases, courts should recognise business realities
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by taking notice of the commercial purpose of guarantees, the purport, utility

and obvious intent of which are to ensure that creditors would be paid early by
guarantors when the principle debtors are unable or unwilling to do so.
[39] In Che Wan Development Sdn Bhd v. Co-operative Central Bank Bhd [1989]
1 MLRH 267; [1989] 1 CLJ (Rep) 366, NH Chan J (as he then was) wrote a
lengthy judgment, relying mainly on English cases again applied the “special
circumstances” test. In his judgment, the learned judge, inter alia, says at p 588
(p 370) of the report:-
Put shortly, it is this: that the court has a discretion as to the granting or
refusing of a stay of execution pending appeal and that as a rule it will only
grant a stay if there are special circumstances, which circumstances must be
deposed in the affidavit supporting the application.

[40] On discretion of the court, the learned judge says:-

In this country, the words of s 73 of the Courts of Judicature Act 1964 are,
‘unless the court... so orders’. Plainly, this gives a discretion to the court. A
judicial discretion, no doubt, which must be guided by proper rules founded
on principle.

[41] On special circumstances, the learned judge, inter alia,says:-

It is plain that the validity or correctness of the decision appealed from are not
special circumstances.

[42] At p 589 (p 371) of the report:-

Merits or strong grounds for an appeal are also not special circumstances.

[43] At p 595 (p 376) of the report:-

Again there is no evidence which has been deposed on affidavit which
would enable this court to find that if a stay is granted the appeal if
successful would become nugatory.
[44] In the concluding paragraph of the judgment, at p 597 (p 377) of the
report, the learned judge says:-
The plaintiff has obtained judgment, and it seems to me impossible to
suggest that on the basis of the orders which I have made, the plaintiff
ought to be deprived of its rights on the judgment the fruits of which it
would have been fully entitled. Therefore, whether the judgment and
the orders which I have made are right or wrong and that is a matter
which may be tested in the Supreme Court I reach the conclusion
that there is nothing in the law and the facts which I have already
mentioned which would make it just or proper for me to grant a stay
of execution.
[45] We now come to two Federal Court judgments both delivered on 3 May
1995. They are Kerajaan Malaysia v. Jasanusa Sdn Bhd [1995] 1 MLRA 213;
[1995] 2 MLJ 105; [1995] 2 CLJ 701; [1994] 1 AMR 560 and Kerajaan Malaysia
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v. Dato’ Hj Ghani Gilong [1995] 1 MLRA 360; [1995] 2 MLJ 119; [1995] 3 CLJ
161; [1995] 2 AMR 1465. Both are income tax cases. Both applied the “special
circumstances” test. The judgment of the court in both cases were written
by Edgar Joseph Jr FCJ. I shall only quote from the second case, ie, Kerajaan
Malaysia v. Dato’ Haji Ghani Gilong. In that case, the appellant having obtained
a summary judgment, the respondent applied for and obtained an order for a
stay of execution of the judgment. In allowing the appeal, the learned judge
said at p 169 of the report:-
However, in the instant appeal, the question arose whether having regard to
the particular circumstances of the case, the judge was entitled to exercise his
power to grant a stay.
We noted, that in the instant appeal, there was no formal application for stay
supported by an affidavit affirmed by the taxpayer or his duly authorised
agent, alleging special circumstances to justify the making of the order for
stay. In other words, although the onus was upon the taxpayer to demonstrate
special circumstances justifying a stay, there was no material upon which the
judge could have granted the order for a stay. The Jasanusa case, was therefore
readily distinguishable, on the facts. We thus had no option but to discharge
the order for stay.

[46] Three months later, on 2 August 1995, Abdul Malik Ishak J delivered his
judgment in Wu Shu Chen v. Raja Zainal Abidin Raja Hussain & Anor [1995] 4
MLRH 45; [1995] 3 MLJ 224; [1996] 2 CLJ 353; [1995] 3 AMR 2313. That is
a case where an application for a stay of execution pending appeal that involves
sum of money amounting to RM25,892,000. The decision is well summarised
in the headnote:-
(2) The court will not deprive a successful party of the fruits of his litigation
until an appeal is determined, unless the unsuccessful party can show special
circumstances to justify it. What may amount to special circumstances it a
question of fact in each case. It must be something distinctive and out of the
way. An appeal to the Court of Appeal and the fact that a large amount of
money is involved do not constitute special circumstances.
(3)The applicant had failed to establish by affidavit evidence that the first
defendant was insolvent and therefore would not be in a position to reimburse
the award and to pay damages in the event that the applicant were to succeed
in her appeal.

