Pacific & Orient Insurance Co Berhad v 1. ) Mohammad Hafizi Bin Bahari (WA-22NCC-449-09/2020)

Enclosure (“Enc.”) 471 is the Plaintiff’s application for a stay of execution of the Judgment/Order dated 1.3.2023 granted in favour of the Defendants pending the disposal of the Plaintiff’s appeal against the said Judgment.

The application for a stay of execution was dismissed with costs on 27.6.23 and broad grounds were rendered to the parties. The Plaintiffs have appealed against my decision by filing a Notice of appeal on the same day. These are the full grounds for my decision.

The Plaintiff’s pleaded case in this action is that the 1st and 2nd Defendants as rider and owner respectively of motorcycle No. PER 6664 have committed fraud by lodging two false reports that the 1st Defendant was riding the said motorcycle no. PER 6664 which was involved in an 2 accident on 3.9.2014 with one Thanabalan’s motor cycle No. JQA 6107. The Defendants were alleged to have conspired with the Plaintiff’s insured, namely, Thanabalan, to make a false claim. The 1st Defendant suffered multiples injuries including being paralysed as a result of the accident. Having obtained a judgment on 28.9.2017 against the Plaintiff’s insured in Sessions Court Johore Bahru Suit No. JA-A53KJ-632-09/2016 (“the SC Judgment”), the Plaintiffs have threatened to enforce and execute the SC Judgment against the Plaintiff. The Plaintiff here sought an injunction against the Defendants to prohibit them from enforcing the SC Judgment and for declarations that the SC judgment is irregular and cannot be the basis to commence any execution proceedings, damages for (i) abuse of process, (ii) malicious prosecution, (iii) unjust enrichment and (iv) for the tort of threat of execution against the Plaintiff without first obtaining a judgment against the Plaintiff.

The Defendants in defending the action denied there was any conspiracy, asserted that the Plaintiff is estopped from challenging the SC Judgment at this stage; the SC Judgment was obtained after 2 witnesses had given unchallenged evidence; and the proceedings herein are an abuse of court process as the Plaintiff has filed various applications in the Sessions Court to intervene and set aside the SC Judgment.

After a full trial conducted virtually online by using the Zoom video conferencing platform lasting 22 days, I had on 1.3.2023 dismissed the Plaintiffs’ claim with costs. The grounds of Judgment are set out in Pacific & Orient Insurance Co Berhad v Mohammad Hafizi Bin Bahari & Anor [2023] 6 CLJ 932; [2023] MLJU 875. Pursuant to the Judgment, the Plaintiff was ordered to pay costs of RM90,000 subject to allocator to the Defendants. The Plaintiff has appealed against the dismissal of its claim to the Court of Appeal (“the main appeal”).

It ought to be mentioned that in post trial submissions, the Plaintiff withdrew the relief it had sought for abuse of process, malicious prosecution and unjust enrichment.

As adverted earlier, broad oral grounds were furnished to the Plaintiff when its application for stay of execution was dismissed; and these grounds were embodied in the court minutes of 27.6.2023. It is observed that whilst the Plaintiff has appealed against the dismissal of enc. 471 for a stay of execution of the Order dated 1.3.2023, the Plaintiff had also filed a Notice of Motion in Enc. 20 in the main appeal for a stay of the same Order dated 1.3.2023. This Court by letter dated 26.7.2023 to the Plaintiff’s solicitors enquired whether the Plaintiff was proceeding with the appeal against the dismissal of enc. 471 (in tandem with the Notice of Motion in enc. 20 in the main appeal) to obviate the necessity of this Court furnishing full written grounds for the dismissal of enc. 471. There was no reply from the Plaintiff’s solicitors todate.

