Injunctions l5-l6

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PART I

INJUNCTIONS

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“Let the first act of every morning be to make the following resolve for the day: - I shall not fear anyone on Earth.

- I shall fear only God.

- I shall not bear ill will toward anyone. - I shall not submit to injustice from anyone.

- I shall conquer untruth by truth. And in resisting untruth, I shall put up with all suffering.” ― Mahatma Gandhi

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Introduction

Meaning of an injunction

Nature of injunctions

Characteristics of injunctions

Legal principles

Types of injunctions

No grant of injunctions

Injunction to perform negative agreement

Powers of the court to grant damages

Case law Analysis

Comparative Studies

Syariah Perspective

Critical Comments

Conclusion

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Page 3 INJUNCTIONS

Introduction

•An injunction is an order of the court directing a person or persons to

refrain from doing or continuing some particular act or thing complained of, or less often, to do some particular act or thing. In other words, an injunction is an order of court to prohibit threatened or continuing illegal conduct of certain kinds. Thus, where a beneficiary has reasons to believe that a trustee is about to commit a breach of trust he or she need not wait until it has happened before taking action. Instead he or she may obtain an injunction to restrain the threatened breach.

•Examples of instances in which the court has granted injunction to

prevent breaches of trust abound in the law reports.

Case Law Analysis

•Fox v Fox (1870) LR 11 Eq 142 an injunction was granted to prevent

trustees distributing the trust property other than in accordance with the terms of the trust instrument.

•overriding objective of an injunction is “to protect and preserve legal

rights and interests and to prevent the commission or . of a legal wrong”.

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Meaning of an injunction/Nature of injunctions:

•An injunction is an order to restrain the person to whom it is directed

from performing a specified act, or requiring him to perform a specified act, as the case may be. In other words, an injunction is an order by the court to a party to do or refrain from doing a particular act.

•It is important therefore to note that a court may be able to restrain a

party from committing a breach of trust by issuing an injunction. Thus, in Malaysia the general power of the High Court to grant injunctions can be found under paragraph 6 of the Schedule to the Courts of Judicature Act 1964, and under the Specific Relief Act 1950, sections 50 and 51

•Para 6 of the Schedule of the Courts of Judicature Act 1964 deals with

preservation of property and provides: “Power to provide for the interim preservation of property the subject-matter of any cause or matter by sale or by injunction or the appointment of a receiver or the registration of a caveat or a lis pendens or any other manner whatsoever”.

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General characteristics of an injunction

The granting of an injunction is discretionary

•Injunction is a discretionary remedy based on the inadequacy of

common law remedies. However, it is not conferred according to ‘the caprice of the judge, but according to sufficient legal reasons or on settled legal principles’. (See sections 50 and 53 of the Specific Relief Act 1950)

•The plaintiff must have an interest to protect that would allow the

courts to exercise the discretion in granting it.

An injunction will be refused if damages are considered to be an adequate remedy

•Damages must be shown not to be an adequate remedy i.e. plaintiff

will suffer irreparable harm if the injunction is not granted.

•Although this is the situation, it should be noted that damages in lieu

of an injunction should not be awarded where this would, in effect, be depriving an individual of specific private rights as per the English case of Elliot v Islington Borough Council (1990) The Times 6 July- the decision of the COA.

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General characteristics of an injunction

Refusal to obey an injunction may result in the criminal penalty of contempt of court, with the risk of fine and/or imprisonment

•Non-compliance with an injunction (or an undertaking given in lieu) is

contempt of court, punishment by imprisonment or fine. As disobedience may lead to imprisonment, the injunction must be expressed in exact terms, so that the defendant (trustee) knows precisely what to do, or refrain from doing.

Injunction is a remedy in personam

•In granting an injunction the ‘court acts in personam and will not suffer

anyone within its reach to do what is contrary to the notions of equity.

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Legal principles that govern the granting of injunctions:

•legal principles governing the granting of injunctions can be

summarised by looking into the different types of injunctions e.g. like temporary injunction may be granted at any period of a suit. On the other hand, perpetual injunction can only be granted by a decree made at the hearing and upon merits of the suit. Hence the defendant is thus perpetually enjoined from the assertion of a right, or from the commission of an act, which would be contrary to the rights of the plaintiff. (See sec 52(2) of the Specific Relief Act 1950)

•

•The Law

•a mandatory injunction (which requires a defendant to reverse the

effect of an existing breach- see sec 53 of the Special Relief Act 1950);

•a prohibitory injuction (which orders a defendant not to do something

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Types of injunctions

•First and foremost, injunctions may be classified in several ways, and

the Specific Relief Act 1950 provides in respect of temporary (or interlocutory or interim), perpetual (or final) and mandatory/prohibitory injunctions.

•Perpetual injunctions

•Sec 51(2) of the Specific Relief Act 1950

•a perpetual injunction can only be granted by a decree made at the

hearing and upon merits of the suit; the defendant is thus perpetually enjoined from the assertion of a right, or from the commission of an act, which would be contrary to the rights of the plaintiff.

•to prevent the breach of an obligation existing in favour of the

applicant, whether expressly or impliedly (see sec 52(1); and when the obligation arises from contract, the court shall be guided by the rules and provisions as provided in Chapter II of the Act which deals with specific performance of contracts (see sec 52(2) of the Specific Relief Act 1950)

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Perpetual injunctions

It is vital to make reference to the case of Muniandy Subramanian &

Ors v Majlis Perbandaran Langkwi Bandaraya Pelancongan & Anor

(2003)

plaintiffs were the committee members of the Sri Muniswaran temple at Jalan Kisap, Kuah, Kedah. They applied for an interim injunction against the defendants, the Majlis Perbandaran Langkawi and the State Government of Kedah, to restrain them from demolishing the said temple. The issues were: (1) whether a local authority was a government department; (2) whether an interim injunction could be issued against a government body in view of s.54(d) of the Specific Relief Act 1950; (3) whether there was a serious question to be tried; and (4) whether the balance of convenience lay in favour of the plaintiffs. The court held that: the local authority is not a government department; sec 29(1)(a) of the Government Proceedings Act 1956 specifically prohibits the court to grant an injunction against a government department; and disagreed with the plaintiffs submission that if the interim injunction was not allowed the subject matter would perish. This was because the two newspaper reports exhibited in court showed that the plaintiffs were willing to accept an alternative site for the temple if granted.

