Chapter 9 - Injunction - notes PDF

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Chapter 9 – Injunction (‘Preventive Relief’) Introduction (in Contract II, we will only be learning about temporary injunctions – and not permanent injunctions, of which are usually applied for by the plaintif before the trial of a civil suit, specifically during the case management stage) Preliminary, or temporary, injunctions are usually issued before the start of a trial; they expire upon resolution of the proceeding or at an earlier specified time. Permanent, or perpetual, injunctions may be issued at the end of a trial as part of the court’s final judgment; they usually enjoin (or mandate) the specified act or acts permanently or for as long as the relevant circumstances obtain. A temporary restraining order is an unusual type of preliminary injunction that is issued without a hearing and sometimes without notice to the party against whom it is directed; it is valid for only a short period (no more than two weeks) or until such time as a formal hearing on a preliminary injunction may be conducted. (google)

Akin to a specific performance, an injunction is an equitable remedy granted by the court to complement other remedies sought by the party making a complaint. With that said, an injunction cannot be said to be its own cause of action, but is one that is dependent or arises in addition to a pre-existing cause of action against the defendant. An injunction is a legal and equitable relief granted by the court for the purpose of forbidding, restraining or commanding the person whom the court order is granted against, to do a particular act. For example, s. 4(c) of the Specific Relief Act 1950 states that an injunction order granted by the court is capable of preventing a party from doing an act that he was obligated not to do under the contract. To illustrate, John makes a contractual term under the sale and purchase agreement of a house that Jamie cannot sell the said house to another person. Where an injunction order is granted, such would prevent Jamie from selling the house to any person, other than John. In light of this, s. 5 of the Specific Relief Act 1950 recognises such to be a ‘preventive relief’. Simply put, an injunction is commonly sought for to preserve the status quo in situations where further acts or the failure to perform such acts would cause irreparable harm to one of the parties(harm that cannot be adequately remedied by the award of monetary compensation). To be granted an injunction order, the plaintif must prove that he is likely to sufer irreparable harm without it, that the benefit of granting him an injunction outweighs the burden on the defendant, that the injunction is in public interest and (in the case of a preliminary injunction) that the plaintif is likely to succeed in the eventual trial. Once all requirements are satisfied, the court will make an order for injunction to restore the equitable right of the plaintiff that could have been invaded or threatened by the defendant as the case may be. Failure of the

defendant to comply with such order may result in a charge of contempt of court. (--google--) In Malaysia, the equitable principles relating to injunction is governed under sections 50 – 55 of the Specific Relief Act 1950. According to s. 50 of the Specific Relief Act 1950, it states that an injunction, whether temporary (issued before trial) or perpetual (issued after trial) will be granted by the court in exercising its jurisdiction. Though the court possesses absolute discretion, it has the duty to grant injunction in accordance with judicial principles, and not arbitrarily as emphasised by Raja Azlan Shah CJ (Malaya) in the Federal Court case of Majlis Perbandaran Pulau Pinang v Boey Siew Than & Ors and George Seah SCJ in the Supreme Court case of Aspatra Sdn Bhd & Ors v Bank Bumiputra Malaysia Bhd & Anor. This equitable jurisdiction of the courts in determining whether injunction should or should not be granted is statutorily recognised in ss. 50 and 51(1) of the Specific Relief Act 1950. Specific Performance – it is to command person to perform contractual obligations. Injunction – it is to forbid or command him to do certain act. Court will intervene to prohibit defendant from doing certain things

Interlocutory prohibitory injunction = Require you not to do sth, for a short period Interlocutory mandatory injunction = Require you to do sth, but for a short period Perpetual prohibitory injunction = Require you not to do sth, for a permanent period Perpetual mandatory injunction = Require you to do sth, for a permanent period

Types of Injunctions provided under the Specific Relief Act 1950 Type 1 – Temporary/Interlocutory Injunctions | S. 51(1) of the Specific Relief Act 1950

