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2026 MarsdenLR 112485
IN THE HIGH COURT OF MALAYA AT SHAH ALAM
SHOBA DORAI RAJAH, JC
ANAANDAN A/L VISVA NATHAN – Plaintiff
Versus
MIDLANDS CITY SDN. BHD. – Defendant
CIVIL SUIT NO.: BA-22NCvC-75-02/2026
Solicitor for the Plaintiffs : Ranjan N Chandran with Rani Nadesan
Solicitor for the Defendants 2: Lai Xuen Wei with Farah Aqila binti Mustafa
An interlocutory mandatory injunction, requiring an 'unusually strong and clear case', will not be granted if the relief sought is dispositive of the main action, the applicant's losses are quantifiable in damages, and the balance of convenience favors preserving the contractual status quo.
Headnote:(A) Malaysia - Contracts Act 1950 - Section 40 - Companies Act 2016 - Principle of separate legal entity - Law on interlocutory mandatory injunctions - Principles from Gibb & Co v Malaysia Building Society Bhd [1982] 1 MLJ 271, Tinta Press Sdn Bhd v Bank Islam Malaysia Bhd [1987] 2 MLJ 192, and MBF Holdings Bhd v East Asiatic Co (Malaysia) Bhd [1995] 3 MLJ 89 - Interlocutory mandatory injunctions require an 'unusually strong and clear case' and a high degree of assurance; this standard is far more demanding than showing a serious question to be tried for a prohibitory injunction. (Paras 8-10)
(B) A mandatory injunction is dispositive rather than preservatory when it grants the final remedy sought at the interlocutory stage, such as compelling the return of keys and vacant possession, which would irreversibly transfer possession and control. The 'lower risk of injustice' test must be applied in context; a purely preservatory order (like depositing monies into a stakeholder account, as in ESPL (M) Sdn Bhd v Radio & General Engineering Sdn Bhd) is different from a final and dispositive order. (Paras 22-25)
(C) The principle of separate legal entity dictates that each company is distinct from its shareholders, officers, and affiliates. Allegations of shared addresses or coordinated marketing are insufficient to justify piercing the corporate veil, which requires strict proof of fraud, misrepresentation, or unconscionable conduct, to be adjudicated at a full trial. (Paras 15-17)
Facts of the case:
The Plaintiffs, purchasers of condominium units, entered into Tenancy Agreements and executed Limited Powers of Attorney with the 2nd Defendant, a rental management operator. They alleged that the Tenancy Agreements embodied a Guaranteed Rental Return (GRR) scheme which the 2nd Defendant breached by failing to pay rent. The Plaintiffs unilaterally terminated the agreements and demanded the return of keys to their units. The 2nd Defendant denied an express GRR obligation, stating rent was conditional on sub-tenancy. It proposed a settlement requiring the Plaintiffs to sign a waiver of prior claims in exchange for the keys, which the Plaintiffs rejected on grounds of economic duress. The Plaintiffs then filed an application for an interlocutory mandatory injunction to compel the return of keys.
Findings of Court:
The court found that the Plaintiffs failed to establish the 'unusually strong and clear case' required for an interlocutory mandatory injunction. The Tenancy Agreements contained no express GRR provision but conferred upon the 2nd Defendant absolute discretion to deal with the units. The court held that the relief sought was dispositive final in effect, effectively granting the Plaintiffs their final remedy before trial. The Plaintiffs' losses were commercial and compensable in damages, and the balance of convenience favored the 2nd Defendant, as an irreversible transfer of possession would severely prejudice its contractual rights.
Issues: 1. Whether the Tenancy Agreements embody an express Guaranteed Rental Return (GRR) obligation. 2. Whether the Plaintiffs established sufficient grounds to pierce the corporate veil at the interlocutory stage. 3. Whether granting the interlocutory mandatory injunction would prematurely determine the validity of the agreements and alter the status quo. 4. Whether the relief sought is dispositive rather than preservatory. 5. Whether damages are an adequate remedy and where the balance of convenience lies.
