Banjaran Sempurna Sdn Bhd v Hydroshoppe Sdn Bhd (WA-21NCvC-72-10/2023)

The Kuala Lumpur Tower or Menara Kuala Lumpur in the Malay Language is the highest viewpoint in the city of Kuala Lumpur at 421 metres high. It is also the seventh tallest tower in the world and, together with the Petronas Twin Towers, are considered the icons of the Kuala Lumpur skyline. [“KL Tower”].

The present dispute concerns the management of the KL Tower. The plaintiff filed Enclosure 9 for an ex-parte interim injunction to restrain the 1st to 3rd defendants from managing the KL Tower and disposing, pledging, and/or dealing with the shares of the 2nd defendant pending trial.

The 1st defendant is Hydroshoppe Sdn Bhd. The 2nd defendant is Menara Kuala Lumpur Sdn Bhd. The 3rd defendant is Abdul Hamid Shaikh Bin Abdul Razak. The 4th defendant is Menteri, Kementerian Komunikasi Dan Digital.

I converted the ex-parte injunction application to inter-parte, heard it on 18-01-2024 and dismissed the application with costs of RM 12,000 subject to allocatur.

The plaintiff at the hearing said they relied on two grounds - i. To protect the image and reputation of KL Tower. 3 ii. To protect possible losses of third parties.

The main issue that arose for my consideration, put in a nutshell, is whether a company A who is not a party to a contract between company B and company C, can apply to Court to restrain company B from fulfilling its obligations to company C under the said contract.

I had on 18-01-2024 dismissed the two grounds relied on by the plaintiff as not constituting serious issues to be tried for these broad reasons - i. There is no locus standi for the plaintiff to apply for an injunction to protect the image and reputation of KL Tower as alleged by the plaintiff as the plaintiff is not the owner or concession holder of KL Tower. ii. The 2nd ground that they are protecting the possible losses of third parties again give rise no cause of action against the 1st to 3rd defendants.

The plaintiff has on 26-01-2024 filed an appeal to the Court of Appeal against my decision. I now give my full grounds of judgment.

For the record, the plaintiff filed written submissions Enclosure 22. The 1st to 3rd defendants filed written submissions Enclosure 21. Relevant Background Facts

The KL Tower is owned by the Government of Malaysia. Since its opening in 1996, it has been operated and maintained under a concession [“Concession”] to the 2nd defendant, a subsidiary of the country’s telecommunications company, Telekom Malaysia. [“TM”].

On or about 2021 TM decided not to renew the Concession.

The plaintiff made a proposal to TM to take over the Concession of the 2nd defendant and the management of KL Tower. The 1st defendant also made a proposal to manage the KL Tower and/or undertake the acquisition of the 2nd defendant.

Other companies also sought to manage the KL Tower. Eventually, only the plaintiff, the 1st defendant and a company called Q Space were shortlisted. TM accepted the 1st defendant’s offer on 09-09-2022.

The plaintiff, aggrieved, filed a writ action a year later on 03-10-2023. Three months later, on 10-01-2024 the plaintiff filed a Notice of Application for Interim Injunction [Enclosure 9].

The injunction application asks the Court to prohibit the 1st to 3rd defendants whether acting on their own, through their directors, employees, representatives, agents, proxies, and/or any individual, company, or party associated with the 1st to 3rd defendants from: 5 i. Taking any action, steps, and executing any decision, rights, or powers under the KL Tower Concession until the disposal of this suit; ii. Taking any action, steps, and executing any decisions relating to the management of KL Tower until the disposal of this suit; iii. Taking any actions, steps, and executing any decisions relating to existing service providers of KL Tower and/or new service providers of KL Tower until the disposal of this suit; iv. Disposing, pledging, and/or dealing with the shares of the D2 until the disposal of this suit; and v. Appointing and/or dismissing employees, whether for KL Tower and/or service providers, appointing managers for food and beverage, kiosks, and car parks at KL Tower until the disposal of this suit.

In the Statement of Claim the plaintiff contends that the sale of the shares of the 2nd defendant from TM to the 1st defendant is tainted by corruption and bribery and asks that the sale be set aside. [See paragraph 55 (a) Statement of Claim] [See also Enclosure 22 plaintiff’s written submissions paragraphs 6 to 16].

In the Statement of Claim the plaintiff further prays for a declaration that the plaintiff be awarded the Concession and the management of KL Tower to save the KL Tower. [See paragraph 55 (f) Statement of Claim].