[47]Salim bin Ismail & Ors v. Lebbey Sdn Bhd (No 1) [1995] 2 MLRA 483;
[1997] 1 CLJ 98; [1997] 2 AMR 1110 is a judgment of this court consisting
of Siti Norma Yaakob, Mahadev Shankar JJCA and Abdul Malik Ahmad
J (as he then was). Even though the judgment was delivered on 14 August
1995, which is about three months prior to See Teow Guan & Ors v. Kim Joo
Holdings Sdn Bhd & Ors [1995] 2 MLRA 512; [1995] 3 MLJ 598; [1997] 2
CLJ 299; [1996] 3 AMR 3733, it was reported later than See Teow Guan,
in the Malayan Law Journal. In that case the respondent had obtained a
summary eviction order under O 89 of the Rules of the High Court 1980.
The applicant, having failed to get an order in the High Court, applied for a
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stay of execution in the Court of Appeal. The Court of Appeal granted a stay.
Mahadev Shankar JCA, delivering the judgment of the court, inter alia, said:

It is to be noted that the orders in the court below were not made after full trial,
but on a summary application by Lebbey on affidavit evidence. The grounds
of judgment of the trial judge are not before us and it would be premature for
us to say that this appeal is without any prospect of success.

In deciding whether to grant a stay, we have to balance the financial

repercussions which will be suffered by Lebbey with the imminent destruction
of the homes of the applicants if the orders appealed against are enforced.

The subject-matter of this appeal from the applicants’ point of view is their
continued right to stay in their homes until their claims have been finally
disposed of in a full trial. The destruction of that right cannot be adequately
compensated with money. This is a special reason why a stay should be
granted. Lebbey’s counsel requested that the court only grant a conditional
stay and require the applicants to deposit RM1m if a stay is to be granted. We
did not think that such a request was realistic.

[48] We now come to See Teow Guan. In that case the appellants presented
a petition to wind-up the first respondent company of which they were
shareholders. So were the respondents. The petition contained, inter alia, prayer
4(a) that reads:-
(4) for an order pursuant to s 221 of the Companies Act 1965:-

(a)That there be a distribution in specie of shares and investments;

[49] The second, third and fourth respondents took out a motion to strike out prayer
4(a) on the ground that it was plain and obvious that the relief claimed therein could
not be granted by the court at the hearing of a winding-up petition. The learned Judicial
Commissioner who heard the motion acceded to it and struck out the prayer Against
this, the appellants appealed. The appeal was then pending before the Court of Appeal.
In the meantime, the learned Judicial Commissioner proceeded to fix the petition for
hearing. The appellants then moved the court for a stay of the proceedings on the
petition pending the hearing and disposal of their appeal. The court consisting of Gopal
Sri Ram JCA, Siti Norma Yaakob JCA (as he then was) and Mokhtar Sidin J (as he
then was) unanimously dismissed the motion with costs.

[50] The court, through the judgment of Gopal Sri Ram JCA, found that:-
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.

[51] On “special circumstances”, the learned judge says:-

At one time it was thought that an appellant had to demonstrate that

there were special circumstances warranting a stay of proceedings or of
execution. This was founded on the notion that a successful litigant ought
not to be deprived of the fruits of his litigation. See the case of The Annot
Lyle [1886] 11 PD 114. The authority constantly relied upon in support of
the proposition that special circumstances ought to be demonstrated before
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a stay of execution may be granted is the judgment of Brown J in Serangoon

Garden Estate Ltd v. Ang Keng [1953] 1 MLRH 690; [1953] 1 MLJ 116. For
my part, having considered the more recent authorities on the subject, I have
come to the conclusion that that decision is bad law, and ought no longer to
be followed by this court.

[52] The learned judge then quotes from the judgment of Chan Sek Keong JC
for the reasons thereof and says:-
For my part, I am unable to see any good reason for our courts to cling on to
a legal test which has been repudiated, for good reasons, by the courts of the
jurisdiction from which that test emanated. In any event, I find that there is
respectable authority in our own jurisdiction that points to a more practical
and less stringent approach to the problem.