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sec 52 which address the issue of ‘perpetual injunctions when granted’. For example sec 52(1) states that a perpetual injunction may be granted to prevent the breach of an obligation existing in favour of the applicant, whether expressly or by implication.

•Sec 52(2) states that when such an obligation arises from contract, the

court shall be guided by rules and provisions contained in Chapter II (which deals with specific performance). In other words, in granting an injunction by the court in the context of a breach of contract, reference must be made to Chapter II of the Act as part of the procedure.

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Perpetual injunctions

•sec 52(3) deals with a situation where the defendant invades or

threatens to invade the plaintiff’s right to, or enjoyment of, property, the court may grant a perpetual injunction in cases such:

•(a) where the defendant is trustee of the property for the plaintiff; •(b) where there exists no standard for ascertaining the actual damage

caused, or likely to be caused, by the invasion;

•(c) where the invasion is such that pecuniary compensation would not

afford adequate relief;

•(d) where it is probable that pecuniary compensation cannot be got for

the invasion ; and

•(e) where the injunction is necessary to prevent a multiplicity of judicial

proceedings. (See the explanation to this sec viewing a ‘trademark’ as property)

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•operation of sec 52 on perpetual injunctions when granted better

especially, it becomes inevitable to make reference to some few illustrations given under the sec. The following are some of the illustrations:

•A lets certain land to B, and B contracts not to dig sand or gravel

thereout. A may sue for an injunction to restrain B from digging in violation of his contract.

•A trustee threatens a breach of trust. His co-trustees, if any, should,

and the beneficial owners may, sue for an injunction to prevent the breach.

•The directors of a public company are about to pay a dividend out of

capital or borrowed money. Any shareholders may sue for an injunction to restrain them.

•The directors of a fire and life insurance company are about to engage

in marine insurances. Any of the shareholders may sue for an injunction to restrain them.

•A, an executor, through misconduct or insolvency, is bringing the

property of the deceased into danger. The court may grant an injunction to restrain him from getting the assets.

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Page 13 Note: These are not the only illustrations and thus reference must be

made to Sec 52 of the Specific Relief Act 1950 for further illustrations.

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In addressing the operation of perpetual injunction, reference could be made to the local case of Neoh Siew Eng & Anor v Too Chee Kwong [1963] MLJ 272

plaintiffs were the tenants of rent-controlled premises and the defendant was the landlord. One of the terms of the tenancy agreement was that the defendant as landlord and registered consumer in respect of water supply to the whole of the premises would pay $2 towards the water charges and that the plaintiffs would pay the amount in excess of that sum. To put that in different words, the landlord covenanted not to interrupt the tenants water supply. As a result the plaintiffs had an uninterrupted flow of water to their part of the premises from the date of the commencement of the tenancy in January 1962 until 24 Dec 1962 when the water supply stopped. Following inspection of the pipes, the Waterworks Engineer wrote a letter dated 2 Jan 1963 stating that the common pipe serving the premises was badly corroded and recommending that early action be taken to have the whole of the communication pipe replaced through PWD registered plumber. The defendant did not take any action to have the corroded pipe replaced. The plaintiff sued for, inter alia, restoration of water supply and damages. On 20 Feb 1963, the Court made an interim injunction requiring the defendant to restore the water supply. The corroded pipe was finally replaced on 17 March

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1963. It was held that a perpetual injunction would issue against the defendant requiring her to keep the water supply open and for that purpose to comply with all regulations of the Waterworks Department. The plaintiffs were awarded damages for such damage as they had suffered as a result of the lack of water from the date by which the defendant could reasonably have had the corroded pipe replaced to the date of restoration of the water supply.

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Mandatory injunctions

•restrains the act or omission by directing a person to perform a

positive act. In other words, mandatory injunctions would order the performance of an act or acts. Mandatory injunction is an order of court directing the defendant (s) to do something.

•legislative framework for the grant of mandatory injunction •sec 53 of the Specific Relief Act 1950 which provides

“When, to prevent the breach of an obligation, it is necessary to compel the performance of certain acts which the court is capable of enforcing, the court may in its discretion grant an injunction to prevent the breach complained of, and also to compel performance of the requisite acts”.

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Mandatory injunctions

•illustrations

•A, by new buildings, obstructs lights to the access and use of which B

has acquired a right by prescription. B may obtain an injunction, not only to restrain A from going on with the buildings, but also to pull down so much of them as obstructs B’s light.

•A builds a house with caves projecting over B’s land. B may sue for an

injunction to pull down so much of the caves as so project.

•In the case put as illustrations (i) to sec 52, the court may also order all

written communications made by B, as patient, to A, as medical advisor, to be destroyed.

•In the case put as illustration (v) to sec 52 the court may also order A’s

letter to be destroyed.

•A threatens to publish statements concerning B which would be

punishable under Chapter XXI of the Penal Code. The court may grant an injunction to restrain the publication, even though it may be shown not to be injurious to B’s property.

Note: These are not the illustrations to sec 53 and thus reference must

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Mandatory injunctions

In addressing or discussing mandatory injunctions, it is vital to make reference to some case law.