The plaintiff further contends in Enclosure 22 plaintiff’s written submissions at paragraphs 17 to 18 that - i. 17. the Plaintiff had filed this Suit in order to save the concession of the Second Defendant and the management of Menara KL given that the Plaintiff’s is an eligible concessionaire and to prevent further damage to the reputation of Menara KL which is in the spotlight as a premier tourist attraction. ii. 18. The Plaintiff submits that it is ever ready to take over the concession of the Second Defendant and the management of Menara KL and given the tainted involvement of the First Defendant should be given the opportunity to own the Second Defendant and manage Menara KL.

Essentially, the plaintiff grounds its injunction application on two grounds [See Enclosure 22 plaintiff’s written submission paragraphs C1 and C2]- i. Damage to KL Tower ’s Image and Reputation. ii. Exposure to Claims and Law Suits from Third Parties.

For the 1st ground the plaintiffs submits “As a result, the image and reputation of Menara KL as one of the premiere icons of the Kuala Lumpur skyline has been tarnished. In light of the careless and 7 nonchalant actions of the First to Third Defendant, the Plaintiff decided to file this Application to prevent further damage to Menara KL’s image and reputation.” [See Enclosure 22 plaintiff’s written submissions paragraph 23].

For the 2nd ground the plaintiffs submits “The Plaintiff wishes to highlight that should the First Defendant's concession is declared invalid, all the decisions of the First Defendant up to the Third will be null and void and must be withdrawn”. [See Enclosure 22 plaintiff’s written submissions paragraph 24].

The plaintiff contends that these are bona fide serious issues to be tried and that an interlocutory injunction is warranted to maintain the status quo pending the determination of these issues at trial. The plaintiff also submits that the balance of convenience unequivocally favours the granting of the injunction.

The plaintiff relies on Keet Gerald Francis Noel John v Mohd. Noor Bin Abdullah [1995] 1 MLJ 193 CA for general principles on the granting of interim injunction pending trial.

The 1st to 3rd defendants’ lead counsel Dato DP Naban opposes the injunction application [See Written Submission Enclosure 21 paragraphs 10 to 30] on the following grounds – i. The plaintiff failed to disclose any serious issues to be tried. 8 ii. The balance of convenience lies against the plaintiff. iii. Damages constitute an adequate remedy. iv. The plaintiff came to court with unclean hands.

I begin with the law on interim injunction.

In essence, the court will exercise its discretion to grant an interlocutory injunction to a plaintiff if the following considerations are satisfied: a) The plaintiff has satisfied the court that there is a bona fide and serious question to be tried in respect of the plaintiff's cause of action against the defendant. To determine whether there is a bona fide and serious question to be tried, the judge need not make any determination on the merits of the claim. It is sufficient if the judge identifies the issues raised and decides whether these are serious enough to merit a trial. Thus, if the plaintiff fails to show there is a bona fide and serious question to be tried in respect of the plaintiff's cause of action against the defendant, the court shall refuse to grant the interlocutory injunction. There is no necessity to proceed to the next consideration. b) Damages are not an adequate remedy for the plaintiff. Damages will not be an adequate remedy if it is not possible to assess the 9 amount of damages the plaintiff would have suffered if he wins at trial. [See Baskin Robbins International Co v Avonday Sdn Bhd [1992] 2 CLJ 1198 p 205 E-F Shaik Daud Ismail J]. Damages will also not be an adequate remedy even if the damages that the plaintiff would suffer are monetary in nature and quantifiable if the defendant is not in a position or does not have the financial means to pay the damages. [See Pekeliling Triangle Sdn Bhd & Anor v Chase Perdana Bhd [2002] 2 MLRA 258; [2003] 1 MLJ 130; [2003] 1 CLJ 153; [2003] 1 AMR 378 CA, at 144 C-D, quoting Lord Diplock in American Cyanamid Co v Ethicon Ltd & Ors [1975] 1 All ER 504 and Scomi Group Bhd v Gelombang Global Sdn Bhd & Anor and another case [2020] MLRHU 377; [2020] 12 MLJ 708; [2020] 9 CLJ 122; [2020] 5 AMR 808 at [113] Ong Chee Kwan JC.] c) The balance of convenience lies in favour of a grant of an interlocutory injunction. In this context, the judge must consider where the justice of the case lies. In making his assessment, he must weigh the harm that the injunction would produce by its grant against the harm that would result from its refusal. The objective is to produce a just result for the period between the decision on the application and the trial proper; and d) There is no policy or equitable ground to refuse an interlocutory injunction. [See Keet Gerald Francis Noel John v Mohd. Noor Bin Abdullah [1995] 1 MLJ 193 CA Gopal Sri Ram JCA and Kwong Hing Enterprises Sdn Bhd & Anor v Diamond C Management Corporation [2023] MLRHU 287 HC at [32]] Should I Grant the Interim Injunction? Is there a Bona Fide And Serious Question to Be Tried?