[53] For the purpose of the discussion of this judgment later, it is important
to reproduce some other parts of the judgment. This is what the learned judge
says:-
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.
Apart from the absence of merits, there are other reasons as well.
Encik Thomas informed this court that his instructions are to consent to a
winding-up order at the hearing of the petition. Indeed, the second respondent
has, in para 4 of the affidavit filed in opposition to the motion, explicitly
confirmed this. So, this is not a case where there will be a bitter opposition
to the winding-up of the first respondent. To delay the hearing and disposal
of such a case as this will, in my judgment, cause a manifest injustice to the
parties. It will also put the list of the commercial court in hopeless disorder
There is the added consideration that this is a winding-up petition which, on
authority, ought to be prosecuted to a conclusion with all due speed.
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...
I am convinced that it would, in the face of the judicial pronouncements
which I have referred to, be a poor exercise of discretion to grant a stay in this
case. What good will come of it? None, as far as I can see.
The appellants will not suffer any prejudice. They want the first respondent to
be wound-up. The other respondents are agreeable to that course. So they will
get their primary relief. They want the assets of the first respondent company
to be distributed in specie. That, as I have said, is a matter over which the
High Court has no jurisdiction at the hearing of the appellants’ petition.
But the appellants have, as I earlier observed, the right to raise this with the
liquidator He may or may not agree with the request. Either way, the party
who is dissatisfied with the decision of the liquidator is entitled to raise the
matter on a summons taken out before a judge of the High Court. He may
affirm, vary or set aside the liquidator’s decision. A further appeal against his
decision lies to this court.
As against all this is to be weighed the consequences of granting a stay in this
case. There is no doubt that the effect of such an order would be to prolong
the disposal of what in essence is a simple matter There will be a delay of
several months while awaiting the hearing of an appeal that is bound to fail.
Ultimately, after the passage of many wasted months, the petition will be
heard unopposed and the first respondent will be wound-up. When viewed in
this way, it is not difficult to see where the justice of the case lies.
Accordingly, in the light of the circumstances presented to this court, I am
of the view that the appellants’ application for a stay should not be granted.
It was, therefore, dismissed with costs. A consequential order was made
directing an early hearing and disposal of the petition.

