Hashim Yeop Sani CJ (Malaya):

We allowed this appeal with costs and now state our grounds.

The appellants/plaintiffs, Associated Tractors Sdn. Bhd., in their statement of claim sought for judgment in the sum of RM301,165 being the total amount of alleged defaulted rentals and the estimated value of a harvesting machine. Alternatively the appellants/plaintiffs sought for judgment in the sum of RM151,165 being the same alleged defaulted rentals and the return of the same said harvesting machine together with interests and costs. The claims were based on a rental agreement dated 31 December 1984 whereby the harvesting machine was let out by the appellants/plaintiffs to the first respondent. The claim against the second respondent was based on a straight forward letter of guarantee relating to the same harvesting machine. Both the rental agreement and the guarantee were exhibited - pp. 76-79 and pp. 81-82 of the appeal record.

The two respondents in their statement of defence and counter claim denied firstly there was any rental agreement. The respondents then averred that the appellants/plaintiffs had through their servant and/or agent sold the same harvesting machine to the first respondent at a total price of RM225,000 of which a sum of RM90,000 had been paid as stated in a document in the form of a Salesman's Order No. 0364 which was exhibited to support the defence.

On 13 July 1988 the appellants/plaintiffs applied by summons in chambers to strike out the counter claim on the grounds that it was frivolous and vexatious and/or an abuse of process. This application was not heard as yet when the first respondent on 28 September 1988 applied for an ex parte injunction to restrain the appellants/plaintiffs from taking possession, disposing or interfering with the same said harvesting machine in the possession of the first respondent. An ex parte injunction was granted. On 4 June 1989 after hearing both parties the Judge extended the injunction to continue until the trial of the action or until the hearing of the appellants/plaintiffs' application for final judgment under O. 14 of the Rules of the High Court 1980. Thus the present appeal.

The discretion of the Court in granting or withholding injunction before the trial of an action is governed by established principles. These principles have been developed over the years and the position in law now is that all that the Court needs to be satisfied with before exercising the discretion to grant an injunction is that the claim is not frivolous or vexatious. There is no longer a need for the prima facie case test. In other words as long as the Court is satisfied that there is a serious question to be tried that will constitute a basis to proceed to consider whether on the balance of convenience the injunction should be granted. See Hubbard v. Vosper [1972] 2 QB 84 and American Cyanamid Co. v. Ethicon Ltd. [1975] AC 396.

Many factors can be relevant for consideration at this stage. It is implied in Mohamed Zainuddin bin Puteh v. Yap Chee Seng that any factor which can tip the balance may be considered and this is referred to at p. 42:

Firstly to discover whether the plaintiff's case is frivolous or vexatious. If it is not, then to decide in whose favour the balance of convenience lies. If these factors are evenly balanced it may not be improper for the Court to take into account any tipping in the balance as revealed by affidavits.

The three documentary exhibits in our present case (the rental agreement, the guarantee and the Salesman's Order) would seem to show clearly that there is a serious question to be tried. The Court should not go into the merits at this stage but the three documents on their face value would certainly help to tip the balance one way or the other. Though the defence of non est factum was not pleaded the respondents still denied the rental agreement and the guarantee. The Salesman's Order No. 0364 carried with it a number of conditions set out at the b