2010 MarsdenLR 3663 ; 2010 MarsdenLR 1

ZALEHA ZAHARI, JEFFREY TAN, SYED AHMAD HELMY
RHB BANK – Appellant
Versus
L & R HOLDINGS SDN BHD & ANOR – Respondent

The court established that for an interlocutory injunction to be granted, plaintiffs must demonstrate a bona fide serious issue and that the balance of convenience favors such an order.

Headnote:(A) Bills of Exchange Act 1949 - Sections 24 and 73A - Injunction application - The plaintiffs, a bank customer and a guarantor, claimed the defendant bank acted on forged telegraphic transfer applications leading to financial loss - The court considered if a bona fide serious issue existed and the balance of convenience for granting the injunction - Key issues included proof of allegations and negligence by plaintiffs in failing to detect discrepancies - The court found the plaintiffs had not exercised sufficient vigilance, leading to the conclusion that a serious issue was not evident. (Paras 4-6)

(B) Injunction principles - For an interlocutory injunction to be granted, the plaintiff must show both a bona fide serious issue to be tried and that the balance of convenience favors the injunction. (Paras 5-6)

Findings of Court:
The injunction granted to the plaintiffs was set aside as the balance of convenience did not favor its continuation, stating that greater injustice would arise from granting an injunction that stripped the defendant of its security.

Issues: The main issues revolved around whether there was a bona fide serious issue to be tried, the plaintiffs' vigilance regarding banking statements, and the balance of convenience for granting the injunction.

Ratio Decidendi: The court ruled that the plaintiffs had a burden to show diligence regarding the alleged forgery and could not simply assume that an issue was serious because it would be tried.

Result: Appeal allowed.