Malaysia Airports Sdn. Bhd v Apft Land Sdn. Bhd (BA-22NCVC-520-09/2017)

By Notice of Application dated 13 April 2018, the Defendant seeks for an Order (Enclosure 32) to stay the execution of Judgment dated 21 February 2018 pending the determination and/ or disposal of the Defendant’s appeal against this Honourable Court’s decision.

The cause papers for this application are as follows :

The Notice of Application dated 13 April 2018; 2

The Defendant’s Affidavit in Support affirmed by Dato’ Faruk bin Othman on 13 April 2018;

The Plaintiff’s Affidavit in Reply affirmed by Randhill Singh a/l Amrick Singh on 2 May 2018;

The Defendant’s Affidavit in Reply affirmed by Dato’ Faruk bin Othman on 17 May 2018;

The Defendant’s Notice of Intention to use Affidavit dated 14 June 2018. FACT OF CASE

The facts alleged by the Defendant, I have concluded such scenario as below:

The Plaintiff had given to the Defendant, a concession over a piece of land for the Defendant to carry out maintenance, repair, overhaul and aircraft services at the Light Aircraft Centre located at the Sultan Abdul

The Defendant’s company did not signed the

Among the terms of the said concession were:

The period of the concession was 15 years for the three plot “hangar” at the Light Aircraft Centre located at the 3 Sultan Abdul Aziz Shah Subang Airport;

According to the Letter of Offer, the Defendant is required to pay the concession fee of RM90,120-00 which are still remains unpaid;

Such plots are to be used for maintenance, repair, over-haul and aircraft services;

The Defendant’s company to prepare such plans, architect, landscape and rebuild to develop “hangars” that was endorsed by the Plaintiff;

The Defendant’s company had rebuild and/or develop Hangar 2 area with such higher costs amounting to RM5 million; 4

The Plaintiff has agree to evade settlers at “hangar 1 area; and

The Defendant’s alleged that the trial judge had erred in allowing the Summary Judgment and hence filing this application.

On 21 February 2018, this Honourable Court had granted Summary Judgment for the Plaintiff’s claim against the Defendant.

Dissatisfied with the decision, the Defendant lodged an appeal to the Court of Appeal.

The Defendant’s Counter Claim is scheduled for trial on 3 to 5 September 2018 before this Honourable Court.

As such, the Defendant is seeking to stay the execution of the said Summary Judgment pending:

The disposal of its appeal at the Court of

(ii) The trial and disposal of its Counter claim before this court. 5 PRINCIPLES ON STAY OF EXECUTION

Section 73 of the Courts of Judicature Act 1964 provides as follows : An appeal shall not operate as a stay of execution or of proceedings under the decision appealed from unless the court below or the Court of Appeal so orders and no intermediate act or proceedings shall be invalidated except so far as the Courts of Appeal may direct Rule 13 of the Rules of the Court of Appeal 1994 states : An appeal shall not operate as a stay of execution or of proceedings under the decision appealed from unless the High Court or the Court so orders and no intermediate act or proceedings shall be invalidated except so far as the Court may direct As provided in the two statutory provisions, whether a court grants a stay of execution or stay of proceedings is an exercise of judicial discretion dependant on the particular facts adduced in that court. Accordingly, judgments on these matters are purely illustrative and have no binding effect. The Court of Appeal held in Structural Concrete Sdn. Bhd. v. Wing Tiek Holdings Bhd. & Ors. (1977) 1 MLJ 581, (1997) 1 CLJ 300 : “…..Exercises of judicial discretion are not judicial precedent because they are only authority for the facts of the particular case…”. 6 It is trite law that the burden and onus is on the Defendant to prove special circumstances and this must be explained and/ or shown in the Affidavit. Kosma Palm Oil Mill Sdn. Bhd. & Ors v. Koperasi Serbausaha Makmur Bhd (2004) 1 MLJ 257, 269 (FC), Augustine Paul JCA (as he then was) delivering judgment of the court : "……….[1] There are many factors that may constitute special circumstances and the fact that an appeal would be rendered nugatory if stay was refused is the most common one; it is an example of special circumstances. As nugatoriness is a species of special circumstances, a mere reference to it is sufficient to convey the correct legal impression, and any attempt to restrict the grant of stay to nugatoriness, quite apart from its impropriety, will severely restrict the grounds upon which an applicant may rely. Therefore, the applicants were wrong in submitting that the nugatory approach was not a matter for consideration in this case that only the special circumstances approach was relevant They would have been correct if they had said that they were not relying on nugatoriness but on some other species of special circumstances……….The onus is on the applicants to demonstrate the existence of special circumstances to justify the grant of a stay of execution. The reasons must relate to the enforcement of the judgment. They must be deposed in the affidavit filed in support of the application (see Syarikat Berpakat v Lim Kai Kok (1983) 1 MLJ 406). Where it is alleged that there is a danger of the unsuccessful party not being repaid if its appeal is successful for any reason like, for instance, the insolvency of the other party, this must be shown in the affidavit (see The Annot Lyle (1886) 11 PD 114)…………….” . 7

