Preamble
an act of bankruptcy and left Malaysia while asset disclosure orders were pending. D6’s disclosed assets - a single bank account with only RM2,226.73 - raises concerns about where the substantial investment funds have gone, suggesting prior dissipation. [59] In response, D6 submits that the Plaintiff has failed to establish any real risk of dissipation. D6 argues that the subject matter relates to transactions made in 2010, and there would have been ample opportunity to dissipate assets in the intervening period if that was its intention. The fact that no such dissipation has occurred in the past 14 years strongly suggests there is no real risk of it occurring now. D6 further argues that the Plaintiff’s assertion rests solely on bare allegations and speculation without concrete evidence. D6 has voluntarily disclosed its modest bank account balance, which it argues runs counter to any suggestion of dissipation risk. D6 contends that D1’s non-compliance with court orders cannot be attributed to D6, a separate legal entity. [60] Having considered both parties’ submissions, I find that there is insufficient evidence of a real risk of dissipation by D6 despite the existence of a good arguable case. [61] Firstly, the length of time that has elapsed between the alleged fraud in 2010 and the present application is significant. The principle established in European Grain & S/N NIck5bzbnUW5bppgsk9MBQ Shipping Ltd v Compania Naviera Euro-Asia SA & Ors supports this position. [62] In that case, Chan Sek Keong J held that there was no real evidence suggesting the defendant would take steps to dissipate its assets to avoid payment of any award, observing critically that “the first defendant had ample opportunity to dissipate its assets before and after the plaintiffs' claim had been referred to arbitration, it did not do so. It continued to carry on its business and took no steps to conceal its assets.” [63] The court emphasised that the defendant's conduct during the intervening period was material evidence against finding a real risk of dissipation. Similarly, in the present case, D6 has had over 14 years since the alleged fraudulent conduct in 2010 to dissipate assets but has not done so. [64] This prolonged period of inaction, coupled with D6's continued business operations without any apparent attempt to conceal assets, weighs heavily against finding a real risk of dissipation now. The European Grain principle demonstrates that where a defendant has had extended opportunity to dissipate assets but has refrained from doing so, this conduct provides strong evidence negating any real risk of future dissipation. S/N NIck5bzbnUW5bppgsk9MBQ [65] Secondly, while D1’s conduct and admissions are concerning, these cannot automatically be imputed to D6 as a separate legal entity. The corporate veil should not be pierced without proper justification. D1’s personal non-compliance with court orders does not establish that D6, as a distinct corporate entity, poses a dissipation risk. [66] Thirdly, D6’s voluntary disclosure of its modest bank account shows transparency rather than concealment. While the low balance may raise questions about the ultimate destination of the investment funds, this historical movement of funds does not by itself establish a present risk of dissipation of existing assets. [67] Fourthly, the assertions about D6's role in the alleged fraud, while sufficient to establish a good arguable case at this interlocutory stage, do not automatically translate to a real risk of dissipation. As the Federal Court held in S & F International Limited v Trans-Con Engineering Sdn Bhd [1985] 1 MLJ 62, the plaintiff must demonstrate the risk of dissipation “by solid evidence” and not rely on “mere speculation and serendipity.” The court emphasised that this evidence may take different forms: it may consist of direct evidence that the defendant has previously acted in a way which shows that his probity is not to be relied on, or the plaintiff may show what type of company the defendant is (where it is incorporated, its corporate structure and assets) so as to raise an inference that the company is not to be relied on, or the plaintiff may be able to found his case S/N NIck5bzbnUW5bppgsk9MBQ on the fact that inquiries about the characteristics of the defendant have led to a blank wall. [68] In that case, the court found sufficient evidence of dissipation risk where the foreign defendant's corporate structure suggested it was “not to be relied upon,” it was formed solely for a specific project with no other contracts, its local office had closed, and communications were only possible through its Bangkok office, with an assertion by the defendant's site manager that the plaintiff would be “wound up” if it persisted in its claim. [69] Here, the evidence against D6 falls short of the “solid evidence” standard required by S & F International, as there is no evidence of previous defaults, corporate structure suggesting unreliability, or specific threats or conduct indicating an intention to dissipate assets