Ling Peek Hoe (No. K/P: 521220-08-5119) v Golden Star (No. Berdaftar: 5196380) & 3 Lagi (A-02(IM)-2555-12/2018)

LING PEEK HOE (No.K/P: 521220-08-5119)

LING BOON HUAT (No.K/P: 831204-08-5403)… APPELLANTS

GOLDEN STAR (No.Berdaftar: 5196380)

DING TOH BIEW (No.K/P: 710206-08-6281)

DING TOH GIEN (No.K/P: 680918-08-5573)

DING TOH LEI (No.K/P: 7182372) … RESPONDENTS (In the High Court of Malaya at Ipoh, Perak Darul Ridzuan

Ling Peek Hoe (No.K/P: 521220-08-5119)

Ling Boon Huat (No.K/P: 831204-08-5403) … Plaintiffs

Golden Star (No.Berdaftar: 5196380)

Ding Toh Biew (No.K/P: 710206-08-6281)

Ding Toh Gien (No.K/P: 680918-08-5573)

Ding Toh Lei (No.K/P: 7182372) … Defendants Consolidated with the following matter In the High Court of Malaya at Ipoh, Perak Darul Ridzuan

Ding Toh Biew (No.K/P: 710206-08-6281)

Ding Toh Gien (No.K/P: 680918-08-5573)

Ding Toh Lei (No.K/P: 7182372) … Plaintiffs And Ling Peek Hoe (No. K/P: 521220-08-5119) … Defendant) CORAM: ZALEHA BINTI YUSOF, JCA HANIPAH BINTI FARIKULLAH, JCA KAMALUDIN BIN MD. SAID, JCA 3 GROUNDS OF JUDGMENT

This is an appeal by the appellants (plaintiffs) against the decision of the High Court allowing the respondents’ (defendants) application to stay the committal proceeding pending the disposal of the respondents’ application for review at the Federal Court.

The ground of the plaintiffs’ appeal is that the learned Judicial Commissioner (JC) erred in fact and law in deciding that the High Court has jurisdiction to grant an order for stay of the committal proceeding pending the disposal of an application by the defendants for review in the Federal Court pursuant to Rule 137 of the Federal Court Rules 1995.

We heard the appeal and after due consideration to the respective submissions of counsel, we dismissed the appeal and now give our reasons.

Before dealing specifically with the appeal in the present case, it is appropriate to state the background facts of this case.

The 1st plaintiff was the registered owner of a shop lot known as Lot 59, Taman Ilmu, Setiawan, Perak (“Lot 59”). He was also the registered owner (10/15 parts of undivided shares) of two pieces of agricultural land with the title Nos. GM 3896 Lot 563 and GM 3895 Lot 2564, both at Kg Selamat, Setiawan, Perak (“Tanah Kg Selamat”). The 1st plaintiff’s mother, Wong Sing Bee, owns the other 5/15 parts of undivided shares of Tanah Kg Selamat. The 2nd plaintiff is the 1st plaintiff’s son.

The 1st defendant is an advocate and solicitor. The 2nd defendant is a licensed money lender. The 3rd, 4th and 5th defendants are partners of the 2nd defendant. The 1st, 3rd, 4th and 5th defendants are siblings.

Sometime in 1995, the 1st plaintiff took a loan of RM590,000 from Hong Leong Bank Berhad. Lot 59, Tanah Kg Selamat and another property at No. 7, Jalan Raja Omar, Setiawan, were all placed as securities for the said loan.

In 1996, the 1st plaintiff took a loan of RM5,000 from the 2nd defendant through the 3rd defendant. For purpose of this loan, the 1st plaintiff provided the original copies of the title document of Lot 59, Lot 27 and Tanah Kg Selamat to the 2nd defendant whom would keep these documents until the loans were fully paid. The 1st plaintiff was also asked to sign the said 5 documents for the loan purposes. Subsequently, the 2nd defendant approved further loans amounting to RM792,187.50 to the 1st plaintiff.

Between 1996-2003, there were numerous sale and purchase transactions between the plaintiffs and the defendants related to Lot 59 and Tanah Kg Selamat.

In 2003, the 1st plaintiff discovered that Lot 59 and Tanah Kg Selamat had been transferred to the 3rd, 4th and 5th defendants.

All documentation for the loan and land and property transfer was done by the 1st defendant.