I am of the view that the plaintiff has failed to satisfy the court that there is a bona fide and serious question to be tried in respect of the plaintiff’s cause of action against the 1st to 3rd defendants.

The plaintiff is merely one of the companies that failed in their bids to manage the KL Tower. The plaintiff, as a failed bidder, has no legal and beneficial interest in the KL Tower. Only TM and the Government of Malaysia have legal and beneficial interests in the KL Tower. Only they have the locus standi to take action against the 1st to 3rd defendants in respect of the KL Tower.

Section 54[k] of the Specific Relief Act 1950 also states that an injuction cannot be granted where the applicant has no personal interest in the matter.

The 1st ground asserted by the plaintiff that, to quote, “In light of the careless and nonchalant actions of the First to Third Defendant, the Plaintiff decided to file this Application to prevent further damage to Menara KL’s image and reputation.” unquote [See Enclosure 22 plaintiff’s written submissions paragraph 23] is clearly not a bona fide and serious question to be tried.

The 2nd ground asserted by the plaintiff that, to quote, “The Plaintiff wishes to highlight that should the First Defendant's concession is declared invalid, all the decisions of the First Defendant up to the Third will be null and void and must be withdrawn.” unquote [See Enclosure 22 plaintiff’s written submissions paragraph 24] is again clearly not a bona fide and serious question to be tried.

In Siskina v Distos Compania Naviera SA [1979] AC 210, UKHOL at page 256 Lord Diplock held: “A right to obtain an interlocutory injunction is not a cause of action. It cannot stand on its own. It is dependent on there being a pre-existing cause of action against the defendant arising out of an invasion, actual or threatened, by him of a legal or equitable right of the plaintiff for the enforcement of which the defendant is amenable to the jurisdiction of the court. The right to obtain an interlocutory injunction is merely ancillary and incidental to the pre-existing cause of action. It is granted to preserve the status quo pending the ascertainment by the court of the rights of the parties and the grant to the plaintiff of the relief to which his cause of action entitles him, which may or may not include a final injunction." [Emphasis added]

In Suwiri Sdn Bhd v Government of the State of Sabah [2008] 1 MLJ 743, FC the Court held: “[10] The doctrine of privity of contract is that as a general rule, a contract cannot confer rights or impose obligations on strangers to it, ie, persons who are not parties to it.

... in Dunlop Pneumatic Tyre Co. Ltd v. Selfridge & Co. Ltd [1915] AC 847 ... "... only a person who is a party to a contract can sue on it. Our law knows nothing of a jus quaesitum tertio arising by way of contract. Such a right may be conferred by way of a property, as for example, under a trust, but it cannot be conferred on a stranger to a contract as a right to enforce the contract in personam.” [Emphasis added]

Even if there are criminal breaches committed by the 1st to 3rd defendants in respect of KL Tower (as alleged by the plaintiff which is denied by the 1st to 3rd defendants), they do not give rise to a cause of action that allows the plaintiff to sue the 1st to 3rd defendants in respect of the KL Tower.

In short, the law considers the plaintiff a busybody.

Another issue with the plaintiff’s injunction application is that the plaintiff is seeking reliefs and injunction orders that will affect TM without making TM a defendant.

The plaintiff is asking the Court to restrain the 1st to 3rd defendants from carrying out their obligations with TM. In the Statement of Claim the plaintiff also contends that the sale of the shares of the 2nd defendant from TM to the 1st defendant is tainted by corruption and bribery and asks that the sale be set aside. [See paragraph 55 (a) Statement of Claim].

In the Statement of Claim the plaintiff further prays for a declaration that the plaintiff be awarded the Concession and the management of KL Tower to save the KL Tower. [See paragraph 55 (f) Statement of Claim].

In such a situation the law is clear that “All parties affected by a court order must be made parties to the suit.” The plaintiff’s failure to add TM as a defendant is thus a further ground to dismiss the plaintiff’s application.

