[Chap 14] Injunctions in English Law

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Ravindran on Civil Procedure (2015) Page1

CHAPTER 14 INJUNCTIONS A. INTERLOCUTORY INJUNCTIONS 1. Prohibitory Injunctions 1.1 Defamation Actions

1.2 Injunctions against the Government 2. Mandatory Injunctions

2.1 Has the myth been demolished? 3. The ex parte and ad interim injunctions

3.1 The ex-parte injunction

(a) Computing 21 days (b) Full and Frank Disclosure (c) Setting-aside the ex-parte injunction (d) Enforcing the Undertaking

3.2 The ad interim injunction

B. THE ERINFORD INJUNCTION C. THE FORTUNA INJUNCTION D. THE MAREVA INJUNCTION 1. The General Rule 2. The “Nuclear” Exception 3. The Malaysian Position 4. The Ambit of the Mareva injunction

4.1 Local Defendants 4.2 Third Parties

5. Setting-aside 6. Post-judgment Mareva Injunction 7. Worldwide Mareva Injunction E. THE ANTON PILLER ORDER 1. The Nature and Origins 2. The position in Malaysia 3. Privilege against self-incrimination

(a) The common-law position (b) Legislative Intervention in UK

(c) The position in Malaysia

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An injunction is an order by the court in the exercise of its equitable jurisdiction. There are two types of injunctions - prohibitory and mandatory. A prohibitory injunction restrains a party from doing an act or continuing to do an act whilst a mandatory injunction compels a party to do an act.1 Injunctions may be granted at different stages of the proceedings. Broadly, they may be classified as interlocutory and permanent.2 An interlocutory injunction3 is a pre-trial injunction that may granted at any time before the trial, and in extreme circumstances, even before the commencement of a suit. The permanent injunction is granted after trial. A. INTERLOCUTORY INJUNCTIONS This is an injunction that is granted pending trial. The general principles are well settled although there is some confusion as to whether a different threshold applies to a mandatory injunction. 1. Prohibitory Injunctions A prohibitory injunction is granted to maintain the status quo between the parties pending the trial. The principle was explained by the Court of Appeal in Keet Gerald Francis v Mohd Noor4 where Gopal Sri Ram JCA (as he then was) said:

“ .. a judge hearing an application for an interlocutory injunction should undertake an inquiry along the following lines: (1) he must ask himself whether the totality of the facts presented before him discloses a bona fide serious issue to be tried. He must, when considering this question, bear in mind that the pleadings and evidence are incomplete at that stage. Above all, he must refrain from making any determination on the merits of the claim or any defence to it. It is sufficient if he identifies with precision the issues raised on the joinder and decides whether these are serious enough to merit a trial. If he finds, upon a consideration of all the relevant material before him, including submissions of counsel, that no serious question is disclosed, that is an end of the matter and the relief is refused. On the other hand if he does find that there are serious questions to be tried, he should move on to the next step of his inquiry;

1 “When, to prevent the breach of an obligation, it is necessary to compel the performance of certain acts which the court is capable of enforcing, the court may in its discretion grant an injunction to prevent the breach complained of, and also to compel performance of the requisite acts” – s.53 SRA 1950 2 “Preventive relief is granted at the discretion of the court by injunction, temporary or perpetual.” - s.50 of the Specific Relief Act 1950 3 Also called an interim injunction. As the Singapore Court of Appeal pointed out in Tay Long Kee Impex v Tan Heng Huwah [2000] 2 SLR 750, they are one and the same relief: “.. the terms ‘interim injunction’ and ‘interlocutory injunction’ are not terms of art, and in their ordinary sense, an interim injunction means an injunction made in the meantime and until something is done, eg final disposal of the matter; and an interlocutory injunction means an injunction made prior to the final disposal of the usit or cation, ie at the interlocutory stage of the suit or action. An interim injunction is an interlocutory injunction, and vice versa. We do not think that there is any material difference between the two.” 4 [1995] 1 MLJ 193. These principles were distilled from the celebrated House of Lords decision in American Cynamid v Ethicon [1975] AC 396

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(2) having found that an issue has been disclosed that requires further investigation, he must consider where the justice of the case lies. In making his assessment, he must take into account all relevant matters, including the practical realities of the case before him. He must weigh the harm that the injunction would produce by its grant against the harm that would result from its refusal. He is entitled to take into account, inter alia, the relative financial standing of the litigants before him. If after weighing all matters, he comes to the conclusion that the plaintiff would suffer greater injustice if relief is withheld, then he would be entitled to grant the injunction especially if he is satisfied that the plaintiff is in a financial position to meet his undertaking in damages. Similarly, if he concludes that the defendant would suffer the greater injustice by the grant of an injunction, he would be entitled to refuse relief. Of course, cases may arise where the injustice to the plaintiff is so manifest that the judge would be entitled to dispense with the usual undertaking as to damages … Apart from such cases, the judge is entitled to take into account the plaintiff’s ability to meet his undertaking in damages should the suit fail, and, in appropriate cases, may require the plaintiff to secure his undertaking, for example, by providing a bank guarantee; and (3) the judge must have in the forefront of his mind that the remedy that he is asked to administer is discretionary, intended to produce a just result for the period between the date of the application and the trial proper and intended to maintain the status quo .. It is a judicial discretion capable of correction on appeal. Accordingly, the judge would be entitled to take into account all discretionary considerations, such as delay in the making of the application or any adequate alternative remedy that would satisfy the plaintiff’s equity, such as an award of monetary compensation in the event that he succeeds in establishing his claim at the trial. Any question going to the public interest may, and in appropriate cases should, be taken into account. A judge should briefly set out in his judgment the several factors that weighed in his mind when arriving at his conclusion.”5 (emphasis added)

1.1 Defamation Actions There are some situations where the Keet Gerald principles do not apply. Defamation actions is one such example. The common law has always been cautious about granting an interlocutory prohibitory injunction in defamation actions. The primary reason is that such an injunction would stifle free speech which is regarded as a sacrosanct fundamental liberty.6

5 In Mohamed Zainuddin Bin Puteh v Yap Chee Seng [1978] 1 MLJ 40 Hashim Yeop Sani J (as he then was) said “The traditional theory underlying the grant or refusal of interlocutory injunction has always been that the court abstains from expressing any opinion upon the merits of the case until the trial … In Hubbard v Pitt [1975] 3 All ER 10, Lord Denning again said of the principles involved that the first question to be asked is simply whether there was a serious question to be tried in the sense that the claim was not frivolous or vexatious. Secondly, if the plaintiffs were to succeed at the trial, whether they would be adequately compensated for the interim continuance of the defendant’s activities. Conversely is the question that if the defendants were to succeed at the trial, whether they would be adequately compensated for the interim restriction on their activities which the grant of an interlocutory injunction would have imposed. The judge then considers the balance of convenience, and if the relevant factors were evenly balanced the court should grant an interlocutory injunction which would maintain the status quo. It is said that at that stage the court is not justified, in embarking upon anything resembling a trial of the action upon conflicting affidavits.” 6 The Americans refer to such an injunction as having a Chilling Effect.

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Accordingly, the court would only grant an interlocutory injunction where:7 (i) the impugned statement is unarguable defamatory; (ii) there are no grounds for concluding the statement may be true; (iii) there is no other defence which might succeed; and (iv) there is evidence of an intention to repeat or publish the defamatory statement. 1.2 Injunctions against the Government Injunctions against the Government raises a difficult jurisdictional question. This is because of s.29 Government Proceedings Act 1956 which reads: (1) In any civil proceedings by or against the Government the court shall, subject to this Act, have power to make all such orders as it has power to make in proceedings between subjects, and otherwise to give such appropriate relief as the case may require: Provided that: (a) where in any proceedings against the Government any such relief is sought as might in proceedings between subjects be granted by way of injunction or specific performance, the court shall not grant an injunction or make an order for specific performance, but may in lieu thereof make an order declaratory of the rights of the parties (2) The court shall not in any civil proceedings grant any injunction or make any order against an officer of the Government if the effect of granting the injunction or making the order would be to give any relief against the Government which could not have been obtained in proceedings against the Government. A plain reading of this provision will show that the court does not have the jurisdiction to grant an injunction against the Government. Not so, said Gopal Sri Ram JCA (as he then was) in Sabil Mulia (M) Sdn Bhd v Pengarah Hospital Tengku Ampuan Rahimah & Ors8 P claimed that it had a contract to run a canteen in Tengku Ampuan Rahimah Hospital (D1) and that in breach of that contract, D1 had entered into a similar contract with D4. So, P sued D1, the Ministry of Health (D2), the Government of Malaysia (D3) and D4 and sought an injunction against D1-D4 to restrain them from evicting it from the canteen premises. The High Court, relying on section 29, held that it did not have the jurisdiction to grant such an injunction. The conventional view was that the 2nd Supreme Court decision in Government of Malaysia v Lim Kit Siang9 created a bar to granting such an injunction. In that case, P, who the then Opposition Leader, filed a suit in the Penang High Court on 18.8.1987 and applied, ex-parte for an injunction to restrain United Engineers Malaysia from entering into a contract with the Government for the construction of the remainder of the North-South Highway. The application was dismissed by the High Court.

7 Gatley on Libel and Slander (10th Edn, 2004) at p 787. The origins of this principle may be traced to the decision in Bonnard v Perryman [1887] 2 Ch 269. The Supreme Court adopted this principle in The New Straits Times Press (M) Bhd v Airasia Bhd [1987] 1 MLJ 36. 8 [2005] 2 CLJ 122 9 [1988] 2 MLJ 12

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The Supreme Court allowed the the appeal and granted the injunction.10 On 5.10.1987, the High Court refused an application by the Government and UEM to set-aside the injunction. On 16.3.198811 the Supreme Court, by a majority12 allowed the appeal and set-aside the injunction. On 18.3.1988, UEM and the Government signed the contract. Upon a minute examination of both the Supreme Court decisions, Gopal Sri Ram JCA explained that:

“.. that case is authority for the proposition that s.29 is not an impediment to restraining a private defendant from entering into a transaction with the Government. So, in the present case, there was no reason why [D4] could not have been restrained from entering into a contract with the Government to run a canteen at the .. hospital ..” (the emphasis is mine)

Does that mean that the court has jurisdiction to grant an injunction against the Government or its officers ? After analyzing the history of the English equivalent of section 29 and the position in Canada, Gopal Sri Ram JCA said:

“In our judgment, the effect of current authority is that our courts have jurisdiction to grant interim and permanent injunctions against any servant of the Government. Accordingly, there was no jurisdictional bar to the High Court granting [P] the injunction it sought against [D1] .. Since a Government servant or a member of the Cabinet may be restrained by injunction, it is strictly unnecessary from a practical point of view to decide whether the Government itself may be restrained in appropriate circumstances. Nevertheless, since the question is one which was argued before and ruled upon by the learned judicial commissioner, we think it behoves us to deal with the point .. It has been settled since at least 1978 that s. 29 of the 1956 Act does not prohibit the grant of temporary injunctions against the Government .. Accordingly, it is too late in the day to argue that s.29 bars the grant of an interlocutory or even an interim injunction against the Government.” (emphasis added)

On the facts of Sabil Mulia, Gopal Sri Ram JCA held that since P only had a purely contractual right to run the canteen at D1’s premises, even if it were to succeed at trial, it will be entitled to an award of damages in the ordinary way. “So, all that the appellant complains about is readily compensated by a monetary award. Since monetary compensation is an adequate remedy, it follows that in accordance with well settled principles governing equitable discretion, specific relief is inappropriate in the circumstances of this case.”