[54] It is to be noted that the judgment was delivered on 27 November 1995,

about six months after the judgments of the Federal Court in Kerajaan Malaysia
v. Jasanusa Sdn Bhd [1995] 1 MLRA 213; [1995] 2 MLJ 105; [1995] 2 CLJ 701;
[1994] 1 AMR 560 and Dato’ Hj Ghani Gilong were delivered and after they
were reported. No reference was made to these two cases. Only one Malaysian
case was cited, that is, Mohamed Mustafa v. Kandasamy (No 2) [1979] 1 MLRA
304; [1979] 2 MLJ 126, referred to earlier Two Singapore cases were referred
to, first, the Serangoon Garden Estate Ltd case (which was not followed) and
secondly, Dickson Trading (S) Pte Ltd v. Transmarco Ltd [1987] 2 MLRH 270;
[1989] 2 MLJ 408, a decision of the High Court of Singapore by Chan Sek
Keong JC (which was followed). It should be mentioned that in Dickson Trading
(S) Pte Ltd, Chan Sek Keong JC not only distinguished Serangoon Garden Estate
Ltd. but said that it was wrongly decided. The learned judge in See Teow Guan
also appears to rely quite heavily on the case of Alexander v. Cambridge Credit
Corp Ltd [1985] 10 ACLR 42, a decision of the Court of Appeal of New South
Wales, Australia.
[55] The judgment in Sarwari a/p Ainuddin v. Abdul Aziz a/l Ainuddin was
delivered on 1 December 1995 but was reported in [1995] 4 MLRH 388; [2000]
5 MLJ 391; [1999] 8 CLJ 534. It is a judgment of Shankar J (as he then was)
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and the learned judge applied the special circumstances test. This is what the
learned judge says at p 538 of the report:-
The issue as to whether a stay should be granted has been hotly contested.
All the authorities have been reviewed by my brother NH Chan J in Che Wan
Development Sdn Bhd v. Co-operative Central Bank Bhd [1989] 1 MLRH 267;
[1989] 3 MLJ 40; [1989] 1 CLJ (Rep) 366, except the following:-
(1) Mohamed Mustafa v. Kandasamy (No 2) [1979] 1 MLRA 304; [1979] 2 MLJ
126;
(2) Orion Property Trust & Ors v. Du Cane Court Ltd [1962] 3 All ER 466;
(3) Lee Kuan Yew v. Jeyaretnam JB [1990] 5 MLRH 260; [1991] 1 MLJ 83.
The core factors in this equation which emerge from these cases can be
summarised as follows:-
(1) The court will not deprive the successful party of the fruits of his litigation
until an appeal is determined unless the unsuccessful party can show special
circumstances otherwise;
(2) The validity or correctness of the decision appealed from are not special
circumstances;
(3) Special circumstances are circumstances which go to the enforcement of
the judgment and not those which go to its validity or correctness. Merits or
strong grounds of appeal are not special circumstances;
(4) Proof that a successful appeal would be nugatory is a special circumstance.
[56] On 12 March 1996, four months after the Court of Appeal delivered its judgment
in See Teow Guan, Abdul Malik Ishak J delivered his judgment in All Persons in Occupation
of the House and the Wooden Stores Erected on a Portion of Land Held Under Grant No 26977
for Lot 4271 in the Township of Johor Bahru, Johor v. Punca Klasik Sdn Bhd [1996] 3 MLRH
641; [1996] 4 MLJ 533; [1998] 5 CLJ 49; [1996] 2 AMR 1855. In his judgment, the
learned judge pointed out:-
With respect, See Teow Guan did not consider the Federal Court cases of
Kerajaan Malaysia v. Jasanusa Sdn Bhd [1995] 1 MLRA 213; [1995] 2 MLJ 105;
[1995] 2 CLJ 701; [1994] 1 AMR 560 and Kerajaan Malaysia v. Dato’ Hj Ghani
Gilong [1995] 1 MLRA 360; [1995] 2 MLJ 119; [1995] 3 CLJ 161; [1995]
2 AMR 1465. These two authorities from the highest court in the country,
in no uncertain terms, entrenched the special circumstances approach in the
context of a stay of execution of a judgment and, I may add, a fortiori it must
also be extended to apply to an application for a stay of proceedings in order
to preserve the integrity of an appeal.

[57] The learned judge held that he was bound by the Federal Court decisions
and adopted the special circumstances approach.
[58] On 10 July 1996, ie, the Court of Appeal delivered its judgment in Gentali
(M) Sdn Bhd v. Kawasaki Sunrock Sdn Bhd [1996] 2 MLRA 369; [1996] 3 MLJ
597; [1997] 1 CLJ 70; [1997] 1 AMR 951. Ahmad Fairuz JCA (as he then was),
sitting with Lamin PCA and Abu Mansor JCA (as he then was) delivered the
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judgment of the court in Malay, but for convenience, I shall quote the English
translation given in the law report which I find to be accurate:-
Held, dismissing the appellant’s application:-
(1)In an application for a stay of execution, one of the deciding factors that
should be considered is whether the appellant’s appeal, if successful, will
become nugatory because the order to stay is not given to him nugatory in the
sense that the appellant is deprived of the fruits of his success (see p 602F);
Mohamed Mustafa v. Kandasamy (No 2) [1979] 1 MLRA 304; [1979] 2 MLJ 126
followed.
[59] The learned judge (as he then was) referred to Mohamed Mustafa but not to See Teow
Guan. The judgment is silent about special circumstances. The case appears to have
been decided on the “nugatory test” which the learned judge (as he then was) described
as “one of the deciding factors”, meaning that there are other factors to be considered.
Even then the “nugatory test” was used “in the sense that the appellant is deprived of
the fruits of his success” as in Mohamed Mustafa and not in the sense that “the appeal is
doomed to failure” as in See Teow Guan.

