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1. Heng Chew Lang & Ors v Heng Choon Wah & Ors [2021] MLJU 2776
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 HENG CHEW LANG v HENG CHOON WAH
CaseAnalysis
| [2021] MLJU 2776

Heng Chew Lang & Ors v Heng Choon Wah & Ors [2021] MLJU 2776
Malayan Law Journal Unreported

HIGH COURT (MUAR)

AWG ARMADAJAYA AWG MAHMUD JC
CIVIL SUIT NO JB-22NCVC-64-09 OF 2019
12 December 2021

Shahareen Begum (Nor Aqlily Mohd Mahbob (Shahareen Begum) for the plaintiffs.
Tan Tai Hwa (Lim Yeong Shin with him) (Tan Hwa & Co) for the first and second defendant.
(Clarence Edwin Law Office) for the third defendant.

Awg Armadajaya Awg Mahmud JC:

GROUNDS OF JUDGMENT (ENCLOSURE 22)

INTRODUCTION

[1] This is an application for Mareva injunction pursuant to Enclosure 22 prayers (2) and (3) which reads as
follows:
1. The 1st Defendant, whether through himself, his representative, servant, agent, worker or anyone of them
or in whatsoever manner, that an injunction is granted against the 1st Defendant, until the final decision is
given in this Suit, from taking out, disposing off, transferring, charging, dealing with, reducing the value or
otherwise or in any way handling any of the assets (whether movable or immovable) in Bank Accounts and
/ or any money amounting to the value RM1,713,400-00 including but not limited to the assets that are
listed in the Annexure A which is exhibited together with this Notice of Application.
2. 1st Defendant and / or any third party is ordered to surrender any assets in their possession (movable or
immovable), Bank Account and / or money whether in the name of the 1st Defendant or otherwise and
whether owned personally or jointly, that an injunction be granted until the final decision is given in this
Suit, from taking out, disposing off, transferring, charging, dealing with, reducing the value or otherwise or
in anyway handling any of the assets (whether movable or immovable) in Bank Accounts and / or any
money amounting to the value RM1,713,400-00.

[2] The Learned Counsel for the Defendant has conceded in prayers (1) and (8) and the Court has made the
appropriate orders.
THE BACKGROUND FACTS

[3] The 1st Plaintiff is a Malaysian citizen, of full age and stays at Blk 171, #08-501, Ang Mo Kio, Ave 4, Singapore
560171. The 2nd and 3rd Plaintiffs are daughters of the 1st Plaintiff. The 1st Defendant is the younger brother of the
1st Plaintiff and uncle to the 2nd and 3rd Plaintiffs. The 2nd Defendant is the sister of the 1st Plaintiff and the aunty to
the 2nd and 3rd Plaintiffs.

[4] The 1st Plaintiff is the registered owner of some of the properties listed in the Statement of Claim. The 2nd and
3rd Plaintiffs are registered owners of the balance of the properties listed in the Statement of Claim.
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[5] The Plaintiffs claimed they were threatened and / or coerced by the 1st Defendant into signing the papers /
documents to enable the 1st Defendant to sell the properties as listed in the Statement of Claim.

[6] Out of fear and / or for fear of their safeties, all the Plaintiffs signed the papers / documents for the transfer of
titles of the properties.

[7] On or around August 2019, the Plaintiffs heard news that the 1st Defendant wish to disposed of the properties.
Through the search made at the Land Office, the Plaintiffs discovered that the documents they were compelled to
sign were all Power of Attorneys that gave absolute powers to the 1st Defendant to deal with the properties in any
way that he pleases.

[8] The Plaintiffs further alleged that they never sign / execute any document before any person by the name of
Goh Tay Hock because:
a. They never met him as they were all in Singapore on the purported date and time that the documents were
purportedly executed.
b. The 1st Defendant brought the documents to be executed / signed in Singapore while the said Goh Tay
Hock is in Malaysia.
c. The Plaintiffs have never been explained on the Powers of Attorney (“PA”) and they never intended to give
the said PAs to the Defendants.
d. There was no valuable consideration for the PAs to be given.
e. The PAs were purportedly created but they are contrary to sections 3 and 7, Power of Attorney Act 1949.

[9] No police report was lodged because the Plaintiffs were afraid for their safety and after 2 years they felt
confident enough to initiate legal action.

[10] The 1st Defendant transferred 1/3 of the property (which held under the title HS(D) 5381 PTD 5321 Grisek Sub
District, District of Ledang, Johore) to himself vide Presentation No. 914/2017 and 1/6 of the same property the 2nd
Defendant before charging the balance to the 3rd Defendant for the sum of RM133,400-00.

[11] The Plaintiffs were informed by the Director of Land and Minerals, Johore that they may not enter a private
caveat on the properties and so the Plaintiffs entered a private caveat on the portion of the 2nd and 3rd Defendants.

[12] The Plaintiffs filed the Writ of Summons and Statement of Claim before the High Court of Malaya sitting in
Muar on 29 September 2019 and the cause papers were served on 12 February 2020.

[13] Pending the trial and outcome of the Writ Action, the Plaintiffs filed an application for an injunction against all
the properties as well as a Mareva Injunction of money against the sum of RM1,713,400-00, which is the value of
the Charge of the property.

