Cimb Bank Berhad v 1. ) Chan Kim Goh (WA-22NCC-163-03/2024)

CHAN KIM GOH (No. K/P: 480903-10-5301)

CHAN KUM CHONG … DEFENDAN - (No. K/P: 550328-10-6383) DEFENDAN GROUNDS OF JUDGMENT (Enclosure 32)

This was the Defendants’ application in Enclosure 32 for stay of execution of the summary judgment dated 18.9.2024 (“Judgment”) pending appeal to the Court of Appeal (“this Application”). Page 2 of 11 A]

The Plaintiff granted banking facilities totalling RM42,000,000.00 to Crimson Legend (M) Sdn Bhd (“Borrower”). The Defendants are guarantors.

Following the Borrower’s default, I granted summary judgment on 18.9.2024 ordering the Defendants to pay jointly and severally: i) RM59,948,805.53 as at 3.1.2024; ii) Interest at default rate of 3.5% per annum above the Plaintiff’s Base Lending Rate from 4.1.2024 until full payment; and iii) Costs of RM5,000.00.

The Defendants appealed on 26.9.2024 (“the Appeal”) and filed this stay application on 14.10.2024. B]

The Defendants relied on three grounds: i) The Appeal has merits; ii) The Appeal will be rendered nugatory; and Page 3 of 11 iii) They will suffer prejudice from potential bankruptcy proceedings affecting their ability to secure financing.

The Plaintiff opposed this Application, submitting that the Defendants failed to demonstrate special circumstances as required by law. C]

Section 73 of the Courts of Judicature Act 1964 provides that an appeal does not operate as an automatic stay of execution unless the court so orders.

In Ming Ann Holdings Sdn Bhd v. Danaharta Urus Sdn Bhd [2002] 3 CLJ 380, the Court of Appeal held that a successful litigant should not be deprived of the fruits of judgment unless there are special circumstances. Such circumstances must relate to the enforcement of the judgment, not to its validity or the merits of the appeal.

The Federal Court in Kosma Palm Oil Mill Sdn Bhd [2003] 4 CLJ 1 held that a stay is not to ease the losing party’s difficulties but to prevent irreparable damage, the applicant must show that the respondent cannot restore them to their original position should the appeal succeed. Page 4 of 11 D]

It is trite law that merits of an appeal do not constitute special circumstances: Malaysia Airports Sdn Bhd v. Apft Land Sdn Bhd [2018] 1 LNS 1109; Sigus Ros Sdn Bhd & Anor v. Maybank Islamic Bhd & Anor [2018] 1 LNS 1413; Khee San Bhd & Anor v. OCBC Bank (M) Bhd [2021] 1 LNS 2403.

The alleged triable issues were considered and rejected during the summary judgment hearing. The alleged merits of the Appeal to the Court of Appeal relate to whether the Judgment was correctly decided, not to the enforcement of the Judgment.

What is material in determining whether to grant a stay is the existence of special circumstances relating to the enforcement of the judgment (Kosma (supra)), for example, whether the plaintiff would be able to repay the amount if the appeal succeeds, rather than arguments directed at the correctness of the judgment itself. E] WHETHER THE APPEAL WILL BE RENDERED

This is a pure monetary judgment. The Defendants failed to adduce any evidence that the Plaintiff would not be able to reimburse the Judgment sums if the Appeal succeeds.

The Plaintiff is a licensed financial institution. There is no allegation that the Plaintiff lacks financial capacity to repay. The burden is on the Defendants to demonstrate inability to reinstate: Ming Ann (supra); Etika Distributions Sdn Bhd v. TG Distributions Sdn Bhd [2018] 1 LNS 941. Etika Distributions (supra) also involved a summary judgment and the Court held as follows: “[28] The summary judgment against the defendant therefore is after all a monetary judgment. There is no basis furnished by the defendant to show that a payment by the defendant to the plaintiff could not be reversed or repaid to the defendant should the appeal be allowed. It is not for the plaintiff to show that it would be in a position to make payment back to the defendant. The burden is on the defendant, as the applicant for the stay, to show special circumstances. None has however been forthcoming.” (own emphasis added)

Hence, the Appeal would not be rendered nugatory. F]

The Defendants’ claim of prejudice from potential bankruptcy proceedings and difficulty securing financing does not constitute special circumstances.

Section 5 of the Insolvency Act 1967 requires the Plaintiff to obtain leave before commencing bankruptcy proceedings against guarantors. This statutory safeguard protects the Defendants.

