Pritam Singh Agency Sdn Bhd v Malayan Banking Berhad (AA-22NCvC-102-11/2023)

PRITAM SINGH AGENCY SDN BHD [Company No.:436928-M]

GULSHANJIT KAUR A/P PRITAM SINGH [NRIC NO. : 750321-14-5300] 15

JAGDEV SINGH SIDHU BRAR [NRIC NO.: 760115-14-5181] .…PLAINTIFFS AND 20 MALAYAN BANKING BERHAD [Company No.: 196001000142) ... DEFENDANT GROUNDS OF JUDGMENT 25 Introduction [1] The plaintiffs, in enclosure 5, are seeking an injunction to restrain the defendant against the background facts narrated hereafter. Background Facts [2] The dispute between the plaintiffs and the defendant arose from 30 several hire-purchase agreements entered into by the parties 14/01/2025 09:39:05 AA-22NCvC-102-11/2023 Kand. 33 between 2016 and 2019. Under these agreements, the plaintiffs acquired 12 vehicles, which were integral parts of plaintiffs’ business of transporting palm oil products. [3] In response to financial challenges caused by the COVID-19 35 pandemic and further exacerbated by subsequent floods, the plaintiffs applied for and were granted four moratoriums by the defendant, which deferred the plaintiffs’ payment obligations. The last of these, referred to as “Moratorium 4,” was agreed upon on 30 March 2022, covering the period from 30 March 2022 to 31 August 40

The plaintiffs were then required to resume payments starting in October 2022. The Moratorium 4, being the final Moratorium. [4] The issue began on 3 October 2022, when the plaintiffs attempted to make the required monthly payments for all 12 accounts. While the defendant successfully processed the payment for one account, 45 ie. for vehicle registration no. NDF 6180 in account No:788803388203, the payments for the remaining 11 accounts were unsuccessful. They were kicked back into the plaintiffs’ CIMB account. The plaintiffs contend that these kicked back were not due to any fault on their part but were the result of the defendant’s 50 banking system glitch/errors. Following these failed payments, the plaintiffs contacted the defendant to seek clarification and resolution. [5] The defendant, in response, attributed the kicked back of payments to “system enhancements” and offered the plaintiffs a new account 55 number through which payments could be made. The plaintiffs, however, argued that the defendant unilaterally changed the terms of the agreements without their consent. They further claimed that the defendant tried to force them into signing new variation agreements that were never requested by the plaintiffs. 60 [6] Not accepting the defendant’s proposal to overcome the issue, the plaintiffs continues to attempt making failed payments as the banking system remains unresolved. [7] The plaintiffs alleged that they had suffered significant financial losses, not only due to their inability to make payments but also 65 because of the negative impact on their business reputation caused by the defendant reporting them to Bank Negara Malaysia for defaults under the Central Credit Reference Information System (“CCRIS”). This, according to the plaintiffs, severely affected their ability to secure new contracts under their business. 70 [8] The defendant, on the other hand, due to non-payment, resorted to taking steps to repossess the vehicles, which prompted the plaintiffs to file this suit. Also, the plaintiffs sought an injunction to restrain the defendant from repossessing the vehicles until the matter could be resolved at trial. They argued that the defendant’s refusal to accept 75 payments, coupled with its attempts to unilaterally alter the terms of the agreements, constituted a breach of the original hire-purchase agreements under Moratorium 4. [9] The defendant countered the plaintiff on the issue of payment, stating that they have adequately addressed the issue but that the 80 plaintiffs failed to make any payments even after being provided with a new account. Applicable law [10] In Keet Gerald Francis Noel John v Mohd Noor Bin Abdullah & Ors [1995] 1 MLJ 193; [1995] 2 AMR 1859; [1995] 1 CLJ 293, the 85 Court outlined the steps a judge should follow when assessing an application for an interlocutory injunction. The inquiry should proceed along the following lines: a) Bona Fide Serious Issue to Be Tried: The judge must determine if the facts in totality disclose a serious issue 90 requiring the matter to proceed to trial. At this stage, no decision on the merits is to be made. In the event that no serious issue is made out, the injunction is refused; otherwise, the inquiry continues to consider the next, where the balance of convenience lies. 95 b) Balance of Convenience: The judge evaluates the total facts presented and considers where justice lies by weighing the harm from granting or refusing the injunction. Financial standing, practical realities, and the adequacy of damages are considered. In exceptional 100 cases, courts may allow for relief without the usual undertaking of damages. c) Judicial Discretion: The injunctive remedy is discretionary and aims to maintain the status quo until trial. The judge must consider alternative remedies, 105 whether there was a delay in applying, and consider the public interest and equity. The judgment should detail the factors influencing the decision. Issues for Determination [11] Accordingly, the primary issues to be determined are as follows: 110 a) Whether the facts disclose a bona fide issue to be tried. b) Whether damages constitute an adequate remedy for the plaintiffs. c) Whether the balance of convenience favours the granting of the injunction. 115 Issue 1: Bona Fide Issue to be Tried [12] The Court must determine whether there exists a bona fide issue serious enough to warrant trial. In this case, the plaintiffs argued that the defendant breached the hire-purchase agreements by 120 unilaterally altering terms and refusing payments under Moratorium

