MAYBANK ISLAMIC BERHAD v RUBY ENGINEERING AND ELECTRICAL SDN BHD

Case Significance

Illustrates the exercise of the court's inherent jurisdiction under Order 92 rule 4 to stay execution of a foreclosure Order for Sale pending disposal of an application to set aside an underlying default judgment, where bona fide issues remained and a refusal might render that application academic.

This High Court (Ipoh) decision concerns a defendant's application for a stay of execution of an Order for Sale, made in foreclosure proceedings brought by a bank as chargee. The originating summons for the Order for Sale had been taken out under section 256 of the National Land Code and Orders 28 and 83 of the Rules of Court 2012, in respect of a charge over land held under a stated title. The defendant sought a stay of the Order for Sale dated 7 January 2025, pending the disposal of its separate application to set aside a Judgment in Default dated 27 December 2023 filed before the Ipoh High Court in another suit, which was fixed for decision on 31 July 2025.

The bank opposed the stay, arguing principally that the foreclosure proceedings were premised on statutory rights under the National Land Code as an action in rem, and were not dependent on the Judgment in Default, which concerned an in personam claim. The defendant, for its part, alleged procedural irregularity and mala fides in the obtaining of the default judgment while case management was ongoing, and raised a dispute on quantum together with an offer to restructure.

The court framed the matter as turning on the exercise of its discretion, and specifically on its inherent jurisdiction under Order 92 rule 4 to safeguard procedural fairness and prevent injustice. It considered whether special circumstances were present, whether the pending set-aside application might be rendered academic if a stay were refused, and where the balance of justice lay in preserving the status quo. Concluding that bona fide issues remained pending adjudication and that this was a fitting case to exercise its inherent discretion, the court allowed the application and stayed execution of the Order for Sale pending the final disposal of the set-aside application, with no order as to costs.