Affin Bank Berhad v Gpe Industrial Supplies Sdn Bhd (JA-A52NCC-591-11/2024)

AND GPE INDUSTRIAL SUPPLIES SDN BHD (NO. SYARIKAT: 201701007038 [1221203-A])

POOI CHEE KIONG

CHAN BOON PING (NO. K/P: 830220-01-5515) …DEFENDANTS GROUNDS OF JUDGMENT (Enclosure 45)

The Third Defendant filed Enclosure 45, being an application for a stay of execution pending the disposal of the appeal against the summary judgment entered against him. The reliefs sought by the Third Defendant in Enclosure 45 are as follows:

pelaksanaan Penghakiman Terus bertarikh 16 Disember 2025 (“Penghakiman”) yang diberikan oleh Mahkamah yang Mulia ini digantung sehingga pelupusan penuh dan muktamad rayuan yang difailkan oleh Defendan Ketiga terhadap Penghakiman tersebut kepada Mahkamah Tinggi Johor Bahru melalui Notis Rayuan bertarikh 24 Disember 2025;

kos permohonan ini dijadikan kos dalam kuasa rayuan Defendan Ketiga; dan

lain-lain relif / perintah yang dianggap suai dan manfaat oleh Mahkamah yang Mulia ini.

On 29.4.2026, this Court dismissed the Third Defendant's application in Enclosure 45 for stay of execution and awarded costs of RM3,000.00. Being dissatisfied with the said decision, the Third Defendant filed an appeal.

The grounds for this Court's decision are set out below.

The Plaintiff is a licensed bank, while the First Defendant is a company. The Second Defendant is a shareholder and director of the First Defendant. The Third Defendant was a former shareholder of the First Defendant from 30.11.2020 to 21.7.2021.

As stated earlier, judgment in default of appearance was entered against all the Defendants except the Third Defendant.

4.

On 1.4.2021, the Plaintiff and the First Defendant entered into a facility agreement. Following the First Defendant's default in repayment, the Plaintiff terminated and recalled the facility on 16.5.2024.

The Plaintiff filed an application for summary judgment against the Third Defendant. In respect of the First and Second Defendants, judgment in default of appearance has been entered against them.

The Third Defendant opposed the Plaintiff's application for summary judgment, arguing that the Plaintiff failed to show the steps taken to enforce the judgment against the First and Second Defendants. The Third Defendant further contended that he had never executed the Letter of Guarantee and alleged that the signature on it was forged. He also denied any knowledge of the solicitor, Kelly Lim Chia Lee, who purportedly witnessed the execution of the Letter of Guarantee.

On 16.12.2025, this Court allowed the Plaintiff's application for summary judgment and awarded costs of RM1,800.00. Being dissatisfied with the said decision, the Third Defendant filed an appeal. Pending the disposal of the appeal, the Third Defendant filed Enclosure 45, being an application for a stay of execution of the summary judgment. As stated above, this Court dismissed the application.

This Court derives its jurisdiction to grant a stay of execution from Order 55 rule 16 of the Rules of Court 2012, which provides as follows:

Stay of execution (O. 55 r. 16)

An appeal shall not operate as a stay of execution under the decision appealed against except in so far as the Court appealed from or the High Court may order, and any application for stay shall be made in the first instance to the Court appealed from.

The Court appealed from or the High Court may grant an order of stay of execution on such terms as it thinks fit.

The principles governing the grant of a stay of execution were authoritatively articulated by the Court of Appeal in Ming Ann Holdings Sdn Bhd v Danaharta Urus Sdn Bhd (2002) 3 MLJ 49), where the Court held as follows: 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.

Therefore, it is a well-established principle that a successful litigant is entitled to the fruits of its judgment and should not be deprived of that entitlement pending the determination of an appeal. Accordingly, a stay of execution will not ordinarily be granted unless the unsuccessful party demonstrates the existence of special circumstances that justify such relief. The burden rests squarely upon the applicant seeking a stay of execution to establish the existence of special circumstances warranting a departure from this well-established general principle.