TR Hamzah & Yeang Sdn Bhd v Lazar Sdn Bhd [1985] 2 MLJ 45

“The grant of mandatory injunction is entirely discretionary. Every case must be upon its own particular circumstances. It is a jurisdiction to be exercised sparingly and with caution but in a proper case unhesitatingly. When the court decides to grant such an injunction then the court must see to it that the person against whom is granted knows exactly what he has to do…” (per Lee Hun Hoe CL (Borneo)).

In TR Hamzah & Yeang Sdn Bhd, the respondent employed the appellant, a firm of architects to build a 27 storey office at Jalan Ampang on the usual terms as defined by the Pertubuhan Arkitek Malaysia (P.A.M.) conditions of engagement. The overall fee agreed was 4% of the total contract cost of the project. While approval of the plans was still under consideration by the relevant authority, the appellant sued the respondent for balance of the professional fee of $514, 000.00. The respondent denied the claim and counterclaimed for breach of contract. Subsequently the appellant terminated its services as architects on the ground of failure of payment of fees. The respondent requested that the dispute be referred to the P.A.M. for decision and pending reference that the appellant should issue a letter

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of release to enable them to engage another architect to continue with the work. The appellant denied the request and said until all the fees were paid they would not issue a letter of release.

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TR Hamzah & Yeang Sdn Bhd- The respondent applied by

summons-in-chambers for an order that the appellant forthwith issue the respondent with a letter of release to enable the responded to engage another architect to proceed with the proposed construction of the building. The learned judge of the High Court made an order in terms. The appellant appealed. On appeal, the court held that in the circumstances of this case, the court could not allow the architect to withhold the letter of release as to do so would mean “that the architect can hold the client to ransom”.

Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd

[1998] AC 1. House of Lords refused to grant mandatory injunction to compel a party to carry on a business; on the other hand, such a grant may be justified in respect of orders requiring him to achieve a result.

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Types of injunctions: (.)

TSC Education Sdn Bhd v Kolej Yayasan Pelajaran Mara & Anor [2002]

2 CLJ

plaintiff and the first defendant entered into an agreement wherein the plaintiff was appointed by the first defendant as independent advisers to recruit students from China to pursue courses and programmes with the first defendant. The plaintiff successfully recruited the first batch of students. Subsequently, the plaintiff was requested to stop taking the second batch of students which were already scheduled to arrive in the country. Further, the plaintiff was requested to transfer the first batch of students currently with the first defendant to other colleges. The plaintiff now applied to the court, inter alia, to compel the first defendant to comply with the terms of the agreement. The second defendant was subsequently added as a party. The court held that the second defendant was a corporation established under Majlis Amanah Rakyat Act 1966 and pursuant to the Majlis (Yayasan Pelajaran MARA) Order 1969. Under r.2 of the Order, the creation of the second defendant was confined to the provisions relating to the training and educational facilities of Bumiputras only. It did empower the second defendant to provide training and educational facilities to non-Bumiputras. The question as to whether the defendants should be compelled to carry on with the agreement under sec 56 of the Specific

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Relief Act 1950 did not arise at as the agreement was not valid in the first place being contrary to the Act and the Order.

INJUNCTIONS

Types of injunctions Prohibitory injunctions

•A prohibitory injunction is an order directed to a person to refrain from

the commission, . or repetition of a wrongful act. This form of remedy represents the original form injunction. In other words, a prohibitory injunction would prohibit certain act or acts. Hence, a prohibitory injunction orders a defendant not to do something say in breach of contract.

•It is important to note that there is a difference between prohibitory

and mandatory injunctions i.e. prohibitory injunctions would prohibit certain act or acts, and mandatory injunctions would order the performance of an act or acts. Also, with prohibitory injunctions, a court, in the exercise of its discretion, will not be influenced by the fact that the defendant’s compliance with the injunction would be unduly onerous or that the breach would cause the plaintiff little prejudice. However, with mandatory injunctions, a court will apply the ‘balance of convenience’ test, refusing relief if the hardship caused to the defendant by compliance with the order outweighs the consequential advantages to the plaintiff.

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Interlocutory (or interim) injunctions

Interlocutory (also referred to as temporary or interim) injunctions are such as to continue until a specified time, or until further order of the court, and may be granted at any period of a suit. Hence, interlocutory injunctions are designed to regulate the position of the parties pending a hearing.

•Dr David Vannisingham Ramanathan v Subang Jaya Medical Centre

Sdn Bhd [2007] 1 MLJ 713

appellant was a surgeon who sought an interlocutory injunction the effect of which would have been to prevent the respondent employer from dismissing him until his claim against the employer was finally decided. Delivering the judgment of the COA, Abdul Aziz Mohamad JCA said that the learned trial judge had rightly relied on Penang Han

Chiang as authority that bars granting of the interlocutory injunction to

enable a workman to remain in his job until his representations are finally settled.

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•Penang Han Chiang Associated Chinese Schools Association v

National Union of Teachers in Independent Schools, West Malaysia

[1988] 1 MLJ 302- where the appellant was the employer of certain teachers who were members of a trade union, the respondent. Disputes arose between the appellant, as employer, of the one part and the teachers in the former employment of the appellant, of the other part. A complaint was made to the Ministry of Labour and the Minister referred the trade dispute to the Industrial Court for determination under the Industrial Relations Act 1967. Following the reference to the Industrial Court, the respondents filed a civil suit. The respondent obtained an interlocutory injunction restraining the appellant from terminating the services of the teachers pending the outcome of the proceedings before the industrial court. The appellant appealed. The SC held that sec 20(1)(b) of the Specific Relief Act 1950 gives statutory force to the well established rule that a contract for service contract cannot be specifically enforced. And sec 54(f) of the same Act enacts that an injunction cannot be granted to prevent the breach of a contract of performance of which would not be specifically enforced. On the basis of, inter alia, these statutory provisions, the appeal was allowed.

