JA-24NCC-3-03/2022

The Defendant is a company dealing in the business of animal feed wholesale and import-export of milk powder from and to Singapore, Korea, Taiwan, Philippines and China.

In August 2019, the Defendant failed to obtain a new veterinary heath certificate (VHC) from the Department of Veterinary Services (“DVS”), Johor Bahru due to the change of the DVS Director. As a result, the Defendant could not apply for a new Certificate of Origin (“COO”) which is an important document for the purpose of exporting cargos out of this country.

Due to this fact, Wee directed one Wong Lee Wonn (also known as “Fiona”) to buy a look-alike-genuine fake VHC from a China-based website.

On 14.8.2019, Tan Yam Hon (TYH), a director in Leong Chuan Enterprise (M) Sdn Bhd (LCEMSB) lodged a police report stating that on 5.8.2019 he received a telephone call from DVS inquiring whether his company had made an application for animal food cargos. Subsequently, TYH went to DVS office in Johor Bahru and discovered that the Defendant had made 3 applications for VHC using LCEMSB’s license without permission.

On 3.9.2019, TYH reported this matter to the Malaysian Quarantine and Inspection Services (“MAQIS”). To his surprise, his company’s 3 identity was not only used by the Defendant for the VHC application, but also for falsifying the VHC with fake DVS official seal and signature of DVS’s officer by the name of Dr. Nurul Faizah binti Zainal.

On 21.9.2019, Wee personally informed the Plaintiff that DVS (Pontian Branch) discovered that the Defendant was carrying out business using a fake VHC.

On 28.11.2019, the Plaintiff lodged a police report about the falsifying of the documents and signature by the Defendant with a view that a criminal prosecution would be taken against Wee and the Defendant.

The Plaintiff also discovered that Wee had falsified the Plaintiff’s signature in a few Directors’ Circulation Resolutions and Members’ Written Resolution.

The relationship between the Plaintiff and Wee turned sour when the former expressed his disagreement to the latter’s series of misconducts. The Plaintiff had exhausted his best avenue to rectify such misconducts but to no avail.

The Plaintiff sent a notice under s. 348(2) of the CA dated 30.12.2019 to Wee and the Plaintiff received a reply letter dated 21.1.2020 from Wee’s solicitors claiming that they acted for Wee and stated their authority to accept service of all cause papers. 4

On 20.2.2020, during the Defendant’s Annual General Meeting, Wee signed the Plaintiff off from the board of directors without commencing any discussion.

The outbreak of Covid-19 pandemic in the years of 2020 and 2021 worldwide frustrated the Plaintiff from conducting any further action.

On 1.12.2021, the Plaintiff found out that his shareholding in the Defendant was fraudulently transferred, via forgery of the Plaintiff’s signature, to Wee on 27.10.2021.

On 2.3.2022, the Plaintiff filed the Originating Summons under s. 348 of the CA as to obtain leave to commence a derivative action against Wee in the name of the Defendant.

On 16.11.2022, after hearing lengthy submissions from both parties, I allowed the Plaintiff’s OS (“2022 Order”).

Dissatisfied with the 2022 Order, on 25.11.2022, the Defendant filed an appeal to the Court of Appeal. As at the hearing of this application for stay, the appeal is still pending for decision.

On 30.11.2022, the Defendant filed this application to stay the execution of the 2022 Order in Enclosure 20. In the Affidavit in Support of the Defendant’s application in Enclosure 21, the Defendant stated the following as grounds of its application: 5 Analysis of this court [20] It is trite that the discretionary power to allow a stay must be exercised sparingly where there existence of special circumstances (see Kosma Palm Oil Mill Sdn Bhd & Ors v. Koperasi Serbausaha Makmur Bhd [2003] 4 CLJ 1, Re Kong Thai Sawmill (Miri) Sdn Bhd; Ling Beng Sung v. Kong Thai Sawmill (Miri) Sdn Bhd & Ors (No 2) [1974] 1 LNS 136; [1976] 1 MLJ 131, Kerajaan Malaysia v. Jasanusa Sdn Bhd [1995] 2 CLJ 701; and Kerajaan Malaysia v. Dato' Hj Ghani Gilong [1995] 3 CLJ 161). Otherwise a successful litigant would be deprived of the fruits of a judgment obtained in his favour. The underlying principle is in any application to stay of execution, the onus is on the applicant to show the existence of special circumstances to justify the application.