[14] As the Defendants have conceded on the application for injunction in respect of the properties, the
injunction was granted pursuant to Enclosure 22 para (1) and (8).
THE LAW ON MAREVA INJUNCTION

[15] Mareva injunction, Mareva order or Mareva regime, after the case MAREVA COMPANIA NAVIERA SA v.
INTERNATIONAL BULKCARRIERS SA, [1980] 1 All ER 213 while an earlier case was NIPPON YUSEN KAISHA
V. KARAGEORGIS, [1975] 3 All ER 282 decided before MAREVA COMPANIA NAVIERA SA v.
INTERNATIONAL BULKCARRIERS SA. It is now defined that a Mareva injunction as a “freezing order”.

[16] It must be understood that the purpose of Asset freezing is not as a security,(see JACKSON V. STERLING
INDUSTRIES LTD [1987] HCA 23, ; [1987] 162 CLR 612 (11 June 1987)) neither is it meant to a form of debt
collection in the sense that it is used to pressure a judgment debtor, (See CAMDEX INTERNATIONAL LTD V.
BANK OF ZAMBIA (NO. 2), [1997] 1 WLR 632. ) nor is it a type of asset forfeiture (as the case of Anti Money
Laundering Laws) since it does not confer upon anyone else a proprietary interest in the defendant’s assets, (see
CRETANOR MARITIME CO LTD V. IRISH MARINE MANAGEMENT LTD, [1978] 1 WLR 966).

[17] In civil claims, the Mareva injunction is a Court Order to stop a judgment debtor from dissipating his assets
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so as to have the effect of frustrating judgment, rather than the more strenuous test of requiring an intent to abuse
court procedure. An example of the former would be paying off a legitimate debt, (see IRAQI MINISTRY OF
DEFENCE v. ARCEPEY SHIPPING CO. S.A. (“THE ANGEL BELL”), [1981] 1 QB 65 ) whereas an example of
the latter would be to hide the assets in overseas banks on receiving notice of the action. This would effectively
defeat the ends of justice.

[18] It is important to understand that a “freezing order” should be granted very sparingly, not only on account of
its apparent harshness and will only be reconsidered where the claimant can show that there was at least a good
arguable case that they would succeed at trial and that the refusal of an injunction would involve a real risk that a
judgment or award in their favour would remain unsatisfied and hence frustrate the ends of justice. The judgment
would be seen as a paper judgment of no value whatsoever. (See NINEMIAMARITIME CORPORATION v.
TRAVEVSCHIFFAHRTGESELLSCHAFT MBH UND CO KG (“THE NIEDERSACHSEN”), [1983] 1 WLR 1412).

[19] It is quite harsh on defendants because the order is often granted at the pre-trial stage in ex parte hearings,
based on affidavit evidence alone. While it may be set aside later but in the commercial world where solvency or
liquidity in cash flow is important, would have grave impact on both the well-being of the company but the good will
or reputation of the company. This may send shivers down the spines of creditors (such as banks or financial
institutions) or cause suppliers, for example to reconsider credit terms granted earlier. Very often, when it involves
big businesses and networks, it would have a ripple effect.

[20] Because of its hugh potential to cause grave injustice and some parties may cause the abuse of the Court’s
powers in an ex parte proceeding, moving parties are required to provide full and frank disclosure at such
proceedings, (see UNITED STATES OF AMERICA v. FRIEDLAND, [1996] O.J. No. 4399 (Gen, Div.)).

[21] The moving party must make a balanced presentation of the facts and law, including all relevant facts and law
which may explain the respondent’s position if known to the moving party, even if such facts would not have
changed the Court’s decision. Objective assessment and full cards on the table is a must, given the severity of the
consequences. (see UNITED STATES OF AMERICA v. FRIEDLAND, [1996] O.J. No. 4399 (Gen. Div.)).

[22] If the Court is misled on a material fact, or if there is less than full and frank disclosure, the Court will not be
inclined to allow the injunction to continue operating. (see UNITED STATES OF AMERICA v. FRIEDLAND, [1996]
O.J. No. 4399 (Gen. Div.)). The Court may resort to contempt proceedings against parties which provide a
misleading picture on the state of affairs. Keeping in mind, full trial has not commenced, affidavits cannot
deliberately or negligently omit factual matrix for or against the applicant.

[23] Very often, a Mareva injunction is combined with an Anton Piller order in the application. This could be
calamitous for a Defendant as the cumulative effect of these orders could prove catastrophic to the whole of the
business of the unfortunate Defendant by freezing most of its assets and revealing important information to its
competitors, and the two orders have been described by Lord Donaldson as being the law’s “nuclear weapons”.
(see BANK MELLAT v. NIKPOUR, [1985] FSR 87) This is why it is crucial that the Court scrutinised the facts with a
surgical precision without losing sight of the Woods.

[24] A motion for Mareva injunction is also frequently applied together with a Norwich Pharmacal order, or more
commonly known as a tracing order. A Norwich Order is form of pre-action discovery (as against pre-trial
discovery), that allows an aggrieved party to trace otherwise hidden or dissipated assets, with a view to their
preservation.

