Tai Ma Heavy Machinery (M) Sdn Bhd v Ccp Sheet Piling Sdn. Bhd. (dalam Penggulungan) (WA-22NCC-708-10/2024)

CCP SHEET PILING SDN BHD (in liquidation)

EU CHEE CHONG DEFENDANTS GROUNDS OF JUDGMENT (Enclosure 12)

The Plaintiff seeks the following interlocutory injunction pursuant to Order 29 rule 2 of the Rules of Court 2012, and Order 92 rule 4 of the Rules of Court 2012 against the Defendants: -

A mandatory injunction to force the Defendants to return the sheet piles and all items provided to the Defendants for the installation of the said sheet piles.

An injunction to stop the Defendants from disposing of the same sheet piles and all items provided to the Defendants for the installation of the sheet piles.

An injunction to force the Defendants to disclose the whereabouts of the sheet piles.

Costs

All other orders that are deemed fit by this Court.

The Plaintiff’s counsel informs Court that he will only seek prayer (1) as contained in the Notice of Application. Cause of Action against the Defendants 3. The Plaintiff’s claim concerns the rentals that were due and payable for the rentals of the sheet piles delivered to the First Defendant. The Plaintiff claims that, as of 30-9-2024, the sums of RM 2, 124, 994.02 is due and payable by the First Defendant. These sheet piles were allegedly delivered to the First Defendant sometime in 2017.

The Plaintiff recently found that the First Defendant was wound up by an order of Court dated 2-1-2020.

The Plaintiff has since filed the required proof of debt with the liquidators appointed over the affairs of the First Defendant.

The Plaintiff also claims that the Second to Fourth Defendants have acted in breach of Section 540 and Section 539(3) of the Companies Act 2016. The Plaintiff says that the Second to Fourth Defendants being former directors of the First Defendant, have undertaken (i) the business of the First Defendant with the intention to defraud creditors, or (ii) and that the business of the company was undertaken for a fraudulent purpose, or (iii) that at the time when the contract was entered into, there was no reasonable or probable ground of expectation that the company was able to pay its debts.

The Plaintiff also avers: -

That the Second and Third Defendants had failed to pay the sums due in 2018 even though the company was able to do so.

The Third Defendant knew that the company was unable to pay its debts and had as a result resigned from the board of the First Defendant.

The First Defendant was sued by Jik Teck Piling Sdn Bhd in the civil suit bearing WA-A52NCvC-107-01/2019. This caused the Second Defendant’s resignation from the board of the First Defendant and the appointment of the Fourth Defendant.

The said resignation was designed to evade personal liability for the debts of the First Defendant.

The Defendants had failed to return the sheet piles despite the company being wound up in 2020.

The Defendants have failed to disclose the status of the company and the fact that it was wound up in 2020.

The Fourth Defendant is the alter ego of the Second and Third Defendants. B. Applicable Law for an Interlocutory Injunction 8. The applicable principle concerning an application for interlocutory injunction is trite. I refer to Keet Gerald Francis Noel John v. Mohd Noor @ Harun Bin Abdullah [1995] 1 CLJ 293 where Gopal Sri Ram JCA (as he then was) held: - “To summarise, a Judge hearing an application for interlocutory injunction should undertake an inquiry along the following lines: - first, he must ask himself whether the totality of the facts presented before him discloses a bona fide serious issue to be tried. He must, when considering this question, bear in mind that the pleadings and evidence are incomplete at that stage. Above all, he must refrain from making any determination on the merits of the claim or any defence to it. It is sufficient if he identifies with precision the issues raised on the joinder and decides whether these are serious enough to merit a trial. If he finds, upon a consideration of all the relevant material before him, including submissions of Counsel, that no serious question is disclosed, that is an end of the matter and the relief is refused. On the other hand, if he does find that there are serious questions to be tried, he should move on to the next step of his inquiry; second, having found that an issue has been disclosed that requires further investigation, he must consider where the justice of the case lies. In making his assessment, he must take into account all relevant matters, including the practical realities of the case before him. He must weigh the harm that the injunction would produce by its grant against the harm that would result from its refusal. He is entitled to take into account, inter alia, the relative financial standing of the litigants before him. If after weighing all matters, he comes to the conclusion that the plaintiff would suffer greater injustice if relief is withheld, then he would be entitled to grant the injunction especially if he is satisfied that the plaintiff is in financial position to meet his undertaking in damages. Similarly, if he concludes that the defendant would suffer the greater injustice by the grant of an injunction, he would be entitled to refuse relief. Of course, cases may arise where the injustice to the plaintiff is so manifest that the Judge would be entitled to dispense with the usual undertaking as to damages (see: Cheng Hang Guan v. Perumahan Farlim (Penang) Sdn. Bhd. 1988] 1 CLJ 435 (Rep);[1988] 3 MLJ 90). Apart from such cases, the Judge is entitled to take into account the plaintiff's ability to meet his undertaking in damages should the suit fail, and, in appropriate cases, may require the plaintiff to secure his undertaking, for example, by providing a bank guarantee; thirdly, the Judge must have in the forefront of his mind that the remedy that he is asked to administer is discretionary, intended to produce a just result for the period between the date of the application and the trial proper and intended to maintain the status quo, an expression explained by Lord Diplock inGarden Cottage Foods Ltd. v. Milk Marketing Board [1984] AC 130 and applied in Cheng Hang Guan (supra). It is a judicial discretion capable of correction on appeal. Accordingly, the Judge would be entitled to take into account all discretionary considerations, such as delay in the making of the application or any adequate alternative remedy that would satisfy the plaintiff's equity, such as an award of monetary compensation in the event that he succeeds in establishing his claim at the trial. Any question going to the public interest may, and in appropriate cases should, be taken into account. A Judge should briefly set out in his judgment the several factors that weighed in his mind when arriving at his conclusion.”