Basically I agree with the Defendant’s argument that normally a stay should be granted to maintain the status quo as decided in Kosma Palm Oil Mill Sdn Bhd & Ors (supra). However, this was not explained in detail 6 by the Defendant. Looking at the Affidavit in Support affirmed by Wee in Enclosure 21, I find that the Defendant’s grounds are essentially one liner and bare assertions without being supported by any ample evidence. I find it difficult to be accepted. The similar approach was taken in Likas Bay Precint Sdn Bhd v. Micheal Kinsuan & Ors [2021] 1 LNS 1530 when there was no sufficient evidence produced to prove the special circumtances. In that case, it was held that –

The applicant for stay bears the burden of adducing sufficient evidence to discharge the onus of establishing special or exceptional circumstances to justify a stay of the execution. Bare assertions, arguments and speculations are not sufficient.

The similar principle was echoed by Abdul Malik Ishak J (as he then was) in Walter Pathrose Gomez & Ors v. Sentul Raya Sdn Bhd [2005] 7 CLJ 385; [2005] 5 MLJ 555 where the Lordship highligted the need to support the arguments for stay with evidence as follows: I must categorically say that the defendant's assertion on the plaintiffs' so called "poverty" was a one liner assertion and a bare averment unsupported by any evidence. It was purely speculative because the defendant makes reference to the poverty point only at that para. 5(b) of encl. 11. There was no evidence, at all, that the plaintiffs are insolvent and are not in a position to reimburse the liquidated and ascertained damages in the event the defendant succeeds in the appeal in the Court of Appeal. Thus, if a stay was allowed as sought for by the defendant it would send a wrong signal to those parties who lost their cases upon the merits by wrenching the fruits of litigation from the successful parties by adopting dubious methods of keeping the litigation alive through spurious appeals without any real prospect of success and simply in the hope of gaining some respite against immediate execution on the judgment. It has become fashionable to make an assertion, without affidavit evidence, that the 7 successful party would not be in a position to reimburse the judgment sum. The court would certainly decline to accept assertions from the bar without support from affidavit evidence.

I must state here that the Defendant being the applicant has to discharge the legal burden as to demonstrate the existence of special circumstances which must be deposed in the affidavit in support evidencing the factual basis warranting the exercise of discretion in favour of a stay. In short the onus is on the Defendant to establish that the special circumstances are real and not mere speculations or arguments.

In the upshot, upon careful perusal of the Affidavit in Support of the Defendant, I find that the Defendant failed to prove convincingly the existence of special circumstances which are the basis for any application for a stay. As such I dismiss the Defendant’s application for stay in Enclosure 20 with costs. Dated: 5.6.2023 -SIGNED- (SHAMSULBAHRI BIN HAJI IBRAHIM) Judicial Commissioner, Johor Bahru High Court Counsels: For the Plaintiff – Lee Kian Hong; Messrs Lee Kian Hong & Partners For the Defendant – Chang Tau Sian; Messrs Henry Soong & Chang 8 Cases referred to:  Kerajaan Malaysia v. Dato' Hj Ghani Gilong [1995] 3 CLJ 161  Kerajaan Malaysia v. Jasanusa Sdn Bhd [1995] 2 CLJ 701  Kosma Palm Oil Mill Sdn Bhd & Ors v. Koperasi Serbausaha Makmur Bhd [2003] 4 CLJ 1  Likas Bay Precint Sdn Bhd v. Micheal Kinsuan & Ors [2021] 1 LNS 1530  Re Kong Thai Sawmill (Miri) Sdn Bhd; Ling Beng Sung v. Kong Thai Sawmill (Miri) Sdn Bhd & Ors (No 2) [1974] 1 LNS 136; [1976] 1 MLJ 131  Walter Pathrose Gomez & Ors v. Sentul Raya Sdn Bhd [2005] 7 CLJ 385; [2005] 5 MLJ 555