[25] The process is regarded as a high-stakes exercise for many reasons:

i. The application is almost always made without notice, to prevent the defendant from spiriting away their
assets before the freezing order is granted. Applicant’s counsel is therefore required to make full and
frank disclosure of all material facts, and the applicable law, to the court.
ii. As with most injunctions, the applicant must provide an undertaking to the court to compensate the
defendant for any damage caused by the order.
iii. A freezing order that is improperly or sloppily obtained, or one that is drafted too broadly or imprecisely,
will cost the party, and its counsel, heavily in terms of credibility with the court.

[26] As Lord Donaldson MR explained in POLLY PECK INTERNATIONAL PLC v. NADIR [1992] EWCA Civ 3 ;
[1992] 4 All ER 769 (19 March 1992) that such is not the case:
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‘So far as it lies in their power, the courts will not permit the course of justice to be frustrated by a defendant
taking action, the purpose of which is to render nugatory or less effective any judgment or order which the plaintiff
may thereafter obtain,
i. It is not the purpose of a Mareva injunction to prevent a defendant acting as he would have acted in the
absence of a claim against him. Whilst a defendant who is a natural person can and should be enjoined
from indulging in a spending spree undertaken with the intention of dissipating or reducing his assets
before the day of judgment, he cannot be required to reduce his ordinary standard of living with a view to
putting by sums to satisfy a judgment which may or may not be given in the future. Equally no defendant,
whether a natural or a juridical person, can be enjoined in terms which will prevent him from carrying on
his business in the ordinary way or from meeting his debts or other obligations as they come due prior to
judgment being given in the action,
ii. Justice requires that defendants be free to incur and discharge obligations in respect of professional
advice and assistance in resisting the plaintiffs claims.

iii. It is not the purpose of a Mareva injunction to render the plaintiff a secured creditor, although this may be
the result if the defendant offers a third party guarantee or bond in order to avoid such an injunction
being imposed,
iv. The approach called for by the decision in AMERICAN CYNAMID CO. v. ETHICON [1975] UKHL 1 has, as
such, no application to the grant or refusal of Mareva injunctions which proceed on principles which are
quite different from those applicable to other interlocutory injunctions.

[27] Hence, Lord Bingham in FOURIE v. LE ROUX & ORS [2007] UKHL 1 at para. 2; [2007] 1 All ER 1087 (24
January 2007) has this to say;

Mareva (or freezing) injunctions were from the beginning, and continue to be, granted for an important but limited
purpose: to prevent a defendant dissipating his assets with the intention or effect of frustrating enforcement of a
prospective judgment They are not a proprietary remedy. They are not granted to give a claimant advance security
for his claim, although they may have that effect. They are not an end in themselves. They are a supplementary
remedy, granted to protect the efficacy of court proceedings, domestic or foreign.

[28] In GROUP SEVEN LTD v. ALLIED INVESTMENT CORPORATION LTD & ORS [2013] EWHC 1509 (Ch) at
para. 63 (6 June 2013), Justice Hildyard outlined the current scope of freezing orders that can be issued by the
Court:
i. It is designed to prevent injustice to a successful claimant by preserving assets and funds from
being disposed of or dissipated before a judgment is satisfied.
ii. “His assets” refers to “assets belonging to that person, not to assets belonging to another person”
and without words clearly extending the scope of the phrase “his assets”, assets owned
beneficially by someone else will not be subject to the freezing order.
iii. A freezing order is a precautionary measure taken urgently to protect the claimant against the risk
of dissipation, disposal, reduction in value, or loss of assets pending a fuller examination as to
what assets would in reality be available to the claimant for the purposes of enforcing a judgment.
iv. If the words are ambiguous, or admit of a more restrictive interpretation, so that it is arguable
whether or not the assets in question fall within their scope, the court is unlikely to treat a dealing
with such assets as a contempt of court.
v. “Assets” also covers assets which are not in the legal ownership of the defendant but in respect of
which the defendant “retains the power to direct how the assets should be dealt with.”
vi. The phrase “his assets” is extended to include also “assets held by a foreign trust or a
Liechtenstein Anstalt when the defendant retains beneficial ownership or effective control of the
asset.”
vii. It is clear that those words in the standard form do not extend to assets of which the defendant
remains the legal owner but holds for the benefit of someone else.
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viii. If it is desired and found appropriate to extend the scope of the injunction to assets held in trust (in
the case of a facade or sham), additional wording must be included to make that clear, and the
Court will only do this sparingly.
ix. As to piercing or lifting the corporate veil, ownership and control of a company are not themselves
sufficient to provide justification for that course, even when no unconnected third party is involved
and it might be perceived that the interests of justice would be served by it.
x. Even where the circumstances are such as to justify the exceptional step of piercing or lifting the
corporate veil, the effect is not to alter the beneficial ownership of the company’s assets: it is
simply to provide for such asset to be available in defined circumstances to the claimant.

