A stay of bankruptcy proceedings can be granted based on 'sufficient reason' as per Section 97 of the Bankruptcy Act 1967, a lower threshold than 'special circumstances'.

[1] This was an appeal from the decision of the Senior Assistant Registrar who had dismissed the Judgment Debtor's application to have the hearing of the Creditor's Petition stayed pending the hearing of the Judgment Debtor's appeal in the Court of Appeal on the judgment recorded which formed the foundation for the instant bankruptcy proceedings.

[2] The Judgment Debtor had been ordered by the High Court to pay a sum of RM3,000,000.00 to the Judgment Creditor. The judgment was dated 5 April 2010.

[3] There was no stay on the execution of the said High Court judgment. I allowed the appeal nevertheless. In exercise of this Court's discretion, this was a proper case for stay to be granted. The grounds raised by the Judgment Debtor were not totally unmeritorious or lacking in bona fides that they should be rejected summarily without according him the opportunity to ventilate his case fully before the Court of Appeal. That there was no stay of execution of the judgment pending appeal was a relevant consideration, but it would have been an improper exercise of this Court's judicial discretion to take this as the only relevant factor. It is established law that pursuant to s 97 of the Bankruptcy Act 1967 the Judgment Debtor needed only to show a "sufficient reason" for the Court to exercise its discretion to grant stay, not the higher threshold of "special circumstances" in an ordinary application for a stay of execution of a judgment pending appeal. This was an application for stay in bankruptcy proceedings where the governing principle must be as laid down in s 97. See Re Rosli Abdul Kadir, Ex Parte Bank Kerjasama Rakyat Malaysia Bhd , :

" Section 97 of the Bankruptcy Act 1967 the provision under which the application is made provides as follows:

The Court may at any time, for sufficient reason, make an order staying the proceedings under a Bankruptcy Petition, either altogether or for a limited time, on such terms and subject to conditions as the Court thinks just.

The 'special circumstances' test is an acceptable test in an application for a stay of execution usually pending appeal. This has been affirmed by the Federal Court in several cases which need not be cited here as this is a well accepted guiding principle in deciding whether a stay of execution of a judgment should be granted or not pending appeal against a judgment. Nevertheless the 'special circumstances' test is a creation of the courts and is not provided by the statutes. 'Special circumstances' are also referred to as 'special grounds' by certain courts.

The test of 'special circumstances' or 'special grounds' is distinct from the test of 'sufficient reason1 in its principle, legal meaning, weight to the test, degree of burden to be proved to satisfy the Court and particular facts that need to be adduced to pass each test. Even the words 'special' and 'sufficient' are different in their ordinary meanings.

... Certainly, the weight and degree of burden to be proved to satisfy the Court in 'special circumstances' test is higher than the 'sufficient reason' test and the weight and the degree of burden to be proved to satisfy the Court in 'sufficient reason' test is lower than in the 'special circumstances' test. To quote the words of Abdul Hamid Mohamad JCA (as he then was) in Ming Ann Holdings Sdn Bhd v. Danaharta Urus Sdn Bhd , CA:

...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)

... In our local case of Malayan Banking Bhd v. Datuk Lim Kheng Khim (2), , Abdul Hamid Mohamad JC (as he then was) exercised his Lordship's discretion to stay further bankruptcy proceeding until the appeal is heard,