In support of the stay application, the Plaintiff averred in its affidavit that there are special circumstances justifying a stay of the Order dated 1.3.2023:

it has filed an appeal against the Order;

(ii) the Defendants may proceed to file execution proceedings as threatened by their solicitors, which was the cause of filing this Writ; such a mode of execution will cause the business of the Plaintiff which is a public service oriented company, to cease, and if any form of execution proceedings is commenced by the Defendants against the Plaintiff, the Plaintiff will suffer great loss which cannot be compensated because the Plaintiff’s reputation as an insurance company will be affected and would be detrimental to the business of the Plaintiff, especially when winding up proceedings is advertised on the basis that the Plaintiff is an insurance company and the public at large being the insured, would be affected in making the claims;

(iii) in the event the Plaintiff succeeds in its appeal at the Court of Appeal, the appeal will be rendered nugatory if a stay of execution is not granted. [9] It was argued by the Plaintiff that the Johor Bahru High Court in Appeal No. JA-12A-25-07/2021 has granted a stay of the SC judgment pending disposal of the setting aside application made by the Plaintiff and the Sessions Court has fixed 16.5.2023 for decision. [10] The Defendants conversely argued that:

There is nothing in the Order dated 1.3.2023 to be “stayed” because it is a negative order that cannot be stayed in law - CIMB Islamic Bank Bhd v. Wellcom Communications (NS) Sdn Bhd & Anor [2019] 4 CLJ 1; This Court’s Order dated

1.3.2023 does not require any positive action to be done, other than paying the costs of RM90,000.00 which has not been paid by the Plaintiff; and

(ii) no special circumstances were shown. The Law on Stay of Execution [11] It is trite law that an appeal shall not operate as a stay of execution unless the court so orders. Section 73 of the Courts of Judicature Act 1964 (“CJA”) states: “73. Appeal not to operate as stay of execution. An appeal shall not operate as a stay of execution or of proceeding under the decision appealed from unless the court below or the Court of Appeal so orders and no intermediate act or proceeding shall be invalidated except so far as the Court of Appeal may direct.” See also: Kosma Palm Oil Mill Sdn Bhd & Ors v Koperasi Serbausaha Makmur Bhd [2004] 1 MLJ 257 FC which held: “7 The general rule is that an appeal shall not operate as a stay of execution unless the court so orders. Accordingly, as Brown J said in Serangoon Garden Estate Ltd v Ang Keng [1953] MLJ 116 while commenting on the discretion to grant a stay: But it is a clear principle that the Court will not deprive a successful party of the fruits of his litigation until an appeal is determined, unless the unsuccessful party can show special circumstances to justify it.” [12] The onus is on the applicant to demonstrate the existence of special circumstances to justify the grant of a stay of execution – Kosma Palm Oil (supra): “23 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) ….” [13] The following principles distilled from the case of Serangoon Garden Estate Ltd v Ang Keng [1953] MLJ 116, a judgment of the Singapore High Court and often quoted on our shores, including in the Court of Appeal decision in Ming Ann Holdings Sdn Bhd v Danaharta Urus Sdn Bhd [2002] 3 MLJ 49; [2002] 3 CLJ 380 CA are instructive:

granting a stay pending appeal is an exercise of discretion;

(ii) there is no rule of practice limiting the exercise of the discretion;

(iii) it is a clear principle that the court will not deprive a successful party of the fruits of his litigation until the appeal is determined unless there are special circumstances;