The 1st plaintiff maintained that Lot 59 and Tanah Kg Selamat were unlawfully transferred to the 3rd, 4th and 5th defendants.

Based on the development as enumerated above, on 18.8.2006, the plaintiffs filed the civil action No. (M1)-22-203-2006 (“Guaman 203/2006”) against the defendants for, inter alia, a declaration that the Sale and Purchase Agreement and the Transfer of Ownership forms on Lot 59 and Tanah Kg Selamat were null and void. The main ground of the claim was fraud.

On 27.2.2008, the 3rd, 4th and 5th defendants filed a counter-suit against the 1st plaintiff vide civil action No. (M3)-22-45-2008 (“Guaman 45/2008”). In this suit, the defendants claim, inter alia, for damages against the 1st plaintiff’s trespass over Tanah Kg Selamat.

On 24.2.2010, the Ipoh High Court ordered for both Guaman 203/2006 and Guaman 45/2008 to be consolidated, with Guaman 203/2006 became the main suit and Guaman 45/2008 as a counter-claim in that main suit.

The Ipoh High Court on 28.11.2012 ordered that:

The Sale and Purchase Agreement between the 1st plaintiff and the 3rd, 4th and 5th defendants on Tanah Kg Selamat was null and void; and

(ii) The Transfer of Ownership forms for Tanah Kg Selamat was declared null and void.

The Ipoh High Court dismissed the 3rd, 4th and 5th defendants’ application for a stay of execution pending the defendants’ appeal against the said Order dated 28.11.2012.

Subsequently, on 11.4.2013, the plaintiffs’ application for an execution order was granted by the Ipoh High Court and ordered that the 3rd, 4th and 5th defendants to cause the Transfer of Charge Nos. 197-200/2000 Jld 100 7 Folios 65-68 (all for Tanah Kg Selamat) to be released and that the original titles of Tanah Kg Selamat to be surrendered to 1st plaintiff within 60 days from date of the Order.

On 13.3.2015, the Court of Appeal allowed the defendants’ appeal and set aside both Orders granted by the Ipoh High Court on 28.11.2012 and 17.4.2013.

On 20.6.2017, the Federal Court set aside the order of the Court of Appeal and both Orders of the Ipoh High Court were reinstated.

The plaintiffs’ solicitors sent letters to the solicitors for the 3rd, 4th and 5th defendants dated 28.6.2017 and 12.3.2018, requesting compliance with the Order of the Federal Court dated 20.6.2017 or face committal proceeding.

Solicitors for the 3rd, 4th and 5th defendants vide its letter dated 6.4.2018 had advised the 3rd, 4th and 5th defendants to comply with the Order of the Federal Court.

On 16.4.2018, the 1st plaintiff filed an ex-parte application for leave to commence a committal proceeding against the 3rd, 4th and 5th defendants.

On 18.5.2018, the High Court granted leave to the plaintiffs to commence the said committal proceeding. Following this order, on 28.5.2018, the 1st plaintiff filed a committal application against the 3rd, 4th and 5th defendants.

On 25.10.2018, the defendants filed an application before Ipoh High Court for a stay of proceeding relating to the committal proceeding. Their main grounds of this application were that the defendants had applied for leave for the Federal Court to review its decision on 20.6.2017 pursuant to Rule 137 of the Federal Court Rule 1995.

On 31.1.2019, the Ipoh High Court allowed the 2nd, 3rd, 4th and 5th defendants’ application for stay of the committal proceeding of Enclosure 8. Hence, the plaintiffs appeal to this Court.

The defendants filed an application for a stay of committal proceeding pending the determination of the application for review at the Federal Court.

The source of statutory powers relied upon by the defendants to support the application for stay was Order 92 rule 4 of the Rules of Court 2012 (ROC 2012).

The learned JC allowed the defendants’ application for stay of proceeding, primarily based on the following reasons: “[25] Granted, the grounds for the application in Enclosure 8 stems from the Order of the Federal Court dated 20.6.2017. But as far as the proceeding before this Court with regards to Enclosure R8 is concerned, it is regarded as a fresh application with parties provided with the opportunity to convince this Court to grant the committal order or not. This is clearly the principle laid down in Tan Sri Dato’ (Dr) Rozali Ismail & Ors v Lim Pang Cheong & Ors [2012] 2 CLJ 849 when Ariffin FCJ (as His Lordship then was), in delivering the Federal Court decision said: “Contempt of court has traditionally been classified either criminal or civil … one thing is clear, be it civil or criminal contempt, the standard of proof required in either type is the same, which is beyond reasonable doubt.” [26] The current application before me in Enclosure 8 is, to this Court’s finding, a straight forward application for this Court to stay another application which is pending before me. I am seized with the power and jurisdiction to deal with application by virtue of the provisions of O. 45 r.11, O. 55 r.16, and O. 92 r.4 of the Rules of Court 2012 (“ROC 2012”).”

