An application for the grant of an injunction may be made by any party to a cause or matter before or after the trial of the cause or matter, whether or not a claim for the injunction was included in that party's originating process, counterclaim or third party notice, as the case may be. [7] The sole purpose for a Mareva injunction is to prevent a plaintiff from being deprived of the proceeds of an action, by a defendant transferring his assets abroad or dissipating his assets within the jurisdiction: S & F International Ltd v Trans-con Engineering Sdn Bhd [1985] 1 MLJ 62. 30 November 2020 …………………………………………………………………………………………………………………………………………………………… -------------------------------------------------------------------------------------------------------------------------------------- 4 [8] The following requirements, however, must be established by the Plaintiff for a Mareva injunction: a) A valid cause of action over which the court has jurisdiction; b) A good arguable case, which is more than being barely capable of serious argument, but not necessarily one that the judge believes has got more than 50% chance of success; c) A real risk of dissipation of assets, or removal of assets from the jurisdiction which would render the Plaintiff’s judgment of no effect; and d) The balance of convenience that favours the grant of a Mareva injunction. Contentions, evaluation, and findings [9] It was undisputed that the Plaintiff had a valid cause of action. The subsequent issue, therefore, was whether it had a good and arguable case. Whether there was a good and arguable case [10] The principles relating to a ‘good and arguable case” have been distilled in a plethora of cases including S & F International Ltd v Trans-con Engineering Sdn Bhd [1985] 1 MLJ 62; Hock Hua Bank (Sabah) Berhad v. Yong Liuk Thin & Ors [1995] 2 CLJ 900, [1995] 2 MLJ 213; Biasamas Sdn Bhd & Ors v. Kan Yan Heng & Anor [1998] 4 CLJ 754 [1998] 4 MLJ 1; and Lien Hoe Sawmill Co Sdn Bhd v. Yap Sing Hock & Ors [1992] 2 CLJ 1022, [1992] 2 CLJ (Rep) 727, to mean more than being barely capable of serious argument, but not necessarily one that 30 November 2020 …………………………………………………………………………………………………………………………………………………………… -------------------------------------------------------------------------------------------------------------------------------------- 5 the judge believes has more than fifty per cent chance of success. At that stage, the judge does not have to believe that the plaintiff has established a case on a balance of probabilities, but only to the extent that there is a fair chance that the plaintiff will obtain judgment against the defendant. The plaintiff need not show that it has a case so strong as to warrant summary judgment, or even a prima facie case. It would generally be sufficient if the plaintiff is able to demonstrate via the evidence available, that it has a fair chance of success in its claim against the defendant. [11] The Defendant had made several averments, including allegations that the Plaintiff was not even the sub-contractor as it claimed, and that the letter of award, containing the Plaintiff’s appointment, was forged. The Defendant had also disputed the role of one Chen Ji, who acted on behalf of Cason Design in the transactions with the Plaintiff. In my view, these allegations were unsubstantiated by the affidavit evidence adduced by the Defendant, and thus, had not diluted the Plaintiff’s good and arguable case. As such, the Plaintiff had a fair chance of success in its claim. Whether there was a real risk of dissipation of assets [12] The subsequent issue was whether there was a real risk of dissipation of assets by the Defendant. The test for risk of dissipation of assets was distilled by Zakaria Yatim J in Bank Bumiputra Malaysia Bhd & Anor v Lorrain Osman & Ors [1985] 2 MLJ 236, in the following passage: 30 November 2020 …………………………………………………………………………………………………………………………………………………………… -------------------------------------------------------------------------------------------------------------------------------------- 6 I shall now turn to the third ingredient viz., whether there is a risk of the assets being removed before the judgment is satisfied. The question that arises here is what is the test to be applied by the court in determining whether there is such a risk. In Third Chandris Shipping's case, supra, Lawton L.J., in his judgment at pages 671, 672, said, There must be facts from