An interlocutory injunction is also a pre-trial form of relief, imposed in ongoing cases. It is normally enforceable until the conclusion of the trial or some other determination of the action. (Google) S. 51(1) of the Specific Relief Act 1950 provides that a temporary injunction is a type of injunction that can be granted at any period of the civil suit, of which its efect will continue for a specified time or until the court makes a further order. This is regulated by laws relating to civil procedure such as Order 29 of the Rules of High Court 1980 which makes it compulsory for the Court in granting an injunction to fix a date for the hearing to be held before the expiration of a 21-day period. (meaning that a temporary injunction is granted before trial, and will expire after 21 days from the date it was issued) In light of terms used interchangeably, Azmi LP pointed out in the Federal Court case of Nicholas & Ors v Gan Realty Sdn Bhd that a temporary injunction governed under s. 50 of the Specific Relief (Malay States) Ordinance carries the same meaning as an interlocutory injunction used in English law. Hence, a temporary injunction bears the same efect as an interlocutory injunction where it continues for a specific time or until the date of hearing fixed by the court where a further order will be made. 

What is an interlocutory/temporary injunction for? (purpose)

(a) To prevent injustice caused upon one of the parties (eg. destruction of evidence) - if d is trying to destroy evidence, the p can apply for injunction to prevent such (d will be served injunction order, and all evidence will be collected immediately to prevent evidence from being destroyed)

(b) To maintain or preserve status quo pending a trial (existing state of the party, if you change it, it may afect the decision at trial. After the trial, the interlocutory injunction will cease) In the case of RCA Sdn Bhd v Perkerja-Perkerja RCA Sdn Bhd, the respondents were a trade union made up by the employees of the appellant manufacturing company. The respondents sought a court injunction to restrain the appellant from interfering with the activities of the trade union such as distributing application forms in the appellant’s premises to get others to join the trade union. At first instance, the High Court rejected the appellant’s application to dissolve the injunction. However, this decision was overturned by the Supreme Court where the injunction was dissolved on the ground of s. 7 of the Industrial Relations

Act 1967 that prohibited employees from persuading others to join a trade union during working hours without their employer’s consent. It was held by the Supreme Court that the case posed no status quo to be preserved pending trial (because the intervention of the employer was in line with the law since the employees did not obtain permission or consent to distribute application forms for membership in the trade union during working hours). (c) To prevent hardship/prejudice to another party (plaintif) (d) To prevent ‘surprise’ at trial and to preserve fair balance

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Duty of the Grant – Tests (Principles) to be Satisfied in Granting Interlocutory Injunction

In the case of American Cyanamid Co v Ethicon Ltd (1975), the House of Lords laid down a tripartite test which the Courts must answer three questions in determining whether an interlocutory injunction should be granted: 1. whether there was a serious question to be tried (if yes, the court will consider the balance of convenience/where justice of the case lies, that is if the plaintifs were to succeed at trial, whether they would be adequately compensated for the interim continuance of the defendant’s activities, OR, if the defendants were to succeed at trial, whether they would be adequately compensated for the imposition of interim restrictions on their activities.) 2. whether the claim is frivolous or vexatious (= troublesome, nonsense wasting time, the court dw people to claim upon nonfundamental reasons, hence there should not be frivolous or vexatious) 3. whether granting the interlocutory injunction would preserve status quo and not change it These tests/principles laid down were affirmed in the two Malaysian cases of AlorJanggus Soon Seng Trading Sdn Bhd & Ors v Sey Hoe Sdn Bhd & Ors (1995), and the case of SC & Lian Keow Sdn Bhd v Overseas Credit Finance Bhd (1982). Later, the Court of Appeal in the case of Keet Gerald Francis Noel John v Mohd Noor bin Abdullah & Ors (1995) saw Gopal Sri Ram JCA review the abovementioned authorities, and further stating the duties which a judge should undertake in hearing an application for an interlocutory injunction. His Lordship explained the three duties required of a judge:

1. The judge must take into account the totality of the facts presented to determine whether a bona fide serious question had arisen to be tried during the proceeding. If the judge finds that no serious question was disclosed, the prevention relief (injunction) is refused. However, if he finds that there are serious questions to be tried, the judge shall move to the next step of his inquiry/assessment (step 2). 2. The judge must consider all relevant issues, facts and matters of the case such as by weighing the harm that the injunction would cause if granted, and if refused (balance of convenience test). In doing so, the judge may take into account the relative financial standings of the parties (eg. plaintif’s ability to pay damages if the civil suit fails). Where the court doubts the ‘strength of undertaking in damages’, a bank guarantee can be requested for from the plaintif. If the plaintif demonstrates no ability to pay damages in the event that the claim fails, no interlocutory injunction should be granted. 3. The judge must also keep in mind that the grant of injunction is discretionary and is intended to produce a just result, as well as to maintain status quo for the period pending trial. Hence, the judge must consider any adequate alternative remedy that would satisfy the plaintif’s equity (eg. monetary damages). Any questions relating to public interest in granting injunction should also be considered. In light of the guidelines relating to the duty of a judge in granting an interlocutory injunction, Abdul Malik Ishak J classified them into 3 tests – (i) the ‘serious issues to be tried’ test, (ii) the ‘balance of convenience’ test, (weigh the harm that injunction would produce/evaluation of degree of harm; extent to which harm could be compensated by monetary damages), and (iii) the ‘discretionary’ test. (whether in exercising discretion to grant interlocutory injunction is capable of producing a just result. If there is no status quo to be preserved, then there is no need to grant interlocutory injunction) *ms hanis added in two more tests/principles: - damages would not be an adequate final remedy - granting interlocutory injunction would preserve the status quo The guidelines laid down in Keet Gerald Francis was followed in the Malaysian cases of Yukilon Manufacturing Sdn Bhd & Anor v Dato’ Wong Gek Meng & Ors (No. 4) and the case of Tahan Steel Corp Sdn Bhd v Bank Islam Malaysia Bhd.

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Undertaking as to Damages by the Plaintif

The undertaking in damages given by the plaintif can be said to be a requirement that must be satisfied before the Court grants an interlocutory injunction order. According to Abdul Malik Ishak J in the case of TSC Education Sdn Bhd v Kolej Yayasan Pelajaran MARA & Anor, His Lordship explained that the real purpose of an undertaking in damages is to guarantee the court that the plaintif has the financial standing to recompense the loss sufered by the party who was wrongly restrained in the first place due to the injunction that was wrongly granted by the Court at the interlocutory stage. In another case of Morning Star Co-Operative Society Ltd v Express Newspaper Ltd, it was explained that the undertaking as to damages refers to the price that the plaintif has to pay in the event the claim for interlocutory injunction fails. It is rare for the court to dispense (waive) with such undertaking, and such occurs only in exceptional circumstances. On a slightly diferent note, where an interlocutory injunction is granted upon the undertaking in damages given by the plaintif, such order should not be made if damage sufered cannot be quantified and if it is clear that the plaintif is unlikely to be able to pay damages. Furthermore, it was ruled by Gopal Sri Ram JCA in the case of Keet Gerald Francis Noel John v Mohd Noor bin Abdullah that the judge in exercising his discretion to grant the interlocutory order may in some cases require the plaintif to secure his ability to meet the undertaking in damages in the event the civil suit fails, by providing a bank guarantee. 

Duty of the Plaintif to Disclose Material Facts

As injunction is a form of relief in equity, it only makes sense for equitable principles to govern the granting of such remedy. Hence, in light of the Latin Maxim, ‘He who comes to equity must come with clean hands’, this equitable principle would apply as well when it comes to making a claim for interlocutory injunction. To satisfy this governing equitable principle, it is mandatory for the person making a claim for interlocutory injunction to disclose all material facts to the judge in order to achieve a just result. Similarly, the case of Mohamed Zaibuddin bin Puteh v Yap Chee Seng governs the principle that the plaintif who utilises judicial means to ask for an interlocutory injunction should not have the intention to deceive the court. According to Hashim Yeop A Sani J, the court must be satisfied that there was no form or element of deceit present in making the claim, and must also maintain the principle of proceeding with the proceeding with the highest good faith. In the case of Dormeuil Freres SA & Anor v Nicolian International (Textiles) Ltd, it was asserted that the plaintif seeking ex parte relief, whether in regards to an interlocutory injunction order or not must make a full disclosure of the material facts to enable the courts to exercise its

discretion in granting the said relief, to its fullest. (the plaintiff has the duty to disclose all material facts, must not be the one who tries to exert fraud or misrep in contract, so he who comes to equity must come with clean hands.)