In the case of Leong Chee Kong & Anor v. Tan Lena Kee (No.2)

5 CLJ 408, the Court considered the special circumstances approach and the nugatory approach and came to the conclusion that the nugatory principle is in itself a special circumstance and the correct legal position is the special circumstance test. Similarly in the case : Ming Ann Holdings Sdn. Bhd. v. Danaharta Urus Sdn Bhd (2002) 5 CLJ 380, Abdul Hamid Mohammed JCA in the Court of Appeal held as follows: "……..[2].... The most important factor for consideration is granting a stay appears to be whether the appeal if successful is rendered nugatory. It does not matter whether the nugatory factor is considered under the head of "special circumstances" so long as it is considered………….”

In deciding whether proceedings can be stayed pending the disposal of an appeal, the following should be considered:

Whether the applicant can show special circumstances – Jagdis Singh a/l Banta Singh v. Outlet Rank (M) Sdn. Bhd. (2013) 4 MLJ 213, (2013) 3 CLJ 47. An applicant can demonstrate special circumstances when his or her appeal to the Court of Appeal will be rendered redundant if proceedings in the High Court are not stayed;

In Chinese Chamber Realty Pte. Ltd. and others v. Samsung Corp (No. 2)(2003) 4 SLR 313, at para 3, the Singapore High Court considered the balance of 8 convenience (now popularly known as balance of justice), namely a comparison of the existence, nature and extent of prejudice which may be suffered by the parties if proceedings are stayed or otherwise;

If an application to stay proceedings constitutes an abuse of court process, such application should be refused – Jagdis’s case (supra); and

Whether there is an unexplained delay in applying for a stay of proceedings – MCAT Gen Sdn. Bhd. v. Celcom (Malaysia) Bhd. (No. 2) (2007) 8 MLJ 107 FIRST ISSUE Any Special circumstances??

Having read the Affidavits filed and the submissions by both the learned counsel, the Defendant’s Application is premised on several reasons to support its allegation in that the Summary Judgment ought not to have granted by this court, namely the following :

the non-execution of the letter of offer;

(ii) the Plaintiff’s failure to give Hangar 1 to the Defendant; and

(iii) the expenses incurred by the Defendant on Hangar 2 and 3.. 9 Having considered the above reasons, to my mind, the matter was heard and fully considered before me during the Summary Judgment application as not being triable issues. In the present application, the same were repeated again and should not be further considered. In view of this, the correctness of the judgment is irrelevant and ought not to constitute “special circumstances”. In the case of: Kosma Palm Oil Mill Sdn. Bhd. & Ors v. Koperasi Serbausaha Makmur Bhd

