Kl Landmark Development Sdn Bhd (dalam Penggulungan) v Jalex Sdn Bhd (WA-24C-80-03/2022)

The written grounds herein is done in light of the appeal by the Plaintiff against the decision of this Court on 24.5.2023 dismissing the application by the Defendant in enclosure 33 dated 28.4.2023 (Enclosure 33) for an order to stay the proceedings before this Court pending the final disposal of the appeal to the court of Appeal under Civil Appeal no. W-02(A)- 640-04/2023 (“Appeal”) against the Insolvency High Court’s decision dated 13.4.2023 in Post Winding Up No. WA-28PW-389-08/2022 (“PW 389”).

It is pertinent to note that the grounds in support of Enclosure 33 are as follows:

2.1 The Plaintiff has been wound up pursuant to a winding-up Order dated 29.09.2016.

2.2 Despite being wound up, the Plaintiff initiated this present suit against the Defendant without first procuring a valid sanction, whether from the liquidator or the Court.

2.3 On 1.08.2022, the Plaintiff’s sole shareholder, City Properties Sdn Bhd (“CP”) filed a notice of motion vide Post (Winding-Up) S/N 58ojT2EblUiu/w4sMGgCw No.: WA28PW-389-08/2022 to obtain, among other things, a retrospective sanction for the Plaintiff to continue with present suit.

2.4 The High Court had on 13.04.2023 allowed CP’s application and granted, amongst other things, a retrospective sanction to the Plaintiff to continue this suit (“Suit 389 Sanction”). The Defendant had appealed against the entirety of the High Court’s decision.

2.5 As the Court of Appeal’s decision in the Defendant’s appeal against Suit 389 will affect the locus standi of the Plaintiff in this suit, the appeal against Suit 389 ought to be determined first.

2.6 A stay ought to be granted so that the Defendant’s appeal would not be rendered nugatory.

2.7 The balance of justice and convenience lies in favour of the Defendant, and no prejudice will be caused to the Plaintiff that cannot be compensated by costs.

2.8 There are special circumstances which warrant a stay of proceedings here, and the status quo ought to be maintained.

On 23-03-2012, the Plaintiff and the Defendant had entered into a construction contract for the sum of RM19,608,243.50.

On 21-10-2015, the Defendant issued a claim for payment pursuant to Section 5 of the Construction Industry Payment and Adjudication Act 2012 (“CIPAA”). S/N 58ojT2EblUiu/w4sMGgCw

On 18-11-2015, the Defendant commenced an adjudication proceeding against the Plaintiff vide Case No. KLRCA/D/ADJ-0201-

The learned Adjudicator of the adjudication proceedings, Mr. Ivan Loo had granted an award in favour of the Defendant on 29-03- 2016 (“Adjudication Decision”).

The Defendant then commenced a winding-up proceedings against the Plaintiff. The Plaintiff was eventually wound up vide a court order dated 29- 09-2016 under the Kuala Lumpur High Court Companies (Winding-Up) Petition No. WA-28NCC-618-07/2016 (“the Winding-Up Suit”).

Subject to the Winding-Up, the Defendant commenced an action against the sole contributor and/or shareholder of the Plaintiff, City Properties Sdn Bhd (“CPSB”) and two former directors of the Plaintiff (“the Former Directors”) vide the Kuala Lumpur High Court Civil Suit No. WA-22NCC-247-06/2017 (“Suit 247”) for an allegation of fraudulent trading in the course of the winding-up of the Plaintiff. A judgment was entered against CPSB and the Former Directors on 21-06-2022.

Subsequently, the Plaintiff obtained a sanction from the Jabatan Insolvensi Malaysia (“JIM”) on 28-03-2022 to appoint the Plaintiff’s solicitors, Messrs Cheok Ng Lee Law Chambers to represent the Plaintiff in legal proceedings.

The Plaintiff then commenced this present suit against the Defendant by way of the Originating Summons dated 28-03-2022 (Enclosure 1). S/N 58ojT2EblUiu/w4sMGgCw

The Plaintiff further made an application for a nunc pro tunc or retrospective sanction from the Kuala Lumpur High Court under Post (Winding-Up) No. WA28PW-389-08/2022 (“PW 389”).

Upon the disposal of the hearing for Enclosure 1 on 2-11-2022 and the disposal for the Plaintiff’s extension of time application under Enclosure 14, this Court had instructed parties to inform this Honourable Court on the decision of PW 389 pending the decision of this suit.

A nunc pro tunc or retrospective sanction was subsequently been granted in favour of the Plaintiff under Suit 389 by way of an order dated 13-4-2023.

Subsequently, the Defendant filed an appeal against the decision in Suit 389 to the Court of Appeal on 13-4-2023.

The decision of Suit 389 was conveyed to this Honourable Court during the case management dated 14-4-2023 and the Defendant has filed this application to stay the proceedings on 28-4-2023.

In coming to my decision, I had considered that the decision in PW 389 had the effect of granting a retrospective sanction to inter alia commence and carry on the present proceedings brought by the Plaintiff in the present Originating Summons (OS herein) and that when the said OS herein was filed by the Plaintiff, no sanction had been obtained from the Court or the liquidator of the Plaintiff company. S/N 58ojT2EblUiu/w4sMGgCw

It was brought to the attention of this Court, that the Plaintiff had filed a similar application in Originating Summons No. WA-24C-79- 03/2022 (OS 79), see paragraph 5 of the Defendant’s Affidavit in support in enclosure 34, which was dismissed on the basis that no sanction had been obtained from the Court or the liquidator of the Plaintiff company.