I further refer to the decision of Kamaludin Md Said JCA in Perak Hydro Renewable Energy Corporation Sdn Bhd & Anor v. Wak Ngah Pili Bah Adim [2022] 10 CLJ 540: - “Damages Is An Adequate Remedy [60] It was also held in Keet Gerald Francis Noel John v. Mohd Noor @ Harun bin Abdullah & Ors (supra) that the judge would be entitled to take into account all discretionary considerations, such as any adequate alternative remedy that would satisfy the plaintiff's equity, such as an award of monetary compensation in the event that he succeeds in establishing his claim at the trial. [61] It is the defendants' submission that damages will be an adequate remedy to the plaintiffs should the court refused to grant the interlocutory injunction sought by the plaintiffs. [62] The defendants submitted that despite praying for a declaration against the defendants, the plaintiffs have also prayed for damages in the amended statement of claim. This can be seen in para. 61(n) of the amended statement of claim where the plaintiffs' prayed for the defendants to pay damages to the plaintiffs for trespass and damages be assessed by the court. We are aware the damages are for the trespass to lands if the plaintiffs succeed in their claim. [63] Be that as it may, the prayer indicates that damages are an adequate remedy in the circumstances. Therefore, the basis for exercising the court's equitable jurisdiction does not arise in this action. Associated Tractors Sdn. Bhd v. Chan Boon Heng & Anor [1990] 2 CLJ 157; [1990] 1 CLJ (Rep) 30; [1990] 2 MLJ 408 is a case where an injunction was not granted by the court on the basis that the damages would be an adequate remedy. Hashim Yeop Sani CJ held as follows: 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 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. ... 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. [64] The High Court in Kawood Sdn Bhd v. HSBC Bank Malaysia Bhd & Ors [2001] 8 CLJ 363; [2001] MLJU 650, held that in the statement of claim, the plaintiffs are claiming for damages to be assessed together with interest. By its own admission, the plaintiff acknowledged that damages are an adequate remedy and can be assessed and quantified. As such, the court said that there is no basis to grant the injunction to the plaintiff. [65] Similarly, in Kilang Kosfarm Sdn Bhd v. Kosma Nusantara Bhd (No 2) [2002] 3 CLJ 165; [2002] 5 MLJ 662, Ramli Ali J (as he then was) held that the plaintiff have prayed in prayers 3 and 4 of the statement of claim for general and exemplary damages and to ascertain the damages suffered by the plaintiff from the time the plaintiff was expelled from the said estate until the time when vacant possession of the said estate is handed over to the plaintiff as prayed in prayer 2 of the statement of claim. On all those provisions, His Lordship satisfied those damages seem to be a suitable and adequate remedy for the plaintiff. [66] In the circumstances of this case and the application for interlocutory injunction, it is our considered view that the damages are an adequate remedy and therefore the court will refuse the grant of the interlocutory injunction sought by the plaintiffs.”