10 The Court (Lee Hun Hoe CJ (Borneo), Wan Suleiman and Wan Hamzah SCJJ) said: “the learned judge's interpretation of section 29 of the Government Proceedings Ordinance is too wide. Apart from what the statute expressly prohibits, he ruled that the Court cannot grant an injunction against a party having a transaction with the Government as in the present case. That will have the effect, he said, of indirectly prohibiting the Government from signing the agreement. With respect we are unable to agree with the learned judge's extension of the scope of that section ..” 11 While P and his counsel were incarcerated under the Internal Security Act 1960 in the infamous Operasi Lallang. 12 Salleh Abas LP, Abdul Hamid CJ (Malaya) and Hashim Yeop Sani SCJ were in the majority. Seah and Abdoolcader SCJJ dissented. On a separate note, it always important to remember the role this case played in the subsequent Judicial Crisis of 1998 which led to Salleh Abas LP, Azmi Kamaruddin, Eusoffe Abdoolcader, Wan Hamzah, Wan Suleiman Seah SCJJ being suspended. Salleh Abas LP Wan Sulaiman and Seah SCJJ were later removed from office.

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The correctness of this ground breaking decision was doubted by the Court of Appeal in Superintendent of Lands and Surveys, Kuching Division & Ors v Kuching Waterfront Development Sdn Bhd.13 P purchased land at RM3.5 mil (which later appreciated to RM14 mil) and obtained approval for the erection of buildings on the land from Dewan Bandaraya Kuching Utara (DBKU). P did not comply with the conditions in the approval and there was also a danger that the works posed a danger to the public. D (the Superintendant of Lands and Surveys),accordingly re-entered and forfeited the land. P issued a writ seeking a declaration inter alia that the purported re-entry was invalid and for an order that the re-entry be set-aside and for damages. P then sought an interim injunction against D. The Court of Appeal held no injunction would lie for the following reasons: (i) there was no reason to depart or whittle away what has been built into s.29; (ii) since a permanent injunction cannot be granted against the Government, it

followed that the court could not grant an interim injunction against any government department under s. 54 of the SRA;14 and

(iii) the balance of convenience did not favour the grant of an interim injunction.

Public interest weighed against P15 and, in any event, that damages would be an adequate remedy.16

13 [2009] 6 CLJ 751 14 Section 54(d) reads: “An injunction cannot be granted to interfere with the public duties of any department of any Government in Malaysia, or with the sovereign acts of a foreign Government”. Suriyadi JCA (as he then was) said: “Apart from the distinctive statutory prohibition of s.54, there was no reasonable excuse why government departments here should be prevented from carrying out their daily responsibilities, especially when adjoining properties were facing water seepages from the excavated area, let alone danger to the public had now become a serious issue as admitted by [P]. How is the relevant department ever going to carry out its duties if its employees are injuncted? It is obvious in this case that although injunctions were also sought against Government departments and Government servants, in substance and effect, those injunctions were actually against the Government, a scenario that is also adequately covered by s. 29(2) ..” 15 In Tenaga Nasional Berhad v. Dolomite Industrial Park Sdn Bhd [2000] 1 CLJ 695 Gopal Sri Ram JCA (as he then was) said: “... where the defendant is a public authority performing duties to the public one must look at the balance of convenience more widely, and take into account the interests of the public in general to whom these duties are owed.” 16 In American Cynamid, Lord Diplock said: “The court should first consider whether, if the plaintiff were to succeed at the trial in establishing its right to a permanent injunction, he would be adequately compensated by an award of damages for the loss he would have sustained as a result of the defendants continuing to do what was sought to be enjoined between the time of the application and the time of the trial. If damages ... would be adequate remedy and the defendant would be in a financial position to pay them, no interlocutory injunction should normally be granted, however strong the plaintiff's claim appeared to be at the stage.”

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It is difficult to reconcile both decisions and the unenviable task for the court is to determine which decision correctly represents the law on s.29. There are 2 different approaches that have been taken. In Tidalmarine Engineering Sdn Bhd v Kerajaan Malaysia17, Varghese George JC (as he then was) attempted to reconcile both decisions by holding that “while there may be a case to allow interlocutory injunctions against the Governments in appropriate cases on the rationale forcefully stated in Sabil Mulia .. I am inclined to restrict it to only where it is obvious and clear that the Government's discharge of public duties are not interfered with in any way” whilst in Koperasi Belia Nasional & Anor v Kerajaan Malaysia18, Mohamad Ariff Yusof J (as he then was) took the view that he was bound by Kuching Waterfront as it was the later decision. The Federal Court in Minister of Finance, Government of Sabah v Petrojasa Sdn Bhd [2008] 4 MLJ 641 missed the opportunity of settling the position. Arffin Zakaria CJ did however say: “In [Sabil Mulia] the Court of Appeal held, inter alia, that the courts have jurisdiction to grant interim and permanent injunctions against any servant of the government. It also held that it is too late in the day to argue that s 29 of the GPA bars the grant of an interlocutory or even an interim injunction against the government. That is not the issue before us, as such I would not venture to say anything more on this save that the courts have moved away from the traditional stand that no order of injunction may be granted against the government.” 2. Mandatory Injunctions A mandatory injunction is a drastic remedy which compels a party to do a particular act. It could have the effect of altering the status quo pending trial and could also have the effect of granting P his final relief sought without a trial. The threshold that P has cross is, therefore, higher. In Timbermaster Timber Complex (Sabah) Sdn Bhd v Top Origin Sdn Bhd19 Alauddin JCA (as he then was) said:

“In an application for a mandatory interlocutory injunction, the applicant will have to show that they have an unusually strong and clear case and that there are special circumstances before the court will grant them relief .. The rationale for this test is simple to understand. Since the relief of mandatory injunction sought in an interlocutory application would be the primary relief of the application in his main action, the application must convince the court to its satisfaction that he indeed has a high degree of success at the trial of his action.”20 (emphasis added)

17 [2010] 1 LNS 1361 18 [2010] 1 LNS 1547 19 [2002] 1 MLJ 33 20 A similar point was previously made by Abdoolcader J (as he then was) in delivering the judgment of the Federal Court in Gibb & Co v Malaysia Building Society Bhd [1982] 1 MLJ 271: ““[A]n interlocutory application for a mandatory injunction is a very exceptional form of relief .. but there is no reason why interlocutory or indeed interim mandatory injunctions should not issue in proper and appropriate cases .. The case however must be unusually sharp and clear .. and the court must feel a high degree of assurance that at the trial a similar injunction would probably be granted ..”

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2.1 Has the myth been demolished? There is now some confusion regarding this point. In ESPL (M) Sdn Bhd v Radio Engineering Sdn Bhd21 Gopal Sri Ram JCA (as he then was), after quoting extensively from the growing body of jurisprudence and in particular, the “myth demolishing” judgment of Hoffmann J (as he then was) in Films Rover International Ltd v Cannon Film Sales Ltd22, said:

“Is the grant of a mandatory injunction governed by principles different from those applicable to prohibitory injunctions? At one time, that was thought to be the case. No longer so. In Films Rover International Ltd .. Hoffmann J (as he then was) demolished the myth that there was any difference in the principles applicable to the grant of interlocutory mandatory and prohibitory injunctions .. It follows that the steps to be followed in an application for a mandatory injunction are the same as those in an application for a prohibitory injunction. Those steps were set out in the judgment of this Court in Keet Gerald …” (emphasis added)

This part of the judgment has been read by many to mean that Timbermaster and Gibb are no longer good law. That is not so. A careful reading of those decisions will show that the rationale for the higher threshold is based on the fact that the grant of an interlocutory mandatory injunction in those cases would have had the effect of granting P his final relief. That warranted the requirement for P to cross the higher threshold. Gopal Sri Ram JCA explained the point in ESPL:

“We are here dealing with a mandatory injunction in terms in which it gives to the defendant at the interlocutory stage, the whole of the relief it claims under its counterclaim. So, once the mandatory injunction is granted, there is really no need for a trial on the issue of a trust. Keet Gerald was a case where the grant or refusal of an injunction at the interlocutory stage did not put an end to the action. The present is quite the opposite case. Hence .. it has become necessary to place a higher threshold in the defendant’s path by requiring it to prove a case on merits before deciding whether the orders asked for should be granted.” (emphasis added)

But where the mandatory injunction does not have that effect, then P is not required to cross the higher threshold in Timbermaster and Gibb but merely the threshold in Keet Gerald Francis. That represents the true ratio of ESPL. It follows that similar argument may be made for interlocutory prohibitory injunctions as well i.e there may be cases, which are rare, where the grant of a prohibitory injunction will have the effect of granting P his final relief. In such cases, the court would need to feel a high degree of assurance before it is prepared to grant the injunction.23 21 [2005] 2 MLJ 422 22 [1986] 3 All ER 772 23 See Datuk Johari v QSR Brand Bhd [2007] 1 CLJ 85 where Gopal Sri Ram JCA explained the test which evolved from the English decisions in Cayne v Global Natural Resources plc [1984] 1 All ER 225 and NWL Ltd v Woods [1979] 3 All ER 614. This “test” was applied in Extreme System Sdn Bhd v Ho Hup Construction Company Bhd & Ors (No 3) [2010] 1 LNS 481.

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3. The ex parte and ad interim injunctions As previously discussed, an interlocutory injunction is granted pending trial. As is the general rule with all interlocutory applications, it must be made inter partes.24 The Rules however recognize that an injunction may sometimes be required as a matter of urgency and in such cases, it allows P to make the application ex-parte.25 There is also further species known as the ad interim injunction that is granted pending the disposal of an inter-partes application. 3.1 The ex-parte injunction In cases of urgency, P may have resort to O29 r1(2) and move the High Court for an ex parte injunction.26 If no such urgency exists, then P must, in the ordinary way, make the application inter partes. Delay is therefore a relevant consideration – see Lim Hean Pin v Thean Seng Co Sdn Bhd & Ors.27 (a) Computing 21 days

The ex parte injunction will automatically lapse at the end of 21 days from the date on which it is granted28 and the court does not have the power to extend the injunction beyond the 21 day period.29 There was some difficulty in computing the 21 day period in RIH Services (M) Sdn Bhd v Tanjung Tuan Hotel Sdn Bhd.30 This is how Hamid Mohamad JCA (as he then was) explained the computation:

“.. we were asked to decide on the issue whether, in the computation of the 21 day life span of an ex parte injunction .. the day the order is made should be counted or not .. Both O 3 r 2(2) of the RHC and s 54(1)(a) of the Interpretation Acts 1948 and 1967 require that the day the order is made to be excluded in reckoning the 21 days. So, the ex parte injunction granted on 6 December 2001 expired on 27 December 2001.”