This principle that “All parties affected by a court order must be made parties to the suit.” can be seen from the Court of Appeal decision in Saujana Resort (M) Bhd v Chin Cheen Foh & Ors And Another Appeal [ 2021] 3 CLJ 71 CA. Vazeer Alam Mydin Meera JCA held at [41] – … It is trite that in an application for declaration, all parties who would potentially be affected by such an order must be before the court. An action for a declaration is an important device for ascertaining and determining the rights of parties. And it is settled that when a declaratory order is sought, all interested parties must be before the court. See dicta of Viscount Maugham in London Passenger Transport Board v. Moscrop [1942] AC 332 at 345 (HL) which was adopted by the Supreme Court in Ketua Pengarah Jabatan Alam Sekitar & Anor v. Kajing Tubek & Ors And Other Appeals [1997] 4 CLJ 253 p. 282 vide Lord Radcliffe’s observation in Ibeneweka v. Egbuna [1964] 1 WLR 219, p. 226. See also Chor Phaik Har & Ors v. Choong Lye Hock Estates Sdn Bhd & Ors [1996] 1 MLRA 470 & [1996] 4 CLJ 141 CA; Kesatuan Sekerja Pembuatan Barangan Galian Bukan Logam v. Director General of Trades Unions & Ors [1990] 2 CLJ 405; [1990] 2 CLJ (Rep) 218 HC; and Chia Saw Kee & Anor v. Huah Leong Holdings Sdn Bhd & Anor [2003] 3 MLRH 46 & [2003] 8 CLJ 124 HC for an application of this principle.

I hold that the failure of the plaintiff to add TM as a defendant is fatal to its application. The failure to add a necessary party as a defendant also means there is no serious issue to be tried

The failure by a party applying for an interim injunction to add a necessary party as a defendant means there is no serious issue to be tried. [See Hong Kong Vegetable Oil Company Ltd v Malin Sirinaga Wicker & Ors [1978] 2 MLJ 13 (OCJ Singapore) Rajah J at pages 15-16, followed in Serba Dinamik Holdings Bhd v Ernst & Young Consulting Sdn Bhd (formerly known as Ernst & Young Advisory Services Sdn Bhd) [2022] CLJU 1634; [2022] 1 LNS 1634 Ahmad Fairuz Zainol Abidin J at [64-68].

In Hong Kong Vegetable Oil Company Ltd v Malin Sirinaga Wicker & Ors [1978] 2 MLJ 13 (OCJ Singapore) Rajah J at pages 15-16, held: “Principle No. 1 ‘provided that the court is satisfied that there is a serious question to be tried, there is no rule that the party seeking an interlocutory injunction must show a prima facie case’. I interpreted this principle to mean that once the court is satisfied that there is a serious question to be tried then the court is not to follow the previous practice of requiring a plaintiff to show a prima facie case before granting him an interim injunction. Therefore, in the instant case I was of the view that I had first to decide whether there is in fact and in law a serious question to be tried and again in my view implicit in ‘a serious question to be tried’ is the question whether the action is properly conceived and whether all the proper, necessary and/or interested parties are before the court so that any order made by the court can properly and effectively be implemented. In my judgment, if these elements or any of them are not present then, because of non-compliance with this principle alone, the motion should stand dismissed.” [Emphasis added]

Hong Kong Vegetable Oil Company Ltd v Malin Sirinaga Wicker & Ors [1978] 2 MLJ 13 (OCJ Singapore) Rajah J was recently applied in Serba Dinamik Holdings Bhd v Ernst & Young Consulting Sdn Bhd (formerly known as Ernst & Young Advisory Services Sdn Bhd) [2022] CLJU 1634; [2022] 1 LNS 1634 where Justice Ahmad Fairuz Zainol Abidin held - Application not properly conceived “[64] One element crucial for determination is whether all parties affected by the proposed injunction have been named. In essence, it pivots on whether the application was properly conceived. …

Apart from the contractual provisions, EYC is obliged under the Bursa Directive and the SCA to report to regulators. As such, any order would clearly affect both regulators and their statutory powers.

In this regard, the Singapore High Court case of Hong Kong Vegetable Oil Co Ltd v. Wicker and others is instructive: "15. Principle 1 "provided that the court is satisfied that there is a serious question to be tried, there is no rule that the party seeking an interlocutory injunction must show a prima facie case" interpreted this principle to mean that once the court is satisfied that there is a serious question to be tried then the court is not to follow the previous practice of requiring a plaintiff to show a prima facie case before granting him an interim injunction. Therefore, in the instant case I was of the view that I had first to decide whether there is in fact and in law a serious question to be tried and again in my view implicit in a serious question to be tried" is the question whether the 17 action is properly conceived and whether all the proper, necessary and/or interested parties are before the court so that any order made by the court can properly and effectively be implemented. In my judgment, if these elements or any of them are not present then, because of non-compliance with this principle alone, the motion should stand dismissed."