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Page 25 Note: An injunction will not normally be granted to prevent either an

employer or an employee from breaching a contract of service.

INJUNCTIONS

•It is important to note that the procedural aspects in respect of the

application, orders and related manners are governed by the Rules of the High Court, Order 29.

•Cheah Cheng Lan v Heng Yea Lee [2001] 1 AMR 981; [2001] 1 MLJ 433-

where the COA held that the inherent power under Order 29 r 4 is not to be used to extend the life span of an ex parte interim injunction in view of Order 29 r 1 (2B) which provides that unless sooner revoked or set aside, an interim injunction obtained in an ex parte application shall automatically lapse at the end of 21 days from the date on which it was granted, holding that such position is required “in order to prevent injustice or to prevent an abuse of the process of the court that its life span must be limited” at p 986, per Lamin bin Mohd Yunus).

• Cheah Cheng Lan v Heng Yea Lee, the applicant prayed for an order

that the order of the High Court setting aside an ex parte injunction order be set aside and the ex parte injunction order continue to be in force and effect until disposal of the applicant’s appeal. The issue

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before the court was whether the court has an inherent power to extend an ex parte injunction order from time to time until the disposal of the main suit. The court held that by virtue of O 29 r 1(2BA) of the Rules of the High Court, the life of ex parte injunction cannot go beyond the period of 21 days. The court has no power to extend the life of an

ex parte injunction beyond 21 days because of the words ‘shall

automatically lapse’.

INJUNCTIONS

Interlocutory (or interim) injunctions

The principle purpose of the remedy is to protect the plaintiff against injury by violation of his or her right for which he or she could not be adequately compensated in damages recoverable in an action if the uncertainty were resolved in his favour at the trial.

American Cyanmid Co v Ethicon Ltd [1975] AC 396, per Lord Diplock).

•Lord Hope in the case of AG v Punch Ltd [2003] 2 WLR 49, he said that

the purpose of interlocutory injunction is to regulate, and where possible to preserve, the rights of the parties pending the final determination of the matter which is in issue by the court. That purpose should not be confused with court’s reason for deciding that it would be appropriate to grant interlocutory injunction.

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Page 27 •It is important therefore to note that the purpose of interlocutory

injunction is “to prevent a litigant, who must necessarily suffer the law’s delay, from losing by that delay the fruit of his litigation.

INJUNCTIONS

•In addressing the discussion of interlocutory injunctions, it becomes

vital to deal with the issue of the test applicable since it is considered only a temporary or interim injunction that the applicant or plaintiff is seeking. The following is the test:

(Prior to American Cyanamid

The often-cited test here was a strong prima facie case that the applicant’s rights had been infringed. He or she had to show that damages would be inadequate remedy, and that the balance of convenience favoured the grant. In other words, in order to obtain the injunction, an applicant has to show that it was more likely than not that he or she would succeed in securing a final injunction at the trial.

Note: A more flexible approach found favour in Hubbard v Vosper

[1972] 1 All ER 1023- where Lord Denning:

“In considering whether to grant an interlocutory injunction, the right course for a judge is to look at the whole case. He must have regard not only to the strength of the claim but also to the strength of the defence, and then decide what is best to be done…”

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d) Interlocutory (or interim) injunctions (ii) The test in in American Cyanamid

•The court must be satisfied that the applicant’s case is not frivolous or

vexatious and that there is a serious question to be tried. Once this is satisfied, the crucial element would then be the balance of convenience i.e. the claimant need establish only a real possibility of success not a probability.

American Cyanamid Co v Ethicon Ltd [1975] AC 396 the House of Lords

decided that there was no need for the plaintiff to establish a prima facie case. The courts should address themselves to whether there was an important point at issue, and the paramount consideration should be the ‘balance of convenience’. If the balance of convenience did not clearly favour either party then the relative strengths of the parties should be considered. In no circumstances should the court attempt to act in a manner which would, in effect, be a full trial in action.

Note: This test does not affect the rules pertaining to the grant of

interim injunction in defamation cases.

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Herbage v Pressdram Ltd [1984] 1 WLR 1160- where the court stated

that the American Cyanamid has not affected this principle, which might, therefore, be regarded as a “special factor.”)

INJUNCTIONS

The test in American Cyanamid

•In addressing the issue of not turning the process of granting

interlocutory injunction to look like a case of full trial or anything resembling a trial of the action upon the conflicting affidavits.

•Eshwara Engineering Sdn Bhd v Delta Structure Sdn Bhd [2003] 4 MLJ

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•whether interlocutory injunction relief should be granted or not. The

court held that at this stage, it was not justified in embarking upon anything resembling a trial of the action upon the conflicting affidavits.

•Mohamed Zainuddin bin Puteh v Yap Chee Seng [1978] 1 MLJ 40

•a Notice of Motion for an order that the interlocutory injunction

granted on Oct 11, 1976, be set aside. It would appear from the notice as well as the affidavits supporting the application that the sole ground for the application that the injunction be set aside was that the plaintiff

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had not stated the facts fully and accurately to the court and that he had not disclosed all material facts. Applying the principles in American

Cyanamid Co v Ethicon, the court held that the motion to dissolve the

injunction should be dismissed, as there was a serious question to be tried and therefore measures should be taken to preserve the status quo.

INJUNCTIONS

•In addressing the issue of not turning the process of granting

interlocutory injunction to look like a case of full trial or anything resembling a trial of the action upon the conflicting affidavits.

Eshwara Engineering Sdn Bhd v Delta Structure Sdn Bhd [2003] 4 MLJ

18- where the court held that it was not justified in embarking upon anything resembling a trial of action upon the conflicting affidavits in addressing the issue of whether interlocutory injunction relief should be granted or not.