4 CLJ 1(FC), Augustine Paul JCA delivering the judgment of the court held that: "............Both parties delved into some length on the merits of their respective case in the affidavits filed and the submissions made in court. The merits of a party's case in a stay application are not a relevant matter for consideration. In this regard Lord Denning MR said in TC Trustees Ltd v. JS Darwen [1969] 2 QB 295 at p. 302 : In this very case the defendants, in their affidavit under RSC Ord 14 did raise a plea for equitable relief. But it was overruled, and judgment given against the defendants. It is not permissible to renew it again on an application for a stay of execution. ... As Abdul Hamid Mohamad JCA (as he then was) said in Ming Ann Holdings Sdn. Bhd. v. Danaharta Urus Sdn Bhd [2002] 3 CLJ 380 at p. 403 : The weight of authorities appears to me to say that 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 the merits of the appeal). 10 Lee Hun Hoe CJ (Borneo) said in the Federal Court in Re Kong Thai Sawmill (Miri) Sdn Bhd; Lin Beng Sung v. Kong Thai Sawmill (Miri) Sdn Bhd & Ors (No 2) [1976] 1 MLJ 131 at p. 132 : Allegations that there has been misdirection that the verdict of judgment was against the weight of evidence, or that there was no evidence to support the verdict or judgment, are not special circumstances on which the court will grant the application. See Monk v. Bartram [1891] 1 QB 346. "

The learned counsel for the Defendant had submitted that there are merits in their appeal at the Court of Appeal. To my mind, it is also pertinent to note that the merits of an appeal do not constitute a special circumstance to justify a stay of execution. Thus, the Defendant’s averments in his Affidavit in Support that there are merits in his appeal is irrelevant for the purposes of this stay application. In the case of Kosma Palm Oil Mill Sdn. Bhd. (supra), the court held that the special circumstances must be special and not to the validity or correctness of the judgment or the merit of the appeal. Similarly in the case of : Ming Ann Holdings Sdn. Bhd. v. Danaharta Urus Sdn. Bhd. (2002) 3 CLJ 380 (CA), Abdul Hamid Mohamad JCA delivering the judgment of the court held that: The "Yih Shen" : Lai Lai Yin v. M.V. "Yih Shen", Owners Of And Other Persons Interested [1986] 2 MU 65 is a judgment of Mohamed Dzaiddin J (as he then was). ... The learned judge (as he then was), inter alia, said: 11 I should also add that the fact that the defendants believe they have a reasonable chance of success in the appeal is no ground for granting a stay, See: Atkins v. Great Western Railway Co., where the English Court of Appeal held that strong grounds of appeal are not sufficient to grant the application. ……………. In Che Wan Development Sdn. Bhd. Co-operative Central Bank Bhd. [1989] 2 CLJ 584 ... NH Chan J (as he then was) .......On special circumstances, the learned judge, inter alia, says: Merits or strong grounds for an appeal are also not special circumstances. Three months later, on 2 August 1995, Abdul Malik Ishak J delivered his judgment in Wu Shu Chen v. Raja Zainal Abidin bin Raja Hussain & Anor [1995] 2 MLJ 224. ............” SECOND ISSUE Would the Successful Party be Deprived of the fruits of its litigation??

The general proposition of the law on stay of execution is that the court will not deprive a successful party of the fruits of its litigation until an appeal is determined. In the case of: Ming Ann Holdings Sdn. Bhd. v. Danaharta Urus Sdn. Bhd. (2002) 3 MLJ 49 (CA), Abdul Hamid Mohamad JCA (delivering judgment of the court) : 12 “……..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) that justify a stay of execution to be granted……………" It has come to my attention that the Defendant had a counterclaim towards the Plaintiff. Nevertheless to my mind that counterclaim stands as a separate claim from that of the Defendant. It has been decided by this Honourable Court and that the Plaintiff has obtained judgment. Having that in mind, there is no reason to deprive the Plaintiff from enjoying the fruits of its successful litigation until the Defendant’s counterclaim is tried to see whether the Defendant is successful. Having quoted that above cases, it is my considered view that the possibility of succeeding in its counterclaim as claimed by the Defendant is not a justifiable ground for a stay of execution. Even if the Defendant is successful, they can easily recover the amount adjudged on the said counterclaim from the Plaintiff. There is no averment let alone evidence by the Defendant, that if successful on its counterclaim, it would not be able to recover the amount due from the Plaintiff.

