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2022 MarsdenLR 245
HIGH COURT MALAYA KUALA LUMPUR
LIM LAN HOON – Appellant
Versus
KUM YUT KWONG – Respondent
[Petition No: WA-33-291-06/2021]
The court emphasized that a stay of execution requires special circumstances, balancing the rights of both the successful party and the appellant.
Headnote:(A) Courts of Judicature Act 1964 – Section 73 – Rules of 2012 – Order 55 r 16 – Application for stay of execution of decree nisi and matrimonial assets pending appeal – The court may exercise discretion to grant stay based on demonstrated special circumstances – The Petitioner’s fear of asset loss was unfounded due to withdrawn bankruptcy proceedings – The Respondent's right to appeal is balanced against the Petitioner's right to the fruits of litigation. (Paras 8-18)
(B)
Application for stay of execution – Special circumstances must be shown to justify a stay – The appeal not being rendered nugatory is a common example of special circumstances. (Paras 12, 13)
Facts of the case:
The Petitioner obtained a decree nisi and sought to transfer matrimonial assets while the Respondent appealed the decree. The Respondent applied for a stay of execution pending appeal.
Findings of Court:
The court found it just to allow the Respondent’s stay application to prevent irreversible damage to the Respondent's interests pending appeal.
Issues
: The main issue was whether the circumstances warranted granting a stay of execution pending appeal.
Ratio Decidendi:
The court highlighted the need for special circumstances to justify a stay and balanced the rights of both parties, ultimately prioritizing the Respondent's appeal rights.
Result:
Respondent's application for stay granted.
JUDGMENT
Introduction
[1] Two applications were dealt with in this hearing. The Respondent's application in encl 41 was for a stay of execution of the decree nisi, and order of the Court dated 26 August 2021, and the Certificate of Decree Nisi Made Absolute dated 13 September 2021, pending the disposal of the Respondent's appeal to the Court of Appeal ("the Appeal").
[2] The Petitioner's application in encl 39 was for an order to authorise the Deputy Registrar to execute transfer forms in relation to transfer of the matrimonial assets ("Matrimonial Assets") in favour of the Petitioner. This was to give effect to the Order of the Court dated 26 August 2021.
The Factual Background
[3] The Petitioner filed a divorce petition, and in the absence of the Respondent, obtained a decree nisi ("the Decree Nisi") which was made absolute on 13 September 2021.
[4] The Respondent then filed an application to set aside the Decree Nisi, and Order of the Court dated 26 August 2021 ("the Order"), and the Certificate of Decree Nisi Made Absolute dated 13 September 2021 ("the Certificate"), which application was dismissed in December 2021. As a result thereof, on 10 January 2022, the Respondent filed an appeal to the Court of Appeal.
[5] On 17 January 2022, the Petitioner filed an application in encl 39 ("the Petitioner's Application"), seeking an order to authorise the Deputy Registrar to execute transfer forms in relation to transfer of the Matrimonial Assets in favour of the Petitioner.
[6] On 20 January 2022, the Respondent's filed an application in encl 41 ("the Respondent's Application") for a stay of execution of the Decree Nisi, the Order and the Certificate, pending the disposal of the Respondent's appeal to the Court of Appeal ("the Appeal").
[7] The Respondent's Application was allowed for the following reasons.
Contentions, Findings, And Evaluation
[8] The starting point for any application for stay is s 73 of the Courts of Judicature Act 1964 and O 55 r 16 of the Rules of 2012. The provisions read:
Section 73 - Appeal not to operate as stay of execution
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 proceeding shall be invalidated except so far as the Court of Appeal may direct.
Order 55 - Appeals to high from subordinate courts
Rule 16 - Stay of execution
(1) An appeal shall not operate as a stay of execution under the decision appealed against...
(2) The Court appealed from or the High Court may grant an order of stay of execution on such terms as it thinks fit
[Emphasis Added]
[9] This was restated in the landmark case of Kosma Palm Oil Mill Sdn Bhd & Ors v. Koperasi Serbausaha Makmur Bhd, ("Kosma Palm Oil").
[10] This is an important curtain raiser to any application for stay as it is not an automatic right, but rather is left to the discretion of the Court, which must have in mind the right of both the successful party not to be deprived of its fruits of litigation, as well as the unsuccessful party who has the right to appeal. Reference on this point is made to Kosma Palm Oil, Serangoon Garden Estate Ltd v. Ang Keng , , and Leong Poh Shee v. Ng Kat Cheong ; .
[11] The Court, therefore, 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. What may amount to special circumstances is a question of fact in each case.
[12] In order for the Court to exercise its judicial discretion to grant a stay of execution, the Respondent has to demonstrate the existence of special circumstances. This was clarified by the Federal Court case of Kosma Palm Oil, which held that:
It is therefore clear beyond doubt that 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
