Alauddin Mohd Sheriff J:

On 8 March 1997, I granted an order for the sale of the SPK lands. The defendants being dissatisfied with my decision had filed an appeal against it and at the same time this application (encl. 56) for stay of execution was also filed.

There is only one issue to be determined in this application ie, whether the applicants/defendants are entitled to an order of stay of execution of the order for sale pending the outcome of their appeal before the Court of Appeal.

According to the applicants there are two appeals before the Court of Appeal. The first appeal is in respect of the default judgment obtained by the plaintiff bank on 11 October 1994 which resulted in the commencement of the foreclosure action. The second appeal is in respect of my decision given on 8 March 1997 granting the order for sale of the SPK lands.

In this application the applicants rely on three grounds:

(1) The appeal would be rendered nugatory and the substratum of the appeal would be destroyed if stay is refused.

(2) There are merits in the appeal.

(3) Liability of applicants/defendants to pay.

Let me make it clear that this application before me is an application for stay of execution pending appeal before the Court of Appeal against my earlier decision ie, granting an order for sale of the SPK lands. I am not concerned with the appeal against the decision of the High Court Kuala Lumpur granting the default judgment.

It is trite that an appeal does not operate as a stay of execution (see s. 73 CJA 1964 ). However the courts are given the discretion to order otherwise.

With respect to the court's power or discretion to grant or refuse an application for stay, Hashim Yeop Sani J (as he then was) in Syarikat Berpakat v. Lim Kai Kok [1983] 1 MLJ 406 had this to say at p. 107:

As a rule the court will however only grant stay if there are special circumstances and which circumstances must be deposed in the affidavit supporting the application.

The governing principle in all cases where the court is asked to exercise its discretion is clearly expressed by Brown J in Serangoon Garden Estate Ltd. V. Ang Keng [1953] and the principle is this: the court 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.

Counsel for the respondent/plaintiff rightly submitted that there is a long line of local authorities which constantly hold that in an application for stay of execution pending appeal the applicant will have to show by way of affidavits that there are special circumstances in order for the court to exercise its discretion.

See:

(1)Re Kong Thai Sawmill (Miri) Sdn. Bhd. [1976] 1 MLJ 131.

(2) Kerajaan Malaysia v. Jasanusa Sdn. Bhd. [1995] 2 CLJ 701 .

(3)Kerajaan Malaysia v. Dato' Haji Ghani Gilong [1995] 3 CLJ 161 .

Although, in the recent case of See Teow Guan & Ors. V. Kian Joo Holdings Sdn. Bhd. & Ors. [1997] 2 CLJ 299 the Court of Appeal held that the paramount consideration governing an application for a stay of execution, is that the appeal, if successful should not be rendered nugatory, I am bound by the decisions of the Federal Court in Re Kong Thai Sawmill, Jasanusa and Dato' Hj. Ghani Gilong.

With the greatest of respect, it would be observed that the Court of Appeal in See Teow Guan did not consider Jasanusa and Dato' Hj. Ghani Gilong (two authorities from the highest court in the country). There is no doubt that the special circumstances principle in the context of a stay of execution is applicable.

I shall now proceed to consider the grounds of this application.

First Ground

The applicants say that if a stay is not granted their appeal if successful would be rendered nugatory. Upon examination of the affidavit in support of this application, however, I do not see any such evidence.

The applicants, through the fourth defendant, aver as follows:

9. Saya dinasihatkan jikalau saya memb