The Defendant’s counsel further argued that the Defendant has spent a large amount and had obtained financing facility to develop on the said hangars. Again, on this issue, it was brought up at the hearing of the Summary Judgment application recently and be rejected by this court. As such, the Defendant’s case is irrelevant and do not constitute special circumstances. In addition, 13 Defendant’s counsel submitted that if the court is to grant a stay of execution, it will not prejudiced the Plaintiff. I need to stress again that in obtaining a stay of execution, the test and the onus is on the Defendant as the applicant, to show the existence of special circumstances that go to the enforcement of the judgment. To my mind, the lack of prejudice to the party who has successfully obtained a judgment is irrelevant. It is not a prime consideration when it comes to a stay of execution. Furthermore, the Defendant had been occupying the said premises (Hangars 2 and 3) since 2011 without paying a single cent to the Plaintiff. The Defendant has been in breach all along. Having the Plaintiff had successfully in its claim and obtained judgment, to my mind the Defendant’s intent on continuing to deprive the Plaintiff of any income (in the form of the judgment sum) from the said premises. Having scrutinized exhibit (F4)(enclosure 35), it has come to my understanding that the Defendant's income statement shows that for the years 2015 and 2016, the Defendant has sustained and is operating at a loss. It appears from the Defendant’s own income statement, is insolvent. It is my considered view that this is all the more reason for the Plaintiff to be allowed to execute the said judgment quickly so that it may realize whatever sum possible to recover its loss. Any obstacle in the execution of the said judgment, such as a stay, would not only deprive the Plaintiff of the fruits of its litigation, but would also increase the chances of the Plaintiff not being able to recover the judgment sum or rentals from the said premises given the Defendant's weak financial position. Obviously, there will be prejudice to the Plaintiff if a stay of execution is granted. In the case of: Univein Sdn. Bhd. v. Malaysia Building Society 14 Bhd. (2003) 4 MLJ 618 (CA), the appellant applied for a stay of execution pending appeal against an order for sale for lands charged to the respondent as security for loans. The appellant argued that a refusal to grant a stay would render their appeal nugatory or academic, and that the balance of convenience lied in their favour. The court was not convinced. It found that the appellant was more concerned with dollars and cents and that the lands were of no sentimental value to the appellants. The court also held that the balance of convenience tilted in favour of allowing the sale to proceed and that the respondent should not be deprived of the fruit of their litigation; and it was further held that any loss that the appellant might sustain from the sale of their lands could be compensated with damages based on the commercial value of the lands. Abdul Aziz JCA (delivering judgment of the court) : “…..In para 15 of their affidavit in support of their application, the appellants claimed that there were special circumstances justifying the grant of a stay of execution. What the appellants meant the special circumstances to be were set out in paras 14, 16 and 18 of their affidavit. In para 14, the appellants said to the effect that if stay was not granted and the lands were sold, their appeal would be rendered nugatory or academic even if they finally succeeded in getting the order for sale set aside, and they gave their reason for saying so in para 16, where they said to the effect that if there was no stay, the lands would be auctioned off and they would lose their rights in them forever. The point about losing the lands appeared again in para 20 where they argued that the balance of convenience was in favour of granting a stay so that their interest in the lands would be 15 preserved until final disposal of the appeal. It was a point of nugatoriness of appeal. In para 18, the appellants presented another point as to special circumstances, which was inconsistent with the nugatoriness point. They said to the effect that if the lands were sold presently, in view of the economic downturn brought about by the Asian economic crisis the lands would fetch a much lower price than their actual market value. It was a fear of financial loss. It was a point of dollars and cents…….. …………It was, however, obvious to me from the disclosure [i.e. an offer for sale by private treaty for a price RM 4 mil higher than the reserve auction price] that the appellants would not mind losing the lands if they got the right price for them. The respondents had therefore been right in saving in para 17 of their affidavit in reply that the lands were commercial property of no sentimental value to the appellants. That being the case, to my mind the point of nugatoriness and any submission about it did not have to be considered. That left to be considered only the question of dollars and cents from the point of view of what the appellants’ counsel called balance of convenience and the respondents' counsel called balance of justice. It was obvious to me that the balance tilted heavily in favour of allowing the sale to proceed. From RM25,800,000 in 1995, the debt had now mounted to RM71,440,223.50. If the lands were not sold now, but sold only after the disposal of the appeal should the appellants fail in the appeal, with interest accruing daily at more than RM20,000 per day, the total outstanding would keep increasing to an amount that would depend on when the appeal would be decided. At RM20,000 per day, interest per year would come to a region of RM7m. The proceeds of 16 sale of the lands would not pay even half of what the outstanding amount would be then. It would be worse if, depending on the economic situation then, the lands should fetch a lower value than their present market value. As to the balance, the respondents might not be able to recover it at all. The respondents should not be deprived of the fruit of their litigation. They should be allowed to recover now whatever amount they could from the lands. Apart from enabling them to enjoy some fruit from their litigation, that would reduce the amount of the interest that would otherwise keep accruing. On the other hand, if the lands were sold now and the appellants should succeed in the appeal, any loss that they might sustain from the sale of their lands could be compensated for by the respondents with damages based on the commercial value of the lands. There was no question that the respondents would not be able to pay the damages. For those reasons, I saw no justification for a stay of execution and the application had to be dismissed………………” THIRD ISSUE Appeal rendered Nugatory?