In regards to what amounts to material facts, Chao Hick Tin JJA in the case of Tay Long Kee Impex Pte Ltd v Tan Beng Huwah (T/a Sin Kwang Wah) quoted the words of Ralph Gibson LJ in the case of Brinks-MAT Ltd Elcombe who defined material facts as ‘facts which are material for the judge to know in dealing with the applications.’ Thus, it was opined by His Lordship ( Cha Hick Tin JJA) that since the degree of materiality is very general and subjective in nature, what facts amounted to those which are material were in actual fact difficult to determine. Type 2 – Perpetual Injunctions | S. 51(1) of the Specific Relief Act 1950 S. 51(2) of the Specific Relief Act 1950 states that a perpetual injunction will only be granted by the court at the hearing (inter parte – where both parties are present) and examination of the merits of the civil suit (this type of injunction is ordered at the time of final judgement, which concludes the injunction suit). By way of the said order, the defendant will be perpetually enjoined (urged to do something) from the assertion of a right, or from the commission of an act that is contrary to the rights of the plaintif. *main diference of temporary and perpetual = temporary – temporary, short run, focus only on p, may be revoked by the court (meaning can be withdrawn by the same court) Perpetual – final, conclusive, focus on both the p and d, cannot be revoked but it is appealable. In Malaysia, there are very few cases where the claim of perpetual injunction has been successfully sought for (bc perpetual injunction will not be ceased due to its permanent nature). One of them is the case of Neoh Siew Eng & Anor v Too Chee Kwong. In this case, the parties have contracted in a landlord-tenant agreement where there was a term stating that the defendant (landlord) was to pay $2 for the water charges at the said premises, and that the plaintif would pay the amount that exceeded that sum. In December 1962, the water supply stopped due to the corroded pipe in the premises but the defendant did nothing to do repairs until February 1963 following a court interim order that required him to restore the water supply. As a result, the plaintif made an application for perpetual injunction in which the High Court allowed. The efect of such relief had directed the defendant as the owners of the premises who had the obligation to keep all pipes in proper condition, to ensure the continuity of water supply to the said premises, in which was in compliance of the regulations of the Waterworks Department.

(perpetual injunction – ensures the continuity of performance. If under contract, it requires you as owner to provide water supply, then you must provide enough water supply. This is when perpetual injunction is to be applied to ensure continuance of performance)

Type 3 – Prohibitory Injunctions (positive act) | S. 52(1) & (2) of the Specific Relief Act 1950 (prohibit someone from doing sth - not provided in section, but provided in illustration) *Type 3 (prohibitory) and type 4 (mandatory injunction) can be said to be the two forms of perpetual injunction, or temporary injunction – meaning that a perpetual injunction (or temporary injunction) that is granted to the plaintif in extraordinary circumstances can either be prohibitive or mandatory in nature. A prohibitory injunction is an order that prohibits or restrains the defendant from the commission of a specified act (from doing or continuing an action). S. 52(1) of the Specific Relief Act 1950 states that a perpetual injunction may be granted in favour of the applicant (plaintif) in a civil suit to prevent the breach of an express or implied obligation. S. 52(2) of the Specific Relief Act 1950 provides that in light of contractual obligations, the court in granting the perpetual injunction shall follow the guidelines contained in Chapter II of the Act that deals with specific performance of contracts. S. 52(3) of the Specific Relief Act 1950 states that the court may exercise discretion to grant perpetual injunction if it finds that the defendant has invaded or threatened to invade the right of the plaintif to enjoyment of property. Examples of such invasion of rights arising from contracts are illustrated in: -

Illustration (a) in s. 52(3) of SRA – ‘where the defendant is the trustee of the plaintif’s property’ Illustration (b) in s. 52(3) of SRA – ‘where there exists no standard to ascertain the actual damage caused or that is likely to be cause by the invasion’

Petronas Dagangan Sdn Bhd v Omar bin Abdul Samad (1996) and the case of Azmen bin Mohd Yussof & Ors v Vasaga Sdn Bhd (2001) -

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Illustration (c) in s. 52(3) of SRA – ‘where the invasion of the plaintif’s right caused irreparable harm (pecuniary compensation is an inadequate relief) Illustration (d) in s. 52(3) of SRA – ‘where it is probable that pecuniary compensation cannot be got for the invasion’, and Illustration (e) in s. 52(3) of SRA – ‘where injunction is necessary to prevent the multiplicity of judicial proceedings’

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