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[Exclusive] Loob (Tealive)’s stay application dismissed 15 mins ago. Must it NOW close its outlets?

We reported the decision of the Court of Appeal on 27.6.2018 almost just right after decision was delivered in the Court of Appeal. Written grounds were made available here.

A motion was then filed in the Court of Appeal for stay. That essentially is to stay the decision of the Court of Appeal to allow TEALIVE to run its business pending the disposal of the appeal in the Federal Court.

This morning, 5.7.2018, after hearing both parties, the Court of Appeal dismissed the stay application filed by TEALIVE. The grounds of stay is available here. The quorum was Hamid Sultan JCA, Dr Badariah Sahamid JCA and Rhodzariah Ujang JCA and delivered its majority decision. Rhodzariah Ujang JCA dissented.

In dismissing the stay application, the Court of Appeal ruled:

(a) since there is no affidavit to aver that an application for leave to appeal to the Federal Court, prima facie, this is fatal to the application for stay as there is no pending proceeding.

(b) It is trite that an order for stay is discretionary in nature and the court ought not lean in favour of a person who by conduct is perceived to have breached the contractual obligation as well as statutory obligation with knowledge that he is likely to cause loss to the other person.

(c) Further, I take the view that the appellant’s submission that La Kaffa can be compensated with an order for damages to be contemptuous in nature when a statute strictly prohibits them from operating business in that manner and there is a criminal element to it as well as attracts sections in the Penal Code related to cheats.

(d) The judge had taken an oath to preserve, protect and defend the Constitution. In consequence, it will be against the rule of law to disregard a statutory protection in favour of La Kaffa. The cases that Loob was relying did not deal with instances where there was a perceived breach of a statute.

The Court of Appeal also En Passant (in passing) state:

(a) Courts should not lend its hand to persons who on the face of record are seen to be cheats;

(b) In this time and era, the court must arise to ensure perceived 420’s are not provided with discretionary order even in civil cases of this nature, that too at the Court of Appeal stage.

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It is interesting how CJA Hamid Sultan drew an analogy between a person who by conduct is perceived to have breached the contractual obligation (as well as statutory obligation with knowledge to cause loss) with Section 418 of the Penal Code. For completeness, S418 Penal Code is reproduced below:

S418 Penal Code 

Cheating with knowledge that wrongful loss may be thereby caused to a person whose interest the offender is bound to protect

Whoever cheats with the knowledge that he is likely thereby to cause wrongful loss to a person whose interest in the transaction to which the cheating relates, he was bound either by law, or by a legal contract, to protect, shall be punished with imprisonment for a term which may extend to seven years or with fine or with both.

S418 appeared to be a little strong in comparison to the actions committed by TEALIVE (which may be a ground of appeal at the Federal Court). Several lawyers we spoke to also find that the grounds of reversing the High Court’s decision may have gone a little too much in construing the law as if it is deciding for an end relief. It will be good to see whether the decision of the Court of Appeal will be reversed.

The next step for TEALIVE is to appeal against the stay application in the Federal Court but meanwhile, it looks like CHATIME (La Kaffa)’s injunction is upheld and TEALIVE ought not to carry on business similar to CHATIME.

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