[60] It is interesting to note that O 47 r 1 of the Rules of the High Court 1980
empowers the court to stay an execution by writ of seizure and sale if the court
is satisfied “that there are special circumstances which render it inexpedient
to enforce the judgment or order”. The relevant case on this provision is Lim
Joo Thong v. Koperasi Serbaguna Taiping Barat Bhd [1997] 2 MLRA 284; [1998] 1
MLJ 657; [1998] 1 CLJ 947; [1994] 3 AMR 1940 (CA).
[61] On 19 February 2000, this court delivered its judgment in Tropiland Sdn
Bhd v. DCB Bank Bhd & Anor [1999] 1 MLRA 615; [2000] 2 MLJ 65; [2000] 1
CLJ 568; [2000] 1 AMR 766. Abu Mansor JCA (as he then was) delivering the
judgment of the court, inter alia,said:-
We also found that the plaintiff has not shown any special circumstances for a
stay to be ordered. We were fortified in our decision by the Federal Court case
of Re Kong Thai Sawmill (Miri) Sdn Bhd; Ling Beng Sung v. Kong Thai Sawmill
(Miri) Sdn Bhd & Ors (No 2) [1974] 1 MLRA 77; [1976] 1 MLJ 131 which
refused the application for stay as no special circumstances were shown to
support the application for stay.

[62] In Perwira Affin Bank Bhd v. KI Production Sdn Bhd [2000] 1 MLRH 639;
[2000] 4 MLJ 652; [2000] 4 CLJ 482; [2004] 1 AMR 442 Kamalanathan
Ratnam J, relying on the Federal Court judgment in Jasanusa Sdn Bhd applied
the “special circumstances” test and also considered the merits of the appeal.
[63] The cases mentioned above are by no means exhaustive. (I also avoid
citing my own judgments). However, I think, they are sufficient to show the
law on the subject that has been understood and applied by the courts in this
country, at all levels, before and after See Teow Guan.
[64] Putting aside See Teow Guan for the time being, what do the cases say?
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[65] It appears to me that it is a unanimous view that to grant or not to grant