24 O32 r1 and Form 62. 25 O29 r1(2) 26 A mandatory injunction may be granted ex parte in exceptional circumstance. In Tinta Press Sdn Bhd v Bank Islam Malaysia Bhd [1987] 2 MLJ 192, the Supreme Court said: “Such discretion however must be exercised and an injunction granted only in exceptional and extremely rare cases .. The case must be unusually strong and clear in that the Court must feel assured that a similar injunction would probably be granted at the trial on the ground that it would be just and equitable that the plaintiff’s interest be protected by immediate issue of an injunction, otherwise irreparable injury and inconvenience would result .. Where the case is one of urgency, O 29 r 1(2) RHC 1980 allows an application to be made ex parte. In Felton v Callis [1969] 1 QB 200 Megarry J (as he then was) said, that “it requires an exceptional case to justify making a mandatory order on an ex parte application”. 27 [1992] 2 MLJ 10. Edgar Joseph Jr J (as he then was) said: “I recognize that ex parte procedure will only be appropriate either where the delay occasioned by notifying the defendant may cause to the plaintiff irreparable damage, or where secrecy is essential. So, for example, in Bates v Lord Hailsham of St Marylebone Megarry J (as he then was) said: ‘Ex parte injunctions are for cases of real urgency, where there has been a true impossibility of giving notice of motion’ .. It is settled law that delay on the part of the plaintiff in seeking an interlocutory injunction ‘may be calculated to throw considerable doubt upon the reality of his alleged injury’ …” 28 O29 r1(2B) 29 Cheah Cheng Lan v Heng Yea Lee [2001] 1 MLJ 433 30 [2002] 3 MLJ 1

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(b) Full and Frank Disclosure As in all ex-parte applications, equity imposes a duty on the applicant to make full and frank disclosure of all material facts. In Mohamed Zainuddin (supra) Hashim Yeop Sani J said:

“ .. the court in an application of this nature must be satisfied that the person who asked for the interlocutory injunction did not mean to deceive the court and that the court is bound to maintain the principle that those who come “asking ex parte for injunctions must proceed with the highest good faith, and keep back no material facts” .. This standard has been maintained strictly and it was even held that when a party comes for an injunction there is no obligation upon him to ascertain what are the important facts of the case and it is no excuse to say that the party does not consider the facts to be important. The party applying for ex parte injunction is bound to state not only the facts that he considers material but all facts within his knowledge that are material and therefore if it is shown that a plaintiff had innocently omitted to state circumstances which turn out to have material bearing upon his rights the injunction should be dissolved ..”31

This duty has now been codified as a mandatory obligation in O29 r1(2A). An interesting question that used to arise in practice is this - if an ex-parte injunction is set aside due to P’s failure to comply with r1(2A), would it then follow that P should fail in his inter partes application? The legal position was explained by Browne-Wilkinson VC in Dormeuil Freres SA & Anor v Nicolian International (Textiles) Ltd:32

“It is a basic principle, applicable to all ex parte applications, that a plaintiff seeking ex parte relief must make full disclosure to the court of all facts which are material to the exercise of the court's discretion whether or not to grant the relief. If such disclosure is not made by the plaintiff, the court may discharge the ex parte injunction on that ground alone. But if, in the circumstances existing when the matter comes before the court inter partes, justice requires .. the grant of a fresh injunction, such an order can be made notwithstanding the earlier failure of the plaintiff to make such disclosure. Moreover, there is authority that, contrary to the law as it was originally laid down, there is no absolute right to have an ex parte order obtained without due disclosure set aside: there is a discretion in the court whether to do so or not.”

31 In Kosma Palm Oil Mill Sdn Bhd & Ors v Koperasi Serbausaha Makmur Bhd [2004] 1 MLJ 316, Richard Malanjum JCA (as he then was) said: “It is trite law that in any ex parte application it is essential that there must be frank and fair disclosure of all relevant materials including points that may be unfavourable to an applicant” and in Siporex Trade SA v Comdel Commodities Ltd [1986] 2 Lloyd's Law Rep 428, Bingham J (as he then was) said: “The scope of the duty of disclosure of a party applying ex parte for injunctive relief is, in broad terms, agreed between the parties. Such an applicant must show the utmost good faith and disclose his case fully and fairly. He must, for the protection and information of the defendant, summarize his case and the evidence in support of it by an affidavit or affidavits sworn before or immediately after the application. He must identify the crucial points for and against the application, and not rely on general statements and the mere exhibiting of numerous documents. He must investigate the nature of the cause of action asserted and the facts relied on before applying and identify any likely defences. He must disclose all facts which reasonably could or would be taken into account by the judge in deciding --whether to grant the application. It is no excuse for an applicant to say that he was not aware of the importance of matters he has omitted to state. If the duty of full and fair disclosure is not observed, the court may discharge the injunction even if after full enquiry, the view is taken that the order made was just and convenient and would probably have been made even if there had been full disclosure.” 32 [1988] 3 All ER 197. Adopted by the Court of Appeal in Damayanti Kantilal Doshi & Anor v Jigarlal Kantilal Doshi [2004] 1 CLJ 437.

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(c) Setting-aside the ex-parte injunction O29 r1(2B) recognizes that D may make an application to have an ex-parte injunction set-aside before its expiry after 21 days.33 This is how Hamid Mohammad JCA explained the position in RIH:

“However, if the defendant wants to set aside the ex parte order, the defendant is at liberty to file an application for that purpose. It is at the hearing of that application that the court should decide whether to set it aside or not, if it has not lapsed. If in the meantime the ex parte order has lapsed, the court should nevertheless hear the application, not for the purpose of setting it aside or not, because it has lapsed, but for the purpose of determining whether that ex parte order should or should not have been made in the first place. This is necessary in order to determine whether damages should be awarded or not.”

In determining whether to set-aside the ex-parte injunction, the Court will consider whether: (i) P’s application came within the terms of O29 r1(2); (ii) P had strictly complied with O29 r1(2A);34 (iii) the requisite test had been met; and (iii) there was any jurisdictional bar to granting the ex-parte injunction.

(d) Enforcing the Undertaking In Goo Sing Kar v Dato' Lim Ah Chap & Ors35 the Court of Appeal explained the principles regarding the undertaking as to damages. Mohamad Ariff Yusof J (as he then was) held as follows: (i) an undertaking as to damages is “the price which the person asking for an

interlocutory injunction has to pay for it”;36 (ii) the undertaking to pay damages is one given by the plaintiff to the court and the

provider of the undertaking puts himself under the power of the court; (iii) the purpose of the undertaking is that, in the event of the interlocutory injunction

being discharged, the applicant will have to compensate the opposing party for loss or damages which the court is of the opinion, was caused as a result of the injunction;

33 This is how James Foong J (as he then was) explained the point in Elias bin Mooin & Anor v Dato’ Zainal Abidin bin Johari [1997] 5 MLJ 359: “The defendant without putting forward any application to revoke or set aside this ex parte injunction within the period of [21 days] upon its granting must have accepted that this ex parte interim injunction was properly taken out. When this is so, he must be excluded from claiming damages for the period when it existed. 34 Motor Sports International Ltd v Delcont (M) Sdn Bhd [1996] 3 CLJ 483 35 [2013] 2 CLJ 936 36 The undertaking as to damages given by P must "be worth powder and shot" (Commodity Ocean Transport Corporation v. Basford Unicorn Industries Ltd [1987] 2 Lloyd's Rep 197) and the ability of P to honour his undertaking is a material factor in the balance of convenience (American Cyanamid).

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(iv) the undertaking, though described as an undertaking as to damages, “does not found any cause of action, but enables a party enjoined to apply to court for compensation if it is subsequently established that the interlocutory injunction should not have been granted”37;

(v) the undertaking is an absolute undertaking that the applicant will be liable for any

damages which the opposite party may have sustained38; and (vi) if the interlocutory injunction has been obtained fraudulently or maliciously, the

court will not confine itself to proximate damages, but can order exemplary damages39.

The Court of Appeal judgment should not be taken to mean that D is entitled as of right to have the undertaking enforced. It still remains a matter of the court’s discretion. This point was made by the Federal Court in GS Gill Sdn Bhd v Descente Ltd40 where James Foong FCJ said:

“ .. whether an inquiry as to damages should be ordered lies with the discretion of the trial judge. It is not for the defendant to insist that such inquiry should be made. The undertaking to damages for an interlocutory injunction is given to the court and not to the defendant. The trial judge is the best equipped to decide on whether to order an inquiry as to damages since he has an adequate knowledge of the facts of the case. He is even allowed to defer the exercise of this discretion until the end of the trial .. As a general rule, if an interlocutory injunction is wrongly granted, the trial judge should make an order for inquiry to damages on the undertaking given by the plaintiff for the interlocutory injunction. But if there are special circumstances, the trial judge can exercise his discretion to refuse ordering such inquiry. The special circumstances disclosed by Sir Peter Gibson LJ in Cheltenham & Gloucester Building Society v. Ricketts41 can be adopted as a guide but these are not exhaustive. Much depends on the facts and circumstances of each case.”

37 Cheltenham & Gloucester BS v Ricketts [1993] 4 All ER 276 38 In Newby v Harrison [1861] 3 De GF & J 287, Turner LJ said: “The true principle appears to me to be this, that a party who gives an undertaking of this nature puts himself under the power of the Court, not merely in the suit but absolutely; that the undertaking is an absolute undertaking that he will be liable for any damages which the opposite party may have sustained, in case the Court shall ultimately be of opinion that the order ought not to have been made.” The undertaking becomes enforceable by way of an inquiry as to damages in the following sets of circumstances: (a) when the plaintiff has failed on the merits at the trial; or (b) when it is established before trial that the injunction ought not to have been granted in the first place; or (c) when it is established, after trial, by an unsuccessful defendant, that the injunction ought not to have been given – see Ushers Brewery Ltd v PS King & Co (Finance) Ltd [1972] Ch 148. 39 Digital Corp v Darkcrest Ltd [1984] 1 Ch 512, Smith v Day [1882] 21 Ch D 421 40 [2010] 5 CLJ 613 41 [1993] 1 WLR 1545. The following are some examples on what constituted special circumstances. In Smith v. Day [1882] 21 Ch D 421 and Ex parte Hall [1883] 21 Ch. D 664, the respondent had delayed seeking an inquiry as to damages. Then in Hessin v. Coppin [1874] 21 Gr. 253, which is a Canadian case, the interlocutory injunction was granted on the basis of the validity of the patent but the motion to continue with the injunction was dismissed when the patent was found to be invalid. In Modern Transport Co Ltd v. Duneric Steamship Co [1917] 1 KB 370, 380, Swinfen LJ ruled that the inequitable conduct of the defendant constituted special circumstances such that no inquiry as to damages was to be granted even if the claim for the injunction could not be sustained at trial; but he held that the plaintiff was justified in applying for the interlocutory injunction. In another Canadian case of Upper Canada College v. City of Toronto [1917] 40 OLR 438, the court refused inquiry as to damages because of a number of circumstances which included the good faith of the plaintiff and the fact that no costs was awarded against them. Then in Attorney General of Ontario v. Harry [1982] 25 CPC 67, a factor taken into account for not enforcing undertaking as to

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3.2 The ad interim injunction An ad interim injunction42 is granted by the court pending the disposal of an inter partes injunction application. It can arise in 2 circumstances.

(i) When the court grants an ex-parte injunction, it will have to schedule the application to be heard inter partes before the expiry of the 21 days.43 As is often the case, the parties will not be ready to proceed with the hearing as the affidavits would not be complete at that stage. So the inter partes hearing would probably have to be adjourned. In such a circumstance, P will seek to maintain the status quo pending disposal of the inter partes hearing. This is how Hamid Mohamad JCA explained the position in RIH:

“ .. the rule provides that the .. ex parte application be served on the relevant party within [7 days] and the court is required to fix a date for inter partes hearing to be held [within 14 days]. What it means is that, upon it being served, its character changes to one of inter partes .. The purpose is to require the parties (now the parties, not just the applicant) to appear before the judge before the ex parte injunction expires. Of course, if the parties are ready, the court may hear and may decide whether to grant a fresh inter partes injunction or not. The court is not extending the ex parte injunction because it cannot by law be extended. Of course, it may be, for one reason or other, as in this case, that the court is unable to hear the application inter partes. What happens then? The ex parte order expires? Yes. The application, now converted into an inter partes application, also expires? No. The application does not expire, only the ex parte order expires .. So, faced with the situation that the learned judge did, ie he could not hear the application inter partes before the expiry of 21 days and the ex parte injunction was expiring, what could he do? Bear in mind that the application was still before him, alive and pending. He clearly had the jurisdiction to consider whether or not to grant an ad interim injunction pending the hearing inter partes of the application .. the ad interim injunction is not an extension of the ex parte order which expires after 21 days. It is a fresh order made on the converted inter partes application now before the court. And, when the court finally hears the application, inter partes, the court will then decide whether or not to grant an injunction, inter partes. That will be a fresh order again.”