The learned JC was of the view that the defendants’ application for stay of the committal proceeding, fulfils the test of special circumstances as laid down in Leong Poh Shee v Ng Kat Chong [1995] 1 LNS 90; Government of Malaysia v Datuk Haji Kadir Mohamad Mastan [1995] 2 10 MLJ 105 and Kosma Palm Oil Mill Sdn Bhd v Koperasi Serbausaha Makmur Bhd [2003] 5 AMR 758.

Further, the learned JC said: “[32] This court is further of the view that the nugatory principle as laid down in Kosma Palm Oil Mill Sdn Bhd (supra) applies squarely to the matter before me now, in that the outcome of the review brought by D3-D5 before the Federal Court would be rendered nugatory should this court disallow stay and proceed to hear the application in Enclosure 8. That is already a special circumstance that warrants this court to grant the stay applied for.”

Whether the High Court has jurisdiction to grant an order to stay the committal proceeding pending the disposal of an application for review made pursuant to Rule 137 Rules of the Federal Court 1995 in the Federal Court.

As stated above, the only issue in the present appeal is confined to the decision of the High Court granting an order to stay the commencement of the committal proceeding pending the disposal of the defendants’ review application in the Federal Court.

The crux of the argument submitted for the plaintiffs is that once the Federal Court disposed of the appeal, the High Court has no power to allow the stay of the committal proceeding filed by the defendants in this case.

In support of the arguments, learned counsel for the plaintiffs relied on the Federal Court decision in Takako Sakao (P) v Ng Pek Ivan (P) & Anor (No 3) [2012] 2 AMR 821.

The defendants' case was that if the application for stay is not granted by the court, the result of the review becomes nugatory as the position of the parties if the committal proceeding under Enclosure 8 is allowed by the Court, the respondents would be committed to imprisonment and/or be fined, and this definitely could not be compensated with costs.

The defendants relied on the decision of the Federal Court in Kosma Palm Oil Mill Sdn Bhd (supra) to support their application for stay of the committal proceeding in the High Court. In Kosma Palm Oil Mill Sdn Bhd, the Federal Court held that the test applicable to the grant of a ‘stay of execution’ is whether there are special circumstances, the most common of which is whether the appeal would be rendered nugatory if a stay of execution is not granted.

It is to be noted that Kosma Palm Oil Mill Sdn Bhd does not concern an application to stay proceedings. In Kosma Palm Oil Mill Sdn Bhd, at p. 6 and pp. 17-19:

The applicants entered into agreements to purchase estate lands from the respondents. Pursuant to such agreements, the applicants took possession of the estate lands;

There was a dispute regarding the completion of the agreements in question and the respondents regained possession of the estate lands. Consequently, the applicants obtained an interim injunction from the High Court against the respondents which resulted in the applicants retaking possession of the estate lands;

The High Court subsequently dissolved the interim injunction but granted an Erinford injunction pending the disposal of the applicants’ appeal to the Court of Appeal against the dissolution of the interim injunction;

The Court of Appeal dismissed the applicants’ appeal and the Erinford injunction therefore lapsed. The respondents then applied to the High Court for possession of the estate lands and this was granted by the High Court (order for possession of lands);

The applicants appealed to the Court of Appeal against the order for possession of lands. The High Court dismissed the applicants’ first application to stay the execution of the order for possession of lands. Hence, the applicants applied to the Court of Appeal to stay the execution of the order for possession of lands. The Court of Appeal 13 dismissed the appeal (Court of Appeal’s decision) and the stay of execution application;

The applicants applied to the Federal Court for leave to appeal against the Court of Appeal’s decision (leave application). Pending the disposal of the leave application, the applicants applied to the Federal Court to stay the execution of the order for possession of lands; and

The Federal Court dismissed the application to stay the execution of the order for possession of lands on the ground that there were no special circumstances.