to avoid judgment. [70] Finally, D6’s continued corporate existence and compliance with disclosure obligations suggest an entity operating openly rather than one preparing to dissipate assets. The speculative nature of the risk, based primarily on D1’s conduct rather than D6’s own actions, falls short of the solid evidence required to justify the serious step of granting a Mareva injunction. S/N NIck5bzbnUW5bppgsk9MBQ [71] The existence of a good arguable case does not automatically establish a risk of dissipation. As emphasised in Ninemia Maritime Corporation v Trave Schiffahrtsgesellschaft mbH & Co KG, these are distinct requirements that must each be independently proven. The Court of Appeal in Ninemia established the authoritative test for risk of dissipation: “whether, on the assumption that the plaintiff has shown at least 'a good arguable case', the court concludes, on the whole of the evidence then before it, that the refusal of a Mareva injunction would involve a real risk that a judgment or award in favour of the plaintiff would remain unsatisfied” (per Kerr LJ at p 419). [72] The Ninemia court emphasised that this test does not require proof of “nefarious intent” or that the defendant will deal with assets “with the object, and not just with the effect, of putting them out of the plaintiff's reach.” Rather, the court must consider all the evidence holistically to determine whether there is a real risk of non-satisfaction of any judgment. As Lawton LJ observed in Third Chandris Shipping Corp v Unimarine SA, The Pythia, The Angelic Wings, The Genie [1979] 2 All ER 972 (cited with approval in Ninemia), “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 the jurisdiction.” The court should not expect “proof of previous defaults or specific incidents of commercial malpractice” but must assess whether the S/N NIck5bzbnUW5bppgsk9MBQ totality of evidence gives grounds for believing there is a real risk. [73] Here, while the Plaintiff has shown a good arguable case of fraud, the evidence fails to establish the separate requirement of a real risk that D6 will dissipate its assets to frustrate any judgment. The evidence must be examined as a whole, and applying the objective test from Ninemia, no prudent commercial person would infer a danger of default from the circumstances presented. [74] Therefore, despite finding a good arguable case against D6, I am not satisfied that there is sufficient evidence of a real risk of dissipation to justify the grant of a Mareva injunction. The application against D6 is accordingly dismissed with costs of RM20,000. Conclusion [75] While the Plaintiff has established a good arguable case against D6, the evidence fails to demonstrate a real risk of dissipation. The Plaintiff’s reliance on historical events and the conduct of D1 does not sufficiently link D6 to an imminent threat of asset dissipation. As emphasised in Ninemia Maritime, a good arguable case and dissipation risk are distinct requirements, and both must be proven. Since the latter is not met, the application for a Mareva injunction against D6 is dismissed. S/N NIck5bzbnUW5bppgsk9MBQ SETTING ASIDE APPLICATIONS (ENCLOSURES 24 AND 26) The applications Enclosure 24 [76] D1, D3, D4 and D5’s application in Enclosure 24 seeks to set aside the Ad Interim Order dated 21.8.2024, issued pursuant to the Ex Parte Order dated 8.8.2024, on the basis that the order was granted improperly or unjustly. These defendants seek reliefs, including: a) The setting aside of the Ad Interim Order. b) An inquiry and assessment of damages against the Plaintiff. [77] The primary grounds are that the ex parte and ad interim orders should not have been issued or extended. The said defendants argue that the Plaintiff failed to provide full and frank disclosure of material facts when seeking these orders, rendering the orders unjust. Enclosure 26 [78] Simlarly, D6’s application in Enclosure 26 seeks to set aside and discharge the Ad Interim Order dated 21.8.2024, which was obtained ex parte on 8.8.2024. D6 also seeks an order for the assessment of damages against the Plaintiff. S/N NIck5bzbnUW5bppgsk9MBQ [79] The application is grounded on the assertion that the Plaintiff failed to provide full and frank disclosure of material facts when obtaining the Ad Interim Order. D6 contends that the Plaintiff has not substantiated allegations of fraud, dishonest assistance, and misrepresentation with adequate evidence. Furthermore, D6 denies involvement in the alleged misconduct and challenges the validity of the Plaintiff’s affidavits on technical and substantive grounds, including jurisdictional deficiencies. The nature of the applications [80] At the outset, I must address the nature of these applications. While Enclosures 24 and 26 seek to set aside the Ad Interim Order dated 21.8.2024, what fundamentally needs to be considered is whether the Ex Parte Order dated 8.5.2024 was correctly granted, as the Ad Interim Order derives its foundation from and is premised upon the Ex Parte Order. The Ad Interim Order merely continues the effect