Usaha Bahagia Timber Sdn. Bhd. v Tuan Khairul Annuar Bin Tuan Yusuf (BA-22NCvC-239-06/2023)

USAHA BAHAGIA TIMBER SDN BHD [NO. SYARIKAT: 201501033084] 03/11/2025 12:00:40

SUNIL BHALLA A/L HARCHAND SINGH [NO. K/P: 800902-14-5459] …DEFENDAN (DALAM TUNTUTAN BALAS)

On 28-8-2025, Judgment was entered in favour of the Plaintiff after this Court found that the Defendant had breached a valid and enforceable indemnity agreement. The Judgment ordered the Defendant to, inter alia, pay RM8,798,767.83 to the Plaintiff with interest within 7 days, and transfer his shares in the Plaintiff company to the Plaintiff’s nominee within 14 days.

On 30-9-2025, this Court allowed a conditional stay of execution pending the Defendant’s appeal to the Court of Appeal against the Judgment. The conditions were that the Defendant would deposit half the principal Judgment sum (i.e. RM4,399,383.92) into an interest-bearing joint stakeholder bank account of the solicitors within 5 months from the date of the Order, and deposit executed share transfer forms with the Defendant’s solicitors.

The Plaintiff has appealed to the Court of Appeal against the conditional stay ordered.

The principles applicable in considering whether to grant a stay of execution are trite and need not be set out here. In opposing the stay, conditional or otherwise, the Plaintiff argued that there were no special circumstances justifying it as the effects of enforcing the Judgment can be reversed if the Defendant’s appeal succeeds, and his bankruptcy would not prevent him from prosecuting the appeal.

5.

Such considerations are not unprecedented as factors that may militate in favour of granting a stay of execution of a judgment, particularly a conditional stay to “balance between the Plaintiff’s competing right to enjoy the fruits of its litigation with the Defendant’s right not to have its appeal rendered nugatory…” (Genisys Intergrated Engineers Pte Ltd v Uem Genisys Sdn

In this case, the Plaintiff’s finances are net negative in the key financial indicators based on its latest audited financial statement. As the Plaintiff was financed through shareholder investment and the litigation effort that led to the Judgment was driven by the shareholders, damages recovered in the litigation are likely to be channeled back to the shareholders. Likewise, the Defendant’s shares will be transferred to a nominee of the Plaintiff.

The above factors mean that any money paid by the Defendant may, and his shares once transferred will, go into the hands of third parties who are not bound by any order that the Court of Appeal may make. There is accordingly some merit in the Defendant’s argument that the appeal would be rendered nugatory if a stay of execution is not granted because the effects of the enforcement of the Judgement cannot then be reversed, and this is a special circumstance on the facts of this case.

The alternative to paying the Judgment sum is ultimately the personal bankruptcy of the Defendant. Adjudication of bankruptcy on account of failure to pay a Judgment sum is not generally accepted as a special circumstance justifying a stay of execution. This is usually because it can be averted by paying the Judgment sum or otherwise entering into a compromise with the respondent pending an appeal. It is also true that he can request the sanction of the Director General of Insolvency to pursue the appeal even if he is made a bankrupt.

In this case, the Judgment sum is substantial enough to render the Defendant’s bankruptcy likely and there are irreparable consequences that would follow, including the ability of the Defendant to generate future income as a businessman. As this Court assumes that the Plaintiff’s primary objective in the litigation is to recover money, the Defendant’s bankruptcy would not advance that objective. On the contrary, security over 50% of the Judgment sum and the shares would.

For the above reasons, this Court was satisfied that there are special circumstances justifying the conditional stay of the Judgment and so ordered. Bertarikh : 3 November 2025 Peguam bagi Plaintif (Dalam Tindakan Utama) & Defendan-defendan (Dalam Tuntutan Balas): Lau Yi Leong (with Sukhraj Singh) Messrs Ling & Yi Leong Peguam bagi Defendan (Dalam Tindakan Utama) & Plaintif (Dalam Tuntutan Balas):