As to what constitutes "special circumstances", this Court referred to the decision in Golden Plus Holdings Bhd & Ors v China Idea Development Ltd & Ors [2025] MLJU 3908, wherein Atan Mustaffa Yusoff Ahmad J. elucidated the applicable principles as follows: “[25] The concept of “special circumstances” is not rigidly defined and must be assessed in the context of each case’s particular facts. Courts have recognised various factors that may constitute special circumstances, including but not limited to: the irreversible nature of enforcement, the availability of assets to satisfy the judgment should the appeal fail, the risk of rendering the appeal nugatory, and the balance of hardship between the parties. [26] In determining whether special circumstances exist, the court must also consider the balance of justice between the parties. This requires a careful weighing of the successful party’s right to enjoy the fruits of their litigation against the potential prejudice to the appellant if enforcement proceeds before the appeal is determined, particularly where such prejudice cannot be adequately remedied by damages or other means if the appeal ultimately succeeds.”

D. ANALYSIS AND FINDINGS OF THIS COURT As stated earlier, the burden rests upon the defendant to establish the existence of special circumstances warranting the grant of a stay of execution. It is incumbent upon the third defendant to set out, in his affidavit, why a stay of execution should be granted.

Upon a careful reading of the affidavit affirmed by the Third Defendant, it is apparent that the Third Defendant relies on the following matters as constituting the alleged special circumstances justifying a stay of execution:

The Third Defendant disputes the existence and validity of the letter of guarantee dated 1.4.2021;

The Third Defendant contends that his appeal to the High Court raises a question of law and that a stay of execution is necessary to preserve the status quo pending the disposal of the appeal;

The Third Defendant asserts that the judgment sum is substantial and that satisfaction of the judgment will cause him significant financial hardship;

The Third Defendant contends that, even if his appeal ultimately succeeds, the financial prejudice suffered cannot be adequately reversed, as his CTOS and CCRIS records would have been adversely affected; and

Permitting execution to proceed before the determination of the appeal would render the appeal nugatory and occasion irreparable damage that cannot be adequately compensated by an award of damages.

In Sarwari Ainuddin v. Abdul Aziz Ainuddin [1999] 8 CLJ 534, Mahadev Shankar J. (as he then was) held as follows: “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] 2 CLJ 584; ; [1989] 1 CLJ (Rep) 366, except the following:

(1)Mohamed Mustafa v. Kandasami (No. 2) [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 [1991] 1 MLJ 83. The core factors in this equation which emerge from these cases can be summarised as follows:

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;

The validity or correctness of the decision appealed from are not special circumstances;

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;

Proof that a successful appeal would be nugatory is a special circumstance.” (Emphasis added)

Applying the principles laid down in the above case, this Court finds that the circumstances relied upon by the Third Defendant, namely, his dispute as to the existence and validity of the letter of guarantee, and his contention that the appeal raises a question of law, do not constitute special circumstances warranting the grant of a stay of execution.

The Third Defendant’s assertion that the satisfaction of the judgment would cause him substantial and irreversible financial prejudice, including adverse consequences to his CCTOS and CCRIS records, is merely speculative and unsupported by any evidence, as he did not produce any evidence to that effect. No evidence has been adduced regarding his financial standing, credit profile, or reputation. Accordingly, these bare assertions are insufficient to constitute special circumstances warranting the grant of a stay of execution.

Regarding the Third Defendant’s contention that the judgment sum is a large amount of money and that satisfaction of the same would cause him financial hardship, this Court finds that such a circumstance does not constitute special circumstances and is therefore insufficient to justify the exercise of this Court’s discretion in favour of the Third Defendant.

In this regard, this Court refers to the decision in Wu Shu Chen (Sole Executrix of the Estate of Goh Keng How, Deceased) v Raja Zainal Abidin bin Raja Hussin & Anor [1995] 3 MLJ 224, where Abdul Malik Ishak J. (as His Lordship then was) held that the mere fact that the judgment sum is substantial does not, in itself, constitute special circumstances justifying the grant of a stay of execution. His Lordship stated as follows: “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 is 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”. (Emphasis added).

