Ramly Ali J:

[1] Briefly, encl. 27 is the notice of assessment of damages dated 20 February 2006 filed pursuant to order of court dated 13 February 2006. Enclosure 27 seeks to inquire the damages sustained by the 2nd defendant as a result of the plaintiff's ex parte injunction order dated 6 July 2005, which was discharged by the order dated 13 February 2006.

[2] On the first hearing date for encl. 27 before the learned senior assistant registrar, the plaintiff raised a preliminary objection to the effect that encl. 27 should not be heard now but at the end of trial.

[3] On 10 October 2006, the learned senior assistant registrar accepted the plaintiff's preliminary objection and dismissed encl. 27 with costs. The 2nd defendant filed an appeal to the judge in chambers against the said decision.

[4] Only one issue is raised ie, should encl. 27 be enquired at this stage or after trial of this action.

Brief Facts

[5] By a writ of summons dated 4 July 2005, the plaintiff (inter alia) prays for the following orders:-

(a) a declaration that the 1st defendant had in fact breached the supply agreement dated 13 January 2005;

(b) that the 1st and 2nd defendants be ordered to pay damages suffered by the plaintiff as a result of the breach;

(c) an injunction to restrain the 1st and 2nd defendants from accepting from the 3rd defendant a sum of RM970,000 under a Bank Guarantee No: 031BGA 0531009;; and

(d) an injunction to restrain the 3rd defendant from releasing the said amount under the same bank guarantee to the 1st and 2nd defendant.

[6] At the same time vide encl. 3, the plaintiff filed for an ex parte injunction to restrain the 1st and 2nd defendants from accepting the same amount under the same bank guarantee and to restrain the 3rd defendant from releasing the said amount under the said bank guarantee to the 1st and 2nd defendants.

[7] On 6 July 2005, the court granted the plaintiff the said ex parte injunction and fixed 25 July 2005 for inter partes hearing.

[8] On 21 July 2005 the 2nd defendant filed an application (vide encl. 11) to set aside the ex parte order (dated 6 July 2005) and to assess damages suffered by the 2nd defendant as a result of the said ex parte order. Pending disposal of encl. 3 (inter partes) and encl. 11, the court granted the plaintiff an ad interim injunction.

[9] On 13 February 2006, the court gave order in terms of encl. 11 and expressly directed damages to be assessed by the registrar. In allowing encl. 11 in toto, the court on the merits decided that the ex parte injunction ought not to have been granted in the first instance. Furthermore, the court accepted the 2nd defendant's submissions that the ex parte injunction was obtained as a result of material non-disclosures by the plaintiff; damages is an adequate remedy for the plaintiff as the actionable wrong in this action is an alleged breach of agreement and there is no instances of fraud involving the 2nd defendant against the plaintiff.

The Law

[10] The law in respect of inquiry as to damages for injunction entered wrongfully is trite. The English case of Ushers Brewery Ltd. v. P.S. King & Co. (Finance) Ltd. [1971]";2 All ER 468 ("the Ushe";s Brewery Case") afforded the following accepted test when dealing with inquiries as to damages:-

It is my judgment established by the authorities that an inquiry as to damages will not be ordered in these cases until after the Plaintiff has failed on the merits at the trial or it is established before trial that the injunction ought not to have been granted in the first instance.

[11] The Ushers Brewery Case also considered the underlying principle attached to an inquiry as to damages in relation to injunctions. It held that inquiries as to damages stem from the undertaking given by the plaintiff who seeks an injunction. Such an undertaking includes abiding by any order the court may make as to damages that may be occasioned to the defendant in the event the court finds that the injunction is wrongly gra