This Court further refers to the decision of the Court of Appeal in Sabil Mulia (M) Sdn Bhd v. Pengarah Hospital Tengku Ampuan Rahimah & Ors [2005] 2 CLJ 122 where Gopal Sri Ram JCA held: - “That brings us to the second issue, namely, whether an injunction should be granted on the merits of the case before us. Of course, the usual practice of this court once we find that the court below has wrongly rejected an application on jurisdictional grounds is to remit the case to the judge to decide the case on merits. But this is not an ordinary case. Here all the material relevant to the exercise of discretion was before us and the matter is, as we have already said, one of urgency. We therefore considered this to be an appropriate case for us to decide whether the merits justify the grant of the injunction sought. In our view they do not. This is a case of a pure breach of contract. Learned counsel for the appellant cited a number of recent cases where equitable estoppel has been elevated to the status of a constructive trust because of some unconscionable behaviour on the part of the representee. The cases include Yaxley v. Gotts [2000] 1 All ER 711, Gillette v. Holt [2000] 2 All ER

We may add that useful reference may also be made to Birmingham Midshire Mortgage Services v. Sabherwal 80 P & CR 256 where Robert Walker LJ (now Lord Walker) said that in certain situations, for example, a family arrangement, "the concepts of trust and equitable estoppel are almost interchangeable". Relying on this line of authority counsel argues that there subsists a constructive trust in his client's favour because (i) the respondents made a representation that the canteen contract would be renewed; (ii) the appellant, encouraged by the representation and acting upon it, expended money in refurbishing the premises in question, employing additional staff and purchasing new equipment; (iii) the conduct of the respondents in reneging on their promise and awarding the canteen contract to the 4th respondent is unconscionable. Now, if you look at the cases relied on by counsel, you will find that the court in each case imposed a constructive trust to protect a litigant's interest in immovable property. Here, the appellant has no interest whatsoever in the immovable property in which the canteen is situated. All that the appellant has is a purely contractual right to run the canteen at the respondents' premises: nothing more. And if the appellant establishes a breach of contract at the trial of the action then he will be entitled to an award of damages in the ordinary way. So, all that the appellant complains about is readily compensated by a monetary award. Since monetary compensation is an adequate remedy, it follows that in accordance with well settled principles governing equitable discretion, specific relief is inappropriate in the circumstances of this case.”

The following statutory provisions and parts of the Rules of Court are relevant for the purposes of this application: -

Order 29 rule 1 (1) of the Rules of Court 2012 provides as follows: “(1) 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.”

(ii) Order 29 rule 2 of the Rules of Court 2012 provides as follows: “(1) On the application of any party to a cause or matter, the Court may make an order for the detention, custody or preservation of any property which is the subject matter of the cause or matter, or as to which any question may arise therein, or for the inspection of any such property in the possession of a party to the cause or matter.

For the purpose of enabling any order under paragraph (1) to be carried out, the Court may by the order authorize any person to enter upon any immovable property in the possession of any party to the cause or matter.

Where the right of any party to a specific fund is in dispute in a cause or matter, the Court may, on the application of a party to the cause or matter, order the fund to be paid into Court or otherwise secured.

An order under this rule may be made on such terms, if any, as the Court thinks just.

An application for an order under this rule shall be made by way of a notice of application.

Unless the Court otherwise directs, an application by a defendant for such an order may not be made before he enters an appearance.”

(iii) Section 25(2) of the Courts of Judicature Act 1964 provides as follows:

Without prejudice to the generality of subsection (1) the High Court shall have the additional powers set out in the Schedule: Provided that all such powers shall be exercised in accordance with any written law or rules of court relating to the same.”

(iv) Paragraph 6 of the Schedule to the Courts of Judicature Act 1964 provides as follows:

“Preservation of property Power to provide for the interim preservation of property the subject matter of any cause or matter by sale or by injunction or the appointment of a receiver or the registration of a caveat or a lis pendens or in any other manner whatsoever.”

Sections 50 Specific Relief Act 1950 provides as follows: “Preventive relief is granted at the discretion of the court by injunction, temporary or perpetual.”

(vi) Sections 51 Specific Relief Act 1950 provides as follows: “(1) Temporary injunctions are such as are to continue until a specified time, or until the further order of the court. They may be granted at any period of a suit, and are regulated by the law relating to civil procedure.

A perpetual injunction can only be granted by the decree made at the hearing and upon the merits of the suit; the defendant is thereby perpetually enjoined from the assertion of a right, or from the commission of an act, which would be contrary to the rights of the plaintiff.”

