[1].  These questions are:

Q1:   Are courts obligated to consider RTA provisions in applications for a stay of execution in personal injury cases?

Q2:   Under which provision should the application be made?

Q3:   Who is entitled to apply for a stay of execution?

Q4:   Should not the insurer, as the paying party under the RTA, be the applicant?

Q5:   Is the test in RTA cases stricter than in non-RTA cases?

Q6:   Is the insurer’s separate ‘right of intervention’, a legal myth?

[2].  In the RTA, who is the ‘Third Party’ and ‘the Insured’?

Under the RTA, a ‘third party’ refers to victims of vehicular accidents who benefit from statutory protection. They have no prior legal relationship with the insured (the vehicle owner/driver) or the insurer.¹ Section 91(3) and 96(1) of the Road Transport Act 1987, and secs. 6 and 129 of the Financial Services Act 2013, and the Ninth Schedule thereto.

The court in Johannes Kaplan v Aw Chen (1970) clarified that compulsory insurance against third-party risks makes insurers directly liable to satisfy judgments against insured parties.² Johannes Kaplan v Aw Chen [1970] 1 MLJ 220b

To claim their compensation, victims must prove two elements: first, that the tortfeasor (insured driver/owner) caused injury or damage. The second pre-requisite is that the victim must obtain a judgment which holds the tortfeasor liable.

[3].  Mandatory Liability of the Insurer

The RTA imposes a mandatory liability on insurers. They have to compensate third-party victims for injuries or death caused by insured vehicles³ Sections 91(1)(b) and 96(1)  of the RTA – subject to narrow limitations.⁴see Part IV of the RTA Even if the policies are cancelled or avoided, ‘authorised’ insurers remain liable under Section 91(3).

Which dovetails nicely into the twin questions:

“Who is an authorised insurer?”; and

“Why does the RTA use the attributive adjective, ‘authorised’, before the word, ‘insurer’?”

[4].  ‘Authorised Insurer’

Not all insurers are allowed to issue motor insurance policies. Only ‘authorised insurers’ are: sec. 89 RTA.⁵Section 89 of the RTA

To participate in the motor insurance business, an insurer needs to satisfy two pre-conditions.

First, the insurer must become a member of the Motor Insurers’ Bureau (MIB).

Second, it must execute an agreement with the Minister of Transport under the MIB framework.

These requirements ensure that only ‘authorised’ insurers can provide statutory protection to third-party victims.

That leads one to the question: “What is the legal significance of the MIB?” 

Why have it at all?

[5].  The crucial role of MIB, which is often overlooked

One starts with the foundational proposition that the RTA is a social legislation which is designed with only one purpose: safeguarding third-party road users.⁶ Malaysian Motor Insurance Pool v Thirumeniyar a/l Singara Veloo [2020] 1 MLJ 440; and also AmGeneral Insurance v Sa’amran Atan & Ors and Other Appeals [2022] 8 CLJ 175

Under the RTA framework, every ‘authorised’ insurer must abide by the terms of the MIB.⁷Section 89 of the Road Transports Act 1987

It is for this reason that sec. 89 RTA mandates insurers to sign the MIB agreement.

Odd though it may sound, one term of the MIB agreement ensures that even if there is no insurance policy or coverage, authorised insurers are legally obligated to protect third-party victims – unless they fall within a narrow compass of exceptions.⁸Johannes Kaplan v Aw Chen [1970] 1 MLJ 220b

G. Naidu has written an article which critically examines MIB’s legal, social and consumer roles in the RTA scheme – see here for further details.⁹G. Naidu, ‘The role of the MIB and the liability of the insurer concerned under MIB/domestic agreement’; [2023] 1 LNS(A) lxxv, at p.1

Having cleared the fundamentals of the RTA scheme, we now look to the common law test for a stay of execution.