of the Ex Parte Order pending the inter partes hearing of the Mareva injunction application in Enclosure 5. If the Ex Parte Order is found to have been wrongly granted, the Ad Interim Order must necessarily fall away. Conversely, if the Ex Parte Order was properly granted, then absent any other vitiating factors, the Ad Interim Order which maintains its effect should stand. Therefore, my analysis will focus on whether there were proper grounds for granting the Ex Parte Order in the first place. S/N NIck5bzbnUW5bppgsk9MBQ Preliminary objection [81] The Plaintiff contends that Enclosures 24 and 26 to set aside the Ad Interim Order is fatally flawed as it was not supported by any affidavit evidence. Relying on Tan Swee Keng (P) v Tan Hung Khim dan Tan Hung Lim and Others [2006] MLJU 197 (HC), the Plaintiff argues that an affidavit is mandatory to support a Notice of Application as it provides the evidential foundation. While the Defendants filed Notices of Intention in Enclosures 25 and 27 to refer to affidavits filed in reply to Enclosure 5, the Plaintiff submits these are insufficient as they are merely affidavits in reply rather than affidavits specifically supporting the setting aside applications. [82] D1, D3, D4 and D5 maintain they have properly filed affidavit evidence through three affidavits: D1, D3, D4 and D5’s Affidavit affirmed by D1 on 9.9.2024 (Enclosure 20), supported by Notice of Intention to Use dated 12.9.2024 (Enclosure 25), and their Affidavit in Reply affirmed by D1 on 23.10.2024 (Enclosure 52). They argue that Order 32 rule 13 of the Rules of Court 2012 explicitly permits the use of affidavits filed in previous proceedings through a Notice of Intention, and they complied by filing Enclosure 25 on the same day as their setting aside application. [83] D6 argues that Order 32 rule 13 of the Rules of Court 2012 explicitly permits parties to use affidavits filed in previous proceedings through a Notice of Intention. They argue S/N NIck5bzbnUW5bppgsk9MBQ compliance with this rule by filing Enclosure 25 on the same day as its setting aside application. [84] At the outset, I note that several additional preliminary objections were raised during oral submissions concerning the wrong order being challenged, consent to the Ad Interim Order, and proper procedure. As these matters were not raised in the written submissions and appear to have been introduced only during oral arguments, I shall confine my analysis to the objection regarding the alleged lack of supporting affidavits. [85] The central issue is whether D1, D3, D4 and D5’s reliance on Enclosure 20 and D6’s reliance on Enclosure 22 through a Notices of Intention satisfy the requirement for affidavit evidence supporting their Setting Aside Application. I find that it does, for the following reasons. [86] First, Order 32 rule 13 of the Rules of Court 2012 expressly permits parties to use affidavits filed in previous proceedings through a Notice of Intention (Form 58). This procedural mechanism exists precisely to avoid unnecessary duplication of evidence while ensuring proper notice to opposing parties. As held in Ravichanthiran a/l Ganesan v Mat Shah bin Safuan [2019] MLJU 1677 (HC), nothing in the Rules prohibits the use of a Notice of Intention to support an application, provided the notice is filed within the prescribed time. S/N NIck5bzbnUW5bppgsk9MBQ [87] D1, D3, D4 and D5 complied with this requirement by filing Enclosure 25 on 12.9.2024, the same day as their setting aside application. The affidavit in Enclosure 20, affirmed by D1 on 9.9.2024, contains substantive evidence relevant to the Setting Aside Application. Similarly, D6 filed Enclosure 27 on 12.9.2024, the same day as its setting aside application. The affidavit in Enclosure 22, affirmed by D8 on 11.9.2024, contains substantive evidence relevant to the setting aside application. [88] The Plaintiff’s reliance on Tan Swee Keng is distinguishable, as in that case the applicant attempted to rely solely on pleadings without any supporting affidavit evidence. Here, the Defendants have properly identified and incorporated specific affidavit evidence through the prescribed procedural mechanism. [89] Moreover, the courts have recognised some flexibility in this area. In Re Yeap Chee Fun; Ex p Pernas Trading Sdn Bhd [2000] 5 CLJ 280 (HC), it was held that courts have discretion to use affidavits despite formal deficiencies if no prejudice would result. In this case, the Plaintiff has not demonstrated any prejudice from the Defendants’ use of Enclosures 20 and 22 via Notices of Intention, particularly given that the Plaintiff himself has employed similar notices in Enclosures 35 and 37. [90] For these reasons, I find that the preliminary objection regarding lack of supporting affidavits must fail. The S/N NIck5bzbnUW5bppgsk9MBQ Defendants have properly placed affidavit evidence before the court through the permitted procedure of Notice of Intention under Order 32 rule 13. The substantive merits of Enclosures 24 and 26 may therefore proceed to be heard. Enclosure 24 [91] The Plaintiff contends that the ex parte Mareva injunction was properly granted as there was sufficient evidence presented regarding both a good arguable case and risk of dissipation. Through the Defendants’ own Disclosure Affidavits in Enclosures 29 and 47, they have confirmed possession of assets within the jurisdiction, which the Plaintiff argues reinforces rather than undermines the basis for the injunction. The Plaintiff contends that the threshold and legal requirements for granting the Ex Parte Order have been met, with no objections raised by the Defendants regarding the legal or procedural prerequisites. Accordingly, the Plaintiff submits that the discretion to grant the Ex Parte Order was properly and lawfully exercised. [92] D1, D3, D4 and D5 argue that the Ad Interim Order should be set aside as the Plaintiff failed to make full and frank disclosure of material facts, including that he held 5,447,300 VUK shares, actively traded VUK shares between 2014- 2015, and reported his trades to D1. They contend there is no good arguable case as the investment transactions were properly documented and executed according to subscription agreements. The said defendants further argue S/N NIck5bzbnUW5bppgsk9MBQ there is no real risk of asset dissipation, noting no evidence of attempts to dissipate assets despite ample opportunity over many years. [93] In considering whether to set aside the Ad Interim Order, I am mindful that at the ex parte stage the court does not undertake a full examination of the merits regarding good arguable case or risk of dissipation, as these are matters for the inter partes hearing. The key issue is whether the Plaintiff made proper disclosure of material facts when obtaining the Ex Parte Order. [94] The alleged non-disclosure of the Plaintiff’s VUK shareholding and trading activities does not, in my judgment, constitute a failure of the duty of full and frank disclosure. These facts relate to the broader merits of the dispute regarding the validity and nature of the share transactions, rather than being directly material to the grounds for seeking Mareva relief. The essential elements the Plaintiff needed to establish were a good arguable case and risk of dissipation. The details of his historic shareholding and trading activities, while relevant to the substantive dispute, do not fundamentally affect the court’s assessment of whether Mareva relief was appropriate. [95] The Plaintiff’s affidavit evidence discloses the core facts regarding the investment of GBP10 million, the subsequent corporate restructuring, and the grounds for alleging misappropriation of funds. At the ex parte stage, the court S/N NIck5bzbnUW5bppgsk9MBQ assesses whether there is a good arguable case and whether urgent relief is necessary to preserve the status quo until a more comprehensive inter partes hearing can be conducted. This provided sufficient foundation for the court to evaluate whether there was a good arguable case and risk of dissipation warranting injunctive relief. The fact that the Plaintiff may have participated in share trading does not negate the substance of his allegations regarding the original investment. Moreover, the Defendants’ own Disclosure Affidavits have now confirmed the existence of assets within the jurisdiction. [96] The principles in Ninemia Maritime Corp v Trave Schiffahrtsgesellschaft mbH & Co KG recognise that for practical reasons “an elaborate examination of this kind is simply impracticable at the ex parte stage, given the number of applications which have to be dealt with outside sitting hours.” However, the court must still guard against “the damage done by the over-hasty grant of an injunction” which “may well be irretrievable” and ensure this remedy does not become “a vehicle for oppression.” The threshold requires more than “bare assertions” - something more substantial is required. In the present case, the Plaintiff's affidavit evidence provides substantive grounds supported by documentary exhibits, establishing both an arguable case regarding misappropriation of the investment funds and concrete evidence of assets within jurisdiction that may be subject to dissipation. The evidence goes beyond the “exiguous” evidence that characterised the borderline case S/N NIck5bzbnUW5bppgsk9MBQ in Ninemia itself. The court's assessment at the ex parte stage properly focused on whether there was a sufficient evidential foundation for protective relief pending the inter partes hearing, and the Plaintiff's evidence satisfied this standard. The subsequent confirmation of assets through the Defendants' own disclosure affidavits reinforces rather than undermines the propriety of the original grant. [97] Applying these established principles to the present case, the evidence presented in the Plaintiff's affidavit clearly meets the Ninemia threshold by establishing more than a barely arguable case regarding misappropriation of the investment funds through detailed documentary evidence and witness testimony, and by demonstrating through financial records that there