Preamble
pursuant to Sections 465 and 466 of the Companies Act 2016 for the amount of RM78,620,625.24 (“Demanded Sum”) premised on the Adjudication Decision. The 21-day statutory period will accordingly end on 18.1.2024. [9] The Plaintiff responded to the Statutory Demand on 5.1.20245, denying the Defendant’s entitlement to the Demanded Sum. Further, the Plaintiff expressly informed the Defendant that it is prepared to deposit the Demanded Sum in an interest-bearing stakeholder account held by the Plaintiff’s solicitors on/before 18.1.2024 pending the determination of the Appeal. [10] Further on 28.12.2023, the Defendant also commenced garnishee proceeding on an ex-parte basis (“Garnishee Proceeding”) in the Enforcement Application against the Plaintiff which the Senior Assistant Registrar requested the Defendant to withdraw during a case management on 2.1.2024 as it was directed to be filed in the Execution Division of the High Court instead. Findings of This Court [11] This is a further application by the Plaintiff herein to stay the enforcement of the AD after my decision given on 18.12.2023 not to grant a Stay of the same AD pending arbitration proceedings. [12] An appeal per se does not satisfy the test of ‘special circumstances’ , see cases such as Subang Skypark Sdn Bhd v Arcradius Sdn Bhd [2015] MLJU 286, which was followed in Terminal Perintis Sdn Bhd v Tan Ngee Hong Construction Sdn Bhd and another case [2017] MLJU 242 where Mary Lim J had in the former case held: “…the grant of stay is automatic. It is not, let alone as of right or as a matter of course. Being in arbitration merely puts the plaintiff’s case as one within s 16 for consideration; or one which has crossed the threshold. The existence of concurrent proceedings merely prequalifies the plaintiff for this application.” [13] However, based on Kosma Palm Oil Mill Sdn Bhd v Koperasi Serbusaha Makmur Bhd [2004] 1 MLJ 257 the Federal Court has held that: “…the paramount consideration governing an application for a stay, whether of execution or of proceeding, 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.” [14] Thus, a stay ought to be granted where the appeal will be rendered academic and nugatory. After considering the Plaintiff’s submission I agree that their Appeal emanates from their application to stay the AD pending arbitration, which is the subject matter of their appeal. [15] I hold that their said substratum of the Appeal would be rendered nugatory in the event the AD is enforced or executed as the Plaintiff would be disadvantaged and /or prejudiced by the fact that the Court of Appeal may not entertain or hear an appeal which issues are no longer live as the same would be rendered academic, see Menteri Hal Ehwal Dalam Negeri, Malaysia & Ors v Karpal Singh Ram Singh [1992] 1 CLJ 36. [16] I have also taken note that the Plaintiff has been served by the Defendant with a section 466 notice pursuant to the Companies Act 2016 to commence winding up petition against the Plaintiff as well as a garnishee proceeding which was subsequently withdrawn as it was filed in the wrong division of the High Court. [17] All of the above would in my view be a special circumstance for this Court to grant a Stay as per Enclosure 99 herein and to preserve the subject matter of the Appeal. [18] For the record, I have in coming to my decision considered the competing interest of both sides and that the Defendant has is normally entitled to its fruits of litigation in light of the very long delay in payment of the Adjudicated Sum under the AD of almost 2 years and the very purpose of CIPAA i.e that an efficient manner for recovery of payments in the construction industry is. [19] Be that as it may, I find no credence in the Defendant’s argument that Enclosure 99 is an abuse of process as it is merely exercising its rights under the Court process. Alleged Defendant’s Impecuniosity [20] I have also considered the Defendant’s financial position but after careful consideration of the Defendant’s Financial Statements find that the reference by the Auditors, as contended by the Plaintiff, raises a concern of material uncertainty with regards the Defendant’s ability to continue as a going concern for the financial years ending June 2021 & 2023 as I find that the Defendant still has current assets as at 30.6.2023 in the sum of RM192,033,000.00 and fixed deposits amounting to RM3,941,000.00 as well as a revenue of RM133,427,000.00 which is an increase from RM78,042,000.00 in revenue in the previous year end in 2022. [21] I therefore find that the Plaintiff’s contention on the Defendant’s financial impecuniosity has therefore not been proven to this Court on a balance of probabilities and I therefore find the said contention as being misconceived. Recent Federal Court Case of ASM Development (KL) Sdn Bhd v Econpile