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2024 MarsdenLR 674
HIGH COURT MALAYA PULAU PINANG
ALL KURMA SDN BHD – Appellant
Versus
TEO HENG TATT & ORS – Respondent
[Suit No: PA-22NCC-30-09/2021]
A stay of an order to produce documents requires special circumstances; confidentiality claims must be substantiated and do not inherently justify withholding discovery.
Headnote:(A) Rules of 2012 – Order 24 – Discovery and Inspection of Documents – Application for stay of Order to produce documents – Plaintiff's appeal against the Order to produce documents was dismissed as no special circumstances were demonstrated to warrant a stay – Confidentiality claims were found unsubstantiated and insufficient to deny discovery rights – The court emphasized the importance of fair discovery processes in ensuring justice for both parties. (Paras 12, 29, 50)
(B) Stay of Proceedings – The court reiterated that a stay of proceedings is granted sparingly and only in exceptional circumstances – The burden of proof lies with the applicant to demonstrate special circumstances justifying a stay. (Paras 12, 48)
Facts of the case: The Plaintiff sought a stay of an Order requiring it to produce documents for the Defendant's defense, claiming the documents contained confidential information and trade secrets. The Defendant argued the documents were necessary for its defense against claims of breach of fiduciary duty and conspiracy. (Paras 1-6)
Findings of Court: The court found that the Plaintiff's claims of confidentiality were unsubstantiated and that the documents were discoverable and necessary for the Defendant's defense. (Paras 22, 50)
Issues: The main issues included whether the Plaintiff's claims of confidentiality justified a stay of the Order to produce documents and whether special circumstances existed to warrant such a stay. (Paras 6, 12)
Ratio Decidendi: The court ruled that confidentiality does not equate to privilege and that the Plaintiff's refusal to produce documents was unreasonable, emphasizing the necessity of discovery for a fair trial. (Paras 32, 50)
Result: Application for a stay of the Order to produce documents dismissed, with costs awarded to the Defendant.
JUDGMENT
(Stay Of Order To Produce Documents)
Prelusion
[1] The 7th Defendant (D7) applied for an Order for the Plaintiff (P) to produce and serve on D7 documents that D7 needs for the conduct of its defence (D7's Application for an Order to produce documents).
[2] On 23 April 2024, I granted an Order that P produces and serves on D7 the documents stated in the annexure to the Order (Order to produce documents). I ordered that P complies with this Order to produce documents within 21 days from the date of the Order.
[3] I also ordered that P is at liberty to apply, by a formal application, for an extension of time to comply with the Order (if, for instance, the 21-day period is not enough for P to collate the documents and serve them on D7).
[4] On 26 April 2024 (three days later), P filed an Appeal to the Court Of Appeal against the Order to produce documents.
[5] On 30 April 2024, (seven days after the Order to produce documents), P filed this Application to stay the Order to produce documents, pending P's Appeal against it.
[6] Should P's Application for a stay be allowed?
P's Arguments
[7] P mounts two core arguments for a stay:
(1) P has merits in its Appeal; and
(2) if a stay is not granted, P's Appeal will be rendered nugatory, because the documents ordered to be produced contain highly confidential information and trade secrets.
Merits In An Appeal Is Not A Ground For A Stay
[8] P argues that it has merits in its Appeal against the Order to produce documents because D7's Application for an Order to produce documents was a "fishing expedition". P proceeds to argue the merits of its Appeal.
[9] I am of the view that it is improper and unnecessary for P to recanvass the grounds with which it opposed D7's Application for an Order to produce documents, or to present the grounds that it intends to canvass in its Appeal against the Order to produce documents in the Court Of Appeal.
[10] It is a well-established principle that P's merits in opposing D7's Application for an Order to produce documents (at first instance), and P's merits in its Appeal against the Order to produce documents — are not relevant factors for me to consider in this stay application — Kosma Palm Oil Mill Sdn Bhd & Ors v. Koperasi Serbausaha Makmur Bhd, [2004] 1 MLJ 257.
[11] In Kosma Palm Oil Mill (supra), the Federal Court held:
[19] Having expressed my views on the law, I shall now consider the motion. Both parties delved into some length on the merits of their respective case in the affidavits filed and the submission made in Court. The merits of a party's case in a stay application is not a relevant matter for consideration...
[20] As Abdul Hamid Mohamad JCA (as he then was) said in Ming Ann Holdings Sdn Bhd v. Danaharta Urus Sdn Bhd at p 67:
The weight of authorities appears to me to say that the 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).
....
....
[22] It is therefore unnecessary for me to consider the merits of the respective case of the applicants and respondents.
[Emphases Mine]
P's Appeal Will Not Be Rendered Nugatory
[12] It is trite law that a stay of execution of a Judgment or a stay of enforcement of an Order of Court — .just like a stay of the compliance with the Order to produce documents here — will only be granted if there are special circumstances to warrant a stay — Kosma Palm Oil Mill (supra). The Federal Court restated the "special circumstances" principle by holding, at paragraph [23] of the Grounds Of Judgment, that the onus is on the applicant for a stay, like P here, to "demonstrate the existence of special circumstances" to compel the grant of a stay.
[13] P argues that there are special circumstances that justify a stay of the Order to produce documents. P asserts that the special circumstances are that those documents contain "highly confidential information" and "tr