(ii) Even in cases where P applies for an inter partes injunction, the application may not be immediately heard. In that circumstance, it is open for the court to grant an ad interim injunction pending the disposal of the application.44 damages was the inequitable conduct of the defendant. And then borrowing the phrase used by Truner LJ in Newby v. Harrison [1861] 3 DE G F & J 287, 290: "there may be cases in which the court will not consider it just to enforce an undertaking, though the jurisdiction to do so exists". 42 Also known as the holding over injunction 43 O29 r1(2BA) 44 Jakob Renner (an infant suing through his father and next friend, Gilbert Renner) & Ors v Scott King, Chairman of the Board of Directors of the International School of Kuala Lumpur [2000] 5 MLJ 254

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B. THE ERINFORD INJUNCTION This is a form of injunction is available to P who seeks to have the status quo maintained pending his appeal so as not to render his appeal nugatory. The injunction finds its name from Erinford Properties Ltd v Cheshire County Council45 where Megarry J (as he then was) said:

“The questions that have to be decided on the two occasions are quite different. Putting it shortly, on a motion the question is whether the applicant has made out a sufficient case to have the respondent restrained pending the trial. On the trial, the question is whether the plaintiff has sufficiently proved his case. On the other hand, where the application is for an injunction pending an appeal, the question is whether the judgment that has been given is one on which the successful party ought to be free to act despite the pendency of an appeal. One of the important factors in making such a decision, of course, is the possibility that the judgment may be reversed or varied. Judges must decide cases even if they are hesitant in their conclusions; and at the other extreme a judge may be very clear in his conclusions and yet on appeal be held to be wrong. No human being is infallible, and for none are there more public and authoritative explanations of their errors than for judges. A judge who feels no doubt in dismissing a claim to an interlocutory injunction may, perfectly consistently with his decision, recognise that his decision might be reversed, and that the comparative effects of granting or refusing an injunction pending an appeal are such that it would be right to preserve the status quo pending the appeal. I cannot see that a decision that no injunction should be granted pending the trial is inconsistent, either logically or otherwise, with holding that an injunction should be granted pending an appeal against the decision not to grant the injunction, or that by refusing an injunction pending the trial the judge becomes functus officio granting any injunction at all. There may, of course, be many cases where it would be wrong to grant an injunction pending appeal, as where any appeal would be frivolous, or to grant the injunction would inflict greater hardship than it would avoid, and so on. But subject to that, the principle is to be found in the leading judgment of Cotton LJ in Wilson v Church where, speaking of an appeal from the Court of Appeal to the House of Lords, he said, ‘when a party is appealing, exercising his undoubted right of appeal, this Court ought to see that the appeal, if successful, is not nugatory’.”46

In Subashini Rajasingam v Saravanan Thangathoray (No 2)47 a non-Muslim wife (W) made an application was made to the Court of Appeal to restrain her husband (H) from moving the Syariah Court for relief against her pending her application for leave to appeal to the Federal Court. W was concerned at the prospect of H obtaining permanent custody of the eldest child and in converting the second child to Islam.

45 [1974] 2 All ER 448 46 In Chellapa v Sime UEP Properties Bhd [1998] 1 MLJ 20, Shankar JCA quoted with approval the following extract from Interlocutory Injunctions (1992): “On the principle that an appellant must not be deprived of the results of an appeal, the court may grant an injunction pending appeal to restrain an act which will render the appeal nugatory .. Such injunctions pending appeal have been called ‘Erinford injunctions’ after the Erinford case (supra) .. The converse of an Erinford injunction is a stay of an injunction order granted pending appeal. The court has a discretion to grant an injunction and order a stay pending appeal if that is necessary to ensure that the appeal will not be academic ..” 47 [2007] 3 CLJ 209

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The issue was whether, in light of section 3 Civil Law Act 1956, the Court of Appeal had the jurisdiction to grant an Erinford injunction. This how Gopal Sri Ram JCA (as he then was) dealt with the issue:

“The second ground advanced by the husband has to do with the propriety of this court applying what has come by the legal professions throughout the Commonwealth as an "Erinford injunction". That remedy takes its name from the case of Erinford Properties Ltd v. Cheshire County Council [1974 Ch 261 where it was held that a court of first instance which refuses an injunction could nevertheless grant an injunction preserving the status quo pending an appeal against the refusal. It was submitted by learned counsel that as that case was decided in 1974 (the actual decision was handed down on 18 March 1974), it ought not to be applied by our courts by reason of s. 3 of the Civil Law Act 1956 which directs our courts to apply the common law of England in force at the date of its coming into effect, that is 7 April 1956, only in so far as the circumstances permit and save where no provision has been made by statute law. With respect, I cannot agree. The effect of s. 3, often misunderstood by many, was stated by Hashim Yeop A Sani (CJ(M)) in Chung Khiaw Bank Ltd v. Hotel Rasa Sayang Sdn Bhd [1990] 1 CLJ 675; [1990] 1 CLJ (Rep) 57 to be that: “The development of the common law after 7 April 1956 (for the States of Malaya) is entirely in the hands of the courts of this country.” It is important to note that this view was endorsed by the Federal Court in Lori (M) Bhd (Interim Receiver) v. Arab-Malaysian Finance Bhd [1999] 2 CLJ 997.

Another way is to treat s. 3 as not forbidding a Malaysian Court from applying modern developments in English common law .. Put shortly, absent a statutory provision prohibiting the application of developments in English law after 7 April 1956, a Malaysian court is entitled to apply cases decided in England after that date. Indeed, this is what the Federal Court did in Lori (M) Bhd (Interim Receiver) v. Arab-Malaysian Finance Bhd. There is another and perhaps stronger reason that defeats the husband's argument. You begin with the proposition that a Court of Equity has jurisdiction to grant interim injunctive relief whenever it is just and convenient to do so. That is to say, an injunction may be granted to serve the ends of justice. Whether the ends of justice will be served in a given case depends on the facts and circumstances of that case. In the normal case, where an interim injunction is refused or dissolved, the ends of justice may, in particular cases, demand that the successful litigant be restrained from enjoying the fruits of his success until the correctness of the decision in question has been tested through the appellate process. Erinford Properties is merely an illustration of the exercise of that jurisdiction by a court of first instance .. We do not have to call it an "Erinford injunction" but do so for convenience. Labels mean nothing. It is the scope and extent of the particular injunction and the power to grant it that really matters.”48

48 The decision was approved by the Federal Court in Subashini Rajasingam v Saravanan Thangathoray [2008] 2 CLJ 1

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In Everise Hectares Sdn Bhd v Citibank Bhd49 D’s debt to P was secured by a charge over D’s land. D defaulted and P obtained an order for sale. D then issued fresh proceedings and applied for an injunction to restrain P from proceeding with the public auction. The application was dismissed by the High Court on 17.8.2004. The land was successfully sold by public auction to Fenomena Kualiti Sdn Bhd on 8.11.2004. On 5.7.2005, D applied to amend its claim to add Fenomena as D2 and also sought an injunction to restrain Fenomena from taking possession or dealing with the land. The Court of Appeal held as follows. (i) Since the grounds in support of the 2nd injunction were similar to that of the 1st injunction, the doctrine of res judicata applied in favour of R. This is how Malik Ishak JCA put it:

“The principle of res judicata applies also as between two stages in the same litigation to this extent that a court, whether the trial court or a higher court having at an earlier stage decided a matter in one way will not allow the parties to re-agitate the matter again at a subsequent stage of the same proceedings. A decision given by a court at one stage on a particular matter or issue is binding on it at a later stage in the same suit or in a subsequent suit .. Parties cannot raise a second time in the same suit an issue that has already been determined either expressly or by necessary implication.”

(ii) The amendment application was dismissed as it was an abuse of process. D was indirectly seeking a second injunction to prevent dealings with the land although the first injunction application had been dismissed. It was a tactical manoeuvre to delay and prevent P from completing the sale of the said land to Fenomena. Malik Ishak JCA explained that “if [D] intended to prevent the sale of the said land to [Fenomena], [D] should have taken the following steps: (a) appealed against the dismissal of the first injunction application; and (b) applied for an erinford injunction pending the appeal to the Court of Appeal.” 49 [2011] 2 CLJ 25

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C. THE FORTUNA INJUNCTION This is a specie of an anti-suit injunction. It is applied for when a company wishes to restrain a creditor form presenting a Winding-up Petition against it. All the learning on this injunction is found in Mobikom Sdn Bhd v Inmiss Communications Sdn Bhd50 where Gopal Sri Ram JCA (as he then was) said:

“There is no doubt that a court has jurisdiction and power to grant an anti-suit injunction whenever the interests of justice call for or demand it. So an injunction may be issued by our courts to restrain the institution or prosecution of a suit in a foreign jurisdiction where this would lead to a multiplicity of proceedings .. Similarly, a party may be restrained from presenting a winding up petition if it is found, for example, that there is a bona fide dispute about the debt on which the notice of demand issued under s. 218 of the Companies Act is based .. The kind of injunction by which an intended winding up petition is sought to be restrained is known as a "Fortuna injunction" taking its name from the case in which the juridical basis for the relief was first explained. See, Fortuna Holdings Pty Ltd v. The Deputy Commissioner of Taxation [1978] VR 83.51

D. THE MAREVA INJUNCTION The Mareva injunction is a specie of interlocutory injunction which restrains D by himself or by his agents or servants or otherwise from removing from the jurisdiction or disposing of or dealing with those of his assets that will or may be necessary to meet P’s pending claim. It is therefore a specialized from of prohibitory interlocutory52 injunction. It is governed by the general principles in the RC53 subject, of course, to special considerations peculiar to this specie of interlocutory injunction. 50 [2007] 3 CLJ 295 51 McGarvie J said: ‘When a court restrains the presentation of a winding up petition to that court it exercises part of its inherent jurisdiction to prevent abuse of its process .. Thus, existing proceedings may be stayed or dismissed, or documents delivered as a step in the proceedings may be struck out. This is done to relieve a party to the proceedings from an oppressive and damaging situation in which he has been placed through abuse of court process .. The courts have recognized that irreparable damage may be done to a company merely through public knowledge of the presentation of a petition. Usually the damage flows from the loss of commercial reputation which results. The courts have also been conscious of the pressure which may be put on a company, by a person with a disputed claim against it, threatening to present a winding up petition unless the company meets his claim .. The decisions of the courts have established the principle that the presentation of a winding up petition may be restrained by injunction where its presentation would amount to an abuse of the process of the court. The courts apply this principle similarly to restrain the advertisement of a petition already presented. The principle enables companies to be protected from threatened or apprehended oppression and damage from abuse of court process.” 52 A Mareva injunction is in not purely interlocutory as it may also be granted post-judgment. 53 O29

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1. The General Rule Lister v Stubbs54 established the general rule that the court will not grant an injunction to restrain D from parting with his assets so that they may be preserved in case P’s claim succeeds. P, like other creditors of D, must obtain his judgment and then enforce it. He cannot prevent D from disposing of his assets pendente lite merely because he fears that by the time he obtains judgment in his favour, D will have no assets against which the judgment can be enforced. Were the law otherwise, the way would lie open to any claimant to paralyse the activities of any person or firm against whom he makes his claim by obtaining an injunction freezing their assets. 2. The “Nuclear” Exception In Nippon Yusen Kaisha v Karageorgis55 D, a foreigner, failed to pay P its charterparty hire. Attempts to locate D failed as he had closed his office. P feared that D would transfer his funds, which were in a bank in London, out of jurisdiction. These were only assets that D had. So P applied for an injunction to restrain D from disposing or removing the funds out of jurisdiction. Donaldson J (as he then was), relying on the general rule, refused the injunction. In the Court of Appeal, Lord Denning MR, in granting the injunction, said:

“We are told that an injunction of this kind has never been done before. It has never been the practice of the English courts to seize assets of a defendant in advance of judgment, or to restrain the disposal of them .. It seems to me that the time has come when we should revise our practice. There is no reason why the High Court or this court should not make an order such as is asked for here .. It is warranted by s 45 of the Supreme Court of Judicature (Consolidation) Act 1925 .. There is a strong prima facie case that the hire is owing and unpaid. If an injunction is not granted, these moneys may be removed out of the jurisdiction and the shipowners will have the greatest difficulty in recovering anything. Two days ago we granted an injunction ex parte and we should continue it.”