[29] Afterwards, in the case of LAKATAMIA SHIPPING COMPANY LTD v. SU & ORS [2014] EWCA Civ 636 (14
May 2014) it was emphasized that the assets of a company wholly owned by a person subject to a freezing order
are not automatically subject to the order. In that case, Justice Rimer noted:

‘The owner is of course able to control the destiny of the company’s assets. But that does not make this his
assets... First, [the order] is still only concerned with dispositions of assets belonging beneficially to the
defendant, which these assets do not. Secondly, Mr Su has no authority to instruct the companies how to deal
with their assets. All he has is the power, as an agent of the company, to procure the company to make
dispositions of its assets. Such dispositions, when made, are made in consequence of decisions made by the
organs of the company. They are not dispositions made by the company in compliance with instructions from Mr
Su. That may set to be a somewhat formal distinction. But it is a valid one; only the companies have authority to
deal with and dispose of their assets.’

[30] The Malaysia position is found in Order 29 Rules of Court 2012, and the general principles governing the laws
are also the same. Given that in Common Law countries and transnational nature of commercial and banking
activities.

[31] Commonly known as an ‘asset preservation order’ or a “freezing order” in other jurisdictions, this form of
injunctions derives its name from the landmark case of MAREVA COMPANIA NAVIERA SA v. INTERNATIONAL
BULK CARRIERS SA (“The Mareva”) [1980] 1 All ER 213. It is a form of preventive relief granted to restrain the
defendant (who has assets within the jurisdiction of the court) from dissipating or disposing of those assets out of
the jurisdiction before any judgment is obtained by the Plaintiff. The power to grant such an injunction is derived
from section 25(2) of the Courts of Judicature Act, 1964 and the inherent jurisdiction of the court.

[32] In granting such an injunction the following matters must be considered:

a) The Plaintiff must have a good arguable case against the defendant,
b) The Plaintiff must show clear evidence that the defendant has assets within the jurisdiction of the court;
c) The Plaintiff must show clear evidence that the defendant’s assets may be dissipated before judgment can
be obtained by the Plaintiff.

[PACIFIC CENTRE SDN BHD V. UNITED ENGINEERS BERHAD [1984] 2 CLJ REP 319; [1984] 2 MLJ 144;
CREATIVE FURNISHING BHD V. WONG KOI [1989] 1 CLJ REP 22; [1989] 2 MLJ 153; S&F INTERNATIONAL
LTD V. TRANS- CON ENGINEERING SDN BHD [1985] CLJ REP 280; [1985] 1 MLJ 62; ZAINAL ABIDIN BIN
HAJI ABDUL RAHMAN V. CENTURY HOTEL SDN BHD [1982] 1 LNS 34; [1982] 1 MLJ 260; BIASAMAS SDN
BHD V. KAN YANG HENG [1984] 4 CLJ 754].

[33] A Mareva injunction may have a devastating effect on the operations of a company or the life of an
individual. For this reason, the court must be mindful of not granting such an injunction in wide terms and should
only make an order as is necessary to prevent the injustice sought to be prevented by the plaintiff.

[34] The following matters must be considered-

a) An application for a Mareva injunction is commonly moved ex parte. The court must ensure that the
plaintiff makes full and frank disclosure of all the material facts;
b) An application for a Mareva injunction must be supported by an affidavit establishing the matters set out
in Para 4 above. Most importantly, the court must evaluate the evidence adduced by the Plaintiff in
establishing the danger or risk that the defendant’s assets within the jurisdiction are being moved, disposed
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of or dissipated from the jurisdiction so as to frustrate the judgment or prospective judgment of the plaintiff.
There must be evidence from which a prudent, sensible commercial person can properly infer a danger of
default [THIRD CHANDRIS SHIPPING CORPORATION V. UNIMARINE SA [1979] QB 645];
c) A Mareva injunction should not interfere with the ordinary course of business of the defendant or prevent
the payment of creditors in the ordinary course of business. A Mareva injunction should not prevent the
defendant from dealing with its assets for legitimate purposes e.g. payment of ordinary living and business
expenses, reasonable legal expenses, the discharge of obligations under contracts entered into bona fide
before the order was made [PCW (UNDERWRITING AGENCIES) LTD V. DIXON AND ANOTHER [1383]
2 All ER 158], In this regard, the Mareva order must make provision for an amount that the defendant may
utilise for ordinary living expenses and a reasonable sum for legal advice and representation;
d) A Mareva injunction must specify the upper monetary limit sought to be protected by the injunction. Any
amount exceeding this limit may be dealt with by the defendant. [MOTOR SPORTS INTERNATIONAL LTD
V. DELCONT (M) SDN BHD [1996] 3 CLJ 483; [1996] 2 MLJ 605], The limit should not usually exceed
the maximum amount of the plaintiffs claim.

[35] The plaintiff may also apply for discovery of information and documents in aid of execution of a Mareva
injunction. [CBS UNITED KINGDOM LTD V. LAMBERT [1982] 3 ALL ER 237; ASPATRA SDN BHD V. BANK
BUMIPUTRA MALAYSIA BHD [1987] CLJ Rep 50; [1988] 1 MLJ 97].