[6].  General test for a stay of execution

The general test requires an applicant to show ‘special circumstances,’. ‘Special’ means ‘exceptional.’ Augustine Paul JCA in Kosma restated the test as something ‘more than special,’ i.e., ‘very exceptional circumstances.’¹⁰ Kosma Palm Oil Mill Sdn Bhd v Ors v Koperasi Setiausaha Makmur Bhd [2003] CLJ 1

In Smith, Hogg & Co Ltd (1940), six decades before Kosma, Scott LJ stated stays are granted only in ‘rare cases’. He explains when it would be granted: e.g. ‘where’ execution would ‘destroy the subject matter’, or ‘prevent’ the prosecution of an appeal.¹¹Smith, Hogg & Co Ltd v Black Sea and Baltic General Insurance Co Ltd (1940) 162 LTR 11

Any complaint that goes to the ‘merit of the appeal’ and the ‘fear’ of losing business, customers, or goodwill are insufficient.

Crucially, these circumstances (or concerns) must relate to the enforcement of the judgment. Examples include fears that the judgment sum would be ‘transferred to a foreign jurisdiction’; or that payment would ‘destroy the appeal’s substratum’; or that the ‘recipient is insolvent’.¹² Rosengrens Ltd v Safe Deposit Centres [1984] 1 WLR 1334;[1984] 3 All ER 198;[1984] EWCA Civ J0719-4.

Courts require these circumstances to be clearly demonstrated in the affidavits supporting the stay applications.¹³ Syarikat Berpakat v Lim Kai Kok [1983] 1 MLJ 406  A bare allegation without positive probative evidence would not cut it.

[7].  Issues Arising from Ong Koh Hou v Da Land Sdn Bhd (2018)

Fifteen years after Kosma, this Court of Appeal case challenged established principles on the stay of execution. It criticised the ‘special circumstances’ test and endorsed an alternative ‘nugatoriness’ test: it got that from the Court of Appeal decision in See Teow Guan v Kian Joo Holdings (1995).¹⁴See Teow Guan & Ors v Kian Joo Holdings Sdn Bhd & Ors [1995] 3 MLJ 598 However, Kosma Palm Oil Mill(2003), had overruled See Teow Guan in 2003.  Kosma reaffirmed ‘special circumstances’ as the correct test.¹⁵ Kosma Palm Oil Mill Sdn Bhd v Ors v Koperasi Setiausaha Makmur Bhd [ 2003] CLJ 1

The key issues with Ong Koh Hou ¹⁶ Ong Koh Hou @ Wong Kok Fon v Da Land Sdn Bhd and 2 Others [2018] MYCA 2017 was that it disregarded the Federal Court authority in Kosma.

The case seems to have conflated the test for stay of execution in land disputes as compared to monetary judgments, where different thresholds apply:(Renew Capital Sdn Bhd v ADM Ventures).¹⁷ Renew Capital Sdn Bhd & Ors v. ADM Ventures (M) Sdn Bhd & Anor And Another Appeal [2022] 8 CLJ 817. It applied sec. 44 of the Courts of Judicature Act 1964, which is relevant only for appeals from the High Court to the Court of Appeal

The decision in Ong Koh Hou is difficult to reconcile with established precedent, from which it not only departs, but with which it is in direct conflict. Under the principles in Young v Bristol Aeroplane, any court must choose Kosma over Ong Koh Hou.¹⁸ Young v Bristol Aeroplane Company Limited [1944] 1 KB 718[/mfn]

Therefore, Ong Koh Hou is unreliable as a binding authority.

[8].  Relevance of RTA and SCA provisions in Personal Injury Cases

Parliament intended a special relationship between the RTA and the Subordinate Courts Act. These provisions ensure a specific statutory framework governs motor accident claims.¹⁸ Section 65(1)(a) Subordinate Courts Act 1948

Thus, it is the Sessions Court that has jurisdiction over motor accident cases.¹⁹See Part IV RTA and Subordinate Courts Act 1948 (SCA)

[9].  Validity of Stay Applications under O. 55 RC 2012, as compared to sec.96(2)(b) of the RTA

Courts granting stays under Order 55 ²⁰ Order 55 Rules of Court 2012 without invoking Section 96(2)(b) ²¹ Section 96(2)(b) of the Road Transport Act 1987 risk acting ultra vires their powers.