Mohamed Zainuddin bin Puteh v Yap Chee Seng [1978] 1 MLJ 40-

where there was a Notice of Motion for an order that the interlocutory injunction granted on Oct 11, 1976, be set aside. It would appear from the notice as well as the affidavits supporting the application that the

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sole ground of the application that the injunction be set aside was that the plaintiff had not stated the facts fully and accurately to the court and that he had not disclosed all material facts. The could held that applying the principles in American Cyanamid Co. v Ethicon, the motion to dissolve the injunction should be dismissed, as there was a serious question to be tried and therefore measures should be taken to preserve the status quo.

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•It is equally important to point out that probably in dealing with this

test i.e. the ‘balance of convenience’ test as laid down in American Cyanamid, we need to consider the test based on factors such as: (a) If the applicant could be adequately compensated were he to succeed at the trial and the defendant would be in position to make the compensation, the application for an interlocutory injunction should be rejected, even if his or her claim appears strong.

•Perbadanan Setiausaha Selangor v Metroway Sdn Bhd [2003] 4

AMR550. (b) If the application could not be rejected on account of (a), the court must go on to consider whether , if the injunction is granted but the defendant is successful at the trial proper, the defendant would receive adequate monetary compensation from the plaintiff and the plaintiff is in position to pay them. If the answers to both are in the affirmative, interlocutory injunction may properly be granted. (c) If there is doubt as to the sufficiency of the respective remedies in damages available to either party or to both, then the question of the balance of convenience becomes relevant.

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d) Interlocutory (or interim) injunctions (ii) The test in American Cyanamid

Another issue to address while dealing with this test is that of the factors which may be relevant in determining ‘balance of convenience’.

•American Cyanamid, Lord Diplock mentioned three considerations and they are: (i) the preservation of the status quo; (ii) strength of the case in relation to the opponent; & (iii) other special factors (i.e. public interest argument etc).

‘balance of convenience’ test.

•Azman bin Mohd Yusoff v Vasaga Sdn Bhd [2001] 2 AMR 2040, a case founded on nuisance coming from unlicensed disco and pub business. Here the plaintiff applied for an injunction to restrain the defendant from operating a disco and pub business called ‘Vasaga Exclusive Dance Club & KTV’ on the grounds that the business disturbed their peace, tranquillity and safety resulting from the loud music till late at night, vibration to the building and others. The defendant denied the accusations and said that the plaintiff’s complaint was frivolous, baseless and vexatious. The defendant only operated during the trial

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run and the sound of the music was under control. There was no objection from the authorities which controlled the operation of the business. The defendant claimed that the plaintiff acted with mala fide. Allowing the plaintiff’s application for an injunction after scrutinising all the facts, the court held the defendant be restrained by an injunction from causing nuisance to the plaintiff until the disposal of the trial of the plaintiff’s claim against the defendant.

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Interlocutory (or interim) injunctions The test in American Cyanamid

•UMAS Sdn Bhd v RHB Bank Bhd [2001] 1 AMR 1024- where the

plaintiff brought an action against the first and second defendants, alleging trespass of a certain site, and conversion of its equipment and machines and an injunction was granted in their favour preventing the defendants from entering the site or, among others, removing the machines. _

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•It is equally important to address the issue or question of whether the

factors relevant to the ‘balance of convenience’ test should be considered on a step-by-step basis, or considered together at one go while trying to apply the test in a given case or scenario.

•Pekeliling Triangle Sdn Bhd v Chase Perdana Bhd [2003] 1 AMR 378;

[2003] 1 MLJ 130- where the Court of Appeal dealt with this issue by saying that: “…the balance of convenience test must be applied in the manner intended by American Cyanamid, that is, a step-by-step approach as reflected in the dicta of Lord Diplock. The first step is to ask whether the applicant could be adequately compensated by damages, and if the answer to this is affirmative, that would be the end of the matter. In this respect, in so far as the steps were not followed, the High Court had erred…”

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INJUNCTIONS

Types of injunctions

Interim mandatory injunction

•grant of interlocutory mandatory injunctions.

•Syed Agil Barakbah SCJ in Tinta Press Sdn Bhd v Bank Islam Malaysia

Bhd [1987] 2 MLJ 192 where he said: “The discretionary power of the

court to grant mandatory injunction is provided by sec 53 of the Specific Relief Act 1950. By judicial process the power is extended to the granting of an interlocutory mandatory injunction before trial. Such discretion however must be exercised and an injunction granted only in exceptional and extremely rare cases….The case must be unusually strong and clear in that the court must feel assured that a similar injunction would probably be granted at the trial on the ground that it would be just and equitable that the plaintiff’s interest be protected by immediate issue of an injunction, otherwise irreparable injury and inconvenience would result”.

•Tinta Press Sdn Bhd v Bank Islam Malaysia, the respondents had leased certain printing equipment to the appellants. The appellants having defaulted in payment of the monthly rentals, the respondents brought an action to recover possession of the equipment and to recover the arrears of rent. The respondents also made an ex parte application for an obtained a mandatory injunction to enable the respondents to recover possession of the equipment. The appellants

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then appealed to dissolve and set aside the mandatory injunction. This was refused and the appellants appealed. The learned judge on the facts and circumstances of the case rightly concluded that this was an exceptional case where the court was justified in granting a mandatory injunction on an ex parte application before trial.

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INJUNCTIONS

Types of injunctions

Interim mandatory injunction

•Probably in addressing interim mandatory injunction.

• Timbermaster Timber Complex (Sabah) Sdn Bhd v Top Origin Sdn Bhd

[2002] 1 AMR 25; [2002] 1 MLJ 23 where the Court of Appeal noted that an interlocutory mandatory injunction would be appropriate where the applicant show “an unusually strong and clear case and that there are special circumstances before the court”.