(vii) Sections 53 Specific Relief Act 1950 “When, to prevent the breach of an obligation, it is necessary to compel the performance of certain acts which the court is capable of enforcing, the court may in its discretion grant an injunction to prevent the breach complained of, and also to compel performance of the requisite acts.”

Counsel for Isentric have also referred to Gibb & Co v. Malaysia Building Society Bhd [1982] 1 MLJ 271 where the Federal Court held: - “Before we deal with the issues raised we should perhaps touch on a point made by Mr. Sri Ram for the appellant in referring to the judgment of this court in Sivaperuman v Heah Seok Yeong Realty Sdn Bhd [1979] 1 MLJ 150which, referring to a pronouncement to that effect in Wah Loong (Jelapang) Tin Mine Sdn Bhd v Chia Ngen Yiok [1975] 2 MLJ 109, 114 restates inter alia that an interim or interlocutory mandatory injunction is never granted before trial save in exceptional and extremely rare cases. That statement of the law is correct as an interlocutory application for a mandatory injunction is a very exceptional form of relief ( Canadian Pacific Railway v Gaud [1949] 2 KB 239 249(at page 249)), but there is no reason why interlocutory or indeed interim mandatory injunctions should not issue in proper and appropriate cases and the court has jurisdiction to so order. Fry L.J., said in Bonner v Great Western Railway Company (1883) 24 Ch D 1 10(at page 10): “I have no doubt of the jurisdiction of the court to grant a mandatory injunction on interlocutory applications as well as the hearing.” The case however must be ‘unusually sharp and clear’ (Shepherd v Sandham [1971] Ch 340), and the court must feet a high degree of assurance that at the trial a similar injunction would probably be granted but we should observe that questions of degree are involved which depend inter alia upon considerations of hardship to the parties. In deciding the manner of interlocutory injunction that should be granted courts of equity will consider how the interests of the parties may best be protected, bearing in mind both the position of the parties subsequently at the final hearing and also questions of hardship and inconvenience in the meantime, and will take into account any other relevant discretionary considerations which may arise. One of the most important circumstances which will be taken into account by the court is the degree of probability with which it appears to be established that the applicant will ultimately succeed at the final hearing. The stronger the case of the applicant that the matters complained of are unlawful, the more likely it is that it will be found to be just and equitable that his interests be protected by the immediate issue of an injunction ( Bonner (1883) 24 Ch D 1 10). Other matters of particular importance are, on the one hand, the ease or difficulty with which there can be compliance with a mandatory order and the extent of hardship which compliance will cause the respondent and, on the other hand, the nature of the injury and inconvenience which will be caused to the applicant if he does not obtain protection at once ( Strelley v Pearson (1880) 15 Ch D 113 117(at page 117)).”

I also refer to Tinta Press Sdn Bhd v. Bank Islam Malaysia Berhad [1987] 2 MLJ 192, where the then Supreme Court held: - “The case must be unusually strong and clear in that the court must feel assured that a similar injunction would probably be granted at the trial on the ground that it would be just and equitable that the plaintiff's interest be protected by immediate issue of an injunction, otherwise irreparable injury and inconvenience would result.”

Also refer to Sivaperuman v. Heah Seok Yeong Realty Sdn Bhd [1979] 1 MLJ 150, BSNC Leasing Sdn Bhd v. Sabang Shipyard Sdn Bhd & Ors [2000] 2 MLJ 70, Blueprint Planning International Sdn Bhd & Anor v. Ng Wern Ping & Ors [2021] MLJU 527, Tan Chong Keat Sdn Bhd v. Pintar Pintas Sdn Bhd [2005] 4 MLJ 201, and Karunamoorthy a/l Ramasamy (Trading as Era Hemas Trading Registration) v. Hariharan a/l Subramaniam & Ors [2020] MLJU 2276.