More fundamentally, the Defendants’ concerns relate to alleviating their problems and obtaining time to arrange finances. This is precisely what Kosma (supra) held should not be the basis for a stay. The alleged difficulties do not relate to enforcement of the Judgment but to the Defendants’ personal circumstances. In this regard, the following passage from the Federal Court in Kosma (supra) makes this clear: “The applicants contended that they will not be able to settle the debts if the motion is not granted as they generate their income from the disputed lands. It is clear that the applicants have highlighted only the problems that they will encounter if the motion is not successful. This line of reasoning militates against the rationale that a stay is granted only for reasons that relate to the enforcement of the judgment. It is not granted to give the unsuccessful party time to satisfy the judgment or to alleviate his problems.” (own emphasis added)

The Defendants claimed they were taking steps to secure financing to repay the Judgment sums and that bankruptcy proceedings would hinder such efforts. This, however, is not a relevant consideration in determining whether a stay should be Page 7 of 11 granted. Even so, there is serious doubts about the genuineness of the Defendants’ alleged financing efforts based on the documents they exhibited in the Defendants’ Affidavit In Support (Enclosure 31).

The issue of non-disposal of charged properties raised by the Defendants was addressed during the summary judgment hearing. Foreclosure proceedings are not execution of the Judgment and are irrelevant to this Application.

The cases relied upon by the Defendants are distinguishable. Chong Woo Yit v. Government of Malaysia [1989] 1 MLJ 475 concerned fault by third parties, whereas here the Defendants were directors of the Borrower. Ong Koh Hou @ Won Kok Fong v. DA Land Sdn Bhd & Ors [2018] 5 MLRA 648 concerned property sale, not a monetary judgment.

In any event, the Court of Appeal in Energiser Properties Sdn Bhd v. Goh Chin Yang & Ors [2023] 1 LNS 2091 referred to Ong Koh Hou (supra) and confirmed that difficulty in recovering money does not constitute special circumstances for money judgments. G]

The Defendants have not demonstrated special circumstances warranting a stay. Their grounds relate to the correctness of the Judgment and their personal difficulties, not to Page 8 of 11 enforcement. The Plaintiff, being a financial institution, is clearly capable of reimbursing the Judgment sums if the Appeal succeeds.

The Defendants’ grounds in support of this Application ultimately amount to a mere apprehension about an adverse outcome - a point that was succinctly and aptly addressed by the Court of Appeal in Ming Ann (supra), and subsequently approved by the Federal Court in Kosma (supra), which held as follows: “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.” (own emphasis added)

The Plaintiff, as the successful litigant, should not be deprived of the fruits of the judgment in the absence of special circumstances. This principle was made clear in Kosma (supra), where the Federal Court held as follows: “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) Page 9 of 11 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).” (own emphasis added)

For the abovesaid reasons, I dismissed this Application with costs. Dated this 23rd day of October, 2025 -SGD- (WAN MUHAMMAD AMIN BIN WAN YAHYA) JUDGE HIGH COURT OF MALAYA, (COMMERCIAL DIVISION (NCC 3)) HIGH COURT OF KUALA LUMPUR IN THE FEDERAL TERRITORY, MALAYSIA Page 10 of 11 COUNSEL FOR THE PLAINTIFF : Ramesh Sathasivam (Muhammad Amir Arif bin Mawardy together with him) Messrs Ramesh Dipendra Jeremiah Law No. 9-2, 2nd Floor, Jalan Medan Setia 1, Plaza Damansara, Bukit Damansara, 50490 Kuala Lumpur Tel: 03-20956505 Email: info@rdj-law.com COUNSEL FOR THE DEFENDANTS : Mohamad Fauzi Messrs Rejinder Singh & Associates 38 & 39, Tingkat 8, Kompleks Mutiara, No. 568 Jalan Sultan Azlan Shah, 51200 Kuala Lumpur Tel: 03-62575597 Email: rsalaw@gmail.com LEGISLATION / RULES CITED Courts of Judicature Act 1964 ▪ Section 73 Insolvency Act 1967 ▪ Section 5 Page 11 of 11

Chong Woo Yit v. Government of Malaysia [1989] 1 MLJ 475

Etika Distributions Sdn Bhd v. TG Distributions Sdn Bhd [2018] 1

Energiser Properties Sdn Bhd v. Goh Chin Yang & Ors [2023] 1

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

Khee San Bhd & Anor v. OCBC Bank (M) Bhd [2021] 1 LNS 2403

Ming Ann Holdings Sdn Bhd v. Danaharta Urus Sdn Bhd [2002]

Malaysia Airports Sdn Bhd v. Apft Land Sdn Bhd [2018] 1 LNS 1109

Ong Koh Hou @ Won Kok Fong v. DA Land Sdn Bhd & Ors [2018] 5 MLRA 648

Sigus Ros Sdn Bhd & Anor v. Maybank Islamic Bhd & Anor [2018] 1 LNS 1413