Tetuan Tan Chap & Associates v Kkb Poultry Farming Sdn Bhd (WA-24NCvC-1380-04/2024)

1 IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR IN FEDERAL TERRITORY OF KUALA LUMPUR ORIGINATING SUMMONS NO: WA-24NCVC-1380-04/2024 In the matter of Order 17 Rule 1(a) and Rule 3 of the Rules of Court 2012 And In the matter of Paragraph 5 of the Schedule to the Court of Judicature Act 1964 And In the matter concerning the sum of RM200,000 and security documents deposited with Messrs Tan Chap & Associates regarding the purchase of a property, held under individual title Geran Mukim 188, No. Lot 1414, Tempat Sub Circuit 9 Circuit 7, Mukim Rasa, Daerah Hulu Selangor, Negeri Selangor together with structures built thereon, by KKB Poultry Farming Sdn Bhd from the Second, Third, Fourth and Fifth Defendants And In the matter concerning the application by Messrs Tan Chap & Associates for interpleader relief from the claims made by the Defendants. And 28/05/2026 09:49:08 WA-24NCvC-1380-04/2024 Kand. 63 **Note : Serial number will be used to verify the originality of this document via eFILING portal 2 In the matter concerning the existing jurisdictions of this Honourable Court BETWEEN MESSRS TAN CHAP & ASSOCIATES (suing as a firm) …PLAINTIFF AND

1. KKB POULTRY FARMING SDN BHD [Company No: 201301045683 (1075507-W)]

2. KHEW WEI SIANG (NRIC NO: 970909-14-5445) [The Administrator of the Estate of Khew Kok Hoong, deceased]

3. KHEW KOK SENG (NRIC NO: 591117-10-5373/5792123)

4. LAU LAI HUN (NRIC NO: 791026-03-5150) [The Administrator of the Estate of Khew Kiat Wee, deceased]

5. KHEW KOK FEI (NRIC NO: 721016-14-5476/A2243643) …DEFENDANTS **Note : Serial number will be used to verify the originality of this document via eFILING portal 3 GROUNDS OF JUDGMENT Introduction

1. This is an application by the first defendant for a stay of execution of the decision of this Court made on 1 December 2025, pending its intended appeal to the Court of Appeal.

2. The decision sought to be stayed arose from an interpleader summons commenced by the plaintiff, who held the sum of RM200,000 as stakeholder, together with certain security documents, relating to a sale and purchase transaction involving the defendants.

3. By that decision, this Court ordered, inter alia, that the stakeholder sum of RM200,000 be released to the second, third, fourth and fifth defendants, and that the plaintiff continue to hold the security documents, to be released to the first defendant only upon payment of the balance purchase price.

4. The first defendant now seeks to stay execution of that order. Its principal contention is that a consent judgment entered into between itself and the second, fourth and fifth defendants constitutes a special circumstance justifying the exercise of this Court’s discretion to grant a stay. **Note : Serial number will be used to verify the originality of this document via eFILING portal 4 Background Facts

5. The material facts may be stated shortly, though with the precision necessary for the issues which arise. The dispute has its genesis in a sale and purchase agreement (“the SPA”) relating to certain land, under which the first defendant was the purchaser and the other defendants were vendors or persons claiming an interest in the proceeds of sale.

6. The plaintiff is a firm of solicitors which, in the course of the transaction, came to hold the sum of RM200,000 as stakeholder. The plaintiff also held various security documents relating to the land, including the issue document of title, a charge, a discharge of charge, and a duly stamped memorandum of transfer.

7. Difficulties subsequently arose in relation to the completion of the transaction, particularly concerning payment of the balance purchase price by the first defendant. In consequence, competing claims were asserted by the defendants over both the stakeholder sum and the security documents held by the plaintiff.

8. Faced with these competing and mutually inconsistent claims, the plaintiff commenced interpleader proceedings pursuant to Order 17 of the Rules of Court 2012, seeking the directions of the Court as to the proper disposal of the stakeholder sum and **Note : Serial number will be used to verify the originality of this document via eFILING portal 5 the security documents, and seeking protection from further liability.

9. After hearing the parties, this Court, on 1 December 2025, allowed the interpleader summons and made, among others, the following material orders:

10. It is material to note that, prior to the order of 1 December 2025, and in parallel proceedings in the Sessions Court, the first defendant entered into a consent judgment with the second, fourth and fifth defendants. It is not disputed that the third defendant was not a party to that consent judgment and did not consent to its terms. **Note : Serial number will be used to verify the originality of this document via eFILING portal 6 The First Defendant’s Contentions

11. The first defendant submits that unless a stay of execution is granted, its intended appeal will be rendered nugatory. The essence of its complaint is that, once the stakeholder sum is released to the second to fifth defendants pursuant to the interpleader order, there is a real risk that the monies may not be recoverable should the appeal succeed.

12. It is further contended that the interpleader order has the practical effect of determining substantive rights between the parties, such that execution ought properly to be suspended pending appellate review. In this context, the first defendant characterizes these matters as constituting special circumstances sufficient to justify the exercise of the Court’s discretion in favor of a stay.

