An interlocutory injunction may be granted if serious issues are raised regarding the fulfillment of conditions precedent in a share sale agreement, balancing convenience and potential harm to parties involved.

Elaine Yap Chin Gaik JC:

Introduction

[1] In this action, the Plaintiff is seeking to unravel a share sale transaction in relation to the sale of 460,000 of his ordinary shares in a company called EVD Land Sdn Bhd ("EVD Land" and "Shares") to the Defendant.

[2] The Plaintiff claims that the share sale agreement had terminated because a condition precedent was not met and that the Defendant had also breached its terms He is therefore applying for an interlocutory injunction to preserve the Shares and its value pending the trial.

Background Facts

[3] EVD Land together with EV Dynamic Sdn Bhd and EVD Engineering Sdn Bhd were all subsidiary companies of the holding company, EVD Berhad. The Plaintiff, Defendant and Zitan Capital Sdn Bhd were shareholders in what may be called the EVD Group.

[4] Before the events that led to the dispute and this suit, the Plaintiff and Defendant were both directors and shareholders of various entities in the EVD Group. The Shares, for example, represented 43% of the share capital of EVD Land.

[5] Following a shareholder dispute and the filing of an oppression claim by the Defendant in Shah Alam High Court Originating Summons No: BA-24NCC-17-02/2024, the parties entered into a settlement agreement. As part of that settlement, the parties entered into the following agreements:

(a) Share Sale Agreement dated 6 March 2024 ("SSA") by which Plaintiff (as vendor) would sell the Shares to the Defendant for RM10 million.

(b) Share Sale Agreements dated 6 March 2024 by which the Defendant (as vendor) would sell his ordinary and redeemable preference shares in EVD Berhad to Wong Sak Kuan and Yau Ming Teck for a total sum of RM10,001,185.05.

(c) Share Sale Agreement dated 6 March 2024 by which the Defendant (as vendor) would sell his shares in Zitan Capital Sdn Bhd to Wong Sak Kuan in exchange for the shares held by Zitan Capital Sdn Bhd in EVD Land.

The parties pre-signed various resolutions, letters of resignation and form of transfer of securities as deliverables in the above transactions.

[6] The effect of the above transactions is that the Plaintiff would exit EVD Land, and the Defendant would exit EVD Berhad and Zitan Capital Sdn Bhd and cease to be a director of EV Dynamic Sdn Bhd In effect, there would be a parting of ways between the Plaintiff and Defendant.

Analysis And Finding

[7] The interlocutory injunctions sought by the Plaintiff are essentially to restrain the Defendant from transferring the Shares or passing any resolutions to dilute the shareholding represented by the Shares or transfer, encumber or otherwise deal with three properties in Shah Alam, Subang Jaya and South Yarra, Australia belonging to the EVD Land ("Properties").

[8] In considering whether to grant the interlocutory injunctions, the American Cyanamid test ( American Cyanamid Co v. Ethicon Ltd [1975] AC 396) and the guidelines in the case of Keet Gerald Francis Noel John v. Mohd Noor @ Harun Abdullah & Ors 1994 MarsdenLR 493 ; 1994 MarsdenLR 2101 ; ; [1995] 1 AMR 373 applies:

(a) There must be a serious question to be tried;

(b) Damages would not be an adequate final remedy; and

(c) The interim relief is justified on the balance of convenience.

The parties submitted on the above. The Defendant additionally argued that not all necessary parties are before the Court and that the Court should not assist the Plaintiff with equitable relief because of his unclean hands.

Serious Issues To Be Tried

A) Non-Fulfilment Of Conditions Precedent

[9] In respect of this claim, the facts are as follows.

[10] EV Dynamic Sdn Bhd has banking facilities with CIMB Islamic Bank Berhad ("CIMB") secured by a charge over two of the Properties in Malaysia. It was a condition precedent of the SSA that all 3 Properties be discharged within six months of the date of the SSA ("CP"). This CP is found in Schedule 1 cl 3 of the SSA worded as such:

"The discharge of charges by CIMB Bank Berhad on the Properties which are charged to secure various banking facilities provided b