[36] The effect of a Mareva Injunction- whether it converts the claimant to be a secured creditor. In Z LTD V. A-Z
AND AA-LL [1982] QB 558 Lord Denning MR said that:

“A Mareva Injunction is a method of attaching the asset itself. It operates in rem just as the arrest of a ship does. It
enables the seizure of assets so as to preserve them for the benefit of the creditors; but not to give a charge in
favour of any particular creditor”

[37] This latter qualification is vital to the effect of a Mareva injunction. It operates against the assets of the
Defendant, and so can be said to be in ri. It does not of itself create any priority, lien, charge or security in those
assets in favour of the party who made the Mareva application, nor in favour of any other party. It is above all a
remedy in personam, and breach of it makes the party responsible in contempt of Court.

[38] Some important features of a Mareva Injunction:

a) A plaintiff with a judgment against the defendant can enforce it against his assets whether covered by the
Mareva or not but only subject to the rights other persons may have in the property.
b) Any person with a claim against the defendant can proceed to judgment and enforce it notwithstanding the
Mareva Injunction.
c) Third party bona fide purchasers for value without notice of the injunction will get good title regardless of
the defendant’s legal disability with respect to the assets.

[39] A Mareva Injunction merely preserves funds and assets and does not give any rights over them which do not
otherwise exist.
THE ISSUES IN THIS APPLICATION
i. Whether all requirements of a Mareva Injunction has been fulfilled.
ii. Whether the Plaintiffs are required to provided guarantee for damages in this application.

I shall deal with the issues accordingly.

i. Whether all requirements of a Mareva Injunction has been fulfilled.

[40] The law on Injunction is covered under Order 29 Rules of Court.

[41] The affidavit in support of an application made ex parte must contain a clear and concise statement of-
(a) the facts giving rise to the claim;
(b) the facts giving rise to the application for interim injunction;
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(c) the facts relied on to justify the application ex parte, including details of any notice given to the other party
or, if notice has not been given, the reason for not giving notice;
(d) any answer by the other party (or which he is likely to assert) to the claim or application;
(e) any facts which may lead the Court not to grant the application ex parte or at all;
(f) any similar application made to another Judge, and the order made on that application; and
(g) the precise relief sought.

[42] In a simplified form, there must be full and frank disclosure which is the bedrock of interim injunction.

[43] There are a few considerations before injunction is granted which are
i. the plaintiff has suffered irreparable injury;
ii. remedies available at law are inadequate to compensate that injury;
iii. considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted;
and
iv. the public interest would not be disserved by an injunction.

[44] In granting an interim injunction, the following matters must be considered:

a) The Plaintiff’s claim against the defendant must disclose a bona fide serious issue to be tried. Plaintiff is to
show locus. At this interlocutory stage, the court is not required to make a final determination on the merits
of the claim or the rights of the parties;
b) The court must then consider where the justice of the case lies. In determining where the justice of the
case lies, the court must consider –
(1) the harm that the injunction would produce by its grant; and
(2) the harm that would result from its refusal, and come to a conclusion as to which party would suffer
greater injustice.

In determining this, the court must consider whether damages would constitute an adequate remedy in
respect of the Plaintiff’s claim. If damages are adequate, the court should not grant an injunction order;
c) If the relevant factors are evenly balanced, the court should maintain the status quo.

[AMERICAN CYNAMID CO V ETHICON [1975] AC 396; KEET GERALD FRANCIS NOEL JOHN V
MOHD NOOR BIN HARUN ABDULLAH & ORS [1995] 1 MLJ 193; ALOR JANGGUS SOON SENG
TRADING SDN BHD & ORS V SEY HOE SDN BHD [1995] 1 MLJ 241; GARDEN COTTAGE FOODS
LTD V MILK MARKETING BOARD [1984] AC 130; SUNRISE SDN BHD v FIRST PROFILE (M) SDN
BHD & ANOR [1997] 1 CLJ 529].

[45] In our instant case, these facts have been established:

a. the landed properties are owned by the 1st Plaintiff along with the 2nd and 3rd Plaintiffs.

By virtue of section 340 National Land Code, the doctrine of indefeasibility of title applies.
None of the pleadings indicated that the exceptions to the doctrine is applicable and hence the
titles are good against the world.
b. The 1st Defendant transferred 1/3 of the property (which held under the title HS(D) 5381 PTD 5321
Grisek Sub District, District of Ledang, Johore) to himself vide Presentation No. 914/2017 and 1/6 of
the same property the 2nd Defendant before charging the balance to the 3rd Defendant for the sum of
RM133,400-00. All these were done by the Power of Attorney that are now being challenged.
c. The remaining properties as well as the proceeds from the Charge of the properties or their value are
the subject matter of the disputes and their value was placed at RM1,713,400- 00.
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d. The Learned Counsel for the Defendants conceded in the prayer (1) & (8) of Enclosure 22 and this
Court granted the Order accordingly.

[46] For the purpose of this Writ Action the considerations that must be made are as follows:
a) A plaintiff with a judgment against the defendant can enforce it against his assets whether covered by
the Mareva or not but only subject to the rights other persons may have in the property.
b) Any person with a claim against the defendant can proceed to judgment and enforce it notwithstanding
the Mareva Injunction.
c) Third party bona fide purchasers for value without notice of the injunction will get good title regardless
of the defendant’s legal disability with respect to the assets.

