This trial commenced on 6 July 1999 and thereafter continued to be heard on 7 July, 10 August and 11 August 1999 when it was adjourned to 22, 23 and 27 September 1999 for continued hearing.

When the trial resumed, I was informed by counsel for the defendants that there has been a 'development' concerning the parties to this suit by reason whereof the defendants were seeking the court's direction on whether or not the trial should proceed. The 'development' was this: on 25 August 1999, the first plaintiff was charged with an offence of cheating under s 420 Penal Code at the Magistrates' Court, Sungei Siput. The first plaintiff pleaded not guilty to the charge and the case was fixed for mention again on 1 October 1999 pending representation by counsel for the first plaintiff to the Attorney General's chambers. Counsel for the defendants informed the court that the charge preferred against the first plaintiff relates to certain drainage claims made by the plaintiffs in this suit and which the defendants assert are wrongly and fraudulently made. In these circumstances, counsel for the defendants sought directions whether this suit could continue to be heard before the criminal charge against the first plaintiff was tried.

The plaintiffs oppose any adjournment or stay of this civil trial and wish to have the same proceeded with.

To put matters into perspective, the background facts must be referred to, if only briefly.

The first and second plaintiff are individuals who together with the first defendant, a company, are shareholders in the second defendant company which is undertaking a development project known as Perkampungan Tersusun Kledang Fasa Satu, Sungei Siput, ('the housing project') on a joint venture basis with a company called Pelangi Kurnia (M) Sdn Bhd ('Kurnia'). Apparently, the second defendant appointed a firm called Wai Construction Works ('Wai Construction') as a sub contractor to construct and complete a total of 104 units of bungalow lots in the housing project in accordance with terms stated in a letter of appointment and acceptance dated 11 September 1996. Similarly, by a letter dated 15 April 1997, the second defendant appointed Wai Construction to construct and complete the drainage works in the housing project. The proprietors of Wai Construction are the first and second plaintiff.

In the course of the housing project being implemented, differences arose between the shareholders in the second defendant (the first dispute), as a result of which, the housing project came to a standstill eventually leading to the second defendant and Kurnia commencing legal proceedings against the first and second plaintiff in Ipoh High Court Suit No 22–154–1998 (the first court action).

On 2 October 1998, the parties to the first court action entered into an agreement (the settlement agreement) to settle their differences relating to the first dispute leading to a court order being made on 2 October 1998 recording the settlement. One of the terms of the settlement agreement was that a 'funds manager' be appointed so that all monies and other payments due to the second defendant would be received by the funds manager and maintained in the second defendant's bank account at Sime Bank Bhd, Sungei Siput Branch (the said bank account). The funds manager would also make payment out of the monies maintained in the said bank account to all creditors of the second defendant in accordance with certain terms and conditions set out in the settlement agreement. It was also a term of the settlement agreement that Wai Construction shall resume and complete the works subcontracted to it, namely, the construction of the houses and construction and completion of the drainage works in the housing project. As mentioned earlier, one of the functions of the funds manager was to pay creditors of the second defendant. One of the creditors identified in the first schedule to the settlement agreement was Wai Construction with a sum o