Tutorial 10 (Week12) Injunction PDF

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TUTORIAL 10 (WEEK 12): INJUNCTIONSQuestion 1Discuss the law of injunction as provided for under Sections 50- 55 of the Specific Relief Act 1950. Support your answer with decided cases.An injunction is not a cause of action on its own, but "dependent on a pre-existing cause of action against...

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TUTORIAL 10 (WEEK 12): INJUNCTIONS Question 1 Discuss the law of injunction as provided for under Sections 50- 55 of the Specific Relief Act 1950. Support your answer with decided cases.

An injunction is not a cause of action on its own, but "dependent on a pre-existing cause of action against the defendant arising out of an invasion, actual or threatened, by him of a legal or equitable right of the plaintiff. Injunction is a relief in the form of a court order addressed to a specified person forbidding or commanding him to do a certain act. It performs a preventive function, used to complement other remedies sought. The law on injunctions is provided in section 50-55 of the Specific Relief Act (SRA). It is based on equitable principles. S.50 provides that it is granted at the discretion of the court. The court's discretion to grant injunction is not arbitrary but is guided by judicial principles. In the case of Majlis Perbandaran Pulau Pinang v Boey Siew Than & Ors [1979] 2 MLJ 127, FC per Raja Azlan Shah CJ (Malaya) at 130: “… It is not to be arbitrarily exercised but must be done judicially in accordance with principles". Moreover, in the case of Aspatra Sdn Bhd & Ors v Bank Bumiputra Malaysia Bhd & Anor [1988]1 MLJ 97, SC per George Seah SCJ at 110: “… the discretion [under ss 50 and 51(1) of the Specific Relief Act] … established that the exercise of this equitable jurisdiction is to be governed by well-recognised judicial principles". Section 51(1) SRA provides that temporary injunctions are to continue until a specified time, or until the further order of the court. They may be granted at any period of a suit, and are regulated by the law relating to civil procedure. (Order 29 of the Rules of the High Court 1980). The temporary injunction as defined above has been judicially recognized as the interlocutory injunction referred to in English Law. In Nicholas & Ors v Gan Realty Sdn Bhd [1970] 12 MLJ 89, FC., In this case Azmi LP opined, “… a temporary injunction under s.50 of the Specific Relief (Malay States) Ordinance is the same thing as an interlocutory injunction mentioned in the English textbooks. Temporary injunctions are such as to continue until a specific time or hearing of the case upon the merits or generally until further order.” In Arab Malaysian Corporation Builders Sdn Bhd & Anor v Asm Development Sdn Bhd, the HC referred to commercial litigation: Pre-Emptive Remedies, which presented the distinction between interlocutory and interim injunction. Interlocutory injunction is an order to preserve a particular set of circumstances pending full trial of the matters in dispute. Interim injunction is an order in the nature of an ‘interlocutory injunction’ but restraining the defendant only until after a named day or further order. The purpose of an interlocutory injunction is to preserve the status quo of the parties pending a trial. An interlocutory injunction is seldom granted if its effect is to grant the plaintiff a final relief. In RCA Sdn Bhd v Pekerja-Pekerja RCA Sdn Bhd [1991] 1 CLJ 19; 1 MLJ 309, SC, the plaintiffs were a trade union and employees of the defendant, which was a semi-conductor manufacturing company. The plaintiffs had obtained an injunction to restrain the defendant from interfering with the union's activities including the distribution of application forms (for membership in the trade union) while in the defendant's premises. S7 Industrial Relations Act 1967 (Act 177) prohibits workmen from persuading others to join a trade union during working hours without the consent of the employer. The defendant's application to dissolve the injunction was dismissed by the High Court. On appeal, the Supreme Court held that there was no status quo to be preserved; thus, the SC allowed the appeal and dissolved the injunction.