The Defendant's primary argument is founded upon the fact that there is an appeal pending before the Court of Appeal and that if the Plaintiff proceeds to take over the concession area of the subject properties, the appeal, if successful, would be rendered nugatory. However, apart from making this blanket statement and stating that monetary compensation would be insufficient, the 17 Defendant has failed to adduce any form of evidence to explain how exactly the appeal would be rendered nugatory since the Court of Appeal may award the Defendant with monetary compensation which based on the evidence available, is sufficient. Nowhere in its affidavits in relation to the application for a stay of execution has the Defendant alleged that if its appeal is successful, the Plaintiff would not be able to refund the judgment sum. There is also no averment that if the Defendant is successful in its counterclaim, the Plaintiff would not be able to pay the sum adjudged on the counterclaim. Likewise, there is no averment or evidence by the Defendant that the Plaintiff is impecunious or insolvent. To my mind, the lack of the aforesaid averments and evidence means the Defendant has failed to show that its appeal, if allowed, would be rendered nugatory. FOURTH ISSUE Balance of Convenience??

In the case of : In Chinese Chamber Realty Pte Ltd. and others v. Samsung Corp (No. 2)(2003) 4 SLR 313 as quoted in Universal Trustee (M) Bhd. v Lambang Pertama Sdn. Bhd. & Anor (2015) 7 MLJ 305, Wong Kian Kheong J noted that one of the factors to be considered in granting a stay pending disposal of an appeal is “the balance of convenience (now popularly known as balance of justice), namely a comparison of the existence, nature and extent of prejudice which may be suffered by the parties if proceedings are stayed or otherwise.” A reading of the reliefs prayed for in the Defendant's counterclaim will show that the 18 Defendant is seeking damages purportedly arising out of the failure to give Hangar 1 and the wrongful termination of the concession arrangement. The Defendant is not seeking specific performance of any contract. Therefore, the Defendant's counterclaim is in substance, purely for monetary compensation. As such, the Defendant has failed to show that it cannot be adequately compensated by damages or that the Plaintiff would not be able to pay monetary compensation or damages if so adjudged. Furthermore, the Plaintiff has been licensed by the Federal Government to operate and it has been operating numerous airports throughout Malaysia. To my mind, there is no question of the Plaintiff not being able to refund the summary judgment sum or any sum which may be adjudged as payable to the Defendant. In the case of : Ming Ann Holdings Sdn. Bhd. v. Danaharta Urus Sdn. Bhd. (2002) 3 CLJ 380 (CA), Abdul Hamid Mohamed JCA delivering the judgment of the court held that: “……..It must be remembered that the judgment is a money judgment. There is not even an allegation, what more evidence, that the respondent is not in a financial position to repay the applicant if it need be. And bear in mind that the respondent is Danaharta Urus Sdn. Bhd…………….”