I find the summary of the applicable law as laid down in Blueprint Planning International Sdn Bhd v. Ng Wern Ping (supra) and “[18] The principles regarding the threshold for granting interlocutory injunctions which can be gleaned from the above decided authorities can be summarized as follows:

where an applicant seeks an interlocutory prohibitory injunction before the trial, the threshold is serious triable issue or arguable case: American Cynamid case; Keat Gerald case.

where an applicant seeks an interlocutory mandatory injunction before the trial for performance of obligation which is ordinarily granted only at the final hearing or trial, the threshold is a relatively higher one, i.e. the following requirements:

the Court has to the assess the strength of the applicants case on merits,

(ii) the Court feels a high degree of assurance that the applicant would be able to establish his right at the trial or it appears more probable that the applicant will succeed at the trial on the point at hand; and

(iii) if its refusal would give rise to disproportionate prejudice or hardship to the applicant, as against the prejudice or hardship its grant will cause the opposite party:” C. Application to the Facts of this case

The Plaintiff’s claim is for fraud against the Second to Fourth Defendants 16. I find that Plaintiff’s pleaded case against the Second to Fourth Defendants is premised on an alleged fraud undertaken by these directors against creditors under Section 540 and Section 539(3) of the Companies act 2016.

Therefore, for this Court to grant the orders against the said Defendants, to force them to obtain the sheet pile and return it back to the Plaintiff, the Plaintiff must show sufficient evidence that these individuals committed the alleged wrongs and that in most likelihood a similar judgment would eventually be obtained against them.

For the Plaintiff to be successful, it must be established that the business of the company has been carried out:

with intent to defraud creditors of the company or creditors of any other person; or

(ii) for any fraudulent purpose.

(iii) that the defendant was knowingly a party to the carrying on of the business in that manner; and

(iv) that there was dishonesty.

I refer to Tay Keong Kok & Ors v. Eastmont Sdn Bhd & Another appeal [2025] 1 CLJ 583 where the Court of Appeal explained the key principles of Section 540 of the Companies Act 2016: ”[55] The distillation of the key principles on the application of s. 540 of the CA 2016 from case law authorities, which principally are also relevant to the instant case before us is well set out in Lai Fee & Anor v. Wong Yu Vee & Ors (supra) as found in the following passages, which we reproduce hereunder: [24] That responsibility for fraudulent trading under s. 540 of the CA 2016 is the statutory exception to the corporate personality doctrine has been the subject of extensive discussion in a line of cases. Accordingly, it might be useful and desirable to set out a synopsis of the well-established principles which govern the application of this statutory exception which are: i. The words 'with intent to defraud creditors... or for any fraudulent purpose' in s. 304 of the Companies Act 1965 should be read disjunctively even though on the facts of the case both limbs are relevant and applicable (Siow Yoon Keong v. H Rosen Engineering BV [2003] 4 CLJ 68; [2003] 2 MLRA 126 CA); ii. In the context of carrying on business, the phrase 'with intent to defraud creditors' is in general a proper inference that the company is carrying on business with intent to defraud the creditors of the company if the company continues to carry on business to incur debts at a time when there is to the knowledge of the directors no reasonable prospect of the creditors ever receiving payment of those debts. (R v. Grantham [1984] BCLC 270). It has also been interpreted to include an intent to deprive creditors, of an economic advantage or inflict upon them some economic loss (Coleman v. The Queen [1987] 5 ACLC 766). The word 'intent' is being used in the sense that a man must be taken to intend the natural or foreseen consequences of his act (Re Cooper, (supra) at 267); iii. The word 'fraud' is also defined under s. 17 of the Contracts Act

According to Sinnadurai, Law of Contract, Fourth Edition 2011 at para [5.07], fraud is defined 'to include certain acts which are committed with intent to induce another party to enter into a contract'. Section 17 sets out five types of different acts which constitute fraud. These include 'a promise made without any intention of performing it' and 'any other act fitted to deceive': s. 17(c) and (d), Contracts Act 1950. iv. The words 'if... it appears' in s. 304 of the Companies Act 1965 is indicative of a lower threshold in order to trigger the operation of s.