Ratio Decidendi: The court reasoned that mandatory injunctions require a higher threshold than prohibitory ones, demanding an 'unusually strong and clear case.' The present case involved serious triable issues of contractual interpretation and corporate identity that could not be resolved on affidavit evidence. Compelling the return of keys would be a final and dispositive order, not a preservatory one. As the Plaintiffs' losses were quantifiable and compensable in damages, and the 2nd Defendant's prejudice was irreversible, the balance of convenience supported refusing the injunction.
Result: The Plaintiffs' application under Enclosure 4 is dismissed. Costs shall be in the cause. (Para 34)
GROUNDS OF JUDGMENT
INTRODUCTION
1. This judgment concerns the Plaintiffs' application in Enclosure 4 for an interlocutory mandatory injunction against the 2nd Defendant, Clifton Management Sdn Bhd. In essence, the Plaintiffs are seeking an order compelling the 2nd Defendant, to release and deliver vacant possession and all keys to, the Plaintiffs' respective units. They further request that the Defendant be restrained from making such delivery conditional upon the Plaintiffs signing termination agreements that include waivers of their accrued claims under the alleged Guaranteed Rental Return (GRR) scheme. Having carefully considered the extensive affidavits filed by both parties, the detailed written submissions, I have set out the reasons for my decision below.
BRIEF BACKGROUND
2. The Plaintiffs are purchasers and beneficial owners of condominium units in the property development known as Midlands City inSemenyih, Selangor. The 1st Defendant, Midlands City Sdn Bhd, is the housing developer responsible for the construction and the Sale and Purchase Agreements (SPAs) relating to the said units.
3. In connection with their purchases, the Plaintiffs entered into Tenancy Agreements with the 2nd Defendant, Clifton Management Sdn Bhd, who acted as part of a rental Scheme. At the same time, the Plaintiffs had executed Limited Powers of Attorney appointing the 2nd Defendant to manage, sub-let and administer their units. It is not disputed that these documents were voluntarily executed and duly witnessed by solicitors who explained the terms and obligations.
4. The dispute revolves around the payment of rent as the Plaintiffs contend that the Tenancy Agreements were intended to give effect to a GRR scheme, whereby the 2nd Defendant was contractually bound to make quarterly rental payments. It is alleged that the 2nd Defendant failed to honour this obligation during the first year of the tenancy, thereby committing a breach of the agreements. In consequence, the Plaintiffs issued Letters of Demand and proceeded to unilaterally terminate the Tenancy Agreements and further demanding the immediate return of the keys to their respective units.
5. The 2nd Defendant denies any express GRR obligation, asserting that rent was only payable upon occupation by sub-tenants. Due tounfavorable market conditions, no sub-tenants occupied the Plaintiffs' units. Subsequently, to resolve the matter, the 2nd Defendant proposed a without-prejudice settlement, requiring the Plaintiffs to execute a Termination Agreement together with a Revocation of Power of Attorney, which contained a clause waiving all prior claims. However, the Plaintiffs rejected this proposal, alleging economic duress and unconscionable conduct and subsequently filed the present application to compel the return of their keys.
6. In addition, the Plaintiffs have repeatedly emphasised before this Court the acute financial distress occasioned by their inability to access their units, asserting that the 2nd Defendant has wrongfully withheld the keys and thereby obstructed their efforts to secure tenants to service outstanding bank loans. They depict the 2nd Defendant as an oppressive custodian holding their proprietary interests "to ransom."
7. The affidavit evidence, however, discloses that as early as 25 August 2025, the 2nd Defendant, had extended the bona fide "without prejudice" commercial settlement proposal. That draft agreement expressly covenanted that the 2nd Defendant would forthwith return all physical keys and deliver vacant possession of the units to the Plaintiffs. In addition, compromised cash payments were offered for instance, RM8,000.00 in respect of one Parcel A-11-09, to facilitate an orderly resolution of the dispute.
8. The law on interlocutory injunctions in Malaysia is clear and well-developed. For ordinary prohibitory injunctions, the courts apply the three-stage test from Keet Gerald Francis Noel John v Mohd Noor @ Harun Abdullah & Ors [1995] 1 CLJ 293, which builds on Amer
