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2000 MarsdenLR 320
VINCENT
JAYA HARTA REALTY SDN BHD – Appellant
Versus
KOPERASI KEMAJUAN PEKERJA-PEKERJA LADANG BHD; TETUAN ISHARIDAH HO CHONG & MENON (GARNISHEE) – Respondent
For the appellant plaintiff - Ram Kumar; M/s Morgan & Co For the respondent garnishee - Steven Puung; M/s Isharidah, Ho, Chong & Menon
The court has discretion to grant a stay of execution pending appeal, provided special circumstances are demonstrated, ensuring the balance of convenience favors the applicant.
Headnote:Statute Analysis: Under O. 45 r. 11 of the Rules of the High Court 1980, the court has the discretion to grant a stay of execution. Facts of the Case: The plaintiffs sought to stay an order setting aside a garnishment of RM842,037.24 due to a judgment debt, arguing that without a stay, their appeal would be nugatory.
Findings of Court:
The court emphasized that 'special circumstances' must be demonstrated for a stay of execution; such a condition exists in this case as the garnished funds are critical to satisfy the judgment.
Issues: The main question is whether there exist special circumstances justifying the stay.
Ratio Decidendi: The court established that the balance of convenience favored granting the stay as releasing the funds would jeopardize the plaintiffs' ability to satisfy the judgment if their appeal succeeds.
Result: The application for stay was allowed subject to terms ensuring the funds are safeguarded.
The legal document discusses the court's discretion in granting a stay of execution pending an appeal, emphasizing that such discretion is limited by the requirement to demonstrate "special circumstances" that justify the stay (!) (!) . The court highlights that the primary considerations include the balance of convenience in favor of the applicant, the potential for the appeal to be rendered nugatory if the stay is not granted, and the arguability of the appeal (!) (!) .
The court elaborates that "special circumstances" are not rigid or narrowly defined but are a collection of relevant factors that, when demonstrated convincingly through affidavit evidence, justify the grant of a stay (!) (!) . These factors often include the likelihood that, without a stay, the enforcement of the judgment could result in the dissipation of assets or funds that are crucial to satisfy the judgment if the appeal succeeds (!) .
In this case, the court found that the garnished funds are essential for satisfying the judgment debt, and there is a significant risk that these funds could be released or dissipated if the stay is not granted, thereby rendering the appeal nugatory (!) (!) . The court also noted that the garnishees had no assertion against releasing the funds nor any undertaking not to do so, further supporting the application for a stay (!) .
Additionally, the court considered the financial status of the third-party company involved and the circumstances indicating that the funds are likely to be released to the defendants or the third party if the stay is not granted, which would undermine the appeal's effectiveness (!) .
The court ultimately granted the stay of execution, imposing specific terms to safeguard the funds, including depositing the amount in a reputable bank and maintaining the deposit until the appeal's final disposal (!) (!) . These measures aim to balance the interests of both parties while ensuring that the judgment debtor's rights are protected during the appeal process (!) - (!) .
Vincent Ng J:
Before me is an application (vide encl. 98) by the plaintiff company ('plaintiffs'), under O. 45 r. 11 of the Rules of the High Court 1980 ('the Rules'), to stay an order granted by my predecessor on 28 April 1999 setting aside a garnishment order made by the learned senior assistant registrar, garnishing the sum of RM842,037.24 held by the respondent/ garnishee ('garnishees'), a legal firm practising under the name and style of M/s. Isharidah, Ho, Chong & Menon. The 28 April 1999 order also ordered the plaintiffs to return the garnished funds to the garnishees. The plaintiffs' application for garnishment was grounded upon a regularly obtained judgment debt against the defendant company/judgment debtor (defendants).
The events leading to the application are as follows. The plaintiffs had been engaged by the defendants to do some work on the defendants' land, identified as Lot 2790, Mk. Sungai Petani, Daerah Kuala Muda, held under Geran no. 64729 (the 'said land'). After completing the contracted work, the plaintiffs sought payment of RM665,851.20. The defendants, however, informed the plaintiffs that they were for the time being, unable to pay due to shortage of funds. At the same time the defendants requested for further time as they were in the midst of negotiating a sale of the said land to a company known as Syarikat Skyline View Sdn. Bhd. (hereinafter to be referred as 'Sykt. Skyline View'). And, in the event that the deal was successful, the land would be sold at RM4 million, and payment to the plaintiffs could then be effected.
Despite this assurance no payment was received. Thus, the plaintiffs instituted the present suit and proceeded to sign judgment in default against the defendants on 18 April 1995. The plaintiffs having knowledge of the purported sale of the land to Sykt. Skyline View also became aware of the fact that the garnishees had been appointed by Sykt. Skyline View as solicitors in the sale and purchase transaction. As solicitors, they were also acting as stakeholders of the sale price. Thus, to reap the fruits of its final judgment the plaintiffs took out garnishment proceedings under O. 49 of the Rules against the garnishees. The learned senior assistant registrar allowed the plaintiffs' application, resulting in the garnishees filing an application (vide encl. 27) to, inter alia, stay the execution proceedings of the garnishment order dated 21 January 1997 and also to set aside the garnishment order dated 21 January 1997. This application by the garnishee was dismissed by the senior assistant registrar after he heard submissions. The garnishees then appealed (vide encl. 61) to the judge in chambers against the senior assistant registrar's order of dismissal. On 28 April 1999, the learned judge allowed the appeal. The garnishment order was set aside and the plaintiffs were ordered to return the garnished money to the garnishees on or before 12 May 1999 with interest. The plaintiffs appealed to the Court of Appeal against this order of 28 April 1999 vide Court of Appeal Civil Appeal no: K02-335-99. At the same time the plaintiffs filed the present application before me (encl. 98) to stay the execution of the judge's said order pending the disposal of their appeal to the Court of Appeal.
At the hearing of encl 98, the parties were on common ground that the court has unfettered discretion to grant a stay of execution, but the court's powers should only be exercised when there exist special circumstances, as an appeal does not operate as a stay. Though, I must observe that initially the plaintiffs' counsel betrayed a befuddled and bemused thought process, when in his written submission he said: "In Malaysia there are two (2) principles formulated by the courts on the stay principle namely: (i) that there must be 'special circumstances' shown; and, (ii) on the 'nugatory' principle. Both these principles stand as the law today." In order to demonstrate the existence of special circum
