1. ) Uthama Kumara Naidu A/L Sundara Rajoo v 1. ) Hsbc Bank Malaysia Berhad (WA-22NCC-279-07/2020)

UTHAMA KUMARA NAIDU A/L SUNDARA RAJOO [Identity Card No.: 690224065067]

SRI THARAN NAIDU A/L SUNDARA RAJOO [Identity Card No.: 731202016019] … PLAINTIFFS

HSBC BANK MALAYSIA BERHAD [Company No.: 127776-V]

LEONG AUCTIONEER SDN BHD [Company No.: 922719-M]

AZIRAM BIN MAT SALLEH [Identity Card No.: 680130106121] … DEFENDANTS GROUNDS OF JUDGMENT Introduction [1] Enclosure (“Enc.”) 352 is the Plaintiffs’ application made pursuant to Order 55 Rule 16 of the Rules of Court 2012 and/or under the inherent jurisdiction of the Court for a stay of execution of the Judgment granted in favour of the Defendants on 12.12.2022 pending the disposal of the Plaintiffs’ appeal against the said Judgment. [2] The application for a stay of execution was dismissed with costs. The Plaintiffs have appealed against my decision. These are the grounds for my decision. Background [3] The 1st Plaintiff (“P1”) at the commencement of this suit, is said to be a bankrupt with sanction of the lnsolvency Department of Malaysia/Jabatan lnsolvensi Malaysia to commence this suit whilst the 2nd Plaintiff (“P2”) is the brother of P1 and purportedly holds P1’s Power of Attorney. P1’s bankruptcy was said to be discharged on 29.12.2020. [4] P1 in 2005, bought the residential property with an address as No.21, Jalan Puncak 2, Taman Puncak Bukit Utama, Bukit Antarabangsa, 68000 Ampang, Selangor Darul Ehsan (“the Property”) for a sum of RM1,030,074.00. [5] To part finance the purchase of the Property, P1 by a facility agreement dated 28.2.2006 and Letter of Offer dated 27.10.2005 (“the Agreement”) took a facility of RM772,555.00 from the 1st Defendant (interchangeably “D1” or “the Bank”) and as security for the facility, by a deed of assignment (“DOA”) on the same date assigned all present and future right, interest and title the Property to the Bank, and also executed a power of attorney (“POA”) in favour of the Bank appointing the Bank as his lawful attorney in relation to the Property. [6] The 2nd Defendant (“D2”) is an auctioneer whilst the 3rd Defendant (“D3”) is the successful bidder and purchaser of the Property. [7] P1 defaulted in payment of his facility instalments. The Bank by letter dated 30.5.2017, recalled the facility, demanded payment of the outstanding sum of RM716,844.16 as at 24.5.2017 within 14 days, and also gave notice that the Bank will exercise its right under the Agreement, DOA and POA, to inter alia, sell the Property in the event such payment is not received. Payment as demanded was not received and by its solicitors’ letter dated 11.08.2017, the Bank terminated P1’s right to possession and/or occupation of the Property and exercised its rights under the Agreement, the DOA and POA to sell the Property by way of auction. [8] After 7 previous unsuccessful attempts by the Bank to auction the Property, the Property was ultimately auctioned off on 19.11.2019 to D3 as the successful bidder. The sale of the Property to D3 was completed on 15.6.2020. [9] The Plaintiffs filed this action on 7.7.2020 (and not 10.10.2021 as asserted in para 3 of their submissions) against the Defendants alleging that the Bank was negligent in failing to take reasonable precautions to obtain the true market value of the Property and sold the Property at an undervalue; the Bank was vicariously liable arising from the actions of the auctioneer, who is said to be the Bank’s agent, in purportedly refusing to allow P2, who was present with a Hong Leong Banker’s cheque no. 148987 for the sum of RM111,603.00 to bid at the auction of the Property on 19.11.2019 at 2pm; the auction was not properly carried out; D3 was not present at the auction but was allowed to bid for the property. As such, the Plaintiffs sought inter alia to set aside the sale by auction of the Property and for general damages to be paid by the 1st, 2nd and 3rd Defendants. [10] All 3 Defendants filed their respective defence. The 3rd Defendant counterclaimed against the Plaintiffs for an order for vacant possession of the Property, special damages in the sum of RM10,000 for loss of rental and bank charges, general and aggravated damages due to the Plaintiffs’ for refusal to deliver vacant possession. [11] After a full trial conducted virtually online by using the Zoom video conferencing platform lasting 8 days, I had on 12.12.2022 dismissed the Plaintiffs’ claim and allowed in part the 3rd Defendant’s counterclaim. The reasons for my Judgment are set out in Uthama Kumara Naidu a/l Sundara Rajoo & Anor v HSBC Bank Malaysia Bhd & Ors [2023] 4 CLJ 642; [2023] MLJU 279. Pursuant to the Judgment, the Plaintiffs were ordered to jointly and severally pay costs of RM100,000 to the Bank, RM80,000 to D2, RM100,000 to D3; all costs being subject to allocator as well as deliver vacant possession of the Property to D3 within 21 days of Judgment and pay D3 general damages of a sum of RM 5,000 a month for loss of rental or as damages for being kept out of use of the Property from 15.6.2020 (date of full payment of purchase price) to date of delivery of possession; exemplary damages at RM37,500 (computed on the basis of 25% of the general damages which at date of Judgment works out to RM150,000), interest at 5% per month on the sums awarded from date of filing of counterclaim to full payment. Plaintiffs’ case for a stay of execution [12] At the outset, I note that the Plaintiffs ought to have filed the stay application under O. 45 r. 11 Rules of Court 2012 instead of O.55 r. 16. In support of the stay application, the Plaintiffs’ averred in their affidavit that there are special circumstances justifying a stay of the Judgment:

