Kuan Chee Sian v Victor Chin Boon Long (BA-22NCC-187-09/2025)

The Plaintiffs filed this action and applied for a Mareva Injunction against the Defendants. The application first came before this Court at the ex parte stage and was subsequently heard inter partes upon the filing of the parties’ respective affidavits. After hearing the parties fully, this Court declined to grant the Mareva Injunction sought. However, the Court directed that the sum of RM3,400,000, which had earlier been placed by the 1st Defendant (“D1”) in an interest-bearing fixed deposit pursuant to the Court’s direction, remain preserved pending the disposal of the suit or further order of the Court.

The 1st Defendant has since filed a Notice of Appeal dated 19.2.2026. It is important to note that the appeal is confined to part of this Court’s decision. The 1st Defendant does not challenge the refusal of the Mareva Injunction. Instead, the appeal is directed solely at the order requiring the preservation of the RM3.4 million fixed deposit. These Grounds of Judgment therefore address the basis upon which that order was made, and the reasons why the Court considered it appropriate to maintain that arrangement.

The issue which arises, in light of the appeal, is a narrow but important one. The question is whether, having declined to grant a Mareva Injunction, the Court was nevertheless entitled to maintain the preservation of the RM3.4 million secured by D1 by way of his fixed deposit. The focus is therefore not on Mareva relief itself, but on the propriety and justification of the preservation order made by the Court.

The Plaintiff’s claim is for a sum of approximately RM3.4 million arising from the transactions pleaded in the statement of claim. At the ex parte stage, the Plaintiff sought a Mareva Injunction on the basis that there was a risk that assets might be dissipated before judgment could be obtained and enforced.

During that hearing, counsel for D1 informed the Court that D1 held fixed deposits exceeding RM4 million. It was further indicated that D1 was prepared to use those deposits as security in order to avoid the making of an interim Mareva order pending the inter partes hearing. This was a position taken by D1 himself and not one suggested or imposed by the Court.

In light of that proposal, the Court did not grant a Mareva Injunction at the ex parte stage. Instead, the Court directed that the deposits be maintained as an interim arrangement pending the inter partes hearing. This allowed the matter to proceed on a practical footing while the Court heard both sides fully.

At the inter partes hearing, the Court considered the affidavits and submissions of the parties in detail. It became apparent that while D1’s deposits exceeded RM4 million, the Plaintiff’s claim was confined to RM3.4 million. The Court therefore refined the arrangement by limiting the preserved sum to RM3.4 million, which corresponds directly with the amount in dispute.

The Court did not impose any restraint over the balance of D1’s funds. The preserved amount remained in D1’s name and continued to earn interest. It bears emphasis that no Mareva Injunction was granted at any stage of the proceedings.

There were extensive documents filed in this case. All were considered in reaching my decision. The Plaintiff relies on the affidavit in support filed under Enclosure 4. In that affidavit, the Plaintiff sets out allegations relating to the management of the company and certain financial transactions which form the basis of the claim. The Plaintiff contends that these matters give rise to a concern that assets may not be available to satisfy a judgment if the claim ultimately succeeds.

The Plaintiff also exhibited corporate records obtained from the Companies Commission of Malaysia together with financial documents relating to the company. These documents were relied upon to support the Plaintiff’s concerns regarding the handling of funds and the risk of dissipation.

The Defendants disputed these allegations. The 1st Defendant filed an affidavit in reply under Enclosure 20 explaining the transactions and contending that the dispute is essentially commercial in nature and should be resolved at trial. The 2nd Defendant filed a similar affidavit under Enclosure 18 denying the Plaintiff’s allegations.

Both Defendants maintain that there has been no attempt to dissipate assets and that there is no basis for the grant of Mareva relief. They further contend that the Plaintiff’s allegations relate to issues which are properly to be determined at trial and do not justify interlocutory intervention.

The principles governing Mareva Injunctions are well established. The Federal Court in Zainal Abidin bin Haji Abdul Rahman & Ors v Century Hotel Sdn Bhd [1982] 1 MLJ 260 recognised that the Court has jurisdiction to grant such relief where there is credible evidence that a defendant may dissipate assets so as to frustrate the enforcement of a judgment.

