Clement Skinner JC:

On 8 November 1997, Paganelli Sdn Bhd (hereafter the petitioner) presented a petition, pursuant to s. 218(1)(e) Companies Act 1965, for the Winding-up of Care-Me Direct Sales Sdn Bhd (hereafter the respondent) on the ground that the respondent was unable to pay its debts. By a letter dated 16 September 1997, the petitioner had sent a notice to the respondent demanding payment of a sum of RM25,717 within three weeks from receipt of the said notice. When this demand went unanswered, the petitioner filed this petition.

Upon being served the petition, the respondent filed a motion to strike it out. The court was duly moved on 18 March 1998 and on 19 March 1998 struck out the petition with costs. The learned judge found, inter alia, that the debt allegedly due to the petitioner was genuinely disputed on substantial grounds.

Being dissatisfied with the above decision the petitioner on 17 April 1998 filed an application seeking leave to appeal from the Court of Appeal. Pending the hearing of its application the petitioner applies for a stay of the order striking out the petition as well as a stay of the taxation of the respondent's costs.

Section 73 of the Courts of Judicature Act 1964 (the Act) expressly states that an appeal shall not operate as a stay of execution or of proceedings under the decision appealed from unless the court below or the Court of Appeal so orders. Rule 13 of the Rules of the Court of Appeal 1994 mirrors the provisions of s. 73 of the Act and s. 43 of the Act provides that whenever an application may be made either to the High Court or to the Court of Appeal, the application should be first made to the High Court.

The court appealed from is thus vested with a discretion to order a stay but like any other judicial discretion, it is to be exercised in accordance with well settled principles.

Those principles have almost without exception required an applicant to show special circumstances to warrant the grant of a stay (see Re Kong Thai Sawmill (miri) Sdn. Bhd; Ling Beng Sung V. Kong Thai Sawmill (miri) Sdn. Bhd. & Ors. (no. 2) [1974] Kerajaan Malaysia v. Jasanusu Sdn. Bhd. [1975] 2 MLJ 105, Kerajaan Malaysia v. Dato' Hj. Ghani Gilong [1995] 3 CLJ 161; [1995] 2 MLJ 119). The Court of Appeal has however in recent times advocated a more practical, flexible and less stringent approach with the primary object of ensuring that an appeal, if successful, will not be rendered nugatory. This is how his Lordship Gopal Sri Ram JCA speaking for the Court in See Teow Guan & Ors. V. Kian Joo Holdings Sdn. Bhd. & Ors. [1997] 2 CLJ 299 expressed it at p. 610:

In my judgment, the paramount consideration governing an application for a stay, whether of execution or of proceedings, or, in the case of an application for some other form of interim preservation of the subject matter of an appeal, such as the grant of an injunction or other appropriate relief under s. 44(1) of the Courts of Judicature Act 1964, is that the appeal to this Court, if successful, should not be rendered nugatory.

If upon balancing all the relevant factors, this court comes to the conclusion that an appeal would be rendered nugatory without the grant of a stay or other interim preservation order, then, it should normally direct a stay or grant other appropriate interim relief that has the effect of maintaining the status quo.

Reading the decision of the Federal Court in the cases of Dato' Hj. Ghani Gilong and Jasanusa Sdn. Bhd., and that of the Court of Appeal in See Teow Guan, it seems to me that the approach I should take in considering this application is to see if the applicant can either show special circumstance or demonstrate that an appeal if successful would be rendered nugatory to entitle it to a stay.

What are the factors then that the petitioner rely upon as entitling them to a stay.

Mr. Alex Chang, learned Counsel for the petitioner began by saying that the decision of the learned judge shows ex facie erro