(iv) the ground that, if the defendant is successful in his appeal, he cannot be restored to the same position as before, standing alone, is not a sufficient ground on which to grant a stay, however, it is 'an important factor' to take into consideration, if there are other grounds, for example, merit of the appeal. Both grounds, together, may well amount to 'special circumstances'. [14] As to what amounts to “special circumstances”, Ming Ann (supra) at pg. 67 held: “ ….. 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). “ See also the case of Low Nam Hui v Huang Yan Teo [2007] 7 MLJ 13; [2007] 6 CLJ 27, where the Court of Appeal elucidated: “[13] The statutes or the rules of court do not define what constitutes a special circumstance. This is left practically to the opinion and judicial discretion of the presiding judges. In a nutshell, a special circumstance must mean something out of the ordinary or something unusual. The category of special circumstances can never be limited or closed, as from time to time and case to case different and various factors may be accepted as special circumstances. The judge sitting alone or the judges of an appellate court must decide, on the available evidence disclosed in the competing affidavits before him or them, whether there are special circumstances relating to the enforcement of the order or judgment in order to justify a stay of the order or judgment appealed against, and on what terms, if any, which are reasonable. ……” (Emphasis added) [15] I now turn to deal with the issues raised by the Plaintiff. [16] It must be borne in mind that enc. 471 is specific – to stay the Order of 1.3.2023, not the SC judgment. The Plaintiff’s submissions make plain that it is the Order dated 1.3.2023 that is sought to be stayed. In my respectful view, after the Plaintiff’s claim was dismissed, whatever the fate of the setting aside of the SC judgment where decision was to have been delivered on 16.5.2023 as adverted to earlier, ought to be ventilated in some other forum but not here. Stay of the SC Judgment ought not to be conflated with the stay sought in enc. 471. [17] The Order of 1.3.2023 dismissed the Plaintiff’s claim and required costs to be paid by the Plaintiff to the Defendants. With the dismissal of the Plaintiff’s claim, obviously, the interlocutory injunction granted on 10.2.2021 to restrain the Defendants from executing on the SC Judgment until disposal of the action, ended there. The payment of costs of RM90,000 is a positive order. It required an act to be done. I am inclined to accept the Defendant’s submission that this Court’s order which dismissed the Plaintiff’s claim is not a positive order; it does not require any positive action to be done except for payment of costs. The Defendants’ learned counsel cited CIMB Islamic Bank Bhd supra where the Court of Appeal stated: “[10] In the instant case, the respondents having filed an application under s. 404 of CA 2016 and having got the statutory interim relief, and subsequently when the application was dismissed by the court, had also successfully obtained the stay of 'no order'. The ingenuity of the respondents in obtaining the stay had brought s. 404 of CA 2016 to live. The consequence is that the respondents obtained a second bite at the cherry which gave the statutory interim protection again under s. 410 of the CA 2016. In our view, in jurisprudential term, it is indeed an abuse of process as complained of by the appellant. …….. [14] …..