They have filed an appeal against the Judgment/ there are merits in the appeal and there are novel points of law; and

(ii) The Plaintiffs’ appeal will be rendered nugatory if a stay of execution is not granted. The Law on Stay of Execution [13] It is trite law that an appeal shall not operate as a stay of execution unless the court so orders. Section 73 of the Courts of Judicature Act 1964 (“CJA”) states: “73. Appeal not to operate as stay of execution. An appeal shall not operate as a stay of execution or of proceeding 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.” See also: Kosma Palm Oil Mill Sdn Bhd & Ors v Koperasi Serbausaha Makmur Bhd [2004] 1 MLJ 257 FC which held: “7 The general rule is that an appeal shall not operate as a stay of execution unless the court so orders. Accordingly, as Brown J said in Serangoon Garden Estate Ltd v Ang Keng [1953] MLJ 116 while commenting on the discretion to grant a stay: 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.” [14] The onus is on the applicant to demonstrate the existence of special circumstances to justify the grant of a stay of execution – Kosma Palm Oil (supra): “23 The onus is on the applicants 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 (see Syarikat Berpakat v Lim Kai Kok [1983] 1 MLJ 406) ….” [15] The following principles distilled from the case of Serangoon Garden Estate Ltd v Ang Keng [1953] MLJ 116, a judgment of the Singapore High Court and often quoted on our shores, including in the Court of Appeal decision in Ming Ann Holdings Sdn Bhd v Danaharta Urus Sdn Bhd [2002] 3 MLJ 49; [2002] 3 CLJ 380 CA are instructive:

granting a stay pending appeal is an exercise of discretion;

(ii) there is no rule of practice limiting the exercise of the discretion;

(iii) 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;