which the Commercial Court, like a prudent, sensible commercial man, can properly infer a danger of default if assets are removed from jurisdiction … …. In the Pacific Centre's case, supra., Edgar Joseph Jr. J., after reviewing the relevant passages in the English cases, came to the conclusion, at page 150, that the test is as follows:— I prefer the view that it would be sufficient for the plaintiff to merely show a risk of disposal of assets which has the effect of frustrating the plaintiff in his attempt to recover the fruits of a judgment he is likely to obtain against the defendant … [13] The decision of Zakaria Yatim J above was approved by the Supreme Court in Aspatra Sdn Bhd & Ors v Bank Bumiputra (M) Bhd & Anor [1987] CLJ (Rep) 50. Based on the above case, the test for risk of dissipation of assets is whether a sensible commercial man could infer a danger that payment would not be forthcoming if assets are dissipated. [14] The issue, therefore, is whether the facts were sufficient to show a risk of disposal of assets. The test was laid down in S & F international ltd v. Trans-Con Engineering Sdn Bhd [1985] 2 CLJ 228, as follows: Before such relief is granted the plaintiff must secondly show that there is a risk that assets will be dissipated: he must demonstrate this by solid evidence, e.g. that the defendant's previous actions show his probity is not to be relied upon or that the corporate structure of the defendant infers that 30 November 2020 …………………………………………………………………………………………………………………………………………………………… -------------------------------------------------------------------------------------------------------------------------------------- 7 it is not to be relied upon, but mere proof that the defendant is incorporated abroad will not suffice;..., and that a refusal of an injunction would involve a real risk that a judgment or award in his favour would remain unsatisfied because of the defendant's removal of assets from the jurisdiction or dissipation of assets within the jurisdiction. [Emphasis added.] [15] The evidence indicated that the Defendant had absconded with large amounts of money relating to the Project. He had taken out substantial sums from the bank account of Cason Design, and was arrested by the police on 27 April 2020 on suspicion of possession of drugs and firearms. He was also found with a cash amount of MYR700,000, which was confiscated by the police at that material time. This was compounded by the fact that the business premises of Cason Design is currently closed, and that the Defendant had paid only a sum of MYR30,000 for the works, and had even failed to settle payment of the Plaintiff’s claim in another suit, namely, JA-22NCC-18-05/2020 (“Civil Suit No 18”). [16] All these facts, in my view, are sufficient for a ‘prudent and sensible man’ to infer a danger that the Defendant would deal with its assets in such a manner that he would have no assets within this jurisdiction to settle the Plaintiff’s claim, if the need arose. Whether this Application was oppressive and a duplicity [17] The Defendant contended that since the High Court in Civil Suit No 18 had granted an injunction for amount of MYR2,787,967.97 against the 30 November 2020 …………………………………………………………………………………………………………………………………………………………… -------------------------------------------------------------------------------------------------------------------------------------- 8 Defendant, the risk of dissipation in the present case had no longer existed. [18] I am unable to agree with this contention, since Civil Suit No 18 was entirely different from this one, and the injunction pursuant thereto encompassed the Plaintiff’s claim only in that suit, which was based on a different factual matrix. [19] Ultimately, the existence of an order for Mareva injunction granted by another Court, which hinged on a different factual matrix and cause of action, did not prevent this Court from exercising its discretion in favour of the Plaintiff, although parties in both Civil Suit No 18 and the present one, were the same. Furthermore, since there is an appeal against the decision in Civil Suit No 18, if that appeal is allowed, the Plaintiff, even if successful in this claim, may be left with nothing more than the value of the paper on which the judgment is documented. [20] At this juncture, reference is made to Pacific Centre Sdn Bhd v United Engineers (Malaysia) Bhd [1984] 2 MLJ 143, where it was aptly stated