The respondents were not able to produce one authority to say that once an originating process is dismissed, the court could grant a stay to keep the originating process alive. In our view, such an order is unprecedented. The case of DA Land does not support such a proposition. DA Land relates to orders given by court and where there is an appeal on the order and the appellant intends to make an application to stay the order pursuant to s. 44 of CJA 1964. DA Land is not authority for the proposition to stay the dismissal of originating process.” (Counsel’s emphasis) [18] The Court of Appeal in CIMB Islamic Bank Bhd set aside the stay order granted by the High Court in favour of the respondent after the High Court had dismissed the judicial management application by the respondent. [19] In my respectful view, the dismissal of the Plaintiff’s claim here not being a positive order cannot be enforced by execution and is incapable of being stayed following CIMB Islamic Bank Bhd. See also Takako Sakao (f) v Ng Pek Yuen (f) & Anor (No 3) [2010] 2 MLJ 141 FC; Ming Ann Holdings Sdn Bhd v. Danaharta Urus Sdn Bhd [2002] 3 MLJ 49 CA at pg. 68: - “..The decision appealed against was the decision of the learned judicial commissioner striking out a prayer in the winding up petition. There was no order that a party was to do something. There was nothing to be executed, really.” [20] In my judgment, for a stay of execution to be granted by a court, the sine qua non is a positive order. [21] That leaves the remaining part of the Order of 1.3.2023 which entails a positive order to pay costs of RM90,000. A stay of execution in my view ought not to be allowed on the circumstances obtaining here. [22] Firstly, there is nothing special, extraordinary or unusual about the lodging of an appeal by the Plaintiff. [23] Second, the positive order in favour of the Defendants relates to a monetary judgment for costs. For monetary judgments, the observation of the Court of Appeal in Ming Ann (supra) is instructive: “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......” (Emphasis added) [24] In similar vein, in Kosma Palm Oil, the Federal Court had this to say: “25 …..Thus, the applicants ought to have focussed on the inability of the respondents, if at all, to re-instate them to their original position should they be successful in the appeal. There must be an affidavit showing that if the losses are incurred there is no reasonable prospect of them being reimbursed if the appeal succeeds (see Atkins v GW Ry (1886) 2 TLR 400). This they did not do….” (Emphasis added) [25] Just as in this case, there is nothing in the Plaintiff’s affidavit to suggest that if the costs of RM90,000 is paid to the Defendants, they will not be in a financial position to pay back the monies. I am conscious that inability to reimburse the Plaintiff was raised in submissions but it was not raised in the Plaintiff’s affidavits. In Ng Hee Thong & Anor v Public Bank Bhd [1995] 1 MLJ 281 at 287, the Court of Appeal stated: “It is a principle fundamental to our system adversarial litigation that evidence upon a matter must be given on oath. The practice of counsel giving evidence from the Bar, as was done in this case, is to be deprecated.” [26] Sans evidence of the Defendants’ impecuniosity or insolvency, in my judgment, there is no question of the appeal being rendered nugatory due to inability to pay back the Plaintiff the monetary sums ordered. [27] In any case, the Federal Court in Asean Security Paper Mills Sdn Bhd lwn Mitsui Sumitomo Insurance (Malaysia) Bhd [2008] 2 MLJ 137 held that: “The respondent’s fear that there was no prospect in recovering the money from the appellant in the event they were successful in the revision was mere speculative and an unfounded fear. The risk of the appellant’s dissipation of the insurance money awarded was a universal risk regardless of whether the appellant was rich or poor and a universal risk was not a special circumstances.” (Emphasis added) [28] The grounds relied on by the Plaintiff that execution will cause the business of the Plaintiff which is a public service oriented company, to cease, and if any form of execution proceedings is commenced by the Defendants against the Plaintiff, the Plaintiff will suffer great loss which cannot be compensated because the Plaintiff’s reputation as an insurance company will be affected and would be detrimental to the business of the Plaintiff, especially when winding up proceedings is advertised on the basis that the Plaintiff is an insurance company and the public at large being the insured, would be affected in making the claims, the Court of Appeal in Ming Ann provided a short answer to those fears at pg. 70: “…. All that the applicant has to do to avoid such ‘fears’ is to settle the judgment debt.” [29] Third, the general rule is that there shall be no stay - see Kosma Palm Oil (supra): “12 ….. The grant of a stay for any ordinary reason will have just that effect and destroy the general rule that there shall be no stay. Thus, I agree with Ramly Ali JC (as he then was) who said in Utama Merchant Bank Bhd v Dato' Mohd Nadzmi bin Mohd [2001] 5 MLJ 317 that there must be 'strong justification' for a party to come within an exception