In Mareva Compania Naviera SA v International Bulkcarriers SA56 Donaldson J, despite doubting the correctness of the Nippon decision because Lister and other cases which pointed in the opposite direction were not cited to the Court of Appeal, nonetheless granted an injunction until 5pm to enable the Court of Appeal to reconsider the position. In the Court of Appeal, Lord Denning MR reiterated that the court had the jurisdiction to grant such an injunction and the rest, as they say, is history. 54 [1886-90] All ER Rep 797 55 [1975] 3 All ER 282 56 [1980] 1 All ER 213

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Thus, the Mareva injunction was born. It has been described as “one of the nuclear weapons of the law”57 and it is today accepted that it operates as an exception to the general rule. This was explained by Megarry VC (as he then was) in Barclay-Johnson v Yuill:58

“It seems to me that the heart and core of the Mareva injunction is the risk of the defendant removing his assets from the jurisdiction and so stultifying any judgment given by the courts in the action. If there is no real risk of this, such an injunction should be refused; if there is a real risk, then if the other requirements are satisfied the injunction ought to be granted. If the assets are likely to remain in the jurisdiction, then the plaintiff, like all others with claims against the defendant, must run the risk, common to all, that the defendant may dissipate his assets, or consume them in discharging other liabilities, and so leave nothing with which to satisfy any judgment. On the other hand, if there is a real risk of the assets being removed from the jurisdiction, a Mareva injunction will prevent their removal. It is not enough for such an injunction merely to forbid the defendant to remove them from the jurisdiction, for otherwise he might transfer them to some collaborator who would then remove them; accordingly, the injunction will restrain the defendant from disposing of them even within the jurisdiction.”

3. The position in Malaysia In Zainal Abidin Bin Haji Abdul Rahman v Century Hotel Sdn Bhd59 the High Court took the view that it did not have the jurisdiction to grant such an injunction. On appeal to the Federal Court, Raja Azlan Shah CJ (Malaya) (as he then was) said:

“The Mareva injunction is an .. injunction granted ex parte against a defendant in a pending action to restrain him from removing assets from and now even dissipating them within the jurisdiction and so stultifying any judgment in favour of the plaintiff. It has been steadily widened so that it is now available in a personal injury claim .. and where the defendant is not a foreigner or foreign based .. We are very much impressed .. that the jurisdiction [fulfills] a modern commercial need. The English courts had to approach modern problems with the flexibility of modern business. Whilst in former days it was difficult for defaulting debtors to transfer assets out of the jurisdiction to stultify a judgment, today, vast sums of money can be transferred out of the country in a matter of seconds as a result of a few words spoken by telephone or by sending a telex message.60

57 Donaldson LJ (as he then was) in Bank Mellat v Mohammed Ebrahim Nikpour [1982] Com LR 158. 58 [1980] 3 All ER 190 59 [1982] 1 MLJ 260 60 In Third Chandris (supra), Lawton LJ said: “Before the coming of the electric telegraph, the railways and steamships, foreign debtors who wished to flee the realm and take their assets with them in order to avoid paying their just debts must have found doing so far from easy. Travel overland was slow and once the coast was reached there might be long waits because of the vagaries of wind .. Nowadays defaulting on debts has been made easier for the foreign debtor by the use of corporations, many of which hide the identities of those who control them, and of so-called flags of convenience, together with the development of world-wide banking and swift communications. By a few words spoken into a radio telephone or tapped out on a telex machine bank balances can be transferred from one country to another and within seconds can come to rest in a bank which is untraceable or, even if known, such balances cannot be reached by any effective legal process .. Once a writ is issued, a debtor who intends to default will do what he can to avoid having to meet his obligations. The British defaulter may try to dissipate his assets; he may succeed to some extent but retribution in the form of either bankruptcy or liquidation will probably come about one day. Until recently the prospects for the defaulting foreigner were much better. A telephone call or telex message could

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Paragraph 6 of the Schedule to the Courts of Judicature Act, 1964 would appear to be the equipollent provision to s 45 of the English Supreme Court of Judicature (Consolidation) Act, 1925 … We hold therefore that the provisions of para 6 of Schedule to the Act are pertinent and do indeed apply and we are of the view that the same considerations are applicable as in the case of the English statutory provision of 1925. We have accordingly come to the conclusion that contrary to the learned judge’s view the High Court has jurisdiction to grant a Mareva injunction in appropriate circumstances.”

The position was confirmed by the Federal Court in S & F International Ltd v Trans-Con Engineering Sdn Bhd61 where Abdoolcader FJ said:

“This appeal involves by way of review of the exercise of its discretion by the High Court the determination of the justification for or in the alternative at least the extent and ambit of a Mareva injunction granted to the respondent in respect of moneys due to the appellant under a contract entered into with the National Electricity Board ('the Board'). The order known as a Mareva injunction - so named after the case of Mareva Compania Naviera SA v International Bulkcarriers SA [1980] 1 All ER 213 decided in June, 1975 and the second case in which the English Court of Appeal granted this form of relief - is a species of interlocutory injunction which restrains a defendant by himself or by his agents or servants or otherwise from removing from the jurisdiction or disposing of or dealing with those of his assets that will or may be necessary to meet a plaintiff's pending claim. The policy underlying and the principles governing an order of this nature have been expounded and ossified in a catenation of congeneric cases and the relief so afforded when the circumstances of a case merit it has been acknowledged by this court in Zainal Abidin bin Haji Abdul Rahman v Century Hotel Sdn Bhd [1982] 1 MLJ 260 in the matter of jurisdiction to avail here.”

4. The Ambit of the Mareva injunction The ambit of the Mareva injunction was explained by Lord Denning MR in Third Chandris Shipping Corp v Unimarine SA:62

“It is just four years ago now since we introduced here the procedure known as Mareva injunctions. All the other legal systems of the world have a similar procedure .. It has been welcomed in the City of London and has proved extremely beneficial. It enables a creditor in a proper case to stop his debtor from parting with his assets pending trial .. In order to obtain a Mareva injunction there has to be in existence a substantive cause of action on which the plaintiff is suing or about to sue in the High Court in England or is enforcing or about to enforce by arbitration in England .. Much as I am in favour of the Mareva injunction, it must not be stretched too far lest it be endangered .. These are the points which those who apply for it should bear in mind:

(i) The plaintiff should make full and frank disclosure of all matters in his knowledge which are material for the judge to know.

within seconds of the service of a writ, or knowledge that a writ had been issued, put all liquid assets out of the reach of the creditor. It was these considerations which led this court to exercise the jurisdiction given by s 45 of the Supreme Court of Judicature (Consolidation) Act 1925 to issue ex parte injunctions whenever it was just or convenient so to do, the cause of action itself being triable within the jurisdiction.” 61 [1985] 1 MLJ 62 62 [1979] 2 All ER 972

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(ii) The plaintiff should give particulars of his claim against the defendant, stating the ground of his claim and the amount thereof, and fairly stating the points made against it by the defendant.

(iii) The plaintiff should give some grounds for believing that the defendants have assets

here .. In most cases the plaintiff will not know the extent of the assets. He will only have indications of them. The existence of a bank account in England is enough, whether it is in overdraft or not.

(iv) The plaintiff should give some grounds for believing that there is a risk of the assets

being removed before the judgment or award is satisfied. The mere fact that the defendant is abroad is not by itself sufficient. No one would wish any reputable foreign company to be plagued with a Mareva injunction simply because it has agreed to London arbitration. But there are some foreign companies whose structure invites comment. We often see in this court a corporation which is registered in a country where the company law is so loose that nothing is known about it, where it does no work and has no officers and no assets. Nothing can be found out about the membership, or its control, or its assets, or the charges on them. Judgment cannot be enforced against it. There is no reciprocal enforcement of judgments. It is nothing more than a name grasped from the air, as elusive as the Cheshire cat. In such cases the very fact of incorporation there gives some ground for believing there is a risk that, if judgment or an award is obtained, it may go unsatisfied. Such registration of such companies may carry many advantages to the individuals who control them, but they may suffer the disadvantage of having a Mareva injunction granted against them. The giving of security for a debt is a small price to pay for the convenience of such a registration .. Other grounds may be shown for believing there is a risk. But some such should be shown.

(v) The plaintiffs must, of course, give an undertaking in damages, in case they fail in their

claim or the injunction turns out to be unjustified. In a suitable case this should be supported by a bond or security and the injunction only granted on it being given, or undertaken to be given.