We start with O.55r.16 which states:

“(1).   An appeal shall not operate as a stay of execution …, and any application for stay shall be made in the first instance to the Court appealed from.”

“(2).  The Court appealed from or the High Court may grant an order of stay of execution on such terms as it thinks fit.”

That ‘general’ discretion granted to the court under O.55 r.16(2) is for non-RTA cases; for the RTA has its own specific set of rules for a stay: and that is boxed-in by other provisions.  It would be a mistake to consider that O.55 r16 ‘overrides’ relevant RTA provisions, to which we now turn:

The first section that needs study is in sec. 96(1) which speaks about the mandatory duty to pay the third party victim (which is subject to the two preconditions which it sets out):

“If, …, judgement regarding any such liability  … is given against any person insured by the policy, then …, the insurer shall, subject to this section, pay to the persons entitled to the benefit of the judgement any sum payable in respect of the liability, …”.

The phrase “subject to this section” in sec. 96(1) brings into play sec.96(2)(a) reads: “No sum shall be payable by an insurer under subsection (1)(b) … “in respect of any judgement, so long as execution is stayed pending an appeal; …”

These two provisions are themselves subject to sec. 91(3) which reads: “Notwithstanding anything in any written law, a person issuing a policy of insurance … shall be liable to indemnify the person … specified in the policy in respect of any liability which the policy purports to cover …”

Who will deny that RC 2012 is ‘written law’? The phrase ‘Notwithstanding anything in any written law’ has the effect of taking O.55 out of the insurer’s ‘stay equation’. The RTA mandates that the insurer’s liability to pay is automatic, subject only to two escape routes: (a) a relief under sec.96(3) declaring the policy is void or unenforceable; or (b), a temporary stay pending appeal under sec.96(2)(b).

Courts must reconsider the legal effect of utilising the general rule in O.55 while ignoring the specific statutory provisions enacted for that very purpose.

If two sets of statutory provisions conflict, sec. 23 of the Interpretation Acts 1948 and 1967 prioritise primary statutes over subsidiary legislation.²² Section 23 of the Interpretation Acts 1948 and 1967, entitled “Avoidance of subsidiary legislation in case of inconsistency with Act” reads at subsection (1): “Any subsidiary legislation that is inconsistent with an Act (including the Act under which the subsidiary legislation was made) shall be void to the extent of the inconsistency.” Sub-section (1A) reads: “For the purposes of subsection (1), any subsidiary legislation made under an Act is not inconsistent with that Act or any other Act merely by reason of the absence in the Act under which it is made of any provision relating to the commencement, application, Interpretation 27 operation, interpretation or construction of the subsidiary legislation or to any other matter in connection with such subsidiary legislation if provisions relating to the commencement, application, operation, interpretation or construction of, or other matter in connection with, subsidiary legislation generally are contained in this Act.” And sub-section (2) reads: “In this section “Act” includes a federal law styling itself an Ordinance or Enactment.”

