A party seeking an injunction must have clean hands; an illegal contract cannot serve as a basis for equitable relief.

[1] This is an application from the Plaintiff, a company for an interlocutory injunction against the Defendants. This interlocutory injunction is requested pending the disposal of the main suit. I had with respect, refused the same and this written grounds explain the reasons for the decision.

Background Facts

[2] The Plaintiff is a tenant of three pieces of lands where the First ("D1") and Second Defendant ("D2") are the owners of the lands. D1 owns 70% shares in D2. All three signed a tenancy agreement for all three pieces of lands. This is not a registered lease but purely a contractual agreement.

[3] This tenancy agreement was executed after the Plaintiff did some works on the lands as agreed by D1 and D2 and there was outstanding payment for this due to the Plaintiff.

[4] Part payment for the deposit of the tenancy came from the debt owed by D1 and D2 to the Plaintiff.

[5] Through the tenancy agreement, the Plaintiff agreed to pay the monthly rental for the lands but it is also entitled to the proceeds of the oil palm cultivated on the lands.

[6] Subsequent to the tenancy agreement, D1 as vendor executed a sale and purchase agreement of the lands with a third party as purchaser. Also executed is a shares sale agreement for shares in D1 between the Third Defendant and Fourth Defendant (both owed 50% shares each in D1) as vendors of the shares and one Mohammad Saufee Muhidin and one Md Isa Adam as purchasers for the same.

[7] These two agreements affected the interest of the Plaintiff in the tenancy agreement. The Plaintiff thus sued all Defendants.

[8] Pending the disposal of the main suit, the Plaintiff filed the present application for interlocutory injunction to restrain all Defendants in executing the terms of the two agreements.

Court's Findings

[9] There is one strong reason why the Plaintiff's application for interlocutory injunction cannot be allowed. This is because the tenancy agreement, which is the raison d'etre for the Plaintiff's claim, is illegal. No illegal agreement should be enforced and recognised by any courts of law. Indirectly enforcing and recognising the illegal agreement can be deduced if this Court is minded to grant the interlocutory injunction. This should be avoided at all costs.

[10] Why is the tenancy agreement illegal? It is illegal as the same is executed in contravention of s 8(i) of the Malay Reservation Enactment (FMS Cap 142) [As Applicable to the State of Negeri Sembilan] ("MRE") that states as follows:

Subject to the provisions of subsection (ii) and ss 16 and 17 no Malay holding shall be transferred, charged or otherwise disposed of to any person not being a Malay, and no memorandum of transfer, charge or lease in contravention of this section shall be capable of registration in Land Office or Registry of Titles.

[Emphasis Added]

[11] No wonder the lease was not registered by the Plaintiff. The Plaintiff cannot registered it as it contravenes the above statutory provision. In short, the lease or tenancy is illegal.

[12] Worse still, the Plaintiff admitted in para 25 of its own affidavit in support for the interlocutory injunction that the tenancy agreement is illegal. In this paragraph the Plaintiff itself quoted the above statutory provision. The Plaintiff again admitted to the illegality at para 4 of its written submission in reply.

[13] Since the Plaintiff itself admitted the illegality of the tenancy agreement, how could it be possible for this Court to allow the interlocutory injunction?

[14] The Plaintiff's case is made more daunting as s 19(i) of MRE further states as follows:

All dealings or disposals whatsoever and all attempts to deal in or dispose of any Malay holding contrary to the provisions of this Enactment shall be null and void and no rent paid