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When injunctions cannot be granted

•It is important to note that there are instances where the court may

refuse to grant an injunction based on some reasons or arguments. For example, sec 54 of the Specific Relief Act 1950 provides that injunctions cannot be granted in the following cases:

(a) To stay a judicial proceeding at the institution of the suit in which the injunction is sought, unless such restrain is necessary to prevent a multiplicity of proceedings;

(b) To stay proceedings in a court not subordinate to that from which the injunction is sought;

•To restrain person from applying to any legislative body;

•To interfere with the public duty of any department of any

Government in Malaysia, or with the sovereign acts of a foreign government.

•To stay proceedings in any criminal matter;

Note: These are not the only cases where an injunction cannot be

granted by the court. There are other cases as well under the sec.

(41)

When injunctions cannot be granted

•In order to understand the provision of sec 54 better, reference must

be made to some of the illustrations given under the sec. The following are some of the illustrations:

(a) A seeks an injunction to restrain his partner, B, from receiving the partnership debts and effects. It appears that A had improperly possessed himself of the books of the firm and refused B access to them. The court will refuse the injunction.

(b) A manufactures and sells crucibles, designating them as “patent plumbago crucibles” though, in fact, they have never been patented. B pirates the designation. A cannot obtain an injunction to restrain the piracy.

(c) A sells an article called “Mexican Balm” stating that it is compounded of divers rare essences, and has sovereign medicinal qualities. B commences to sell a similar article to which he gives a name and description such as to lead people into the belief that they are buying A’s Mexican Balm. A sues B for an injunction to restrain the sale. B show that A’s Mexican Balm consists of nothing but scented hog’s lard. A’s uses of his description is not an honest one and he cannot obtain an injunction.

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Dr David Vanniasingham Ramanathan v Subang Jaya Medical Centre Sdn Bhd (2006)

INJUNCTIONS

Injunction to perform negative agreement

•The issue of an injunction to perform a negative agreement is dealt

with under sec 55of the Specific Relief Act 1950 which provides: “Notwithstanding paragraph 54(f), where a contract comprises an affirmative agreement to do a certain act, coupled with a negative agreement, express or implied, not to do a certain act, the circumstances that the court is unable to compel specific performance of the affirmative agreement shall not preclude it from granting an injunction to perform the negative agreement: Provided that the applicant has not failed to perform the contract so far as it is binding on him.

•Medlux Overseas (Guernsey) Ltd v Faber Medi-Serve Sdn Bhd [2001] 3

AMR 3664-where Gopal Sri Ram JCA explained: “In our judgment, where there is a breach of a negative covenant, the court in this jurisdiction ought to treat it no differently from any other application for an interlocutory injunction…”

(43)

Injunction to perform negative agreement Case Law Analysis

•Pertama Cabaret Nite Club Sdn Bhd v Roman Tam [1981] 1 MLJ 149-

where the appellants were the owners of a night club in Kuala Lumpur. The respondent was a well known singer from Hong Kong. The respondent had signed a contract agreeing to appear and sing at the appellant’s night club for a number of days. Clause 15 of the contract provided that if the respondent breached any of its terms, the appellant could terminate the contract; and that in the event of such termination, the respondent was not to perform in Kuala Lumpur for a fixed period of three months thereafter. The respondent declined to honour his contract and began performing to another night club. The appellant sued and applied for an ex parte interim injunction to restrain the defendant from appearing at any opera house, theatre, concert hall or other public or private entertainment in Kuala Lumpur until the hearing of the summons. The SC granted an interim injunction restraining the defendant from singing in any place in Kuala Lumpur given that in the contract with the plaintiffs, the defendant had covenanted not to perform in the stipulated area during the validity of the contract or three months thereafter.

(44)

It is important to note that under English law, an injunction may be granted as to restrain breaches of negative covenants. See the case of

Doherty v Allman (1978)-where the court stated that: “If parties for

valuable consideration, with their eyes open, contract that a particular thing shall not be done, all the court of equity has to do is to say, by way of injunction, that which the parties have already said by way of covenant, that the thing shall not be done; and in such case the injunction does nothing more than give the sanction of the process of the court to that which already is the contract between the parties…”

Lumley v Wagner (1852)- where Miss Wagner, an opera star, had

agreed with Lumley that she would sing at Her Majesty’s Theatre during a certain period, and would not sing anywhere else without his written permission. She made another engagement with Gye to sing at Covent Garden and abandoned her previous commitment to Lumley, who sought an injunction to restrain her from singing for Gye. Lord St. Leonards held that an injunction should be granted to restrain the

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breach of the negative stipulation; it would not of course have been possible to obtain specific performance of the promise to sing).

INJUNCTIONS

an injunction to perform a negative agreement. Common law position or approach is, the court will not normally grant an injunction to restrain a defendant from acting in breach of a negative undertaking if to do so would compel performance of an agreement otherwise unenforceable in equity.

Dayang Nurfaizah bte Awang Dowty v Bintang Seni Sdn Bhd [2004] 2

AMR 555, [2004] 2 MLJ 39- where Muhamed Hishamudin J found that the management agreement entered into by the parties was in essence a contract for personal services and was thus unenforceable (see sec 20(1(b) of the Specific Relief Act 1950).

In Dayang Nurfaizah, the first defendant applied for an interlocutory injunction against the plaintiff to restrain the plaintiff from appointing or engaging any person, other than the first defendant , as her personal manager and to restrain the plaintiff from making any public performance without the consent of the first defendant. The court held

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that in deciding whether or not to grant the interlocutory injunction, the court was duty bound to consider whether the first defendant had a cause of action against the plaintiff. For, should the court find that the first defendant had no cause of action against the plaintiff, it must dismiss the interlocutory injunction. As the defendant, was seeking to enforce the performance of a contract for personal services, a remedy which is barred by sec 20(1)(b) of the Specific Relief Act 1950, she therefore had no cause of action against the plaintiff.