It is trite that ‘special circumstances’ are needed to be proven to this Court for a stay to be granted as per the Federal court decisions in Kosma Palm Oil Mill Sdn Bhd & Ors v Koperasi Serbausaha Makmur Bhd[2004] 1 MLJ 257 and the High Court case of Syarikat Berpakat v Lim Kai Kok [1983] 1 MLJ 406.

From the facts before me, it is evident that the Plaintiff did not have the requisite sanction to commence the action before this Court and PW 389 was filed after the matter herein was filed and after OS 79 was dismissed.

I had of course in the course of making my Order considered that the Defendant did not have as of right, the right to the Stay in Enclosure 33 pursuant to section 73 of the courts of Judicature Act 1964 and whether Enclosure 33 was an abuse of process.

After due and careful consideration, I hold that ‘special circumstances’ has been proven and a Stay was to be allowed on the premise that:-

20.1 the sanction given in PW 389 goes to the issue of the Plaintiff’s locus to file the matter before this Court in the Originating Summons herein S/N 58ojT2EblUiu/w4sMGgCw

20.2 the sanction goes directly to the root of the matter 20.3 if the Appeal to the Court of Appeal is rendered in favour of the Defendant then there will be the issue of any Order given in this Originating Summons herein being rendered academic and invalid apart from thereby being a waste of time and costs 20.4 as a result of the above, in my view, the Appeal maybe rendered nugatory

Thus, after balancing the respective interest of the parties and its effect thereto in whether to grant a Stay, this Court holds that there would be no prejudice to the Plaintiff to grant a Stay as per Enclosure 33 as any Stay granted can be compensated at the end of the day by costs in the Appeal if the Appeal would be dismissed and consequently the Setting Aside of the Adjudication Decision under the Originating Summons herein is allowed as compared to this Court not granting a Stay wherein any orders granted in the Originating Summons herein would be rendered redundant if the Stay is not allowed and the Appeal is in favour of the Defendant herein. Accordingly, I am inclined to preserve the status quo of the matter pending the outcome of the Appeal.

In the said balancing act aforementioned I have, after taking into account all the factors before me, concluded that the Plaintiff will not be deprived of its fruits of litigation on the same aforementioned grounds. In short, the Plaintiff can still litigate its claims in the OS herein if the Appeal is dismissed. It is merely a matter of months for the Appeal to be heard and disposed and costs is once again sufficient to alleviate this issue. S/N 58ojT2EblUiu/w4sMGgCw

This court had, also considered the case cited by learned counsel for the Plaintiff being the Court of Appeal case Chang Shu Hua (P) v Goon Fook Hong (Notice of Motion) [2008] MLJU 181 which inter alia stated there should be shown irreparable damage or irremediable injury to the applicant for the stay to be granted. I find that the facts of the case therein are different from the matter before me and thus I am not applying the 2 said factors to be considered as referred to above. The said factual differences can be observed in the following passage in the said case: “Prayer (ii) of the notice of motion in encl 31a sought for a stay of execution of the order of the Court of Appeal judgment of 15 November 2006 pending disposal of the appeal to the Federal Court. If this court were to entertain prayer (ii) of the notice of motion in encl 31a this panel would in effect be interfering with the decision of another panel of this court. That cannot be right. Only the Federal Court has the jurisdiction to grant the stay as sought for in prayer (ii) of the notice of motion in encl 31a. In Neduncheliyan Balasubramaniam v Kohila a/p Shanmugam[1997] 3 MLJ 768, the Court of Appeal held that the application for stay had to be made in the Federal Court and not in the Court of Appeal. It must be borne in mind 'that the Court of Appeal possesses only appellate jurisdiction' (to borrow the words of Augustine Paul FCJ in Metramac Corporation Sdn Bhd v

Respectfully, I am also of the view that the Court of Appeal in Chang Shu Hua (P) (supra) had only stated that the said 2 other facts S/N 58ojT2EblUiu/w4sMGgCw mentioned above i.e irreparable damage or irremediable injury to the applicant, are only factors to be considered and that they were not mandatory factors which must exist in every case for a Stay to be granted.

For all of the aforesaid reasons, I hold that Enclosure 33 is not an abuse of process.

Wherefore this Court had thereby allowed prayers a and b in Enclosure 33 with a further order that the Plaintiff be given liberty to apply to relook at the matter after 1.11.2023. Dated: 24th day of May 2023 sgd. NADZARIN WOK NORDIN HIGH COURT JUDGE CONSTRUCTION COURT 1 COUNSEL FOR THE PLAINTIFF: Kamraj Nayagam, Nicole Lee Shih En. And Lee Tze Jiet (Messrs Cheok Ng Lee Law Chambers] COUNSEL FOR THE DEFENDANT: Josphinae Wong Peism Ting and Wong Chee Ming (Messrs Christina Chia Law Chambers] S/N 58ojT2EblUiu/w4sMGgCw