(iv) 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'. [16] As to what amounts to “special circumstances”, Ming Ann (supra) at pg. 67 held: “ ….. 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). “ See also the case of Low Nam Hui v Huang Yan Teo [2007] 7 MLJ 13; [2007] 6 CLJ 27, where the Court of Appeal elucidated: “[13] The statutes or the rules of court do not define what constitutes a special circumstance. This is left practically to the opinion and judicial discretion of the presiding judges. In a nutshell, a special circumstance must mean something out of the ordinary or something unusual. The category of special circumstances can never be limited or closed, as from time to time and case to case different and various factors may be accepted as special circumstances. The judge sitting alone or the judges of an appellate court must decide, on the available evidence disclosed in the competing affidavits before him or them, whether there are special circumstances relating to the enforcement of the order or judgment in order to justify a stay of the order or judgment appealed against, and on what terms, if any, which are reasonable. ……” (Emphasis added) [17] I now turn to deal with the issues raised by the Plaintiffs. [18] Firstly, there is nothing special, extraordinary or unusual about the lodging of an appeal by the Plaintiff. I find merits in the appeal advanced by the Plaintiffs as a ground for a stay to be irrelevant as explained by the Kosma Palm Oil (supra) at para 19 pg. 268: “19 ..Both parties delved into some length on the merits of their respective case in the affidavits filed and the submission made in court. The merits of a party's case in a stay application is not a relevant matter for consideration. In this regard Lord Denning MR said in TC Trustees Ltd v JS Darwen [1969] 2 QB 295 at p 302: In this very case the defendants, in their affidavit under RSC Ord 14 did raise a plea for equitable relief. But it was overruled, and judgment given against the defendants. It is not permissible to renew it again on an application for a stay of execution …” (Emphasis added) [19] Second, the Judgment in favour of D1, a bank, D2 and D3 relates to a monetary judgment for costs, whilst for D3, it is costs as well as monetary compensation and an order to deliver vacant possession. For the monetary part of the Judgment, the observation of the Court of Appeal in Ming Ann (supra) is instructive: “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......” (Emphasis added) [20] In similar vein, in Kosma Palm Oil, the Federal Court had this to say: “25 …..Thus, the applicants ought to have focussed on the inability of the respondents, if at all, to re-instate them to their original position should they be successful in the appeal. There must be an affidavit showing that if the losses are incurred there is no reasonable prospect of them being reimbursed if the appeal succeeds (see Atkins v GW Ry (1886) 2 TLR 400). This they did not do….”(Emphasis added) [21] Just as in this case, there is nothing in the Plaintiffs’ affidavit to suggest that if the monetary sums are paid to the Defendants, they will not be in a financial position to pay back the monies. Further, D1 being a bank, there is no question of inability to repay the Plaintiffs if they succeed in the appeal. [22] Sans evidence of the Defendants’ impecuniosity or insolvency, in my judgment, there is no question of the appeal being rendered nugatory due to inability to pay back the Plaintiffs the monetary sums ordered. [23] Third, the general rule is that there shall be no stay - see Kosma Palm Oil (supra): “12 ….. The grant of a stay for any ordinary reason will have just that effect and destroy the general rule that there shall be no stay. Thus, I agree with Ramly Ali JC (as he then was) who said in Utama Merchant Bank Bhd v Dato' Mohd Nadzmi bin Mohd [2001] 5 MLJ 317 that there must be 'strong justification' for a party to come within an exception to a general rule…” (Emphasis added) [24] In Universal Trustee (M) Bhd v Lambang Pertama Sdn Bhd & Anor [2015] 7 MLJ 305 at [5], Wong Kian Kheong JC held that “Stay of execution and stay of proceedings pending appeal to Court of Appeal should be the exception and not the norm.” [25] In my view, a bald assertion of merit in the appeal and there are novel points of