a stay of execution pending appeal is an exercise of discretion by the court.
Of course some judges merely use the word “discretion”, some use the words
“unqualified discretion” and some use the words “absolute and unfettered
discretion”. To me that does not really matter The point is that, it is an exercise
of the discretion by the court on established principles.
[66] The approach taken by most judges appears to be that a successful litigant
should not be deprived of the fruits of a judgment obtained in his favour,
unless there are special circumstances (or special grounds) that justify a stay
of execution to be granted. 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 (or merits of the appeal). Many judges
considered the question whether the appeal, if successful, is rendered nugatory
under the head of special circumstances. (Sometimes, the phrase used is whether
the appellant, if successful, can be restored to its former position). The general
view appears to be that that is the more, if not the most, important factor of
all. Of course, no one ever attempts to define special circumstances, for good
reasons. It is also a common view that it depends on the facts of a particular
case. Thus, “business realities” has been taken into consideration, I believe
under this head. It is a common view that merits of the appeal (or correctness
or validity of the judgment) is not special circumstances. Some judges do not
use the term “special circumstances”. They straight away consider whether
the appeal, if successful, would be rendered nugatory. Examples are Mohamed
Mustafa and Gentali (M) Sdn Bhd v. Kawasaki Sunrock Sdn Bhd [1996] 2 MLRA
369; [1996] 3 MLJ 597; [1997] 1 CLJ 70; [1997] 1 AMR 951 (CA) and the
term was used “in the sense that the appellant is deprived of the fruits of his
success.” I think it does not matter whether the nugatory factor is considered
under the head “special circumstances” or not, so long as it is considered.
[67] I shall now come to See Teow Guan. The first thing to be noted is that it is an
application for a stay of proceedings, not for a stay of execution. The decision
appealed against was the decision of the learned Judicial Commissioner striking
out a prayer in the winding-up petition. There was no judgment to be executed.
There was no order that a party was to do something. There was nothing to
be executed, really. However, with respect, the confusion arises because the
judgment talks about stay of execution. If we confine that case to applications
for stay of proceedings and not for stay of executions that judgment can be left
alone and nothing more need be said about it.
[68] However, as the judgment deals with principles of a stay of execution and
declares that the long established principle ie, the “special circumstances” test
should no longer be followed, the judgment has to be discussed.
[69] First, See Teow Guan declares “special circumstances” as bad law and
should no longer be followed. With respect, I do not think that the Court of
Appeal can do so, particularly in view of the Federal Court judgments in Re
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Kong Thai Sawmill (Miri) Sdn Bhd; Ling Beng Sung v. Kong Thai Sawmill (Miri)
Sdn Bhd & Ors (No 2) [1974] 1 MLRA 77; [1976] 1 MLJ 131, Jasanusa Sdn Bhd
and Dato’ Hj Ghani Gilong. Mohamed Mustafa, though a Federal Court judgment
is no authority to say that “special circumstances” is bad law. The judgment
makes no mention of “special circumstances” at all. It may well be that it
considers that the appeal being rendered nugatory as “special circumstances”
without saying it, or it may consider it under a separate heading, as some
judges do. The point is that, that factor (appeal being rendered nugatory) was
considered. Furthermore, no reference was made to the earlier Federal Court
judgment in Re Kong Thai Sawmill (Miri) Sdn Bhd & Ors, which used the term
“special circumstances.” And, sixteen years after Mohamed Mustafa, the Federal
Court was still using the term “special circumstances” in Jasanusa Sdn Bhd and
Dato’ Hj Ghani Gilong. The Singapore High Court judgment and the New South
Wales Court of Appeal judgment are no authority for this court to overrule our
own Federal Court judgments.
[70] Furthermore, even this court, subsequent to See Teow Guan was still
using the “special circumstances” test see Tropiland Sdn Bhd v. DCB Bank Bhd
& Anor [1999] 1 MLRA 615; [2000] 2 MLJ 65; [2000] 1 CLJ 568; [2000] 1
AMR 766. So, with respect, in my judgment, it is not quite right to say that
See Teow Guanhas “jettisoned” the “special circumstances” test. The weight
of authorities is simply too heavy for this court to do so and even this court
subsequent to the attempt, continues to treat it as still very much alive.
[71] My reading of See Teow Guan shows that having “jettisoned” special
circumstances the learned judge went on to consider other factors like the
appeal, if successful, would be rendered nugatory and concluded that, in that
case, the appeal “was doomed to failure.”
[72] I agree that in an application for a stay of execution, that the appeal, if
successful, would be rendered nugatory is the “paramount consideration” or
by whatever name it is called. And, I do not think that it matters whether it is
considered under the head of “special circumstances” or not, so long as it is
considered and so long as he does not go so far as to say that no other factors
may be considered because this is an exercise of discretion, and therefore all
the relevant factors should be considered.
[73] My difficulty with See Teow Guan if it were to be applied to an application
for a stay of execution is that that the learned judge found that the appeal
would be rendered nugatory because it is doomed to failure. As I understand
it, the nugatory test that the courts talk about in an application for a stay of
execution goes to the subject matter of the case, not the merits of the appeal. In
other words, the appeal, if successful, is worthless because the appellant cannot
be put in its former position. That “the appeal is doomed to failure” in my view,
goes to the merits of the appeal, not to the execution.
[74] I do not think that a court hearing an application for a stay of execution
should make a finding that the appeal is doomed to failure or even that there
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are no merits in the appeal. The reasons are given by Shankar JCA (as he then
was in) in Salim bin Ismail & Ors v. Lebby Sdn Bhd (No 1) [1995] 2 MLRA 483;
[1997] 1 CLJ 98; [1997] 2 AMR 1110 (CA):-
The grounds of judgment of the trial judge are not before us and
it would be premature for us to say that this appeal is without any
prospect of success.
[75] I would venture to add additional reasons: in the case of the Court of
Appeal or the Federal Court, the court that sits to hear the stay application, it is
only constituted to hear the stay application, not the appeal. Indeed the appeal
may not even be heard by the same panel. Not only the grounds of judgment,
usually, are not before the court, but so are the appeal records. The court too
does not have the benefits of the arguments on the merits of the appeal. In the
circumstances, I am of the view that, as a general rule, it is not only premature
but it is also unfair to the parties and wrong for the court, hearing an application
for a stay, to make a finding that the “appeal is doomed to failure”, “without
any prospect of success”, “has no merits” and the like.
[76] Think of a trial judge trying to apply the principle when he is hearing an
application for a stay of execution against his own judgment, which under the
rules will have to be made before him first. Is he going to be his own judge
and say that there are no merits in the appeal against his own judgment? Even
if he honestly thinks so, experience shows (here I am speaking from my ten
years experience as a trial judge in the High Court, not to mention my days
in the Sessions and Magistrate’s Courts) that there are cases in which the trial
judge is very confident of the correctness of his judgment, yet it is reversed on
appeal. On the other hand, there are cases in which he is not that confident, in
fact has some doubts whether he has given a correct decision, yet, on appeal it
is confirmed. That, perhaps, is one of the reasons why a person should not be
his own judge.
[77] In the circumstances, I am of the view that See Teow Guan should not be
treated as laying down new principles to be applied in an application for a stay
of execution. It should be confined to its own facts in an application for a stay
of proceedings. The principles that have been applied by the courts of all levels
in this country remain the same. Call them by whatever name one prefers.
So long as the relevant factors discussed earlier are considered, the correct
principles are applied, the exercise of the discretion should not be faulted.
[78] Back to present case. It is to be noted that the affidavit in support says that
there are special circumstances, there are merits in the appeal and also that if
stay is not granted the appeal will be rendered nugatory. I have said the function
of the court is not to look for phrases used (as they are not “passwords”) but
to look at the substance, consider the facts and the circumstances of the case in
the light of the relevant factors that should be considered in the exercise of the
discretion of the court and decide.
 Ming Ann Holdings Sdn Bhd
232 v. Danaharta Urus Sdn Bhd [2002] 1 MLRA