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INJUNCTIONS

Injunction to perform negative agreement

•In order to understand the provision of sec 55 of the Specific Relief Act

1950 better, it would be vital to make reference to some few illustrations given under the sec. The following are the illustrations: (a) A contracts to sell to B for $1,000 the good-will of a certain business unconnected with business premises, and further agrees not to carry on that business in Kelang. B pays A the $1,000 but A carries on the business in Kelang. The court cannot compel A to send his customers to B, but B may obtain an injunction restraining A from carrying the business in Kelang.

•A contracts to sell to B the good-will of a business. A then sets up a

similar business close to B’s shop, and solicits his old customers to deal with him. This is contrary to his implied contract, and B may obtain an injunction to restrain A from soliciting the customers, and from doing any act whereby their good-will may be withdrawn from B.

Note: These are not the only illustrations to sec 55 of the Specific Relief

Act 1950. Thus, reference could be made to other illustrations under the sec as well.

(48)

Powers of the court to grant damages in lieu of injunction

•It is important to note that since the granting of an injunction is

considered discretionary in nature (i.e. See sec 50 of the Specific Relief Act on preventive relief how granted. See sec 53 of the Specific Relief Act 1950 on granting of mandatory injunctions), the courts may not grant an injunction if damages are considered to be an adequate remedy.

(49)

Conclusion

•overriding purpose of an injunction is “to protect and preserve legal

rights and interests and to prevent the commission or . of a legal wrong”.

•injunction is a matter of discretion, in general, an order to restrain the

breach of a negative contract may be obtained almost as of right.

•sec 55 of the Specific Relief Act 1950 does not take away the

fundamental that a grant of an injunction remains a matter a of judicial discretion.

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•

Q & A Session

•Source: attorneys-sc.com

•“A democracy is nothing more than mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine.”

(51)

Page 51 TUTORIAL QUESTIONS

Discuss, explain and analyse the following with good case support :- 1. Meaning of an injunction 2. Nature of injunctions 3. Characteristics of injunctions 4. Legal principles 5. Types of injunctions 6. No grant of injunctions

7. Injunction to perform negative agreement 8. Powers of the court to grant damages

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PART II

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“As my sufferings mounted I soon realized that there were two ways in which I could respond to my situation -- either to react with bitterness or seek to transform the suffering into a

creative force. I decided to follow the latter course.” ― Martin Luther King Jr.

Introduction

Injunctions in public law

Mareva injunction

Conditions for the grant of Mareva injunctions

Activities of third parties

Anton Piller order

Conditions for Anton Piller order

Case law Analysis

Comparative Studies

Syariah Perspective

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Conclusion

INJUNCTIONS

Introduction

•

Injunctions are private law remedies that are available in

‘judicial review’ proceedings as far as public law is concerned.

For example, in public law injunctions are understood as orders

that prevent an administrative body, including a minister, from

acting unlawfully. They can be interim (temporary) or

permanent.

Injunctions in public law

•

Injunctions in public law can be understood by way of making

reference to the operation of the concept of judicial review

involving public bodies. These public bodies provide services for

and regulate the public across a huge range of activities. A list

of such activities would include: education, health, housing,

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employment, social security, town planning, transport, fuel,

immigration, licensing and taxation.

•

It is important to note that the state regulates and provides for

us through powers given to various administrative authorities

such as ministers, central government departments,

governmental agencies, local authorities, tribunals, public

corporations and so on. These persons and bodies are provided

by statute with necessary powers, either duties or discretions

to carry out their tasks.

INJUNCTIONS

Injunctions in public law

•

Therefore, injunctions in public law play an important role by

acting as a remedy in protecting people from arbitrary and an

affair actions and decisions of these public bodies.

•

Injunctions in public law can be used in a situation where a

public body reached a decision acting outside its powers given

under a given statute i.e. ultra vires.

•

Injunctions though considered a private law remedy, they are

still available as a form of remedy even in public law cases e.g.

they may be granted by the court in administrative law cases or

even in criminal law cases.

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INJUNCTIONS

Mareva injunctions

•

The Mareva injunction is a specialised form of injunction. It is a

judicially crafted remedy.

•

Case Law Analysis

•

Mareva Compania Naviera SA v International Bulk Carriers

SA [1975] 2 Loyd’ Rep 509.

•

According to Lord Denning MR, a Mareva injunction is

interlocutory, not final; it is ancillary to a substantive pecuniary

claim for debt damages; it is designed to prevent the

judgment…

•

The principle aim of a Mareva order or injunction is to restrain

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their assets within the jurisdiction of the court . In other words,

the essential purpose of this injunction is to prevent foreign

parties from causing assets to be removed from the jurisdiction,

in order to avoid the risk of having to satisfy any judgment

which may be entered against them pending proceedings in this

country.

•

To put it in a different way, a successful plaintiff sometimes

finds that he is unable to satisfy the judgment because the

defendant may have spirited his assets out of the jurisdiction.

In extreme cases, the defendant may do this as soon as he

becomes aware of the possibility of a suit being instituted

against him. Where a plaintiff apprehends a real risk of this

happening, he may apply ex parte to the court for an injunction

restraining the defendant in a pending action from removing

the assets from the jurisdiction.

INJUNCTIONS

Mareva injunctions

•

It is important to note that the restraint is not restricted to

prevent the removal of assets from jurisdiction but extends to

their dissipation within jurisdiction as well.



All in all, the object of a Mareva injunction (freezing order) is

to prevent the frustration of a monetary judgment by

preventing the dissipation or removal of the defendant’s assets

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(“judgment proofing"). A Mareva injunction does not effect

seizure of an asset. It restrains a defendant from dealing with

an asset in certain ways. Mareva injunctions act in personam

against defendants, not in rem against their assets. It does not

confer any property rights.