It does not matter whether s. 304 contains in it both civil and a criminal provision - the civil provision in sub-section (1) and the criminal sanction in sub-section (5) are properly carved out and they do not interfere in each other's operation (Siow Yoon Keong v. H Rosen Engineering BV [2003] 2 MLRA 126; JCT Ltd v. Muniandy Nadasan & Ors And Another Appeal [2016] 2 MLRA 562); v. The burden of proof is on the plaintiffs to establish fraudulent trading within the meaning of s. 304 of the Companies Act 1965. The standard of proof in civil cases involving proof of fraud or fraudulent conduct is on the balance of probabilities (Sinnaiyah & Sons Sdn Bhd v. Damai Setia Sdn Bhd [2015] 7 CLJ 584; [2015] 5 MLRA 191 FC); vi. The existence of fraud is a question of fact. It is dependent on the circumstances of each particular case. Fraud must mean actual fraud, ie, dishonesty of some sort (PJTV Denson (M) Sdn Bhd & Ors v. Roxy (Malaysia) Sdn Bhd [1980] CLJU 55; [1980] 1 MLRA 562 FC); vii. In order to establish dishonesty under s. 304 of the Companies Act 1965, it must be shown that firstly, what was done was dishonest according to the ordinary standard of reasonable and honest people, and secondly that the actor himself must have realised that the act was by those standards dishonest (Tradewinds, (supra)); viii. It is fraud if it is proved that there was the taking of a risk which there was no right to take which would cause detriment or prejudice to another. It need not be proved that the defendant knew at the time when debts were incurred that there was no reasonable prospect of creditors ever receiving payment of their debts. It was enough if the defendant realised at the time when the debts were incurred that there was no reason for thinking that funds would be available to pay the debt when it would become due or shortly thereafter. These words import a criterion that is partly subjective and partly objective (Regina v. Sinclair[1968] 1 WLR 1246); ix. Whether there was any intention on the part of the defendants to defraud or to carry on any fraudulent purpose is a question of fact to be inferred from the surrounding circumstances and the subsequent conduct of the defendants, especially the concealment of material facts (Rahj Kamal bin Abdullah v. PP [1998] 1 SLR 447; LMW Electronics Pte, (supra)); x. Actual knowledge was required before a person could be said to be knowingly a party to the fraudulent transaction carried out by a company within the meaning of s. 304 of the Companies Act 1965 - it must be shown that the person has participated, concurred or taken some positive steps in the carrying on of the company's business in a fraudulent manner - however, it is not necessary to show proof of his having assumed a controlling or managerial role over the company's business before he could be said to be a party to the carrying on of it (Tan Hung Yeoh v. Public Prosecutor [1999] 2 SLR(R) 262 HC); xi. It is not necessary to establish a scheme to defraud to trigger the invocation of s. 304 of the Companies Act 1965. The wordings of s. 304 do not lend itself to be read in such a manner - a single act of doing business to defraud a creditor would be sufficient to trigger an action for compensation against the errant person in his personal capacity. A business may be found to have been carried out with intent to defraud creditors notwithstanding that only one creditor is shown to have been defrauded, and by a single transaction (Re Gerald Cooper (supra); Morphitis v. Bernasconi & Ors [2003] BCLC 53; Prem Krishna Sahgal, (supra)). [56] The overriding objective of the provision, we reiterate, is therefore to allow the corporate veil to be pierced, representing a crucial departure from the well-entrenched principles of limited liability and separate corporate legal personality. This, in turn, means that once fraudulent trading is established, there would then be personal responsibility on the part of any person who was knowingly a party to the carrying on of such business with intent to defraud, without any limitation of liability, for all or any of the debts or other liabilities of the company, as the court may direct.”

The evidence produced by the Plaintiff in this case is insufficient to prove that the First Defendant was carrying on business with the intent to defraud creditors, or that the directors knew, that at the material time, that there was no reasonable prospect of the creditors ever receiving payment of those debts.

What the Plaintiff has only shown is that the sheet piles were rented by the First Defendant since 2017 and payment stopped after 2018. The Plaintiff did demand payment of the sums that were allegedly due but it did not receive any response from the First Defendant.

As seen in the earlier cases such as Lam Tile (Timur) Sdn Bhd v. Lim Meng Kwang & Anor [2015] 3 CLJ 763, Aneka Melor Sdn Bhd v. Seri Sabco (M) & Another Appeal [2016] 2 CLJ 563, Chin Chee Keong v. Toling Corporation (M) Sdn Bhd [2016] 6 CLJ 666, Dato’ Prem Krishna Sahgal v. Muniandy Nadasan & Ors [2017] 10 CLJ 385 and Tradewinds Properties Sdn Bhd v. Zulhkiple A Bakar & Ors [2019] 2 CLJ 261, there must be evidence of an objective intent to defraud creditors and dishonesty on the part of those who had control over the entity before such a finding could be made.

The Plaintiff also claims that the Second and Third Defendants have intentionally resigned from the First Defendant and appointed the Fourth Defendant to ensure that they are not made personally liable for the debts of the company. The Plaintiff suggests that the Fourth Defendant is actually a proxy of the other Defendants and was running the company on the instructions of the Second and Third Defendants.