13. The first defendant’s also relies on the consent judgment entered into between itself and the second, fourth and fifth defendants. It is submitted that the consent judgment demonstrates that the SPA had been terminated, or at least fundamentally altered, and that this constitutes an additional special circumstance justifying a stay.

14. Finally, It is contended that the release of the stakeholder sum pursuant to the interpleader order would prejudice the first defendant’s position pending appeal, particularly in light of the arrangements recorded in the consent judgment. **Note : Serial number will be used to verify the originality of this document via eFILING portal 7 The Second to Fifth Defendants’ Contentions

15. The second to fifth defendants oppose the application. They submit, first, that an appeal does not operate as an automatic stay and that the burden lies squarely on the first defendant to demonstrate the existence of special circumstances, which it is said, has not been done.

16. They emphasize that the order sought to be stayed is, in substance, a monetary order, and that there is no evidence that the second to fifth defendants would be unable to refund the stakeholder sum should the appeal succeed. Bare assertions of potential non-recovery, it is submitted, are insufficient.

17. It is further contended that the interpleader proceedings have been concluded, that the plaintiff has been duly discharged in accordance with the scheme of Order 17, and that there is no legal basis to restrain the execution of the Court’s directions merely because one party remains dissatisfied with the outcome. Analysis and Findings

18. I begin with settled principle. It is trite law that an appeal does not operate as a stay of execution. This proposition is codified in Order 55 rule 16 of the Rules of Court 2012, which provides:

16. Stay of execution (O. 55 r. 16) **Note : Serial number will be used to verify the originality of this document via eFILING portal 8

(1) An appeal shall not operate as a stay of execution under the decision appealed against except in so far as the Court appealed from or the High Court may order, and any application for stay shall be made in the first in stance to the Court appealed from.

(2) The Court appealed from or the High Court may grant an order of stay of execution on such terms as it thinks fit.

19. The discretion to grant a stay is thus an exceptional one. It is not exercised as a matter of course, nor merely because an appeal is intended or even arguable. The burden lies squarely on the applicant to demonstrate special circumstances justifying the suspension of a lawful order of the Court.

20. The governing approach has been consistently affirmed at the highest level. In Kosma Palm Oil Mill Sdn Bhd & 2 Ors v Koperasi Serbausaha Makmur Bhd [2004] 1 MLJ 257, the Federal Court reiterated the long-established principle articulated by Brown J in Serangoon Garden Estate Ltd v Ang Keng [1953] MLJ 116: “[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 **Note : Serial number will be used to verify the originality of this document via eFILING portal 9 determined, unless the unsuccessful party can show special circumstances to justify it. [8] This is a re-statement of the common law rule explained in The Annot Lyle (1886) 11 PD 114 where Lord Esher MR said at p 116: ... that an appeal shall be no stay of proceedings except the court may so order. We are asked to depart from this rule, although it is admitted that there are no special circumstances in this case which afford a ground for so doing. If in any particular case there is a danger of the appellants not being repaid if their appeal is successful, either because the respondents are foreigners, or for other good reason, this must be shewn by affidavit, and may form a ground for ordering a stay. To grant the present application would, in the absence of special circumstances, clearly be to act contrary to the provisions and intention of the Rules of Court [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…” [Emphasis is mine]

21. What amounts to special circumstances is necessarily fact-sensitive, but certain propositions are well settled. Ordinary incidents of litigation such as inconvenience, financial pressure, or the mere existence of an appeal, do not suffice. Nor is the court concerned, save in the clearest of cases, with the merits of the intended appeal. **Note : Serial number will be used to verify the originality of this document via eFILING portal 10

22. The inquiry is a limited one. The question is whether refusal of a stay would render the appeal nugatory, or occasion an injustice of such a character that it cannot be adequately remedied by the appellate process.

23. Against that legal background, I turn to the order sought to be stayed. The principal direction is the release of a defined sum of RM200,000 to the second to fifth defendants. In substance and effect, this is a monetary order made in the context of concluded interpleader proceedings.

24. The accompanying direction that the plaintiff continues to hold the security documents pending payment by the first defendant of the balance purchase price is protective in nature. Far from prejudicing the first defendant, it preserves the status quo and safeguards its position pending performance of its contractual obligations.

25. The central submission advanced by the first defendant is that, once the stakeholder sum is released, its appeal will be rendered nugatory because there is a risk that the monies may not be recoverable should the appeal succeed.