[47] I find that it is not in dispute that the property which held under the title HS(D) 5381 PTD 5321 Grisek Sub
District, District of Ledang, Johore has been disposed off and before the value of the said property is dissipated
before the end of this trial, it will (if the Plaintiffs win the arguments) be a mere paper judgment.

[48] I take note that the Defendants may apply for the sum of money in excess of RM1,713,400-00 is not subject of
the Mareva injunction but the Defendants must provide the details for this Court to discern between properties /
money to the said sum for the purpose of business or other activities of the Defendants.

[49] It is the finding of this Court that the Plaintiffs succeeded in fulfilling all the requirements of a Mareva
injunction.
ii. Whether the Plaintiffs are required to provided guarantee for damages in this application.

[50] In most circumstances, the Plaintiff is usually expected to provide an undertaking as to damages. It may be
stated in the application itself or in the affidavit in support. [ELIAN MOOIN & ANOR V DATO ZAINAL ABIDIN
JOHARI [1997] 3 CLJ 455]. In Malaysia, an undertaking is not a mandatory pre requisite for an injunction. (DATO
TAN TOH HUA V TAN TOH HONG & ORS [2001] 1 CLJ 732).

[51] An undertaking as to damages may be necessary as the court abstains from expressing an opinion on the
merits of the case until the hearing. A defendant may apply for an order of fortification of the undertaking as to
damages when the Plaintiff’s undertaking appears illusory or insufficient.

[52] In Malaysia, an undertaking is not a mandatory pre requisite for an injunction. (DATO TAN TOH HUA V TAN
TOH HONG & ORS [2001] 1 CLJ 732).

[53] An undertaking as to damages may be necessary as the court abstains from expressing an opinion on the
merits of the case until the hearing. A defendant may apply for an order of fortification of the undertaking as to pay
damages.

[54] In ATKIN’S COURT FORMS MALAYSIA – CIVIL PROCEDURE ON UNDERTAKING AS TO DAMAGES

UNDER INJUNCTIONS:-

“Under an undertaking as to damages, the plaintiff binds himself to abide by any order as to damages which the
court may make in the event of the plaintiff’s failure to establish his claim at trial. The damages is awarded to the
defendant for whatever damage he has suffered which, as the court should be of the opinion, has been caused by
the grant of the interlocutory injunction1 . It is thus the regular practice on the grant of an interlocutory injunction
that the plaintiff should give an undertaking as to damages. An undertaking given should be recorded in written
form.”

[55] As to an undertaking as to damages would only apply in an ex parte application for an interim injunction.
There is no such requirement for an undertaking as to damages in an inter partes application: see ESHWARA
ENGINEERING SDN BHD V DELTA STRUCTURE SDN BHD [2003] 4 MLJ 18 ; [2003] 7 CLJ 447; PETRONAS
DAGANGAN SDN BHD V OMAR BIN ABDUL SAMAD [1996] 4 MLJ 391.

[56] Under the injunction, sometimes the plaintiffs may still be required to give an undertaking even though no
injunction was granted but was given an undertaking by the defendant in the terms of the injunction instead:
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WONG SONG V HIAP LEE MANUFACTURING INDUSTRIES SDN BHD [1998] 1 CLJ 1001; RAJAMANIKAM A/L
ADAIKALAM V BOLTON FINANCE BHD [2000] 3 MLJ 454 UBE ENGINEERING SDN BHD V UBE INDUSTRY
SDN BHD [2001] 1 CLJ 300.

[57] In Law and Practice of Injunctions in Malaysia 2020, on Undertaking under the heading of Practice &
Procedure:-

“UNDERTAKING [6.029]

Although it is the general practice to require an undertaking as to damages by the applicant, it is not a mandatory
one and an omission to provide an undertaking in the affidavit is not fatal. The court has the discretion to dispense
with the undertaking if the essential justice of the case so requires it.”

[58] In ANG SUE KHOON V MAJLIS BANDARAYA PULAU PINANG [2016] 11 MLJ 516, it was held that –

“[93] Secondly, while the imposition of an undertaking in damages may be common in certain types of injunction
cases, it is a rule of flexible application, and not an immutable prerequisite. SEEMA DEVELOPMENT SDN BHD V
MAH KIM CHYE [1997] MLJU 235; [1998] 1 CLJ 174 concerns two applications for a post judgment Mareva
injunction. The facts in that case are different from ours. But the following dicta at p 12 ; 181d–f (CLJ) are of
interest to our present discourse. The court there explains that the requirement of an undertaking in damages is
flexible in nature, and that it can be dispensed with where the situation is somewhat different from the typical one
involving a Mareva injunction: On the question of the requirement of an undertaking in damages, … the
circumstances in this case were different from an application for an interlocutory injunction, … As such, the
ordinary requirement of an undertaking in damages given in interlocutory injunction applications may, in my view,
be dispensed with here. Although the giving of an undertaking in damages is normally required of a plaintiff
applying for a Mareva injunction … it remains flexible in application.