In any event, even if the Defendant's allegation that the Appeal would be rendered nugatory, to my mind the law is clear that nugatoriness is merely one of the determining factors in considering an application for stay. In Kosma Palm Oil (supra), the Court stated as follows at paragraph 14 of the said judgment: 19 “……………With regard to the specific factors that constitute special circumstances, I refer again to Government of Malaysia v Datuk Haji Kadir Mohamad Mastan and another application where Ian Chin JC (as he then was) said at pp 520-521: What, then, constitute special circumstances? It was said in Mohamad Mustafa v Kandasami (No 2) [1979] 2 MLJ 126, at p 127, that: 'One of the determining factors that calls for consideration is whether by not making an order of stay of the execution it would make the appeal if successful, nugatory in that it would deprive an appellant of the results of the appeal. How pertinent that factor would be may vary according to the circumstances of each particular case………..”

Nevertheless, having had this in mind, I would further consider other factors as stated in the case of : Chang Shu Hua v. Goon Fook Hong (2008) 3 CLJ 429 (CA), the Court also provided other factors that must be taken into account when applying the special circumstances approach. Abdul Malek Ishak JCA (delivering judgment of the court) held that: “…..The said factors are as follows……

whether damages would be an adequate remedy if the applicant who applies for the stay succeeds in his appeal?;

(ii) the public policy consideration that has to be taken into account;

(iii) the need to examine the subject matter of the appeal; 20

(iv) the need to weigh in a balance of the hardship of the parties involved;

the delay in filing the application for a stay;

(vi) whether the court would exercise its inherent jurisdiction to grant the stay; and

(vii) where would the balance of convenience or the balance of justice lie………..? CONCLUSION

In conclusion to the above, it is my finding as below:

In any event, there is no special circumstances warranting a stay as even if the Defendant succeeds in the appeal it would not be rendered nugatory as monetary compensation is more than sufficient;

The Defendant’s reason to seek a stay of execution in that it has lodged an appeal and that it has a counterclaim pending against the Plaintiff. There is nothing special, extraordinary, uncommon or unusual on lodging an appeal;

The balance of convenience tilts in favour of the Plaintiff; it is the Plaintiff who will suffer irreparable damage in the event that this Honourable Court grants a stay of execution since the stay would effectively prevent the Plaintiff from dealing with the subject properties. The Plaintiff is in no better position from before it came to this Honourable Court; 21

The general rule is that the court will not deprive a successful party of the fruits of its litigation until an appeal is determined. To allow the Defendant’s application for a stay of execution would be blatantly unfair to the Plaintiff. This Honourable Court ought to bear in mind that the Plaintiff has already suffered considerable loss due to the Defendant’s actions.

Such a stay order would be a perverse order conferring rights on the Defendant.

After hearing the submission by both the learned counsel, in the premise, I have no hesitation to conclude that the Defendant’s application for Stay of Execution of the Judgment Proceedings (Enclosure 32) is hereby dismissed with cost of RM2000.00 to the Plaintiff subject to allocator fees. Dated 26 July 2018. (DATO’ HJ. MOHAMAD SHARIFF BIN HJ. ABU SAMAH) Judicial Commissioner (NCVC 6) High Court of Malaya Shah Alam, Selangor Darul Ehsan 22 Counsel For the Plaintiff : Mr Jasmeet Pal Singh (Messrs. Siew & Jasmeet) For the Defendant : Mr. Annamalai (Messrs. Norendra & Yap)