Again, R Rama Chandran v Industrial Court (1997) emphasised that courts should prefer the use specific statutory mechanisms over general provisions.(See Edgar Joseph Jr FCJ in the Federal Court).²³ R Rama Chandran v Industrial Court of Malaysia & Anor [1997] 1 CLJ 417. There Edgar Joseph Jr was distinguishing the powers granted to the courts under Article 226 of the Indian Constitution of India from powers granted to Malaysian courts paragraph 1 of the Schedule to the Court of Judicature Act 1964. It is noteworthy that Edgar FCJ did not discuss article 121 in the Malaysian Constitution When we apply these tests, the general procedural rule in O.55 Rule 16 RC 2012 cannot override a specific, primary statutory provision in sec. 96(2)(b) of the RTA.²⁴The Federal Court case of DYAM Tunku Ibrahim Ismail Ibni Sultan Iskandar Al-Haj v. Datuk Captain Hamzah Mohd Noor & Another Appeal [2008] 6 CLJ 334 discussed the court’s use of specific powers and general discretionary powers. There, the plaintiff had sued DYAM Tunku Ibrahim Ismail Ibni Sultan Iskandar Al-Haj. The plaintiff had applied, ex-parte, for extensions of time to renew the writ. The defendant-appellant objected to these extensions. The appeal turned on two questions. First, whether the applicant’s requirement to show ‘efforts to effect service of a writ’ was a mandatory prerequisite.[Under RHC 1980 O. 6 r. 7(2A) (“RHC”), and under O. 6 r. 7(2) RHC.] Second, if such a mandatory prerequisite was not complied with, whether the ‘general provision’ in O.1A RHC 1980 could be invoked to cure that failure: [O. 1A RHC 1980 reads: “Regard shall be to justice”.  “In administering these Rules, the Court or a Judge shall have regard to the overriding interest of justice and not only to the technical non-compliance with these Rules.” See also O. 6 r. 7(2A), RHC 1980. (The equipollent provision in RC 2012 also)]. The Federal Court held one could not invoke a general power to ask the court for an exercise of discretion when a specific power was not complied with. At paragraph [46] of its grounds, the Federal Court ruled: “A general provision such as O. 1A RHC must not supersede a mandatory requirement of the Rules. Order 1A RHC cannot be invoked when a party intentionally disregards in complying with the Rules. Thus, in this case, O. 1A RHC did not apply as the respondents had intentionally disregarded O. 6 r. 7(2A) RHC for their own reasons. (paragraph 46)”

[10].  Who is entitled to apply for a Stay?

Only insurers can apply for stays under sec. 96(2) RTA because they bear the liability to pay victims directly (Johannes Kaplan v Aw Chen, and Tang Loon Pau v Mohd Salihin.(2024).²⁵ Johannes Kaplan v Aw Chen [1970] 1 MLJ 220b & Tang Loon Pau v Mohd Salihin [2024] 2 MLJ 256

[11].  Proper Forum for Stay Applications

Insurers should intervene at trial courts rather than initiating separate suits elsewhere (AmGeneral Insurance v Sa’Amran Atan, Federal Court). Splitting proceedings burdens victims and violates their rights.²⁶ AmGeneral Insurance v Sa’amran Atan & Ors and Other Appeals [2022] 8 CLJ 175

The Malaysian Federal Court has cited Indian rulings like United India Insurance Co Ltd v Santro Devi ²⁷ United India Insurance Co Ltd v Santro Devi and Others [2009] 3 MLJ 130, emphasising social justice in third-party insurance schemes. Justice Sarkar’s observations in British India General Insurance v Captain Itbar Singh highlight that any loss should fall on insurers, for it is part of their anticipated business risk.²⁸ British India General Insurance v Captain Itbar Singh and others AIR 1959 SC 1331

[12].  The concept of an insurer’s right to intervene in legal proceedings is a ‘legal myth’

While some cases²⁹Jiwaneswary Raman v Etiqa General Takaful Bhd and Tang Loon Pau & Ors v Mohd Salihin Bin Kotni & Anor suggest this right exists, these rulings do not sit well with established legal principles. Under the RTA scheme, the insured’s liability is borne entirely by the insurer, for it is the ‘paying party.’ By signing an insurance contract, the insured subrogates its rights to the insurer, enabling the insurer to act in his name.