[79] First the applicant alleges that the learned judge had unilaterally directed
that the case be tried on issues after having fixed a date for a full trial. This is
actually an allegation that goes to the correctness or validity of the judgment,
or merits in the appeal. Even then, looking on the notes of proceedings it is
clear that it is not so. Anyway, he raised no objection.
[80] Further, even the new counsel for the appellant gave an undertaking to the
learned judge to file his written submission. Why should he undertake to file
his written submission before the trial if there was to be a full trial?
[81] The applicant then talks about merits of the appeal. I prefer the more
cautious approach taken by Shankar JCA in Salim bin Ismail & Ors and NH
Chan J (as he then was) in Che Wan Development Sdn Bhd v. Co-operative Central
Bank Bhd [1989] 1 MLRH 267; [1989] 3 MLJ 40; [1989] 1 CLJ (Rep) 366 and
not say emphatically that the appeal is “doomed to failure” or otherwise, “has
no merits” or otherwise, without the benefit of the grounds of judgment, a full
argument on merits and I may not even be on the panel that hears the appeal
eventually. I prefer to be neutral, at this stage, on the issue.
[82] Next, the applicant talks about “special circumstances” which, in fact,
is an argument that if the stay is not granted, the appeal, if successful will be
rendered nugatory, or that the applicant, if successful in the appeal, cannot be
restored to its former position.
[83] It must be remembered that the judgment is a money judgment. There
is not even an allegation, what more evidence, that the respondent is not in a
financial position to repay the applicant if it need be. And bear in mind that the
respondent is Danaharta Urus Sdn Bhd.
[84] The grounds relied on by the appellant are nothing more than “fear of
losing"; fear of losing business, fear of losing customers, fear of losing suppliers,
fear of losing goodwill, fear of not being able to collect its debts from third
parties, in case the appellant company is wound-up. All that the applicant has
to do to avoid such “fears” is to settle the judgment debt.
[85] The winding-up petition is still pending. The applicant still has every
opportunity to contest it.
[86] Whatever it is, those factors are not “special circumstances” (if we want to
use the term) nor do they show that the appeal, if successful, will be rendered
nugatory (if we prefer that term). They are nothing unusual. Execution is a
natural process after obtaining a judgment and winding-up is one of them.
[87] From the notes of proceedings, we see that both the learned counsel for the
respondent as well as the learned judge have been very accommodative with
the applicant. Even after a “final” date of hearing, a number of postponements
were granted to suit the applicant.
 Ming Ann Holdings Sdn Bhd
[2002] 1 MLRA v. Danaharta Urus Sdn Bhd 233

[88] In the circumstances, is this a case in which, this court, in the exercise of
its direction should grant a stay? My answer is clearly “No”.
[89] On these grounds, I would dismiss the application with costs.
[90] My learned brothers KC Vohrah JCA and Faiza Thamby Chik J have read
this judgment in draft and have expressed their agreements with it.