law in the appeal by the Plaintiffs, without elaborating what they are, cannot amount to special circumstances; otherwise a stay would be granted in every case, as every appellant will surely expect that his appeal will succeed. This would fly in the face of s.73 of the CJA and established case laws. [26] As for delivery of vacant possession to D3, I do not see how this will render the appeal nugatory. Following Kosma Palm Oil, the Court of Appeal in Jagdis Singh a/l Banta Singh v Outlet Koperasi Serbausaha Makmur Bhd [2013] 4 MLJ 213, explicitly stated that in regards to a stay application, whether the fact that the appeal will be rendered nugatory if stay is refused is not granted as a matter of routine and it is not an automatic or mechanical relief slavishly followed after filing an appeal. In my view, a stay of execution in the instant case will positively benefit the Plaintiffs at the expense of the D3 who has made full payment, and completed the auction sale almost 3 years ago on 15.6.2020 but has been deprived of his right to the Property to date. [27] It must also be recalled that this Court had on 21.10.20 dismissed the Plaintiffs’ application for an injunction in enc. 17 to restrain D3 from taking possession of the Property. Besides, there was delay in prosecuting the claim by which time D3 has made full payment and completed the auction sale. There was no appeal lodged by the Plaintiffs against the refusal to grant the injunction. Yet, D3 was not able to gain possession. D3 has now finally been granted judgment and the privilege to exercise his full rights over the Property. In the context that there has been a full trial here, following Syarikat Berpakat v Lim Kai Kok [1983] 1 MLJ 406 and Re Kong Thai Sawmill (Miri) Sdn Bhd [1976] 1 MLJ 131, unless special circumstances are shown, there shall be no stay. In this regard, this Court has necessarily balanced the competing interest of the Plaintiffs and D3. To my mind, if the stay of execution is granted, D3 will be prevented from possession of the Property and effectively prevent him from reaping the benefit of the judgment. It bears repetition that D3 having completed payment for the Property, has waited for years to obtain possession. In my judgment, it will be manifest injustice to D3 to make him wait any longer. [28] In the round, I am of the opinion that having obtained judgment in their favour, a stay of execution will deprive D1, D2 & D3 of their fruits of litigation. They are entitled to chew on the fruits of their success. Granting the stay of execution sought will amount to wrenching the fruits of litigation from D1, D2 & D3. [29] The exercise of discretion cannot be arbitrary but according to established principles. Discretion should be exercised when special circumstances are established. [30] On the facts here, I find the Plaintiffs have not discharged the legal burden in this case to show any unusual or special circumstance to warrant the exercise of discretion in their favour to stay execution of the judgment. [31] For the reasons, given, I declined to order a stay. The Plaintiffs application for stay of execution is dismissed with costs. Dated 6th May 2023 - sgd - ……………………….. Liza Chan Sow Keng Judge High Court of Malaya at Kuala Lumpur COUNSEL: For the Plaintiffs : Thilagan Mehanathan Messrs Shafee & Co. For the 1st Defendant : Sathya Kumardas (together with her, Pauline Koh) Messrs Shearn Delamore & Co. For the 2nd Defendant : Mahendran Shunmugam (together with him, Kamal Ishmael) Messrs Izauddin Firdaus & Mahendran For the 3rd Defendant : Yusri Farid Mat Sood Messrs Yusri Omar Arshad & Partners CASES REFERRED: Uthama Kumara Naidu a/l Sundara Rajoo & Anor v HSBC Bank Malaysia Bhd & Ors [2023] 4 CLJ 642; [2023] MLJU 279 Kosma Palm Oil Mill Sdn Bhd & Ors v Koperasi Serbausaha Makmur Bhd [2004] 1 MLJ 257 Serangoon Garden Estate Ltd v Ang Keng [1953] MLJ 116 Ming Ann Holdings Sdn Bhd v Danaharta Urus Sdn Bhd [2002] 3 MLJ 49; [2002] 3 CLJ 380 Low Nam Hui v Huang Yan Teo [2007] 7 MLJ 13; [2007] 6 CLJ 27 Universal Trustee (M) Bhd v Lambang Pertama Sdn Bhd & Anor [2015] 7 MLJ 305 Jagdis Singh a/l Banta Singh v Outlet Koperasi Serbausaha Makmur Bhd [2013] 4 MLJ 213 STATUTES/LEGISLATION REFERRED: Order 45 Rule 11 and Order 55 Rule16 of the Rules of Court 2012 Section 73 of the Courts of Judicature Act 1964