The insurer typically appoints a panel solicitor to represent the insured, aiming to protect its financial interests. By this arrangement, the insurer, a ‘puppeteer,’ controls the defence. When insurers claim a separate right to intervene, it raises the question: “How can the insurers intervene when they are already present in court through their appointed solicitor?” Insurers argue they have ‘dual rights’—through the insured and the policy document—but this creates a conflict of interest. Both solicitors (for the insured and insurer) are ultimately paid by the same entity, blurring their distinct roles.

Allowing intervention gives insurers ‘two bites at the cherry,’ enabling them to attack a plaintiff’s case twice: first through the defendant’s solicitor and then under another guise. This undermines principles of procedural fairness and natural justice, resulting in a ‘duplex impetus’ (or ‘double attack’). My point is that it is unnecessary for the insurer to intervene since insurers can achieve all necessary relief through their existing role in court.³⁰ See [1] https://mslawllp.com/insurers-may-intervene-and-assert-the-same-rights-as-their-insureds-to-contest-both-liability-and-damages/; [2] https://laweconcenter.org/resources/rethinking-prop-103s-approach-to-insurance-regulation/; [3] https://cl.cobar.org/features/intervention-by-the-defending-insurer-in-liability-cases-after-bolt-factory-lofts/; [4] https://www.student.unsw.edu.au/paraphrasing-summarising-and-quoting; [5] https://www.wiley.law/media/publication/167_Insurer-Intervention-How-Why-and-When.pdf; [6] https://ieltsdaily.ir/static/downloads/IELTS_Reading_Actual_Tests_with_Suggested_answers.pdf and [7] https://www.cooperscully.com/uploads/seminars/Sheffield%20-%20Insurer’s%20Right%20to%20Intervene.pdf; as well as

[8] https://www.oecd.org/content/dam/oecd/en/publications/reports/2004/03/insurance-in-the-baltic-countries_g1gh4178/9789264021082-en.pdf

[13].  Expedited Compensation for Victims

Courts must prioritise victims’ rights to timely compensation without unnecessary litigation delays: see Chen Boon Kwee v Berjaya Sompo Insurance,[2024]; and Wong Uong Kee v RHB Insurance,[2009], and  TAC Construction & Trading v. Bennes Engineering Bhd).³¹ Chen Boon Kwee v Berjaya Sompo Insurance Bhd [2024] CLJU 2583;  Wong Uong Kee v RHB Insurance [2009] 9 CLJ p. 859; and TAC Construction & Trading v. Bennes Engineering Bhd [1999] 2 CLJ 518 Stay orders should not prejudice victims’ statutory entitlements.

[14].  Answers to Key Questions

The general test in non-RTA cases require ‘special circumstances.’ However, in personal injury cases, RTA provisions play a crucial role.

Therefore, the courts, when confronted with an application for a stay of execution, must look at four points.

First, they must exercise greater vigilance and keep their constant eye on sec. 96(2)(b), which governs stay application in RTA cases. The courts must also have regard to the significance of secs. 96(1), and 91(3) of the RTA.³² Sections 91 and 96 of the Road Transport Act 1987

Secondly, the courts should have regard to the crucial role of the insurer as ‘the paying party’ under the RTA .

Thirdly, the RTA mandates that the only party who is entitled to apply for a stay is not the defendant, but the insurer. However, the court in Sa’amran ruled an insurer has to bring itself into the negligence suit, instead of running off to another court for the stay order. That would cause delay and thus, injustice. [This, with respect, is subject to the ‘intervention is a myth’ argument].

Fourthly, the courts must note the threshold difference in the test for a stay of execution: for personal injury cases, the RTA lays down a test that is far stricter than the one for non-RTA cases.