The Third Defendant relied on several authorities in support of his contention that special circumstances exist to warrant the grant of a stay of execution. Among the authorities cited was Golden Plus Holdings Bhd & Ors v China Idea Development Ltd & Ors [2025] MLJU 3908, wherein the High Court granted a stay of execution on the basis that the status quo, once altered, would be incapable of being restored. This Court is of the view that the decision in Golden Plus (supra) is clearly distinguishable from the present case.

In Golden Plus, refusing a stay would likely have resulted in the forced sale of the applicants' long-standing family residence, which the High Court found to have significance beyond its monetary value and therefore could not be adequately compensated by an award of damages. Furthermore, the High Court found that the company's shares, once liquidated or transferred, could not easily be restored to their original state, thereby rendering the consequences of execution effectively irreversible.

For ease of reference, the relevant excerpt from the judgment in Golden Plus Holdings Bhd & Ors v China Idea Development Ltd & Ors (supra) is reproduced below: [30] The Mayfair Property, situated at Flat B, 31st Floor, The Mayfair, 1 May Road, Mid-Levels, Hong Kong, has been Maria’s principal residence since 2008 - a period exceeding 15 years. In the event of enforcement, this property would likely be subjected to a forced sale. In my view, the loss of a long-standing family residence carries significance beyond mere monetary value and cannot be adequately compensated by damages alone, even if the appeal ultimately succeeds and the Applicants become entitled to recover the judgment sum. This sentiment finds recognition in the Court of Appeal’s decision in Salim bin Ismail & Ors v Lebby Sdn Bhd [1997] 2 MLJ 1, where the court considered the irreversible consequences of enforcing a summary eviction order concerning a party’s longstanding residence as a circumstance relevant to granting a stay. [31] Similarly, the shares in private companies, once liquidated or transferred to satisfy the judgment, cannot be easily restored to their original state or ownership. The corporate structure and shareholding arrangements, once disrupted by enforcement, may prove impossible to reinstate even if the appeal is ultimately successful. The status quo, once disturbed by forced liquidation, may be irrevocably altered. This consideration goes beyond the ordinary consequences of having to satisfy a substantial judgment debt and enters the realm of irreparable harm. [32] I find that these considerations distinguish the present case from Ming Ann Holdings, where the court noted that concerns about potential loss of business, customers, suppliers or goodwill could be adequately addressed by settling the judgment debt. In this case, the Applicants’ concern is fundamentally different in character: enforcement would likely necessitate the forced sale of significant and irreplaceable assets, resulting in harm that cannot be undone even if the appeal succeeds…”

In fact, a careful reading of Golden Plus(supra) will reveal that the High Court stated that the quantum of judgment in isolation does not constitute a special circumstance. The High Court held as follows: [28] I acknowledge the force of the Plaintiffs’ submission that the quantum of a judgment, in isolation, does not constitute a special circumstance. In Ming Ann Holdings, the Court of Appeal endorsed the principle established in Wu Shu Chen v Raja Zainal Abidin [1995] 3 MLJ 224 that “the fact that a large amount of money is involved do[es] not constitute special circumstances.” To hold otherwise would mean that all substantial judgments would be automatically stayed pending appeal.

For the reasons set out above, this Court finds that the Third Defendant has failed to establish the existence of special circumstances warranting the grant of a stay of execution. In particular, the Third Defendant has failed to adduce any evidence demonstrating that the enforcement of the judgment would occasion to irreparable prejudice or any loss incapable of being adequately compensated with money. Accordingly, the application is dismissed with costs. Dated 5 July 2026 -sgd-SUHAILY BINTI SAMSUDIN JUDGE SESSIONS COURT JOHOR BAHRU JOHOR To the parties’ solicitors: For the Plaintiff : Mr.Au Ching Yi with Ms. Nurul Fadhilah binti Kamarulzaman (Messrs. Manjit Singh Sachdev Mohammad Radzi & Partners) For the Third Defendant :Ms.Kirrthana a/p Palisamy (Messrs.Kalpana & Partners)