26. That submission encounters an immediate and fundamental difficulty. There is no evidence to support it. The first defendant has not deposed to any facts demonstrating that the second to fifth defendants lack the means to make restitution if required. **Note : Serial number will be used to verify the originality of this document via eFILING portal 11

27. It has long been settled that a bare assertion of potential non-recoverability is insufficient. In Etika Distributions Sdn Bhd (dahulunya dikenali sebagai Permanis Distributions Sdn Bhd) v TG Distributions Sdn Bhd [2018] MLJU 894, Mohd Nazlan J rejected a similar argument, holding: [28] The summary judgment against the defendant therefore is after all a monetary judgment. There is no basis furnished by the defendant to show that a payment by the defendant to the plaintiff could not be reversed or repaid to the defendant should the appeal be allowed. It is not for the plaintiff to show that it would be in a position to make payment back to the defendant. The burden is on the defendant, as the applicant for the stay, to show special circumstances. None has however been forthcoming. [29] The following observation of the Court of Appeal in Ming Ann Holdings Sdn Bhd is of relevance: - Next the applicant talks about special circumstances which, in fact, is an argument that if the stay is not granted, the appeal, if successful will be rendered nugatory, or that the applicant, if successful in the appeal, cannot be restored to its former position. 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.” [Emphasis is mine] **Note : Serial number will be used to verify the originality of this document via eFILING portal 12

28. In the present case, there is no affidavit evidence of insolvency, dissipation of assets, or any other circumstance pointing to irrecoverability. The Court is invited to speculate. That is not a permissible basis upon which to deprive the successful parties of the fruits of their litigation.

29. Nor does the interpleader character of the proceedings alter the analysis. Once the competing claims were adjudicated and directions given, the plaintiff was entitled to act upon them. To stay execution in the absence of special circumstances would undermine the very purpose of interpleader proceedings, which is to achieve finality and to discharge the stakeholder from further exposure.

30. I also bear in mind that the security documents remain with the plaintiff and are not to be released unless and until the first defendant pays the balance purchase price. That arrangement provides a significant measure of protection. In the event of a successful appeal, the first defendant is not left without recourse, nor exposed to irreparable prejudice.

31. I turn then to the first defendant’s reliance on the consent judgment entered into with the second, fourth and fifth defendants. It is necessary to consider its legal effect. A consent judgment, though recorded as an order of court, is in substance a contract between the parties who enter into it. Its binding force is confined to those parties. It cannot bind, nor prejudice, **Note : Serial number will be used to verify the originality of this document via eFILING portal 13 persons who were not parties to the compromise and did not assent to its terms.

32. It is common ground that the third defendant was not a party to the consent judgment. The third defendant’s rights, as determined by the interpleader order, therefore remain entirely unaffected by it.

33. This consideration alone is sufficient to defeat the first defendant’s reliance on the consent judgment as a basis for a stay. The interpleader order resolved, in a single and integrated determination, the competing claims of all defendants. A compromise excluding one claimant cannot suspend or neutralise the operation of that order.

34. The contention that the consent judgment terminated or displaced the SPA is likewise misconceived. The third defendant is one of the registered proprietors of the land. In the absence of its participation, it is legally and practically impossible for the remaining defendants to effect a sale or to alter fundamentally the contractual framework governing the transaction.

35. Accordingly, the consent judgment does not establish special circumstances, nor does it demonstrate that refusal of a stay would render the appeal nugatory. **Note : Serial number will be used to verify the originality of this document via eFILING portal 14

36. There is a further, and independently decisive difficulty with the first defendant’s submissions. In substance, they invite this Court to revisit the correctness of its interpleader determination.

37. That is not the function of a stay application. Save in the clearest of cases, a court must refrain from engaging with the merits of an intended appeal. To do otherwise would trespass upon the province of the appellate court and undermine the principled restraint governing the stay jurisdiction.

38. To the extent that the first defendant contentions on the merits of the matter is a matter for the Court of Appeal. It cannot be transmuted into a special circumstance for the purposes of a stay. Conclusion

39. For the reasons set out above, I am not satisfied that the first defendant has discharged the burden of demonstrating special circumstances justifying a stay of execution.

40. The consent judgment relied upon by the first defendant does not bind all parties affected by the interpleader order, does not establish termination of the SPA, and does not disclose any risk of irreparable prejudice or nugatory appeal. To rely on it would, in substance, require this Court to engage impermissibly with the merits of the intended appeal. **Note : Serial number will be used to verify the originality of this document via eFILING portal 15

41. Accordingly, the application for a stay of execution is dismissed. The orders of this Court dated 1 December 2025 shall take effect forthwith.

42. Costs of this application in the sum of RM4,000 each shall be paid by the first defendant, firstly to the second, fourth and fifth defendant jointly, and secondly to the third defendant, subject to allocatur. . Dated the 3rd day of March 2026 -SGN- ……………………………………………….. MOH KOK WAI JUDICIAL COMMISSIONER OF THE HIGH COURT HIGH COURT (CIVIL DIVISION NCvC14) HIGH COURT OF MALAYA AT KUALA LUMPUR IN THE FEDERAL TERRITORY OF MALAYSIA **Note : Serial number will be used to verify the originality of this document via eFILING portal 16 Counsel for the Plaintiff : Tan Lih Chong Messrs Tan Chong Lii & Co Counsel for the First Defendant : Jasswant Singh Messrs Jasswant & Associates Counsel for the Second, Fourth and Fifth Defendants : Absent Messrs Guna Perumal & Associates Counsel for the Third Defendant : Cheong Su Yin and Tan Zhi Ching Messrs Cheong Su Yin & Co **Note : Serial number will be used to verify the originality of this document via eFILING portal