to a general rule…” (Emphasis added) [30] In Universal Trustee (M) Bhd v Lambang Pertama Sdn Bhd & Anor [2015] 7 MLJ 305 at [5], Wong Kian Kheong JC held that “Stay of execution and stay of proceedings pending appeal to Court of Appeal should be the exception and not the norm.” [31] I fail to see how paying up the costs ordered will render the appeal nugatory. Following Kosma Palm Oil, the Court of Appeal in Jagdis Singh a/l Banta Singh v Outlet Koperasi Serbausaha Makmur Bhd [2013] 4 MLJ 213, explicitly stated that in regards to a stay application, whether the fact that the appeal will be rendered nugatory if stay is refused is not granted as a matter of routine and it is not an automatic or mechanical relief slavishly followed after filing an appeal. In my view, a stay of execution in the instant case will positively benefit the Plaintiffs at the expense of the Defendants. [32] The Plaintiff relied heavily on Ong Koh Hou @ Won Kok Fong v Da Land Sdn Bhd & Ors [2019] 4 CLJ 622; [2018] MLJU 778 arguing that “the Court of Appeal held at para 11 that this Honourable Court has an unqualified discretion to grant a stay where there are special circumstances and this was the view held by the Courts before the decision in Ong Koh Hou. At para 14 of the said judgment the Court of Appeal held that the special circumstances rule may not be the appropriate ground to grant a stay but what is paramount is that the Court must recognize the statutory right of appeal. At para 19 of the said judgment the Court of Appeal held that the right of appeal (in that case to the Court of Appeal and in our case to the High Court), is an entrenched constitutional right and therefore the question of special circumstances rule cannot dictate the right of the Court to grant a stay…” [33] In my respectful view, it is prudent to read Ong Koh Hou carefully and the following point must be made – Ong Koh Hou does not override the principles in Kosma Palm Oil to which I am bound by stare decisis as it is a decision of the Apex Court. The Kosma Palm Oil principles inter alia, on special circumstances to be established for grant of a stay of execution was reaffirmed by the Federal Court in Asean Security Paper Mills supra and more recently in Public Prosecutor v Dato' Sri Mohd Najib bin Hj Abd Razak [2019] 4 MLJ 421 where the Apex Court said: “[19] Kosma Palm Oil represents the legal position governing stays of execution for civil appeals (see: Tan, Kee Heng, Civil and Criminal Appeals in Malaysia, 3rd ed., (Sweet & Maxwell, 2016) at Chapter 7.3). The relevant question before us now is whether it applies with equal force to a stay of criminal proceedings at the trial court when there are pending appeals in respect of interlocutory applications before this court.” [34] In my judgment, applying the special circumstances test do not denude the Plaintiff’s constitutional right of appeal. The exercise of discretion cannot be arbitrary but according to established principles. Discretion should be exercised when special circumstances are established. [35] In the context that there has been a full trial here, following Syarikat Berpakat v Lim Kai Kok [1983] 1 MLJ 406 and Re Kong Thai Sawmill (Miri) Sdn Bhd [1976] 1 MLJ 131 and of course Kosma Palm Oil, unless special circumstances are shown, there shall be no stay. In this regard, this Court has necessarily balanced the competing interest of the Plaintiff and the Defendants. To my mind, if the stay of execution is granted, the Defendants will be prevented from reaping the benefit of the judgment. [36] On the facts here, I find the Plaintiff has not discharged the legal burden in this case to show any unusual or special circumstance to warrant the exercise of discretion in its favour to stay execution of the Order dated 1.3.2023. There is simply no compelling justification for this court to grant the stay. [37] For the reasons, given, I declined to order a stay. The Plaintiff’s application for stay of execution is dismissed with costs. Dated 5th August 2023 - sgd - ……………………….. Liza Chan Sow Keng Judge High Court of Malaya at Kuala Lumpur COUNSEL: For the Plaintiff : Dato R Kamalanathan (together with him, Vinod Kamalanathan and Anis Amirah) Messrs Vinod Kamalanathan & Associates For the Defendants : Lee Yen Yee Messrs Teo & Associates CASES REFERRED: Pacific & Orient Insurance Co Berhad v Mohammad Hafizi Bin Bahari & Anor [2023] 6 CLJ 932; [2023] MLJU 875 CIMB Islamic Bank Bhd v. Wellcom Communications (NS) Sdn Bhd & Anor [2019] 4 CLJ 1 Ming Ann Holdings Sdn Bhd v. Danaharta Urus Sdn Bhd [2002] 3 MLJ 49 CA at pg. Ng Hee Thong & Anor v Public Bank Bhd [1995] 1 MLJ 281 Asean Security Paper Mills Sdn Bhd lwn Mitsui Sumitomo Insurance (Malaysia) Bhd [2008] 2 MLJ 137 Universal Trustee (M) Bhd v Lambang Pertama Sdn Bhd & Anor [2015] 7 MLJ 305 Jagdis Singh a/l Banta Singh v Outlet Koperasi Serbausaha Makmur Bhd [2013] 4 MLJ 213 Ong Koh Hou @ Won Kok Fong v Da Land Sdn Bhd & Ors [2019] 4 CLJ 622; [2018] MLJU 778 Public Prosecutor v Dato' Sri Mohd Najib bin Hj Abd Razak [2019] 4 MLJ 421 Syarikat Berpakat v Lim Kai Kok [1983] 1 MLJ 406 Re Kong Thai Sawmill (Miri) Sdn Bhd [1976] 1 MLJ 131 STATUTES/LEGISLATION REFERRED: Section 73 of the Courts of Judicature Act 1964