It is noted that Kosma Palm Oil Sdn Bhd concerns only an application to stay the execution of a court order and does not relate to the court’s power to stay proceedings as applied by the defendants before the High Court in Enclosure 8.

The case of Takako Sakao (supra) relied by the plaintiffs does not concern an application to stay proceedings.

In Takako Sakao, the facts are as follows: The appellant, a Japanese citizen, and the first respondent were business partners in a restaurant. They decided to acquire the shop house (‘the property’) in which they operated their restaurant business. Upon acquiring the property, the first respondent sought to retain it for her own benefit and sold the property to the second respondent company. The appellant then commenced an action against the 14 first respondent to establish that she was the beneficial owner of the property of which the second respondent was the registered proprietor. The appellant’s claim that a trust had arisen in her favour was dismissed by the High Court but this court allowed the appellant’s appeal reversing the judgments of the courts below and holding that the appellant was the beneficiary under a constructive trust, which bound the conscience of the second respondent as trustee. Orders were accordingly made to protect the subject matter of the trust in specie. Thereafter it emerged that the second respondent had sold off the subject matter of the trust unilaterally and that it had pocketed the proceeds of the sale. This court then made a second judgment in the form of specific relief (‘the second judgment’) to give effect to the principal judgment of this court. The respondents now moved to stay execution of the orders made in the principal judgment and the second judgment on the grounds that they had applied for review under r 137 of the Rules of the Federal Court 1995 (‘the review application’). The respondents submitted that this court had the jurisdiction and power to hear this application and grant a stay pursuant to s 80 of the Courts of Judicature Act 1964 (‘the CJA’). They argued that s 80 of the CJA should be construed widely to include post-judgment applications that seek a stay of execution pending the hearing of an application to review.

Gopal Sri Ram, FCJ held as follows: “… Once an application for leave is refused or an appeal is finally disposed off by this court, there is nothing left to protect or preserve. If the second respondent’s argument is correct, then an appellant who fails in his appeal will equally be entitled to ask for a stay pending a review. That proposition need only be stated to recognize its fallacy. Once an appeal is disposed off, there is no power in this court to stay its effect…”

43.

Sections 73 and 102 CJA, rule 13 RCA and rule 52 RFC, in our view, do not empower the court to stay proceedings pending the outcome of a review. As such, these provisions do not support the defendants’ application for stay of the committal proceeding pending the review application in the Federal Court.

The issue of staying proceedings was the subject of detailed consideration by the Court of Appeal in AB (Sudan) v Secretary of State for the Home Department [2013] EWCA Civ 921. The Court firstly contrasted a stay of proceedings with a stay of enforcement of a judicial decision or order. It emphasized that stay of proceedings issue involve case management decisions. It added at para [25]: “27. A stay on proceedings may be associated with the grant of interim relief, but it is essentially different. In determining whether proceedings should be stayed, the concerns of the court itself have to be taken into the balance. Decisions as to listing, and decisions as to which cases are to be heard at any particular time are matters for the court itself and no party to a claim can demand that it be heard before or after any other claim. The court will want to deal with claims before it as expeditiously as is consistent with justice. But, on the other hand, it is unlikely to want to waste time and other valuable resources on an exercise that may well be pointless if conducted too soon. If, therefore, the court is shown that there will be, or there is likely to be, some event in the foreseeable future that may have an impact on the way a claim is decided, it may decide to stay proceedings in the claim until after that event. It may be more inclined to grant a stay if there is agreement between the parties. It may not need to grant a stay if the pattern of work shows that the matter will not come on for trial before the event in question. The starting point must, however, be that a claimant seeks expeditious determination of his claim and that delay will be ordered only if good reason is shown.

In cases where a request for a stay on proceedings is coupled, expressly or by necessary implication, with a request for interim relief, the 17 court will need to take into account the factors relevant to both types of decision, and may need to take into account a third: that by securing interim relief and a stay, the applicant may be asking the court to use its powers to give him, for as long as he can secure it, a benefit that he may not obtain at the trial."

The English Court in R (on the application of AO & AM) v Secretary of State for the Home Department [2017] UKUT 168 (1AC) referred to AB (Sudan) (supra) and stated as follows:

Every claimant is entitled to expect expeditious judicial adjudication. The strength of this expectation will be calibrated according to the individual litigation equation.

The judicially imposed delay flowing from a stay order requires good reason.

Judicial choreography whereby one case is frozen awaiting the outcome of another is justified for example where the assessment is that the latter will have a critical impact upon the former.