[94] Thirdly, even in the context of injunctions (let alone a ‘stay’), an undertaking in damages will be required only
if it is fair to do so. That this is so is supported by a case cited by the planning applicant itself, namely SPLENDED WAVE
SDN BHD V SONG HWA SUB [2015] 8 MLJ 612 (at p 623G), where reference is made to the following passage by
Lord Denning in the case of ALLEN AND OTHERS V JAMBO HOLDINGS LTD AND OTHERS [1980] 2 All ER 502 at p
505 (also cited by the planning applicant):

It is said whenever a Mareva injunction is granted, the plaintiff has to give the cross-undertaking in damages
… I do not see why a poor plaintiff should be denied a Mareva injunction just because he is poor, whereas the
rich plaintiff would get it. One has to look at these matters broadly. As a matter of convenience, balancing one
side against the other, it seems to me that an injunction should go to restrain the removal of this aircraft.

[95] Fourthly, we are dealing with an inter partes application for stay here. There are authorities to suggest that,
again in the context of injunctions (let alone a ‘stay’), an undertaking in damages only applies to the case of an ex
parte application for an injunction; and not in an inter-partes application. In ESHWARA ENGINEERING SDN BHD V
DELTA STRUCTURE SDN BHD [2003] 4 MLJ 18 at p 28G, it is held that ‘an undertaking as to damages would only
apply in an ex parte application for an interim injunction, and there is no such requirement for the same in an inter
partes application’. That case followed an earlier decision in PETRONAS DAGANGAN SDN BHD V OMAR BIN ABDUL
SAMAD [1996] 4 MLJ 391 at p 402.

[59] In KLASSIK TROPIKA DEVELOPMENT SDN BHD V LEMBAGA RAYUAN NEGERI PULAU PINANG & ORS
[2016] MLJU 707, his Lordship Justice Lim Chong Fong held that –

“[91] Fourthly and in respect of non-requirement of the undertaking to damages to be provided by the Third to
Seventh Respondents, the First Respondent considered the same in paragraphs 90 to 98 of the Grounds.
Basically, the First Respondent found as a matter of law that there was no necessity to require such as
undertaking in a stay application. In addition, there is a plethora of case authorities that suggest the giving of the
undertaking is discretionary in analogous court injunction cases. The undertaking to damages could be dispensed
in a fair and just circumstance.

[92] I am of the view that this is not in fact a consideration by the First Respondent in the making of the Decision.
Rather, this is a cross security that was requested by the Applicant in the event that a stay order is granted. The
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provision of the security is hence merely collateral. Put simply, the denial of security has no direct bearing on the
validity of the Decision. Consequently, I find that the Applicant’s reliance on this as an irrelevant consideration is
misconceived.

[93] In re- capitulation of the second primary issue, I find and hold that the First Respondent did not take into
account irrelevant considerations in making the Decision, contrary to that as alleged by the Applicant. Conclusion

[94] For the foregoing reasons, I therefore disallow the Application with costs of RM 5,000 to be paid by the
Applicant to the First Respondent, RM 25,000 to the Third Respondent and RM 25,000 to the Sixth and Seventh
Respondents collectively.”

[60] At the risk of being repetitive, the following facts have been established-
a. the 1st Plaintiff is a Malaysian citizen, of full age while the 2nd and 3rd Plaintiffs are daughters of the 1st
Plaintiff.
b. The 1st Defendant is the younger brother of the 1st Plaintiff and uncle to the 2nd and 3rd Plaintiffs. The 2nd
Defendant is the sister of the 1st Plaintiff and the aunty to the 2nd and 3rd Plaintiffs.
c. The 1st Plaintiff is the registered owner of some of the properties listed in the Statement of Claim. The 2nd
and 3rd Plaintiffs are registered owners of balance of the properties listed in the Statement of Claim.
d. The Plaintiffs claimed they were threatened and / or coerced by the 1st Defendant into signing the papers /
documents to enable the 1st Defendant to sell the properties as listed in the Statement of Claim. Out of fear
and / or for fear of their safety, all the Plaintiffs signed the papers / documents for the transfer of titles of the
properties.
e. On or around August 2019, the Plaintiffs heard news that the 1st Defendant wish to dispose off the
properties.
f. Through the search made at the Land Office, the Plaintiffs discovered that the documents they were
compelled to sign were all Power of Attorneys that gave absolute powers to the 1st Defendant to deal with
the properties in any way that he pleases.
g. The 1st Defendant transferred 1/3 of the property (which held under the title HS(D) 5381 PTD 5321 Grisek
Sub District, District of Ledang, Johore) to himself vide Presentation No. 914/2017 and 1/6 of the same
property the 2nd Defendant before charging the balance to the 3rd Defendant for the sum of RM133,400-00.
h. The Plaintiffs were informed by the Director of Land and Minerals, Johore that they may not enter a private
caveat on the properties and so the Plaintiffs entered a private caveat on the portion of the 2nd and 3rd
Defendants.
i. The Plaintiffs filed the Writ of Summons and Statement of Claim before the High Court of Malaya sitting in
Muar on 29 September 2019 and the cause papers were served on 12 February 2020.
j. Pending the trial and outcome of the Writ Action, the Plaintiffs filed an application for injunction against all
the properties as well as an a Mareva Injunction of money to the sum of RM1,713,400-00, which is the
value of the Charge of the property.