.. speed is of the essence. Ex parte is of the essence. If there is delay, or if advance warning is given, the assets may well be removed before the injunction can bite. It is rather like the new injunction in Chancery, the Anton Piller injunction, which has proved equally beneficial. That must be done speedily ex parte before the incriminating material is removed. So here in Mareva injunctions before the assets are removed.” (emphasis added)

In Ninemia Maritime Corp v Trave Schiffahrtsgesellschaft mbH & Co KG63 Mustill J (as he then was) held that before a Mareva injunction will be granted, P must show that (1) he has a good arguable case, which is more than being barely capable of serious argument, but not necessarily one that the judge believes has got more than fifty per cent chance of success; (2) there is a risk that assets will be dissipated: he must demonstrate this by solid evidence, e.g. that D’s previous actions show his probity is not to be relied upon or that the corporate structure of D infers that it is not to be relied upon, but mere proof that D is incorporated abroad will not suffice. The Court of Appeal64 reiterated the point that P had to show that a refusal of an injunction would involve a real risk that a judgment or award in his favour would remain unsatisfied because of the 63 [1984] 1 All ER 398 64 [1984] 1 All ER 413

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defendant’s removal of assets from the jurisdiction or dissipation of assets within the jurisdiction. 4.1 Local Defendants As observed in Zainal Abidin, the Mareva is also available against a local D. In Yuill (supra), Megarry VC said:

“If, then, the essence of the jurisdiction is the risk of the assets being removed from the jurisdiction, I cannot see why it should be confined to ‘foreigners’, in any sense of that term .. Naturally the risk of removal of assets from the jurisdiction will usually be greater or more obvious in the case of foreign-based defendants, and so the jurisdiction has grown up in relation to them. But I cannot see why this should make some requirement of foreignness a prerequisite of the jurisdiction. If, for example, an Englishman who has lived and worked all his life in England is engaged in making arrangements to emigrate and remove all his assets with him, is the court to say ‘He is not a foreigner, nor is he yet foreign-based, and so no Mareva injunction can be granted’? Why should it make all the difference if instead he had been a foreign national with a foreign domicile who, after living and working here for a while, was preparing to leave with his assets? Is it really to be said that in relation to Mareva injunctions, there is one law for the foreigner and another for the English, and that this flows from a statutory power to grant an injunction if it appears to the court to be ‘just or convenient’ to do so? I cannot see any sensible ground for holding that in this respect there is some privilege or immunity for the English and Welsh.”65

4.2 Third Parties The position of third parties in respect of a Mareva injunction obtained by P against D is as follows: (i) P obtains no priority over the assets of D nor does he attain the position of a secured creditor in the event of D’s insolvency. In Iraqi Ministry of Defence v Arcepey Shipping Co SA; The Angel Bell66 P claimed a ranking among the creditors of D in the event of their insolvency which otherwise it was not be entitled to. Goff J (as he then was) said:

“[T]he purpose of the Mareva jurisdiction was not in any way to improve the position of claimants in an insolvency but simply to prevent the injustice of a foreign defendant removing his assets from the jurisdiction which otherwise might have been available to satisfy a judgment ... a Mareva injunction is not a form of pretrial attachment but a relief in personam which prohibits certain acts in relation to the assets in question.” (emphasis added)67

65 In Chartered Bank v Daklouche [1980] 1 All ER 205 a Mareva injunction was granted against an English-based defendant. Lord Denning MR said: “The law should be that there is jurisdiction to grant a Mareva injunction even though the defendant may be served here. If he makes a fleeting visit, or if there is a danger that he may abscond, or that the assets or moneys may disappear and be taken out of the reach of the creditors, a Mareva injunction can be granted. Here is this £70,000 lying in a bank in England, which can be removed at the stroke of a pen from England outside the reach of the creditors.” 66 [1980] 1 All ER 480 67 The Court of Appeal in Campbell Mussells & Ors v Thompson (The Times, 30.5.1984) held that a Mareva injunction was never intended to put P in the position of a secured creditor.

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In PCW (Underwriting Agencies) Ltd v Dixon68 it was held that the sole purpose of a Mareva injunction was to prevent P being cheated out of the proceeds of an action, should he be successful, by D transferring his assets abroad or dissipating his assets within the jurisdiction, and that the remedy was not intended to give P priority over those assets, or to prevent D from paying his debts as they fell due, or to punish him for his alleged misdeeds, or to enable P to exert pressure on him to settle an action. 2. D is not prevented from paying his debts as they fall due even where it is alleged that the debt is due pursuant to an illegal and void moneylending transaction. In The Angel Bell (supra), Goff J said:

“[T]he point of the Mareva jurisdiction is to proceed by stealth, to pre-empt any action by the defendant to remove his assets from the jurisdiction .. But it does not follow that, having established the injunction, the court should not thereafter permit a qualification to it to allow a transfer of assets by the defendant if the defendant satisfies the court that he requires the money for a purpose which does not conflict with the policy underlying the Mareva jurisdiction .. I find it difficult to see why, if a plaintiff has not yet proceeded to judgment against a defendant but is simply a claimant for an unliquidated sum, the defendant should not be free to use his assets to pay his debts .. It is not to be forgotten that the plaintiff’s claim may fail, or the damages which he claims may prove to be inflated. Is he in the meanwhile, merely by establishing a prima facie case, to preclude the bona fide payment of the defendant’s debts? .. It does not make commercial sense that a party claiming unliquidated damages should, without himself proceeding to judgment, prevent the defendant from using his assets to satisfy his debts as they fall due and be put in the position of having to allow his creditors to proceed to judgment with consequent loss of credit and of commercial standing.”

On the argument that to allow D to pay a debt arising from illegal and void moneylending transaction would be to enforce an illegal transaction Goff J said:

“I do not think that this is right. No doubt the court will not enforce, directly or indirectly, an illegal contract; but by lifting the Mareva injunction in the present case to enable the defendants to repay to the interveners the loan they have received would not be to enforce the transaction, even indirectly. A reputable businessman who has received a loan from another person is likely to regard it as dishonourable, if not dishonest, not to repay that loan even if the enforcement of the loan is technically illegal by virtue of the Moneylenders Acts. All the interveners are asking is that the defendants should be free to repay such a loan if they think fit to do so, not that the loan transaction should be enforced. For a defendant to be free to repay a loan in such circumstances is not inconsistent with the policy underlying the Mareva jurisdiction. He is not in such circumstances seeking to avoid his responsibilities to the plaintiff if the latter should ultimately obtain a judgment; on the contrary, he is seeking in good faith to make payments which he considers he should make in the ordinary course of business. I cannot see that the Mareva jurisdiction should be allowed to prevent such a payment. To allow it to do so would be to stretch it beyond its original purpose so that instead of preventing abuse it would rather prevent businessmen conducting their businesses as they are entitled to do.”

68 [1983] 2 All ER 158

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In Ace King Pte Ltd v Circus Americano Ltd69 P alleged that it had a contract with D whereby P was appointed to promote the Gerry Cottle Circus in Singapore and Malaysia. D however had staged the Circus at Subang Jaya Malaysia with Nupro and Majlis Sukan Negara, Malaysia as the promoters. The Court, on P’s application, granted a Mareva injunction D from “removing from the jurisdiction of the Court, pledging, giving them by way of security or otherwise disposing or in any way dealing with any of the asset or assets in which they or any of them are beneficially interested insofar as the same do not exceed the sum of M$876,337.92.” A company incorporated in Hong Kong intervened in the proceedings. It claimed that Gerry Cottle Circus was owned and managed by them and not D. It claimed that it had to pay legitimate debts to a number of creditors and also had to pay the weekly salaries of their artistes. The Interveners also asked the Court to allow them to release $116,000 to be used as freight charges to ship the circus animals, six polar bears, one black bear, four leopards, four jaguars and one black panther, back to the United Kingdom and another $50,000/- for costs of transportation from Subang Jaya to the docks in Singapore. The Mareva injunction was varied accordingly.

(iii) The Mareva injunction should not interfere with the business of innocent 3rd parties. In Galaxia Maritime SA v Mineralimportexport; The Eleftherios70 P obtained a Mareva injunction against D71 whose assets, 11,000 metric tons of coal, were on board the vessel Eleftherios which was to set sail shortly. The owners of the vessel applied to the Court of Appeal to have the injunction discharged. At the hearing, P gave an undertaking that they would provide a guarantee in respect of any loss or damage suffered by the third parties as a result of the order. The Court of Appeal set-aside the injunction. Kerr LJ said:

“To allow a plaintiff to serve a Mareva injunction on a shipowner in relation to cargo, which is owned or alleged to be owned by the defendant and which is on board pursuant to a voyage charter concluded between the shipowner and the defendant, in order to seek to prevent the ship from sailing out of the jurisdiction with the cargo, appears to me to be a clear abuse of this jurisdiction, because it involves an unwarrantable act of interference with the business of the third party, the shipowner. A plaintiff seeking to secure an alleged debt or damages due from the defendant, by an order preventing the disposal of assets of the defendant, cannot possibly be entitled to obtain the advantage of such an order for himself at the expense of the business rights of an innocent third party, merely by proffering him an indemnity in whatever form. In this connection, it is crucial to bear in mind not only the balance of convenience and justice as between plaintiffs and defendants, but above all also as between plaintiffs and third parties. Where assets of a defendant are held by a third party incidentally to the general

69 [1985] 2 MLJ 75 70 [1982] 1 All ER 796 71 It was in the following terms: ‘That the Defendants by themselves their employees or agents or otherwise howsoever be restrained and an Injunction is hereby granted restraining them from disposing of or dealing with their assets within the jurisdiction or from removing such assets from the jurisdiction and in particular the cargo loaded on board the “ELEFTHERIOS” so as to reduce the value of those assets below the sum of US$413,403·47 until trial or further Order.’

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business of the third party (such as the accounts of the defendant held by a bank, or goods held by a bailee as custodian, for example in a warehouse) an effective indemnity in favour of the third party will adequately hold this balance, because service of the injunction will not lead to any major interference with the third party’s business .. Where the effect of service of the injunction on the third party substantially interferes with the third party’s business, the rights of the third party must in my view always prevail over the desire of the plaintiff to secure the ultimate recovery of debts or damages from the defendant with which the third party is in no way concerned …”72

5. Setting-aside As previously discussed73, an ex-parte Mareva injunction can be set-aside by the court if an application is taken out for that purpose. In Motor Sports International Ltd v Delcont (M) Sdn Bhd74 the Court of Appeal set-aside an ex-parte Mareva injunction of the following grounds: (i) Non-compliance with O29. This is what Gopal Sri Ram JCA (as he then was) said:

“The provisions of O. 29, r. 2A were introduced by amendment in order to ensure that ex parteinjunctions of any sort were not granted willy-nilly, but only in cases where they were truly called for. In order to ensure that the policy behind the introduction of r. 2A is not defeated, High Courts must demand strict compliance with its terms. More so, when the relief applied for is in the nature of a Mareva or an Anton Piller type of injunction because of the incalculable harm and damage that may be caused to a defendant by the grant of either of these orders. Having perused the affidavit in question, we find that there has not been even a feeble attempt to meet the requirements of r. 2A, especially sub-paragraph (d) thereof. On this ground alone, the ex parteinjunction ought to have been dissolved by the learned Judge.”

(ii) The ex parte order did not place a monetary limit on the sums frozen in the bank accounts. Gopal Sri Ram JCA said:

Now, it is a well-established principle governing Mareva injunctions that they ought not to place a restraint upon a defendant more than is absolutely necessary .. In a case such as the present, where the amount of the claim has been quantified, it is necessary for the order of Court to sufficiently identify the upper limit of the sum that is sought to be

72 Eveleigh LJ said: “The effect of this present injunction, in so far as the owners of the Eleftherios are concerned, is to interfere with their trading assets. Counsel for the plaintiffs has submitted to this court that that is a matter which should not affect the final outcome because, as he says, his clients have given a guarantee. For myself I do not believe that when the third party protests, the fact that a guarantee has been given should be decisive in the matter at all. A third party is entitled to freedom of action and he is entitled to trade freely .. But not only is the trading activity of the third party interfered with in this case, but one does not know what arrangements could be made by the members of the crew, and perhaps others, for their own movements after this vessel completes its voyage .. I regard it as absolutely intolerable that the fact that one person has a claim for a debt against another, that third parties should be inconvenienced in this way, not only to affect their freedom of trading but their freedom of action generally speaking …” 73 Chap 18, Part 1.5.1 C 74 [1996] 3 CLJ 483

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protected by the injunction. As Lord Denning observed in Z Ltd. v. A-Z & AA-LL [1982] 1 QB 558, 576: ‘In other cases, however, it may still be desirable to insert a maximum amount in the general injunction as against the defendant himself. But, as this is unworkable against a bank, it would at the same time be desirable to add a special injunction restraining the defendant from disposing of any of the sums standing to the credit of the defendant in a specified bank account in excess of the maximum: or from disposing of any item deposited with the specified bank for safe custody. The reason being that every bank or other innocent third party should know exactly what it should or should not do.’ In our judgment, where a plaintiff claims an exact sum, a Mareva injunction that restrains the defendant from dissipating his assets must specify an upper limit: if it does not, then the order is liable to be condemned as being too wide and therefore oppressive. The remedy of a Marevais, after all, equitable relief that is granted to ensure that the course of justice is not thwarted. Since equitable considerations are involved, a Court should carefully weigh the balance of justice to ensure that any order it makes or any relief it grants in the exercise of its Mareva jurisdiction is not used as an instrument of oppression. Encik Chin Chee Leong, who appeared for the respondent, argued that although the upper limit rule was not observed in the present case, no harm was occasioned, because the restraint upon dealing with the bank accounts was later varied by consent. With respect, we do not see this as being a satisfactory answer to the point made by Encik Lazar. The point of time at which the validity of a Marevainjunction is to be tested is the date of its grant and by reference to its terms as they stood at that date. If such an injunction is oppressive by its terms at the date of its grant, any subsequent variation may merely have the effect of ameliorating the oppression with regard to the future. It does not cleanse the tainted order of the taint which was within it at the time of its grant. In the circumstances, we are in agreement with the argument advanced on the appellants' behalf.”