that the ‘base of the Mareva jurisdiction is the principle that disposal of assets would result in the fruits of the judgment in favour of the plaintiff being uncollectable:’ per Edgar Joseph Jr J (as he then was). [21] I found instructive also the case of Jasa Keramat Sdn Bhd v Monatech (M) Sdn Bhd [1999] 4 MLJ 217, where the court in that case, in dealing with the issue of a reduction of Mareva sum, held, in the words of Jeffrey Tan J (as he then was): 30 November 2020 …………………………………………………………………………………………………………………………………………………………… -------------------------------------------------------------------------------------------------------------------------------------- 9 …the mareva sum should not be reduced, as a reduction will leave the plaintiff exposed still to the risk that a judgment or award in his favour would remain unsatisfied because of the defendant's dissipation or disposal of assets not frozen by the reduction of the mareva sum, and to the danger that the defendant will deal with his assets such that he would have no assets within the jurisdiction to fully satisfy the judgment or award in his favour. And the irony of it all, where the counterclaim exceeds the claim, a reduction would even wipe away the entire mareva sum, such that the plaintiff who shows a good arguable claim as well as a risk of the dissipation or disposal of assets and therefore is deserving of a mareva injunction would be left still high and dry, undeservedly but nonetheless effectively, without a mareva injunction. [Emphasis added.] [22] If the Court in Jasa Keramat Sdn Bhd v Monatech (M) Sdn Bhd [1999] 4 MLJ 217, was concerned with the reduction of the Mareva sum, a fortiori in this case if a Mareva injunction was not allowed at all, merely on the basis that the subject matter of this Application was the same in the Civil Suit No 18. Furthermore, the judgment sum claimed in the present case had no nexus whatsoever to the judgment sum in Civil Suit No 18. Whether undertaking as to damages was a bare one [23] The Defendant contended that the Plaintif’s undertaking as to damages was nothing more than a bare one, since the Plaintiff is purportedly an empty shell and is in dire financial straits itself. In my view, even if that is the case, I am unable to accept this argument, bearing in mind that the rationale for the undertaking is to enable the Court to make the necessary orders to compensate the party who is 30 November 2020 …………………………………………………………………………………………………………………………………………………………… -------------------------------------------------------------------------------------------------------------------------------------- 10 said to have suffered losses in the event it is established that the Plaintiff was not entitled to the injunction in the first place. [24] I draw guidance from the Federal Court in Jeffery Law Siew Su & Ors v. Yu Gui [2017] 4 CLJ 665, wherein it was held by Jeffrey Tan FCJ: ... The court has no power to compel an applicant for an interim injunction to furnish an undertaking as to damages. All that it can do is to refuse that application if he declines to do so. The undertaking is not given to the defendant but to the court itself. Non-performance of it is contempt of court, not breach of contract, and attracts the remedies available for contempt; but the court exacts the undertaking for the defendant's benefit. It retains a discretion not to enforce the undertaking if it considers that the conduct of the defendant in relation to the obtaining or continuing of the injunction or the enforcement of the undertaking makes it inequitable to do so... " (F Hoffmann-La Roche & Co AG and Others v. Secretary of State for Trade and Industry [1975] AC 295, at 360-361 per Lord Diplock). But "... whether an inquiry as to damages should be ordered lies with the discretion of the trial judge. It is not for the defendant to insist that such inquiry should be made" (GS Gill Sdn Bhd v Descente Ltd [2010] 5 CLJ 613; [2010] 4 MLJ 609 per James Foong FCJ, delivering the judgment of the court). [Emphasis added.] [25] Since the undertaking was made to Court and accepted, the Defendant’s argument on the alleged bare undertaking by the Plaintiff was bereft of merit. Whether there was material non-disclosure of fact by the Plaintiff [26] The Defendant averred that he had declared his assets as required in Civil Suit No 18 and contended that the Plaintiff, in submitting 30 November 2020 …………………………………………………………………………………………………………………………………………………………… -------------------------------------------------------------------------------------------------------------------------------------- 11 otherwise in its ex parte application for the Mareva injunction, had not disclosed material facts. [27] First, a perusal of the relevant documents indicated that only selective revelations were made by the Defendant. There were gaps in the disclosure of banking transactions, and from the documents themselves, large sums of money had remained unaccounted for by the Defendant. [28] In any event, it is fundamental to note that even if there was information omitted at the ex parte application stage, ultimately the overriding factor was the justice of the case. On this note, I draw guidance from the case of Noor Jahan Bte Abdul Wahab v Md Yusoff Bin Amanshah & Anor [1994] 1 MLJ 156, in particular, the following enlightening paragraph by Edgar Joseph Jr SCJ: Although there was non-disclosure of facts, the court would still have to consider whether justice required the injunction to continue. It was not necessarily the case that if a full and true picture had been disclosed to the court, the interlocutory injunction would not have been granted. [Emphasis added.] [29] Reference is made also to the Court of Appeal case of Damayanti Kantilal Doshi & Ors v Jigarlal Kantilal Doshi & Ors [2006] 7 MLJ 70, where although there appeared to be non-disclosure of a fact at the ex parte application stage, it was stated by Richard Malanjum JCA (as he then was) that ‘the paramount consideration is whether the justice of the case requires the granting of the interim injunction on the facts 30 November 2020 …………………………………………………………………………………………………………………………………………………………… -------------------------------------------------------------------------------------------------------------------------------------- 12 presented in the inter partes hearing despite the making of an ex parte order earlier on.’ [30] In the same way, the balance of convenience was in favour of the Plaintiff, in the event the assets were dissipated by the Defendant, and the justice of this case, therefore, required that this Application be allowed. Conclusion [31] In the final analysis, I had to look at the comparative effect of my decision. No doubt, the Defendant’s assets will be frozen, but should the Defendant succeed, he would be compensated by the damages that the Plaintif had undertaken to pay, whereas if this Application was not allowed, the Plaintiff woud be prejudiced if it was successful as it would not have any security to claim the judgment sum from. [32] In the upshot, therefore, based on the aforesaid reasons, and after careful scrutiny and consideration of all the evidence before this Court, and written and oral submissions of both parties, this Application was allowed. 30 November 2020 …………………………………………………………………………………………………………………………………………………………… -------------------------------------------------------------------------------------------------------------------------------------- 13 Dated: 30 November 2020 .………….SIGNED………….. (EVROL MARIETTE PETERS) Judicial Commissioner High Court, Johor Bahru Counsel: For the Plaintiff – Amer Ashrhaf Bin Azuddin; Messrs Tetuan Kuah, Lim, Chin & Ooi For the Defendant – Mazri bin Mohamed; Messrs Mazri & Co Cases referred to: ➢ Aspatra Sdn Bhd & Ors v Bank Bumiputra (M) Bhd & Anor [1987] CLJ (Rep) 50 ➢ Bank Bumiputra Malaysia Bhd & Anor v Lorrain Osman & Ors [1985] 2 MLJ 236 ➢ Biasamas Sdn Bhd & Ors v. Kan Yan Heng & Anor [1998] 4 CLJ 754; [1998] 4 MLJ 1 ➢ Damayanti Kantilal Doshi & Ors v Jigarlal Kantilal Doshi & Ors [2006] 7 MLJ 70 ➢ Hock Hua Bank (Sabah) Berhad v. Yong Liuk Thin & Ors [1995] 2 CLJ 900; [1995] 2 MLJ 213 ➢ Jasa Keramat Sdn Bhd v Monatech (M) Sdn Bhd [1999] 4 MLJ 217 30 November 2020 …………………………………………………………………………………………………………………………………………………………… -------------------------------------------------------------------------------------------------------------------------------------- 14 ➢ Jeffery Law Siew Su & Ors v. Yu Gui [2017] 4 CLJ 665 ➢ Lien Hoe Sawmill Co Sdn Bhd v. Yap Sing Hock & Ors [1992] 2 CLJ 1022; [1992] 2 CLJ (Rep) 727 ➢ Noor Jahan Bte Abdul Wahab v Md Yusoff Bin Amanshah & Anor [1994] 1 MLJ 156 ➢ Pacific Centre Sdn Bhd v United Engineers (Malaysia) Bhd [1984] 2 MLJ 143 ➢ S & F International Ltd v Trans-con Engineering Sdn Bhd [1985] 1 MLJ 62 Legislation referred to: ➢ Rules of Court 2012, Order 29