INJUNCTIONS

Conditions for the grant of Mareva injunctions

•

The legal basis for the grant of a Mareva injunction is the risk

that the defendant may deal with its property in such a way as

not to satisfy judgment in favour of the plaintiff, and for the

purpose, the order or injunction may be granted whenever it is

just and convenient to do so.

•

Case Law Analysis

•

Zainal Abidin bin Haji Abdul Rahman v Century Hotels Sdn Bhd

[1982] 1 MLJ 260- This was an appeal from the decision of

Hashim Yeop A. Sani J. The respondent had let the third floor of

a nine-storey building belonging to them to the appellant for

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purposes of running a recreation centre. The respondent

subsequently decided to close the hotel business run by them

and they informed the appellant that there would no longer be

guests of the hotel requiring the services provided by the

appellant. The appellant issued a writ claiming wrongful

repudiation of the contract & damages. The appellant then filed

a notice of motion to restrain the respondent from selling,

transferring or in any manner whatsoever disposing of the land

and building until the hearing and disposal of the suit or until

further order. He claimed that if the land and building were

sold he would be deprived of the fruits of any judgment he

might obtain against the respondent. Hashim Yeop A Sani J.

dismissed the application as he held inter alia that the relief

sought by the appellant was unknown in our law as there was

no equivalent to sec 45 of the English Court of Judicature

(Consolidation) Act, 1925. He also held that the appellant had

not disclosed sufficient grounds to justify any intervention by

the court. In allowing the appeal, the court held that the High

Court in Malaysia has jurisdiction to grant Mareva injunction in

appropriate circumstances, as the provisions of para 6 of the

Schedule to the Courts of Judicature Act, 1964, are equivalent

of the provisions of sec 45 of the English Court of Judicature

(Consolidated) Act, 1925. In this case although the appellant

has raised a serious question to be tried on the question of

damage he has suffered by reason of alleged wrongful

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repudiation of the lease agreement, there was no evidence to

show that there was a danger that the available assets of the

respondent would be dissipated to prejudice the appellant’s

claim. In the circumstances it would not be proper to make the

order sought by the appellant against the respondent.

INJUNCTIONS

Guidelines for the grant of Mareva injunctions

•

Case Law Analysis

Poly Electronic & Electrical (M) Sdn Bhd v Daewoo Corp (No.1)

[2003] 2 MLJ 310- where the plaintiff had obtained a Mareva

injunction. By the Mareva injunction, the defendant was

restrained until further order of the court, whether by

themselves, their servants, agents or howsoever, from

disposing of or dealing with its assets within the jurisdiction, in

so far as the same does not exceed the sum of RM5,263,475

save such sums as are reasonably necessary for the defendant’s

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ordinary operational expenses. The plaintiff discovered that

they could not ascertain whether the defendant had in fact set

aside assets to the value of RM5,263,475 pursuant to the

Mareva injunction. The stand of the plaintiff was that there was

a need for the defendant to disclose to this court that the sum

of RM5,263,475 had, in fact, been retained in the bank account

of the defendant within jurisdiction in compliance with the

Mareva injunction that was issued. This was an application by

the plaintiff for an order that the defendant discloses all its

assets within the jurisdiction to the value of RM5,263,475 by

way of an affidavit. In allowing the application, the court held

that a Mareva injunction is an in personam order. It becomes in

rem when it is brought to the notice of a third party not to aid

in dealings with the assets of the defendant.

INJUNCTIONS

Guidelines for the grant of Mareva injunctions:

•

guidelines governing the grant of the injunction or order

The applicant must have a good arguable case- See the case of

Hock Hua Bank (Sabah) Bhd v Yong Liuk Thin [1995] 2 MLJ

213-where Gopal Sri Ram stated that in the present case there was

an added consideration in that the appellants were applying for

a Mareva injunction. As such, the relative strength or weakness

of the defence filed during the early stages of action was

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extremely relevant in assessing whether the appellants had an

arguable case, which must be established to a higher standard

than that applicable to the usual application for an injunction.

INJUNCTIONS

Guidelines for the grant of Mareva injunctions

•

The following are the guidelines governing the grant of the

injunction or order:

•

The applicant must have a good arguable case-

•

Case Law Analysis

Ang Chee Huat v Engelbech Thomas Joseph [1995] 2 MLJ 83-

where in dismissing the appeal the court held that the three

essential requirements for granting a Mareva injunction had

been considered by the judicial commissioner. With regard to

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the requirement of a good arguable case, after reading the

pleadings and the affidavits, the respondent has shown that he

has a good arguable case in respect of his claim for the return

of the RM500,000.

•

Case Law Analysis

Kembara Dinamik Corporation Sdn Bhd v Bahtera Sensasi Sdn

Bhd [2004] 3 AMR 312.

INJUNCTIONS

Guidelines for the grant of Mareva injunctions



Case Law Analysis



The applicant must make full and frank discloser of all the

material matters.

Creative Furnishing Sdn Bhd v Wong Koi @ Wong Khoon Foh

t/a Syarikat Sri Jaya [1989] 2 MLJ 153- In allowing the appeal,

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frank and full disclosure of all material facts. Every material

representation must not be misleading and there must not be

any suppression of material facts. Failure to do so at the crucial

time of making the ex parte application would invariably be

fatal. In this case the respondent had sued the appellant and

another defendant for alleged partnership debt for materials

supplied and work done in respect of millworks on two floors of

the Shangrila Inn, Penang under the terms of sub-contract. On

the date of the issue of the writ the respondent obtained ex

parte a Mareva injunction against the appellant and the other

defendant to restrain them from disposing or otherwise dealing

with their assets not exceeding $95,000. The appellant applied

to set aside the ex parte Mareva injunction. This was dismissed

and the appellant appealed.

INJUNCTIONS

Guidelines for the grant of Mareva injunctions



The applicant must make full and frank discloser of all the

material matters.



Case Law Analysis