At the same time, Mareva relief is an extraordinary remedy and must be exercised with caution. In Pacific Centre Sdn Bhd v United Engineers (Malaysia) Bhd [1984] 2 MLJ 143 (FC), the Court emphasised that such relief must not be used as a means of providing security for a Plaintiff’s claim.

Having considered the affidavits filed by the parties, I was not satisfied that the Plaintiff had shown a real risk that D1 would dissipate assets so as to frustrate the enforcement of any judgment. The Plaintiff’s allegations concern the underlying dispute between the parties and are matters which should be determined at trial.

It is also material that from the outset of the proceedings D1 indicated that he was prepared to maintain his fixed deposits as security. This was a significant factor in the Court’s decision not to grant a Mareva Injunction at the ex parte stage. The arrangement addressed, in practical terms, the Plaintiff’s concern regarding the availability of funds.

At the inter partes hearing, the Court reviewed that arrangement and confined it to RM3.4 million. This ensured that the preservation was limited strictly to the amount in dispute and did not extend to the entirety of D1’s assets. In my view, this was a measured and proportionate approach.

The refusal of the Mareva Injunction does not automatically require the release of the secured funds. The decision not to grant Mareva relief reflects the Court’s conclusion that a coercive injunction is not necessary. However, the existence of the secured sum itself addresses the concern regarding dissipation.

It is important to distinguish between a Mareva Injunction and the preservation of a sum which has already been secured. A Mareva Injunction operates as a coercive order restraining a Defendant from dealing with assets. The present arrangement does not have that character. It arose from D1’s own proposal and was subsequently refined by the Court.

To grant a Mareva Injunction in circumstances where the subject matter of the claim has already been secured would risk turning the Mareva jurisdiction into a means of providing security for the Plaintiff’s claim. This is precisely what the Court cautioned against in Pacific Centre.

The preservation of the RM3.4 million therefore does not operate as a Mareva Injunction in substance. It is simply the continuation of an arrangement which ensures that the subject matter of the dispute remains intact pending trial.

In these circumstances, the preservation of the sum maintains the position pending trial. It ensures that the subject matter of the dispute remains available while allowing the parties to proceed without unnecessary prejudice.

The appeal by D1 challenges this preservation. Having considered the matter, I am unable to see any error in the Court’s approach. The decision represents a proper exercise of discretion based on the evidence before the Court.

For the reasons set out above, I was not satisfied that the Plaintiff had established the requirements for a Mareva injunction. At the same time, the preservation of the RM3.4 million was justified in order to maintain the position pending trial. The arrangement reflects a fair balance between the parties and ensures that the proceedings are not rendered nugatory.

In relation to costs, I considered the conduct of the parties and the manner in which the matter was resolved. The Plaintiff did not succeed in obtaining a Mareva Injunction. However, the position at the ex parte stage was materially influenced by the 1st Defendant’s own indication that he was prepared to maintain his fixed deposits as security, which led to the interim arrangement being put in place.

At the inter partes stage, the Court refined that arrangement by confining the preserved sum to RM3.4 million, being the amount in dispute. In those circumstances, the outcome reflects a measure of success on both sides. Having regard to these factors, I considered it appropriate to make no order as to costs.

The Court therefore ordered as follows: a. The Plaintiff’s application for a Mareva Injunction is dismissed. b. The sum of RM3,400,000 placed in an interest-bearing fixed deposit in the name of the 1st Defendant shall remain preserved pending the disposal of the suit or further order of the Court. c. All issues relating to the merits of the Plaintiff’s claim are reserved for trial. d. There shall be no order as to costs. Dated 14 April 2026 -sgd-DATO’ ANITA BINTI HARUN JUDICIAL COMMISSIONER HIGH COURT OF MALAYA SHAH ALAM SELANGOR DARUL EHSAN To the parties’ solicitors: For the Plaintiffs : Jason Cheong Kah Lok & Nyat Kai Wen (Messrs Kah Sheng & Co.) For the 1st Defendant: Wong Kah Hui & Ng Jing Yi (Messrs KH Wong & Co.) For the 2nd Defendant: Lim Jit Kiong & Lin Chia Yi (Messrs JK Lim)