(iii) The High Court made an order requiring D to deposit a sum of RM300,000 within two weeks from the date of the order. Mr Lazar argued that the effect of the Judge's order was to accord D priority over other creditors and to place it in the position of a secured creditor. This, he said, was contrary to the purpose of the Mareva jurisdiction. Gopal Sri Ram JCA agreed:

“It might perhaps be convenient at this stage to concisely perpend the principles and policy underlying a Marevaorder elucidated in a chain of related cases of which we need only refer to three. In PCW (Underwriting Agencies) Ltd. v. Dixon & Anor.[1983] 2 All ER 158 which sets out the policy underlying the Mareva jurisdiction, it was held that the sole purpose of a Mareva injunction was to prevent a plaintiff being cheated out of the proceeds of an action, should he be successful, by a defendant transferring his assets abroad or dissipating his assets within the jurisdiction, and that the remedy was not intended to give a plaintiff priority over those assets, or to prevent a defendant from paying his debts as they fell due, or to punish him for his alleged misdeeds, or to enable a plaintiff to exert pressure on him to settle an action .. We are in agreement with Encik Lazar. In our judgment, it was quite wrong for the learned Judge to have imposed the condition in question. There is nothing in his judgment to show that he was alive to the effect which this part of his order would have. It cannot be gainsaid that the condition he imposed offended the principles governing the Mareva jurisdiction.”

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6. Post-judgment Mareva injunction In Fawziah Holdings Sdn Bhd v Metramac Corporation Sdn Bhd75 P sued D for breach of contract. Its claim was in two parts: (a) for a liquidated sum of RM65 million and (b) for an unliquidated sum. The trial judge found D liable for the breach. But he declined to award the sum of RM65 million and ordered damages to be assessed. He also denied P the second claim. P appealed against both orders whilst D appealed against the finding of liability. These appeals were heard and judgment was reserved. P then applied to the Court of Appeal for a Polly Peck order.76 The Court of Appeal refused to grant the order but instead granted an injunction restraining D from dissipating up to RM100 million – an order which Gopal Sri Ram JCA described as a “post judgment Mareva injunction”. 7. Worldwide Mareva Injunction In Derby v Weldon (No 1)77 the Court of Appeal whilst recognizing that the courts had the jurisdiction to make a Mareva ‘restraint’ order in respect of assets outside England and Wales, both before judgment78 and after judgment, to make a ‘disclosure’ order in respect of assets outside England and Wales, both before judgment and after judgment, nonetheless cautioned that such orders would only be made in an “exceptional case”. Crédit Suisse Fides Trust SA v Cuoghi79 is an example of an “exceptional case”. Crédit Suisse Fides Trust SA (CSFT) commenced civil proceedings in Switzerland against C alleging his complicity in the misappropriation of USD 21.66m by one of its employees, a V who was a Swiss resident. C, however, lived in England and was domiciled there. Mance J (as he then was) granted CSFT an ex parte worldwide Mareva injunction against C in aid of the Swiss proceedings together with an ancillary disclosure order relating to his assets worldwide. C subsequently applied to confine the scope of the Mareva injunction to his assets in England and Wales. Mance J dismissed the application and confirmed inter partes, the worldwide Mareva injunction against C which he had made and the ancillary disclosure orders relating to C’s assets worldwide. On appeal, Millett LJ (as he then was) said:

“The jurisdiction to make such orders is now firmly established. It is exercised with caution, and a sufficient case to justify its exercise must always be made out; but such orders are nowadays routinely made in cases of international fraud and the conditions necessary in order to preserve international comity and prevent conflicts of jurisdiction have become standardised. As Lawrence Collins QC points out in Essays in International Litigation and the Conflict of Laws (1993), there is no reason in principle why an English injunction should not restrain a

75 [2006] 3 CLJ 177 76 Polly Peck International Plc v Nadir (No.2) [1992] 2 Lloyds Rep 238. The order sought was that the defendant earmark funds that will become available to it to satisfy the plaintiff’s judgment. 77 [1990] Ch 13 78 Republic of Haiti v Duvalier 79 [1997] 3 All ER 724

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person properly before the court from disposing of assets abroad. The order operates in personam. It is “‘not founded upon any pretension to the exercise of judicial or administrative rights abroad, but on the circumstance of the person to whom the order is addressed being within the reach of the Court …” [C] is resident and domiciled in England. He carries on business here in a substantial way, and he is alleged to have committed acts in England which were part of the fraud. He is believed to have assets in other jurisdictions, but the Swiss court has no power to order him to disclose their whereabouts. Unless we make such an order, CSFT cannot apply to the courts where the assets are located for appropriate protective measures, and any final judgment obtained in Switzerland may be rendered ineffective. There is no danger of conflicting jurisdictions, and although the Swiss court cannot make an order against [C] because he is not resident in Switzerland, there is no reason to believe that it would not welcome assistance from the courts of the country where he is resident. If CSFT ultimately obtains final judgment in Switzerland against [C], we will be bound to give effect to it, and it will be our responsibility to execute it against an English domiciliary. It is beyond dispute that at that stage we will have all necessary powers to ascertain the whereabouts of [C]’s assets both here and abroad. It cannot be said to be inexpedient to compel disclosure now so that appropriate steps can be taken to prevent [C] frustrating an eventual judgment of the Swiss court. It would be a very different matter if we were being asked to make a worldwide order against V, but we are not .. the judge’s decision to grant worldwide ancillary Mareva relief is unassailable.”

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E. THE ANTON PILLER ORDER 1. The Nature and Origins In Anton Piller KG v Manufacturing Processes Ltd80, the Court of Appeal, whilst recognizing that a civil court does not have the jurisdiction to grant an order akin to a search warrant, nonetheless held that in the most exceptional circumstances, where the plaintiff has a very strong prima facie case and there is clear evidence the defendant possessed vital material which he might destroy or dispose of so as to defeat the ends of justice before any application inter partes could be made, the court has an inherent jurisdiction to order the defendant to permit the plaintiff’s representatives to enter the defendant’s premises to inspect and remove such material.81 This is how Lord Denning MR explained the principle:

“Let me say at once that no court in this land has any power to issue a search warrant to enter a man's house so as to see if there are papers or documents there which are of an incriminating nature, whether libels or infringements of copyright or anything else of the kind. No constable or bailiff can knock at the door and demand entry so as to inspect papers or documents. The householder can shut the door in his face and say, 'Get out'. That was established in the leading case of Entick v Carrington. None of us would wish to whittle down that principle in the slightest. But the order sought in this case is not a search warrant. It does not authorise the plaintiffs' solicitors or anyone else to enter the defendants' premises against their will. It does not authorise the breaking down of any doors, nor the slipping in by a back door, nor getting in by an open door or window. It only authorises entry and inspection by the permission of the defendants. The plaintiffs must get the defendants' permission. But it does do this: it brings pressure on the defendants to give permission. It does more. It actually orders them to give permission—with, I suppose, the result that if they do not give permission, they are guilty of contempt of court.”82

The essence of the order, which was originally granted in cases concerning piracy or breach of copyright, speed and surprise. The order, which is peremptory and penal in nature, is made ex parte and is based on the inherent jurisdiction of the court.83 80 [1976] 1 All ER 405 81 Ormrod LJ said: “The proposed order is at the extremity of this court’s powers. Such orders, therefore, will rarely be made, and only when there is no alternative way of ensuring that justice is done to the applicant. There are three essential pre-conditions for the making of such an order, in my judgment. First, there must be an extremely strong prima facie case. Secondly, the damage, potential or actual, must be very serious for the applicant. Thirdly, there must be clear evidence that the defendants have in their possession incriminating documents or things, and that there is a real possibility that they may destroy such material before any application inter partes can be made.” 82 It is therefore an in personam order 83 In Anton Piller, Lord Denning MR said: “.. it is a far stronger thing to make such an order ex parte without giving him notice. This is not covered by the Rules of the Supreme Court and must be based on the inherent jurisdiction of the court .. So it falls to us to consider it on principle. It seems to me that-such an order can be made by a judge ex parte, but it should only be made where it is essential that the plaintiff should have inspection so that justice can be done between the parties, and when, if the defendant were forewarned, there is a grave danger that vital evidence will be destroyed, that papers will be burnt or lost or hidden, or taken beyond the jurisdiction, and so the ends of justice will be defeated; and when the inspection would do no real harm to the defendant or his case.”

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In Rank Film Distributors Ltd & Others v Video Information Centre & Others84, Lord Fraser of Tullybelton said:

“These orders are only made when the plaintiff produces strong prima facie evidence of infringement of his copyright. They are made on the ex parte application of the plaintiff, are served on the defendants without previous notice and order the defendants to make immediate discovery of documents and to give immediate answers to interrogatories designed to find out particularly the names and addresses of their suppliers. The usefulness of the Anton Piller order is on the element of surprise.85 This is so essential in cases of piracy. If the pirates have been forewarned then vital documents and articles would be lost, hidden or destroyed. It is too late to shut the stable-door when the steed is stolen.”86

That the order is not limited to cases concerning piracy or breach of copyright was subsequently confirmed in Yousif v Salama87 where the Court of Appeal held that the court had a discretion to grant an Anton Piller order to enable the preservation of a document which did not itself form the subject matter of the action, where the document was the best possible evidence and the plaintiff genuinely feared that the defendant would destroy it prior to hearing of the action or there was a very clear prima facie case leading the court to fear that the defendant would conceal or destroy essential evidence and that to do so would deprive the plaintiff of any evidence on which to put forward his claim and so frustrate the process of justice. This is how Lord Denning MR explained the making of the order:

“The plaintiff, who was resident in the Middle East, says that he made an agreement with the first defendant. Certain goods were to be purchased in England and dispatched to the Middle East. They were then to be re-sold there. In respect of those transactions, the profit was to be divided between the plaintiff and the second defendant, a company controlled by the first defendant .. in March 1980 the plaintiff went with the first defendant to the defendant company’s office to go through the accounts. Two files were produced containing the various accounts. They showed sums due to the plaintiff. Also a desk diary. The plaintiff, being very anxious about the matter, brought proceedings in the court for the sum due to him. On 16 April 1980, he issued a writ for that purpose. The total sum claimed was £14,000–odd. The writ was served. The solicitors for the defendants wrote to the plaintiff’s solicitors saying that they were going to defend the claim strenuously.