Great caution is to be exercised where a stay application is founded on the contention that the outcome of another case will significantly influence the outcome of the instant case. 18 47. The case of AB (Sudan) and R (on the application of AO & AM) was cited with approval recently by the Federal Court in Public Prosecutor v Dato’ Sri Mohd Najib bin Haji Abd Razak [2019] 4 MLJ 441.

The position in Australia is that generally jurisdiction of the courts to stay civil or criminal proceedings pending appeal is an exercise of the inherent jurisdiction of the courts (See: Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (No 1) (1986) 161 CLR 68 at p 684; Fuller & Cummings v Director of Public Prosecutions (Cth) (1994) 68 ALJR 611). Being an extraordinary jurisdiction, exceptional circumstances must be shown before its exercise is warranted. Keeping matters in status quo until the litigation is finally resolved is not the purpose for which the inherent jurisdiction is invoked. Something quite exceptional must be shown before that jurisdiction is exercised (Edelsten v Ward (No 2) (1988) 63 ALJR 346). (see: Public Prosecutor v Dato’ Sri Mohd Najib bin Hj Abd Razak [2019] 4 MLJ 421)

We are not able to find any reported case which has decided an application to stay a suit pending the outcome of the review application file in the Federal Court. We are of the view that the court may only stay a proceeding pending the outcome of a review application in the Federal Court pursuant to the courts inherent power under O.92 r.4 RC, so as to prevent 19 injustice and abuse of court process. (see: AmBank (M) Bhd v. Metal Reclamation (Industries) Sdn Bhd & Ors). Order 92 rule 4 ROC provides as follows: “For the removal of doubt it is hereby declared that nothing in these Rules shall be deemed to limit or affect the inherent powers of the Court to make any order as may be necessary to prevent injustice or to prevent an abuse of the process of the Court.” (Emphasis added)

In light of Order 92 rule 4 of ROC and the authorities cited in para 46 and 48 above, we regard the jurisdiction involved by the High Court as exceptional, that is to say, it is a jurisdiction which should not be exercised unless it appears that the order appeal from it will affect an injustice and the injustice can be avoided by the intervention of the court.

We are of the view that the review application in the Federal Court, would have an implication upon the outcome of the present case. However, it must be emphasized that it is undesirable at this stage to canvass the argument of whether the review application will succeed.

As correctly pointed out by learned counsel for the defendants, the granting of leave by the High Court does not amount to a finding of committal. It is merely an ex-parte vetting process to consider there was a prima facie 20 case of contempt. In the case of Foo Khoon Long v Foo Khoon Wong [2009] 9 MLJ 441 it was stated that: “[21] Be that as it may, it is also important to state the fact this court had granted leave to the said applicant to commence this committal proceeding against the respondents pursuant to an ex parte application (encl 22) did not necessarily mean that this court was satisfied that the charge has been proved beyond reasonable doubt. At the time when the court had granted leave on 11.6.2007, it is pertinent to observe that there was only a prima facie case of contempt, which based on an ex parte application. In other words, it is merely a vetting process on an ex parte basis to consider if there was a prima facie of contempt and the court did not go into the merits (see Wee Choo Keong v MBI Holdings Bhd & Anor and another appeal [1993] 2 MLJ 217).”

It is undeniable that if the respondents were ultimately to succeed on the review application, the severity of prejudice that could be suffered by the defendants is apparent if the stay of committal proceeding is not allowed as the committal proceeding is a proceeding that is penal in nature. The issue on the balance of justice is therefore in favour of the defendants.

We were, therefore, not persuaded that there has been an error to warrant an appellate intervention in the exercise of discretion by the learned JC in the grant of stay of the committal proceeding. 21

For the reasons stated above, we dismissed the appeal by the defendants with no order as to costs. Dated 7 August 2020 Signed HANIPAH BINTI FARIKULLAH Judge Court of Appeal Malaysia Putrajaya Counsel/Solicitors: For the Appellants : Edmund Lim Yun (Hong Chong Hang with him) Messrs Hong Chew King & Co. No. 7, Taman Teratai Jalan Raja Omar 32000 Sitiawan, Perak For the Respondents : Haniff Khatri (Irzan Iswatt with him) Messrs Haniff Khatri No. 6, Tingkat Atas Jalan Camar 4/3 Seksyen 4, Kota Damansara 47810 Petaling Jaya, Selangor