At this juncture, I find that the evidence adduced by the Plaintiff does not establish that the said Defendants resigned for the reasons alleged, nor that the Fourth Defendant is merely a proxy, as claimed. The said averments are not supported by any documentary evidence and remain bare assertions by the Plaintiff. This claim involves questions of the Defendants’ honesty, and the Court is of the view that the Plaintiff has not met the threshold required to establish a prima facie case that the said Defendants are liable as alleged.

For the above reasons, I find that the evidence before me fall short of showing that it could be said that most likely than not that judgment for such a claim would have been entered against the said Defendants.

Therefore, I find that this is not a suitable case for the mandatory interlocutory orders prayed for by the Plaintiff to be forced upon the said Defendants. The issue of dishonesty and fraud on the part of the Defendants could only be determined after hearing the witnesses produced by parties at trial. As I said earlier, the evidence produced by the Plaintiff falls short of proving any form of fraud or dishonesty. What they have shown is merely evidence that the First Defendant was not able to pay its debts after 2018 and as a result, the company was wound up correctly by an order of Court.

(ii) The Plaintiff took more than 5 years before it filed the claim and the application for the return of the sheet piles 27. I also find that the Plaintiff had only sought for the return of the sheet piles after more than 5 years after the First Defendant defaulted on paying the rentals that were allegedly due to it.

Based on the Plaintiff’s pleaded case, the First Defendant started to default in making payments for the rentals since 2018. This would have meant that the Plaintiff waited about 6 years before the suit against the Defendants was filed and the application for mandatory injunction sought.

It is trite law that a litigant must act promptly seeking such interlocutory reliefs. See Planon Ltd v. Gilligan [2022] EWCA Civ 642. The inordinate delay by the Plaintiff in seeking these orders was not explained to the satisfaction of this Court in any of the affidavits. Therefore, on this ground, I also find that the said application should be dismissed.

(iii) Delay and No Additional Inconvenience to the Plaintiff / The

Defendants do not know where the sheet piles are I have also considered the affidavits of the Defendants and find that all of the Defendants allege that they do not know where the sheet piles are at this point in time.

It must be noted that the said sheet piles were delivered to the First Defendant in 2017 and was used as part of the works for the projects undertaken by the First Defendant. More than 5 years have passed since the said sheet piles were delivered and the company has since been wound up, with control now vested in the appointed liquidator.

Therefore, it is not surprising for the Defendants to now claim that they do not know where the sheet piles are. If the Plaintiff had acted on an urgent basis in 2018 or even as late as 2020, there could have been a possibility that the sheet piles be identified and returned back to them. Instead, it took them 6 years before instituting this claim. This delay does not bode well for the Plaintiff when it should have acted immediately once it became aware that the rentals were unpaid.

Furthermore, the Plaintiff would not be put in any inconvenience and no further injury. It waited for more than 6 years before lodging a claim for the said rentals and for the return of the sheet piles. If there was such urgency, I would have expected a suit to be filed immediately for the return of the same. Therefore, as the Plaintiff did not act expediently and did not explain why it took them 6 years before lodging this claim, I do not find that this is a suitable case for the mandatory interlocutory injunction be ordered against the Defendants.

(iv) Damages are adequate 34. I also find that the Plaintiff has also quantified the value of the sheet pile that has been lost or is in the possession of the Defendants. In the statement of claim the Plaintiff valued them as being to the sum of RM 2, 111, 655.00. The Plaintiff has also sought damages for the value of the sheet pile to be paid by the Defendants. This shows that the damages would be adequate in the circumstances of this case and there is no reason why the said Plaintiff could not be compensated monetarily. Damages are therefore proper remedy to compensate the Plaintiff.

I refer to the decision of our superior courts in Associated Tractors Sdn Bhd v. Chan Boon Heng [1990] 2 CLJ 157 as well as Inter Heritage (M) Sdn Bhd v. Asa Sports Sdn Bhd [2009] 2 CLJ 221. Hashim Yeop Sani CJ (Malaya) held in Associated Tractors (supra):- “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 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. 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 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.” D. Orders of this Court 36. For the above reasons, I dismiss the Plaintiff’s application with costs in the cause. Dated 12 Mac 2025 Dato’ Indera Mohd Arief Emran bin Arifin Judge High Court of Malaya at Kuala Lumpur NCC5 Counsel: Lim Pang Kiat for the Plaintiff Pang Kiat, Yu Qi Law Chambers