84 [1980] 2 All ER 273. 85 Lord Wilberforce said: “They are designed to deal with situations created by infringements of patents, trade marks and copyright or more correctly with acts of piracy which have become a large and profitable business in recent years. They are intended to provide a quick and efficient means of recovering infringing articles and of discovering the sources from which these articles have been supplied and the persons to whom they are distributed before those concerned have had time to destroy or conceal them. Their essence is surprise. Because they operate drastically and because they are made, necessarily, ex parte — i.e. before the persons affected have been heard, they are closely controlled by the court … They are only granted upon clear and compelling evidence, and a number of safeguards in the interest of preserving essential rights are introduced.” 86 Keeping with the analogy of the bolting horse, Templeman LJ, in the Court of Appeal, said: “If the stable door cannot be bolted, the horse must be secured .. There was ample evidence to justify the inference that the order would fail to protect the plaintiffs unless it was both peremptory and penal, and made, served and implemented without prior notice to the defendants. If the horse is liable to be spirited away, notice of an intention to secure the horse will defeat the intention.” 87 [1980] 3 All ER 405

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The plaintiff then became very anxious about the file and the desk diary he had seen which contained details of the transactions. He became fearful that the first defendant would destroy those documents before the actual hearing of the case. On 6 May 1980, the plaintiff applied for an Anton Piller order. He did not notify the defendant that he was making the application: because he was afraid the defendant would destroy the documents if he were notified. The plaintiff asked that he should be granted an Anton Piller order to enable him to go to the defendant company’s offices and inspect the documents before the first defendant had an opportunity to destroy them. In many cases such an order would not be granted. But in this case there is evidence (if it is accepted) which shows the first defendant to be untrustworthy. The plaintiff has a legitimate fear that the documents will be destroyed. In the circumstances, it seems to me that it would be proper to make an Anton Piller order...”

2. The position in Malaysia The position in Malaysia was recently explained by the the Court of Appeal in Arthur Anderson & Co v Interfood Sdn Bhd.88 (a) The order is just another form of injunction albeit unique in its application. This

doctrine entered into our legal corpus through para. 6 of the Schedule to the Court of Judicature Act 1964 in the same way as Mareva injunction did.89

(b) The basic requirements are: (i) P must disclose an extremely strong prima facie case, (ii) that a refusal to grant the order will have a very serious effect on P, (iii) that it must be established that D has in its possession the relevant documents

and/or materials being sought for and that there is a real possibility that the defendant may destroy such documents and/or materials,

(iv) that P is required to make a full and frank disclosure, and (v) that the order should contain the necessary undertakings and safeguards to be

complied with upon its execution.90

88 [2005] 2 CLJ 889 89 Zainal Abidin bin Haji Abdul Rahman v. Century Hotel Sdn Bhd 90 This safeguard was explained by Nicholls VC (as he then was) in Thermosensors Ltd. v Hibben [1992] 1 WLR 840: “This is an important safeguard for defendants, not least because Anton Piller orders tend to be long and complicated, and many defendants cannot be expected to understand much of what they are told by the solicitor serving the order. But such a term, if it is to be of use, requires that in general Anton Piller orders should be permitted to be executed only on working days in office hours, when a solicitor can be expected to be available. In the present case Mrs. Hibben was alone in her house, with her children in bed. She was brought to the door in her night attire at 7.15 am, and told by a stranger knocking on the door that he had a court order requiring her to permit him to enter, that she could take legal advice forthwith, but otherwise she was not permitted to speak to anyone else at all. But how could she get legal advice at that time in the morning? She rang her solicitor's office but, predictably, there was no response.”

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In Computerland Corp v Yew Seng Computers Pte Ltd91 Thean J said:

“ … [the] guidelines and safeguards .. is plain common sense. Otherwise it would be like arming an applicant with 'one of the law's two 'nuclear' weapons' per Donaldson LJ (as he then was) in Bank Mellat v Nikpour [1985] FSR 87 at p 90 to be used at his whims and fancies. Thus, we are entirely in agreement with the observation of the learned judge in the case of Makonka Electronic Sdn Bhd v Electrical Industry Workers' Union & Ors when he said: It is a draconian order, granted by the court upon the balance of undertakings by the applicant and upon specific terms and conditions. Those terms, conditions and undertakings cannot be ignored or left for subsequent compliance at will. Compliance with the terms of the conditions and undertakings are necessary pre-conditions to the enforcement of the order… The Anton Piller order is a valuable procedure and ought to be preserved. The efficacy, however, of the Anton Piller procedure depends very much on all the parties seeking a fine balance to protect their respective interests and rights. A solicitor acting for an applicant must remember at all times that he is an officer of the court, and to ensure that the application he is putting forward contains adequate safeguards of the basic rights of the other party. It is not that he is obliged to act for the other party, but that he is bound to ensure the procedure is not abused. He must put forward a reasonable application if it is to be entertained. He should for example ensure: 1 That there is full and frank disclosure of all relevant information and evidence to justify the issue of the order. 2 The order must be drawn such that it extends no further than the minimum necessary to achieve the preservation of evidence which may be otherwise removed or destroyed. 3 The application includes first alternative prayers for orders to produce and deliver specific evidence. Only upon the respondents' failure to produce and deliver such evidence would the other orders of the Anton Piller order are to come into effect. This would offer a 'less draconian unless necessary' approach, and by specifying the evidence to be produced avoid fishing expeditions and unnecessary invasion into unrelated information. 4 That the application contains clear and specific undertakings that the order will be served by a solicitor who will at the same time supply a copy of the application and all affidavits and documents put before the judge in making the application; explain its exact terms to the respondent; advise him to seek immediate legal advice and that he has a reasonable time to do so. 5 That the application contains clear undertakings for damages, and that the evidence obtained will not be used in any other proceedings without the consent of the court. 6 As a further safeguard, to have a separate solicitor to supervise the execution by the applicants' solicitors, and persons who are to accompany him are to be named in the order so that they may be identified by the respondent. The purpose of the safeguards is to ensure that the enforcement of the order could be carried out in a peaceful and orderly manner. For that purpose the order must be carried out strictly on its terms and the undertakings thereunder. Where there has been non-compliance, the order has become liable to set aside and such non-compliance cannot be corrected by subsequent

91 [1991] 3 MLJ 201

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compliance. Such a strict approach is necessary to guarantee that Anton Piller orders are carried out strictly according to its terms and no further.”

Two cases illustrate the early application of the order. Lian Keow Sdn Bhd v C Paramjothy92, P issued a writ for a declaration that they are the beneficial owners of a piece of land and that D1 is holding the said land in trust for the benefit of P. To prevent the destruction of the Trust Deed and the relevant files relating to the purchase of the land from the former proprietors, P applied for an Anton Piller order to authorise P’s representatives to enter the premises of D1 and to take into custody those documents. Yusof Abdul Rashid J, in granting the order, said:

“In the event of [D1] refusing permission to [P’s] representatives to enter the premises, [P] may then bring it to the notice of the court. Should it be proved that the refusal was unreasonable, appropriate action might be taken against [D1], even to the extent of committing him. By the order, [D1]is put in peril if he chooses to refuse permission and such refusal would also occasion adverse inferences being drawn against him.”

In Television Broadcasts Ltd v Mandarin Video Holdings Sdn Bhd93 NH Chan J (as he then was) said:

“The defendants have done great wrong to the plaintiffs. They have plundered the copyright in the plaintiffs’ most recent television films. Even television films can cost a lot of money to make. The defendants stole the copyright in them and have not paid a cent for them; they do not have to bear the huge cost of producing the films … So the plaintiffs came to this court to seek recourse. They asked for an ex parte order — they did not want the defendants to have notice of the application; they wanted an order before the writ was even served. They wanted to take the defendants by surprise so that they could not get rid of incriminating evidence and their stock of infringing video cassettes. In the instant case, the defendants are pirates. They are thieves and I daresay untrustworthy. They are unscrupulous people. When dealing with them this court has to be especially wary. Was there a genuine fear in the instant case? Were essential documents and articles at risk? I was satisfied that the plaintiffs have a legitimate fear that important documents and infringing video cassettes would be removed or hidden. I accepted the view of the plaintiffs that there was a real possibility of that happening. So I granted the order that was sought. It is an Anton Piller order. It was made ex parte and it also carries with it an injunction enjoining the defendants from doing various acts which would be infringing acts …”

92 [1982] 1 MLJ 217 93 [1983] 2 MLJ 346

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3. Privilege against self-incrimination Is D is entitled to rely on the privilege against self-incrimination in respect of discovery or answering interrogatories if there is a real and appreciable risk of criminal proceedings being taken against him? (a) The common-law position In Rank Film Distributors, the House of Lords accepted that D is entitled to rely on the privilege against self-incrimination if there is a real and appreciable risk of criminal proceedings being taken against him. The privilege cannot be invoked where the risk of criminal prosecution is remote or where the offences are trivial in nature. Lord Wilberforce said:

“… it is only too clear (and I deliberately use the language of reluctance) that supply of the information and production of the documents sought would tend to expose the respondents to a charge of conspiracy to defraud. In the very nature of this activity, a number of persons are certain to be involved in it — in printing the master tapes, copying from the master tapes, seeking and accepting orders, and distributing the illicit copies. A charge of conspiracy to defraud, so far from being, as it sometimes is, a contrived addition to other charges, is here an appropriate and exact description of what is being done. So far from it being contrived, fanciful, or imagined, it is the charge on which Mr Dawson … is to stand trial ... Unless some escape can be devised from this conclusion, the privilege must inevitably attach.”94

The House of Lords recognized the paradox in the ruling. As Lord Wilbeforce observed, “It may seem to be a strange paradox that the worse, i.e. the more criminal their activities can be made to appear the less effective is the civil remedy that can be granted but that, prima facie, is what the privilege achieves.” Lord Fraser made the same point: “If the [claim to privilege] is well founded the usefulness of the Anton Piller type of order will be much reduced if not practically destroyed” and appealed for legislative intervention. (b) Legislative Intervention in UK The privilege has since been withdrawn by s.72 of the Supreme Court Act 1981.95

94 Lord Fraser said “[s]ince a charge against the respondents of conspiracy to defraud would not be a contrived, fanciful or remote possibility but an appropriate and exact description of what the respondents and the other persons involved had done, it was clear that disclosure by the respondents of the information sought would tend to expose them to such a charge, which would be a serious charge and would, if proved, attract heavy penalties. It followed that the claim of privilege against self-incrimination should be upheld.” 95 The privilege cannot be claimed in the following civil proceedings in the High Court: (a) proceedings for infringement of rights pertaining to any intellectual property or for passing off; (b) proceedings brought to obtain disclosure of information relating to any infringement of such rights or to any passing off; and (c) proceedings brought to prevent any apprehended infringement of such rights or any apprehended passing off.

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(c) The position in Malaysia In Television Broadcasts, NH Chan J held that the common law privilege against self-incrimination does not apply in Malaysia by virtue of s.132 Evidence Act 1950. However in PMK Rajah v Worldwide Commodities Sdn Bhd96, Zakaria Yatim J (as he then was) held that the reliance on s.132 was misplaced as it only applied to witnesses in a trial. Therefore, the privilege was available for D to invoke.97 Ravindran Shanmuganathan∗

96 [1985] 1 MLJ 86 97 PMK Rajah was applied by the High Court in Arjunan v Kesatuan Kebangsaan Pekerja-pekerja Ladang [1993] 1 MLJ 326 and by the Court of Appeal in AG for Hong Kong v Zauyah Wan Chik [1995] 2 MLJ 620. Regrettably, there was no discussion of the contrary view in Television Broadcasts. ∗The views expressed herein are my own, as are all the mistakes. I welcome comments and may be contacted at [email protected].

[Chap 14] Injunctions in English Law

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