However, the defendant provided evidence showing the payments were declined due to system enhancements, which were communicated to the plaintiffs, and clear avenues were offered for rectification and resuming payments. This aligns with the principle 125 in Keet Gerald Francis Noel John v Mohd Noor bin Abdullah (supra), which requires that the totality of facts be evaluated objectively to identify serious issues for trial. [13] The plaintiffs failed to act in good faith by refusing to utilise the new account provided for payments. The plaintiff instead asserts a 130 breach of contract without attempting basic remedial measures. This conduct, combined with the continued use of the vehicles without payment since October 2022, contravenes the equitable doctrine of “clean hands.” Such principles were reiterated in Golden Plus Holdings Berhad v Teo Sung Ngiap [2019] MLJU 1850; 135 [2019] AMEJ 1706; [2019] CLJU 2145, where the Court emphasised that equitable relief demands compliance with good faith obligations. It states: “[65] In applying for an injunction too, it is trite that a party requesting the same must come to court with clean hands. In 140 CBM Construction Sdn. Bhd. v. Builtcon And Development Sdn. Bhd. & Anor [1992] 2 MLJ 368, it is stated as follows: “Injunction being an equitable relief, the Plaintiff must come to court with clean hands: they did not do so ... This reason alone was sufficient for me to set aside 145 the injunction ...” [66] Likewise, in Tahan Steel Corp Sdn. Bhd. v. Bank Islam Malaysia Bhd [2004] 6 MLJ 1 Abdul Malik Ishak J (as he then was) said: “Now, since injunctions are a discretionary remedy, 150 the plaintiff must come to this court with clean hands for he who comes to equity must come with clean hands ... Here, there is more than an impending breach. Here, there is a pre-existing breach on the part of the plaintiff and for that reason this court will 155 not come to the aid of the plaintiff.” [14] Based on the evidence before the Court, the defendant demonstrated adherence to standard banking practices, timely communication, and no malfeasance in handling accounts. The 160 plaintiffs’ failure to remedy the situation or mitigate their position undermines their claim, and no bona fide issue was found serious enough to merit trial. Thus, the Court concludes that the injunction is unwarranted, in line with the objective standards established in Keet Gerald Francis (supra) and reaffirmed in Golden Plus 165 Holdings (supra). Issue 2: Adequacy of Damages as a Remedy [15] The second consideration is whether damages would provide an adequate remedy for the plaintiffs should the injunction be refused 170 and they ultimately succeed in their claim. The plaintiffs have quantified their damages, including specific losses resulting from the defendant’s actions, amounting to RM 2,301,200.22. [16] The defendant, as a major financial institution, is undoubtedly capable of compensating the plaintiffs should they succeed at trial. 175 The claim revolves around monetary losses, and there is no indication that the plaintiffs would suffer irreparable harm that could not be remedied through damages. Applying the principles laid out in Keet Gerald Francis Noel John v Mohd Noor Bin Abdullah (supra), the adequacy of damages must be objectively assessed. 180 [17] The plaintiffs' contention that blacklisting under the CCRIS caused irreparable harm and cannot be remedied through damages lacks merit. Courts require concrete evidence of harm beyond speculative claims. In this case, the plaintiffs failed to demonstrate how blacklisting directly impacted their business contracts or reputation. 185 As held in Golden Plus Holdings Berhad v Teo Sung Ngiap (supra), damages remain an adequate remedy for financial losses arising from such claims if properly substantiated at trial. If the harm is quantifiable and financial compensation suffices, then damages are an adequate remedy. 190 [18] However, in Associated Tractors Sdn. Bhd V. Chan Boon Heng & Anor [1990] 2 CLJ 157; [1990] 2 MLJ 408 the Supreme Court held that injunction was improperly granted because damages were adequate and was of the view that an early trial was more appropriate. 195 “But it would seem quite clear that the most important factor to consider as a matter of principle is the question of whether in lieu of the injunction damages would be an adequate and proper remedy because in the matter of injunctions and exercising its jurisdiction the Court acts upon the principle of 200 preventing irreparable damage. As Lindley LJ said in London & Blackwell Rly. Co. v. Cross [1986] 31 Ch D 354 at p. 369: The very first principle of injunction law is that you do not obtain injunctions for actionable wrongs for which damages are the proper remedy. 