Thus, it is clear to this Court that the Application has not been properly laid before this Court. If the relevant parties are not before the Court, the order of this Court will not be properly and effectively implemented.” [Emphasis added]

TM is both a proper and necessary party. Absent TM as a defendant, as a matter of law, there can be no serious issue to be tried.

In view of my decision on the grounds set out above, I do not propose to consider the rest of the grounds raised by counsel.

I thank both counsel for their thorough and helpful submissions, both written and oral.

For the above reasons, I therefore dismiss the plaintiff’s application for injunction with costs of RM 12,000 subject to allocatur. Damages to be assessed. …………(signed)………….. Leong Wai Hong Judicial Commissioner High Court of Malaya Kuala Lumpur (NCVC 10) Dated: 29th February 2024 COUNSEL: 1) Arun Ganesh Boopalan, Kalaiselvi Mariamuthu and Dhanaraj Vasudevan for plaintiff. (Kamil Hashim Raj & Lim (Petaling Jaya)) 2) DP Naban, Lisa Yong and Daryl Lee for 1st defendant, 2nd defendant and 3rd defendant. (Rosli Dahlan Saravana Partnership (Kuala Lumpur)) 3) Barath Maniam for 4th defendant. (Jabatan Peguam Negara, Putrajaya (Putrajaya)) CASES REFERRED TO: 1) American Cyanamid Co v Ethicon Ltd & Ors [1975] 1 All ER 504. 2) Baskin Robbins International Co v Avonday Sdn Bhd [1992] 2 CLJ

3) Chia Saw Kee & Anor v. Huah Leong Holdings Sdn Bhd & Anor [2003] 3 MLRH 46 & [2003] 8 CLJ 124 HC. 4) Chor Phaik Har & Ors v. Choong Lye Hock Estates Sdn Bhd & Ors [1996] 1 MLRA 470 & [1996] 4 CLJ 141 CA. 5) Dunlop Pneumatic Tyre Co. Ltd v. Selfridge & Co. Ltd [1915] AC 847. 6) Hong Kong Vegetable Oil Company Ltd v Malin Sirinaga Wicker & Ors [1978] 2 MLJ 13. 7) Ibeneweka v. Egbuna [1964] 1 WLR 219. 8) Keet Gerald Francis Noel John v Mohd. Noor Bin Abdullah [1995] 1 MLJ 193 CA. 9) Ketua Pengarah Jabatan Alam Sekitar & Anor v. Kajing Tubek & Ors And Other Appeals [1997] 4 CLJ 253. 10) Kesatuan Sekerja Pembuatan Barangan Galian Bukan Logam v. Director General of Trades Unions & Ors [1990] 2 CLJ 405; [1990] 2 CLJ (Rep) 218 HC. 11) Kwong Hing Enterprises Sdn Bhd & Anor v Diamond C Management Corporation [2023] MLRHU 287 HC. 12) London Passenger Transport Board v. Moscrop [1942] AC 332. 13) Pekeliling Triangle Sdn Bhd & Anor v Chase Perdana Bhd [2002] 2 MLRA 258; [2003] 1 MLJ 130; [2003] 1 CLJ 153; [2003] 1 AMR 378 CA. 14) Saujana Resort (M) Bhd v Chin Cheen Foh & Ors And Another Appeal [ 2021] 3 CLJ 71 CA. 15) Scomi Group Bhd v Gelombang Global Sdn Bhd & Anor and another case [2020] MLRHU 377; [2020] 12 MLJ 708; [2020] 9 CLJ 122; [2020] 5 AMR 808. 16) Serba Dinamik Holdings Bhd v Ernst & Young Consulting Sdn Bhd (formerly known as Ernst & Young Advisory Services Sdn Bhd) [2022] CLJU 1634; [2022] 1 LNS 1634. 17) Siskina v Distos Compania Naviera SA [1979] AC 210. 18) Suwiri Sdn Bhd v Government of the State of Sabah [2008] 1 MLJ 743. LEGISLATION REFERRED TO: 1) Section 54[k] Specific Relief Act 1950.