are identifiable assets within the jurisdiction that may be subject to dissipation absent protective relief. [98] In these circumstances, I find that the Ex Parte Order was properly granted. The application in Enclosure 24 to set aside the Ad Interim Order is accordingly dismissed with costs of RM5,000.00. Enclosure 26 [99] D6 seeks to set aside the Ad Interim Order dated 8.5.2024 on several grounds. Firstly, it contends that the Plaintiff failed to substantiate allegations of fraud, dishonest S/N NIck5bzbnUW5bppgsk9MBQ assistance and knowing receipt with evidence showing any direct nexus between D6 and the Plaintiff. Secondly, it argues that the Plaintiff failed to prove the GBP10 million investment was actually remitted by him, asserting that the bank statements do not demonstrate the funds came directly from the Plaintiff. D6 maintains that evidence suggests the funds also came from David Allen and Graham Newell, whose roles were not disclosed. Thirdly, it submits that the Plaintiff’s grounds for seeking the Mareva injunction were based solely on unsubstantiated paragraphs in Enclosure 6, without material facts or evidence through exhibits. Additionally, D6 challenges the credibility of the Plaintiff’s claimed 2023 investigation, noting that no details or findings were provided beyond an alleged conversation with the 1st Defendant to which D6 was not privy. [100] On the duty of full and frank disclosure, D6 contends that the Plaintiff failed to disclose material facts when obtaining the Ex Parte Order, particularly the identity and roles of David Allen and Graham Newell who contributed to the investment, details of the claimed 2023 investigation, and the factual basis for alleging D6’s involvement in fraud and dishonest assistance. D6 maintains these omissions are significant enough to warrant setting aside both the ex parte and ad interim orders. [101] The Plaintiff’s position is that the Ex Parte Order was properly granted based on sufficient evidence regarding both the merits and risk of dissipation. The Plaintiff S/N NIck5bzbnUW5bppgsk9MBQ contends that through their Disclosure Affidavits in Enclosures 29 and 47, the Defendants have confirmed possessing assets within jurisdiction, which reinforces rather than undermines the basis for the Mareva injunction. [102] Having considered the submissions, I find that the ex parte Mareva injunction was properly granted. At the ex parte stage, the Plaintiff was only required to show on affidavit that the facts support a good arguable case and risk of dissipation, without delving into the full merits which are matters for the inter partes hearing. The affidavit evidence in Enclosure 6 established sufficient grounds for granting the Ex Parte Order. While D6 challenges the lack of direct evidence linking it to the alleged fraud, at the ex parte stage such detailed proof was not required - what was needed was a showing the essential elements needed to establish were a good arguable case and risk of dissipation regarding the D6 involvement in the alleged misappropriation of funds, which the Plaintiff accomplished through the evidence of fund movements and the nexus between the defendants. [103] On the issue of full and frank disclosure, I find that the Plaintiff satisfied this duty. D6’s complaint about non-disclosure of David Allen and Graham Newell’s roles is not material to whether the Ex Parte Order should have been granted. Their involvement as possible sources of some of the funds does not negate the core allegation that the investment money was misappropriated through a scheme involving the defendants including D6. Similarly, the alleged S/N NIck5bzbnUW5bppgsk9MBQ lack of detail about the 2023 investigation is not material - the key evidence supporting the Ex Parte Order came from contemporaneous documents and admissions rather than the subsequent investigation. Furthermore, D6’s complaint about non-disclosure in Enclosure 22 paragraph 13 merely states in general terms that the Plaintiff failed to make full and transparent disclosure of all relevant facts, without providing particulars. The specifics were only raised in submissions, which is improper. [104] The purpose of a Mareva injunction at the ex parte stage is to maintain the status quo pending proper determination of the substantive issues at the inter partes hearing. Based on the evidence presented in the ex parte application, I am satisfied that the Plaintiff established sufficient grounds for the grant of the injunction. The application in Enclosure 26 to set aside the Ad Interim Order is accordingly dismissed with costs od RM5,000.00. 13 June 2025 ATAN MUSTAFFA YUSSOF AHMAD Judge Kuala Lumpur High Court (Commercial Division) S/N NIck5bzbnUW5bppgsk9MBQ Counsel: For the Plaintiff: Syamsul Azhar Ab Aziz with Brindta and Sasha Nameera Sabtu (Messrs Brindta & Co) For the 1st, 3rd, 4th and 5th Defendants: Lim Tuck Sun with Irene Wong Choo Yi Xi, Anneliz Reina George and Shafiq Zafran (Messrs Irene Wong Chambers) For the 6th Defendant: R Sharmila (Messrs Ravindran) S/N NIck5bzbnUW5bppgsk9MBQ