JUDGMENT

Ramly Ali J:

Introduction

[1] This is an appeal to the judge in chambers (encl. 29) against the decision of the senior assistant registrar on 27 February 2008 dismissing with costs the judgment debtor's application for a stay of bankruptcy proceeding pending disposal of the judgment debtor's application to set aside the judgment in default of appearance in the Session's Court, the judgment which form the basis of the bankruptcy petition in this case.

[2] The judgment debtor's application for the stay of the bankruptcy proceeding is made vide the summon in chambers dated 21 September 2007 (encl. 26) and is supported by the affidavit of the judgment debtor affirmed on 19 September 2007 (encl. 25). The judgment creditor by the affidavit in reply affirmed on 9 October 2007 (encl. 26A) apposed the application. The application is made pursuant to s. 97 of the Bankruptcy Act 1967.

Preliminary Issue: Whether The Test To Warrant The Court's Discretion To Grant Or Refuse The Application Under s. 97 Of The Bankruptcy Act 1967, Is For The Judgment Debtor To Show 'Sufficient Reason' Or 'Special Circumstance'

[3]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.

[4] The judgment creditor in its affidavit (encl. 26A) contended that the application should not be allowed as the judgment debtor failed to show special circumstances in the judgment debtor's affidavit (encl. 25) to warrant the court's discretion to stay the bankruptcy proceeding.

[5] 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.

[6] The test of 'special circumstances' or 'special grounds' is distinct from the test of 'sufficient reason' 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.

[7] 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 [2002] 3 CLJ 380 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)

[8] As such the degree that needs to be passed under the 'special circumstances' test is beyond the 'sufficient reason'.

[9] Cotton, LJ in an application for a stay of bankruptcy proceedings said in In Re Yeatman [1880] 16 Ch. D. 283:

But a judgment had been obtained establishing the validity of the petitioning creditor's debt, and in my opinion, when that is so, and the judgment has not been reversed, the Registrar has power to proceed with the hearing of the petition, if in the exercise of his judicial discretion he thinks fit to do so. But if he is satisfied that a real appeal from a judgment is pending, he ought, in my opinion, as was done in the