[15].  Justice Marshall’s last word on the subject

As my friend Derrick Lee points out, how the courts should treat a stay application, was explained in Fiji Court of Appeals in Attorney General v Dre [2011] 4 LRC 433. Justice Marshall said:

“[36].   One of the factors that would prevent stay applications in places like the United Kingdom in personal injury cases would be the way they would be perceived by judges and the media. Firstly, the plaintiff is suffering or slowly dying as a result of the negligence of the tortfeasor who has after trial lost his case. Secondly, any rule of law that says that a disabled person who needs money for expenses incurred by reason of living as a disabled person cannot get any relief until the finality point within a three-tier system of civil litigation is reached because they are poor and of little means, rather than rich, is extremely unattractive. It is also indefensibly discriminatory. In Fiji personal injury cases routinely take between six and ten years to pass through the courts. In the United Kingdom it is now a fraction of that time. Thirdly, any rule of law that may result in injured persons who have proved their case in court dying before they receive financial redress, with the consequence that their relatives receive the compensation is distasteful. Particularly if their demise is hastened by the lack of damages which they can use.”

You can sense the quiet censure of the court for stay applications.

[16].  Conclusion

Courts should be alive to the overarching principle that justice for accident victims outweighs delays caused by legal technicalities. There are five key points which are important.

[a].  What did Parliament intend by the RTA? Parliament’s vision for the RTA scheme was rooted in compassion and practicality: to ensure that those who suffer life-altering injuries on our roads are not left to languish without help. Swift compensation is not merely a legal obligation; it is a moral imperative that reflects our society’s commitment to protecting its most vulnerable members. This is why, in sections 91(3) and 96(1) the RTA emphasises prompt compensation for victims to cover immediate medical needs.

[b].   A critical analysis shows that insurers raise two arguments. The first is ‘nugatoriness’: (“I have a good chance of winning the appeal, so give me a stay”). The second is, ‘risk of non-recovery’: (“The victim will flee with my money, which I cannot recover”).

These arguments are flawed, or insufficient. Insurers usually apply for a stay of execution in cases involving large awards. Huge awards demonstrate that the victim’s injuries are crippling. The argument about ‘a strong appeal case’ was thrown out by Kosma: ‘nugatoriness’ is only one concern among many others— to which we now turn.

The argument that ‘victims may abscond with funds’ is particularly hollow when one considers the plight of grievously injured individuals—those who cannot walk, or those strapped to hospital beds, are unlikely to flee.

Such arguments reveal a troubling prioritisation of corporate convenience over human dignity. For a victim confined to a hospital bed, grappling with pain and uncertainty, a delayed payment is not just an inconvenience—it is a denial of their chance at recovery and survival.

[c].  Contrast all that with the financial strength of insurers: they collect significant premiums annually. With over 36 million private vehicles on Malaysian roads, insurers collect billions in premiums annually—surely, they can prioritise timely payouts for those in desperate need? The law also mandates that insurers are able to meet compensation obligations, under the Financial Service Act 2013. Third, their reinsurance always protects insurers. So where is the ‘prejudice’?

[d].  Effect of delay: Delays undermine the purpose of the RTA, and aggravate victims’ conditions. Imagine a father who has lost his ability to work because of an accident. His family struggles to put food on the table while waiting for compensation, tied up in legal delays. How does this align with Parliament’s intent?

When courts weigh stay applications in accident cases, they must remember that their decisions may carry life-and-death consequences.

The emotional and human impact of delayed compensation on victims, and their families, should be foremost in a court’s mind.

[f].  The law exists to protect people

To honour Parliament’s intent and to uphold justice, courts must prioritise the needs of victims over corporate interests.

For accident victims, delays in compensation are not merely procedural setbacks—they are life-altering injustices that strip them of their right to dignity and care.

Courts are guardians of fairness.

Legal processes should not become impediments to the alleviation of suffering.

∞§∞

 

 

Gratitude:

The author thanks Judge David Alfred,Mr G. Naidu, Mr Mano Veera, Miss KN Geetha, Miss Lydia Jaynthi, Mr. Derrick Lee, Miss TP Vaani, and Miss JN Lheela.

The image is from Giammarco Boscaro of Unsplash, to whom we express our gratitude.

 

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