Pentadbir Tanah Daerah Petaling v 1. ) PUBLIC BANK BERHAD 2. ) AISHAH BINTI ABDULLAH 3. ) JEHABAR ALI HUSSAIN KADER

Case Significance

Illustrates that a stay of execution sought to await separate proceedings cannot survive once those proceedings are struck out, and that the special-circumstances requirement under Order 45 rule 11 of the Rules of Court 2012 is not met where the foundation for the application has disappeared.

This High Court decision at Shah Alam concerns an interlocutory application to stay proceedings and the execution of orders in a foreclosure matter. A bank had commenced proceedings to enforce charges over several properties in the Petaling district, the second and third defendants being a married couple who were the bank's borrowers under a number of loan facilities. In accordance with the terms of the charges, the bank had taken foreclosure action against the charged properties. The third defendant applied to stay both the proceedings and the execution of any order until a separate originating summons — filed in another matter in the same court — had been disposed of, contending that its outcome bore on the present dispute. The question for the court was whether there were special circumstances justifying a stay under Order 45 rule 11 of the Rules of Court 2012. The premise of the application, however, fell away in the course of events: the third defendant's own claim against the bank and the first defendant in that separate suit had already been struck out. With the very proceedings said to justify a stay no longer on foot, there was no longer any special circumstance capable of supporting the application, and no risk that enforcement would render nugatory a claim that had already been dismissed. The court declined to treat the mere existence of a further, unrelated dispute as a reason to hold up a chargee's enforcement of its security, observing that a stay is not to be granted simply to postpone the day of reckoning for a borrower in default. The court accordingly dismissed the third defendant's application, ordering costs of RM2,000 to be paid to the bank and to the first defendant respectively. The judgment illustrates that a stay sought to await the outcome of separate proceedings cannot survive the collapse of those proceedings, and that the special-circumstances requirement for a stay of execution is not satisfied where the very foundation for the application has disappeared.