205 The respondents in their counter claim sought for the return of the RM90,000 as the sum allegedly paid towards the purchase of the machine and damages and interests. It is clear therefore that this is a case where even holding the defendants to their counter claim damages would be an 210 adequate remedy. Therefore the injunction was in our view not properly granted. In a case like this it would be more appropriate to order an early hearing of the application to strike out the counter claim and the application for summary judgment rather than to grant the injunction.” 215 [19] Likewise, in this case, I reckon that damages are an adequate remedy with a direction for an early trial. Issue 3: Balance of Convenience [20] The balance of convenience test requires the Court to weigh the 220 potential harm to each party if the injunction is granted or refused. In this case, the plaintiffs contend that their business would suffer irreparable harm if the vehicles were repossessed. However, the defendant argues that allowing the injunction would permit the plaintiffs to continue using the vehicles without making the 225 necessary payments, resulting in further financial loss for the defendant, especially considering the depreciating value of the vehicles. [21] In Keet Gerald Francis Noel John v Mohd Noor Bin Abdullah (supra), the Court emphasised that the balance of convenience lies 230 where the risk of greater injustice is lower. Given that the plaintiffs' losses are largely financial and can be remedied by an award of damages, while the defendant would suffer continued financial harm if the vehicles were not repossessed, the balance of convenience in these circumstances favours the defendant. 235 [22] This court is of the view that the plaintiffs’ financial difficulties do not absolve them of their obligations under the agreements to make payments under the hire-purchase agreement. Repossession was a lawful recourse for the defendant, given the plaintiffs' continued failure to make payments. 240 [23] The defendant denies any breach of the hire-purchase agreements, they contend that the system glitch affecting the plaintiffs’ accounts has been addressed, errors rectified, and opportunities provided for the plaintiffs to make payments. As such, the defendant concludes, in which this court agrees, that since damages would adequately 245 remedy any harm suffered by the plaintiffs, the injunction should be dismissed. Conclusion [24] After careful consideration of the submissions and evidence presented, this court finds that the facts do not disclose a bona fide 250 issue serious enough to warrant trial. The plaintiffs’ failure to act in good faith, combined with their continued use of the vehicles without fulfilling payment obligations, undermines their claim. Furthermore, damages in the circumstance of this case are deemed an adequate remedy for the plaintiffs’ losses, and the balance of convenience lies 255 in favour of the defendant, who faces continued financial harm with the depreciation of the vehicles. Accordingly, the plaintiffs’ application for an injunction is dismissed with costs of RM5,000.00 and early trial is fixed. 260 265 Date : 14 January 2025 Moses Susayan 270 MOSES SUSAYAN Judicial Commissioner High Court in Malaya at Ipoh, Perak 275 Counsel: For the plaintiffs: Pramjit Singh Advocates and Solicitors [Messrs Harjit Sandhu, Wan & Associates] 280 Kuala Lumpur For the defendant: Zaizuraimy Abd Rahim (together with Faizal bin Kamaruddin) [Messrs Mad Diah Faizal & Co] 285 Ipoh, Perak (Notice: This Grounds of Decision is subject to official editorial revision) Headnotes 290 Civil Procedure — Injunction — Interlocutory injunction — Grounds to consider — Whether bona fide serious issue to be tried — Plaintiffs alleged breach of hire-purchase agreements and refusal of payments by Defendant — Whether Plaintiffs acted in good faith — Whether Plaintiffs' claim disclosed a serious issue requiring trial — Principles of "clean 295 hands" in equity applied. Whether damages is adequate remedy — Plaintiffs quantified financial losses — Defendant capable of compensating Plaintiffs if successful at trial. Where the Balance of convenience lies — Risk of greater harm assessed — Whether Plaintiff’s business losses outweighed Defendant’s financial harm and vehicle 300 depreciation — Repossession deemed lawful under hire-purchase agreements