[61] The Court of Appeal in DATO’ TAN TOH HUA & ORS v. TAN TOH HONG & ORS [2001] 1 CLJ 733, the facts
were that on 22 July 1997, R1 and R2 (the petitioners) had presented a petition to wind- up the third respondent
(R3). On 7 August 1997, the petitioners obtained an order to appoint provisional liquidators. R3 is a party to the
petition. It was contended that R3 is largely a nominal party because the nature of the disputes giving rise to the
petition and the appointment of the provisional liquidators are disputes which are purely between shareholders. The
Board of Directors of R3, however, is in control of the shareholders who oppose the petition i.e., the appellants. It
was alleged that the appellants, as directors of R3 had engaged the firm of Messrs. Raja, Darryl & Loh to act as the
solicitors for R3 in relation to the petition. R3 had in fact taken active part in opposing the petition and the
appointment of the provisional liquidators. This, according to the petitioners, would “incur great expense to” R3.
Such expense would be “entirely unnecessary” in the light of the fact that the disputes are between shareholders
(para. 12 of the affidavit of R1 and R2 at p. 179 of Appeal Record (AR)). It was also alleged that several
shareholders had moved for an order discharging the appointment of the provisional liquidators whilst R3 had also
made a similar application. The end result, according to the petitioners would be a duplicity of applications at the
expense of R3 (para. 14 of the affidavit of R1 and R2 at p. 179 AR). For these reasons the petitioners feared that
the funds and assets of R3 may be utilised to fund the opposition of the petition. Hence the application for the
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injunctions against the appellants (para. 15 of affidavit of R1 and R2 at p. 180 AR). The appellants deny that R3 is
a nominal party. To them views of R3 ought to be taken into account at the hearing of the petition. They contend
that costs of R3’s legal representation is not a ground for the issuance of injunctions.

[62] It was held that,

So, for example, in ALLEN V. JAMBO HOLDINGS LTD. the Court of Appeal held, when granting a Mareva injunction, that
a cross undertaking was acceptable from the plaintiffs although he was legally aided. The rationale behind this was that
questions of financial ability ought not to affect the position in regard to what is the essential justice of the case.

In fact the case of PENGKALEN SECURITIES SDN BHD V. LEOW LI LAIN [1997] 5 CLJ 440 held that it was not
necessary for the plaintiff to give an undertaking as to damages since the injustice that could be caused to the
plaintiff was very great if the injunction was not allowed. We would hold the same view in the light of the facts and
circumstances existing in this appeal.

[63] His Lordship Justice Edgar Joseph Jr J (as he then was) when in the case of CHENG HANG GUAN & ORS V.
PERUMAHAN FARLIM (PENANG) SDN BHD & ORS [1988] 2 CLJ 35; [1988] 1 CLJ 435 (Rep); [1988] 3 MLJ 90
he said:

In any event, the court will not generally deny a plaintiff an interlocutory injunction to which he would otherwise be
entitled simply on the ground that his cross undertaking in damages would be of limited or of no value.

[64] Therefore, as may be seen in the above authorities, NOT all cases the applicant must put up a guarantee to
pay cost or compensation.

[65] In our instant case, the actual party that suffered actual loss would be the Plaintiffs. Further the Defendants
are at liberty to file for exemptions for any reasonable sum of money for the running of businesses or personal
needs.

[66] The court must then consider where the justice of the case lies. In determining where the justice of the case
lies, the court must consider –
(1) the harm that the injunction would produce by its grant; and
(2) the harm that would result from its refusal, and come to a conclusion as to which party would suffer greater
injustice.

[67] In determining this, the court must consider whether damages would constitute an adequate remedy in respect
of the Plaintiffs’ claim. If damages are adequate, the court should not grant an injunction order.

[68] It certainly is unjust if the Plaintiffs were to be ordered to make an undertaking to pay compensation after all
the losses and damages done to it.
CONCLUSION

[69] For the reason aforesaid, I find that the Plaintiffs succeeded in making out a case for a Mareva Injunction and
I make the following Orders:
i. I grant the Orders sought for in prayers (2) and (3) Encl 22 which are as follows:
a. The 1st Defendant whether through himself, his representative, servant, agent, worker or anyone of
them or in whatsoever manner be injuncted from and satu injunction be granted until the decision is
given in this Suit, from taking out, dispose, transfer, charge, deal with, reduce the value or otherwise or
in any way, handle any of the assets (whether movable or immovable) Bank Account and / or any
money amounting to the value RM1,713,400-00 including but not limited to the assets that are listed in
the Annexure A which is exhibited together with this Notice of Application.
b. 1st Defendant and / or any third party is ordered to surrender any assets in their possession (movable
or immovable), Bank Account and / or money whether in the name of the 1st Defendant or otherwise
and whether owned personally or jointly, be injuncted from and satu injunction be granted until the
decision is given in this Suit, from taking out, dispose, transfer, charge, deal with, reduce the value or
otherwise or in any way, handle any of the assets (whether movable or immovable) Bank Account and
/ or any money amounting to the value RM1,713,400-00
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ii. Cost in the Cause.

End of Document