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2023 MarsdenLR 279
HIGH COURT MALAYA SHAH ALAM
TC SCAFFOLD INDUSTRIAL SDN BHD – Appellant
Versus
JSNT2 SDN BHD – Respondent
[Civil Suit No: BA-22NCvC-107-03/2023]
A Mareva injunction requires a good arguable case, assets within jurisdiction, and a real risk of asset dissipation, balancing the convenience of both parties.
Headnote:(A) Mareva Injunction - Jurisdiction and principles established in Zainal Abidin bin Haji Abdul Rahman v. Century Hotel Sdn Bhd, S & F International Limited v. Trans-Con Engineering Sdn Bhd, and Aspatra Sdn Bhd & 21 Ors v. Bank Bumiputra Malaysia Bhd - Applicant must show a good arguable case, assets within jurisdiction, and risk of asset dissipation - Court finds Plaintiff has a good arguable case for unpaid rentals and transportation charges based on contract documents (Paras 6-30).
(B) Risk of Dissipation - Evidence shows risk of dissipation due to Defendant's foreign ownership and lack of business in Malaysia, necessitating Mareva injunction to protect Plaintiff's interests (Paras 31-39).
(C) Balance of Convenience - Court finds it unfair for Plaintiff to risk non-recovery of judgment while Defendant has benefitted from rented equipment (Paras 36-42).
(D) Scope of Injunction - Mareva injunction limited to retention monies to avoid impairing Defendant's business operations while preserving Plaintiff's claim (Paras 40-43).
Result: Plaintiff's application for Mareva injunction is partly allowed.
| Table of Content |
|---|
| 1. plaintiff's mareva injunction application. (Para 1 , 2 , 3 , 4 , 5) |
| 2. elements for mareva injunction established. (Para 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13) |
| 3. details of contractual agreements between parties. (Para 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24) |
| 4. dispute over binding contract terms. (Para 25 , 26 , 27 , 28 , 29 , 30) |
| 5. defendant's assets within jurisdiction. (Para 31 , 32 , 33) |
| 6. risk of asset dissipation established. (Para 34 , 35) |
| 7. balance of convenience favors plaintiff. (Para 36 , 37 , 38 , 39) |
| 8. scope of mareva injunction defined. (Para 40 , 41 , 42) |
| 9. court's final decision on mareva injunction. (Para 43 , 44) |
Introduction
[1] The Plaintiff commenced the present action against the Defendant for the sums due and owing by the Defendant to the Plaintiff. The Plaintiff claims the total sum of RM3,276,647.95 (continuing losses) against the Defendant in the present action which consists of the following:
(a) Outstanding rental for the Equipment in the sum of RM1,880,123.7 (continuing losses);
(b) Outstanding transportation charges for the delivery of the Equipment in the sum of RM146,000.00;
(c) Repair charges for the defective items of Equipment in the sum of RM185,783.00 (continuing losses);
(d) Replacement costs for the items of Equipment which are damaged beyond repair and deemed lost and/or missing in the sum of RM987,931.14 (continuing losses); and
(e) Late payment interest on the overdue account (s) in the sum of RM76,810.04 (calculated as at 8 February 2023).
[2] By Ex-Parte Notice of Application dated 27 April 2023, the Plaintiff filed an application to restrain the Defendant from removing, disposing of or dissipating, pledging, charging, assigning or otherwise dealing with or diminishing the value of its assets located within Malaysia pending the final determination of the present action ("Mareva Injunction Application").
[3] Pursuant to the case management on 2 May 2023, this Court directed that the Mareva Injunction Application be heard inter partes.
[4] On 12 July 2023 this Court, after hearing both parties, granted an interim Mareva injunction.
[5] Dissatisfied, the Defendant has filed an appeal against this Court's decision on Mareva injunction.
Principles Governing Marava Injunction
[6] The Court's jurisdiction to grant a Mareva injunction has been settled in the following cases of the apex Court:
(a) Zainal Abidin bin Haji Abdul Rahman v. Century Hotel Sdn Bhd [1981] 1 MLRA 703; (Federal Court);
(b) S & F International Limited v. Trans-Con Engineering Sdn Bhd [1984] 1 MLRA 505; [1985] CLJ (Rep) 280 (Federal Court); and
(c) Aspatra Sdn Bhd & 21 Ors v. Bank Bumiputra Malaysia Bhd & Anor ; [1988] 1 MLJ 97; [1987] CLJ (Rep) 50 (Supreme Court).
[7] The following elements are to be established by an applicant seeking the grant of a Mareva injunction by the Court (Creative Furnishing Sdn Bhd v. Wong Koi ; [1989] 1 CLJ (Rep) 22 (Supreme Court)):
(a) The plaintiff has a 'good arguable case' against the defendant;
(b) That the defendant has assets within the jurisdiction; and
(c) There is a real risk of dissipation or secretion of assets so as to render any judgment which the plaintiff may obtain nugatory.
[8] A good arguable case is a case which is more than being barely capable of serious argument but not necessarily one that the judge believes has more than a 50% chance of success: see S & F International Ltd (supra).
[9] This is a higher threshold than the 'serious issues to be tried' test that is applicable in the usual application for an interlocutory injunction, but the applicant need not show that they have a case so strong so as to warrant summary judgment nor even a strong prima facie case. It is sufficient for the applicant to show on the evidence available that there is a fair chance that it will obtain judgment against the defendant (Biasamas Sdn Bhd & 3 Ors v. Kan Yan Heng & Anor ; [1998] 4 CLJ 754; [1998] 4 AMR 3377 (Court of Appeal).
[10] On the existence of assets wit
