Wednesday, 11 May 2016

Malaysia-'quia timet' injunction

In Ting Chuen Peng (suing as representative of State Member for the State of Negeri Sembilan of the United Chinese School Committes' Association of Malaysia (Dong Zong)) & Ors v Yap Kian @ Yap Sin Tian (sued in his personal capacity and as Chairman of United Chinese School Committees' Association of Malaysia (Dong Zong) & Anor [2016] 7 MLJ 445, it was held that:-

"...[34] On 31 July 2015 I granted an ex parte 'quia timet' injunction order ('the ex parte order'). In granting the ex parte order, I was satisfied that based on cases such as PPES Resorts Sdn Bhd v Keruntum Sdn Bhd [1990] 1 MLJ 436 at p 440 and Mobikom Sdn Bhd v Inmiss Communications Sdn Bhd [2007] 3 MLJ 316 at p 321 the court had the requisite jurisdiction to make such an order, albeit that it would impact upon a party's right to file an action and obtain an order to stultify the event (the EGM) for which the protective order was sought in the first place. In particular, I was guided by principles enunciated by Justice Gopal Sri Ram JCA (as he then was) in Mobikom Sdn Bhd v Inmiss Communications Sdn Bhd [2007] 3 MLJ 316 at p 321 where he said:

[4] There is no doubt that a court has jurisdiction and power to grant an anti-suit injunction whenever the interests of justice call for or demand it. So an injunction may be issued by our courts to restrain the institution or prosecution of a suit in a foreign jurisdiction where this would lead to a multiplicity of proceedings (see BSNC Leasing Sdn Bhd v Sabah Shipyard Sdn Bhd & Ors [2000] 2 MLJ 70). Similarly, a party may be restrained from presenting a winding up petition if it is found, for example, that there is a bona fide dispute about the debt on which the notice of demand issued under s 218 of the Companies Act 1965 is based (see Bina Satu Sdn Bhd v Tan Construction [1988] 1 MLJ 533 and Stoneeate Securities Ltd v Gregory [1980] 1 Ch 576). Once the debt on which the proposed petition is based is bona fide disputed it matters not that the debtor company is in fact insolvent (see Mann v Goldstein [1968] 2 All ER 769). (Emphasis added.)

[35] In this context, it is also relevant to harken to the following passage from the judgment of Justice Haidar J (as he then was) in PPES Resorts Sdn Bhd v Keruntum Sdn Bhd [1990] 1 MLJ 436 at p 440 where he said:

A quia timet injunction is a proceeding by which the court is enabled to prevent its jurisdiction from being stultified (see Harris v Griffith [1928] Ch 290.) In my view, the present wordings of our s 54(b) does not muzzle the court in any way from granting an interlocutory injunction in the nature of quia timet to restrain a person from instituting or prosecuting a proceeding. On the no jurisdiction issue, Shankar J, in the unreported case of Li Shing Garments Manufacturing Sdn Bhd v Kwong Hing Trading Sdn Bhd (unreported) had the occasion to consider the case of Cotton Corp of India Ltd v United Industrial Bank AIR 1983 SC 1272, relied on by Mr Colin Lau where at pp 5-6, His Lordship stated:

    17. Mr Sri Ram, counsel for Kwong Hing, submitted initially on the strength of s 54(b) of the Specific Relief Act 1950 that this court had no jurisdiction to entertain Li Sheng's application. He contended that to grant the injunction would be tantamount to staying the proceedings of a court which was not of subordinate jurisdiction. He claimed that the case of Cotton Corp of India Ltd v United Industrial Bank Ltd AIR 1983 SC 1272 demonstrated the fallacy of the argument that s 54(b) did not inhibit the court from granting an injunction to restrain a party from initiating or continuing with proceedings in a court of co-ordinate jurisdiction but that it only precluded the court from directing such an injunction to the other court. The view taken in India was that such an approach would defeat the real objective of the Indian equivalent of s 54(b) and therefore the language of the Indian equivalent was amended to bring the statute in line with what was originally intended. 
    18. Relying on the passages contained in the judgment at p 1278, he argued that the effect of the Malaysian statute now was specifically to exclude the court from entertaining the plaintiff's application at all. He also exerted that the words of the statute excluded the inherent jurisdiction of the court and also any other residuary power, vested in the court of a similar nature which could be exercised by the High Court in England. ( Section 23(2) of the Judicature Act and the parallel powers conferred by the Courts Act 1948.) 
    19. I am unable to agree that s 54(b) of the Specific Relief Act 1950 muzzles the court in this way ... 

I agree with my learned brother that s 54(b) of the SRA does not in anyway muzzle the court from granting a quia timet injunction in an appropriate case. Here, Keruntum should first establish its legal rights under OM No KG 16 of 1988 which are yet to be determined, and in the absence of that, it cannot now purport to assert its legal rights in proposing to take proceedings against PPES when such legal rights over the forest areas are yet to be established. In Fletcher v Bealey (1885) 28 Ch D 688, Parson J explained the law as to actions quia timet as follows:

There are at least two necessary ingredients for a quia timet action. There must, if no actual damage is proved, be proof of imminent danger, and there must also be proof that the apprehended damage will, if it comes, be very substantial. I should almost say it must be proved that it will be irreparable, because, if the danger is not proved to be so imminent that no one can doubt that, if the remedy is delayed the damage will be suffered, I think it must be shown, if the damage does occur at any time, it will come in such a way and under such circumstances that it will be impossible for the plaintiff to protect himself against it if relief is denied to him in a quia timet action. (Emphasis added.)"

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