In the Court of Appeal decision of Keet Gerald Francis Noel John v Mohd Noor bin Abdullah & Ors [1995] 1 AMR 373; [1995] 1 NILJ 193, CA., Gopal Sri Ram JCA reviewed the authorities on interlocutory injunction…that a judge hearing an application for an interlocutory injunction should undertake: (1)whether on the totality of the facts presented, discloses a bona fide serious question to be tried ... [ilf he finds, upon a consideration of all the relevant material before him ... that no serious question is disclosed, that is the end of the matter and the relief is refused. On the other hand if he finds that there are serious questions to be tried, he should move on to the next step of his inquiry; (2) ... 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 and from its refusal. He is entitled to take into account, inter alia, the relative financial standing of the litigants before him 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) … that the remedy is discretionary, intended to produce a just result for the period between the date of the application and the trial proper and to maintain the status quo ... 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 … Any question going to the public interest may, and in appropriate cases should, be taken into account (p. 206-207). An injunction applied for at the interlocutory stage is normally granted upon an undertaking in damages given by the plaintiff. In cases where the strength of the undertaking is doubted, the court may also require some sort of security. The purpose of the undertaking was explained by in TSC Education Sdn Bhd v Kolej Yayasan Pelajaran MARA & Anor [2002] 5 MLJ 577, by Abdul Malik Ishak J as follows: What is the real purpose of an undertaking as to damages? It is simply to vest the court with the jurisdiction to make an appropriate order to recompense the loss suffered by the party who was restrained when it is subsequently established that the plaintiff was not entitled, in the first place, to the injunction. It is always possible that a wrong decision would be made at the interlocutory stage (p.605). S 51(2) SRA provides that a perpetual injunction can only be granted by the decree made at the hearing and upon the merits of the suit; the defendant is thereby perpetually enjoined from the assertion of a right, or from the commission of an act, which would be contrary to the rights of the plaintiff. There are very few cases where it has been successfully obtained. A successful instance is in Neoh Siew Eng & Anor v Too Chee Kwong [1963] MLJ 272. In this case, the plaintiff had rented a rent-controlled premise from the defendant. One of the terms of the tenancy was that the defendant would pay $2 towards the water charges and the plaintiff would pay the amount in excess of that sum. In the month of December 1962, the water supply stopped owing to the corroded state of the pipe. The defendant did nothing to repair the pipe until the month of February 1963 following a court interim order requiring the defendant to restore the water supply. HC held that the plaintiff has the right to obtain damages and a perpetual injunction to direct the defendant to ensure the continuity of water supply to the said premises. This is because the defendant as the owner of the premises was under an obligation not only to see that the supply of water was

not deliberately cut off but also to use her best endeavours to keep all communication pipes in proper repair and generally to comply with all regulations of the Waterworks Department so that the water supply was not cut off. A prohibitory injunction is an order that prohibits a defendant from doing or continuing an action. S.52(1) SRA provides that a perpetual injunction may be granted to prevent the breach of an obligation existing in favour of the applicant, whether expressly or by implication. S 52(2) provides that for an obligation arising from contract, the court shall be guided by the rules and provisions contained in Chapter II which deals with specific performance of contracts. Illustrations (a) and (k) of S52(3) SRA are examples of breaches of obligations which arise from contract including implied contract. An instance of an injunction granted to prevent the infringement of intellectual property rights can be seen in Yukilon Manufacturing Sdn Bhd & Anor v Dato' Wong Gek Meng & Ors (No 4) [1998] 7 MLJ 551. In this case, the defendants are two brothers who had started a joint venture manufacturing business with the plaintiff. Some years later, the defendants set up another company for the purpose of manufacturing a similar product to be sold to the plaintiff's customers. The defendants had also disclosed the plaintiff's trade secret. An ex parte injunction order was granted to prevent the defendants from continuing with the manufacturing of the said products. The defendants attempted to set aside the said injunction. The High Court held that the award of damages was not an adequate remedy and the justice of the case in favour of the plaintiff required the grant of an injunction. Furthermore, S53 SRA gives the power to the court to award mandatory injunctions. A mandatory injunction is an order directing a defendant to do an act. S53 provides: 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. An important case on mandatory injunction is Redland Bricks Ltd v Morries & Anor where the House of Lords set our the principles in the granting of mandatory injunction. Firstly, a mandatory injunction can only be granted when the plaintiff shows a very strong probability upon the present facts that grave damage will accrue to him in the future. Second, damages will not be a sufficient or adequate remedy if such damages does happen. Third the question of the cost to the defendant to do work to prevent or lessen the likelihood of a future apprehended wrong is an element which must be taken into account. This will also depend on whether the defendant has acted reasonably. Fourthly, the defendant must know exactly in fact what he has to do. A perpetual mandatory injunction can be seen in Neoh Siew Eng & Anor v Too Chee Kwong [1963] MLJ 272. Applications for mandatory injunctions have been made at the interlocutory stage. While the courts have the discretion to grant mandatory injunctions before trial, the courts have been careful that it is granted only in exceptional cases. In Gibb & Co v Malaysia Building Society Bhd [1982]1 MLJ 271, FC. The Federal Court held that although an interim or interlocutory injunction is never granted before trial save in

exceptional and extremely rare cases, there is no reason why it cannot be granted in proper and appropriate cases. Furthermore, S. 54 SRA provides that an injunction cannot be granted (a) to stay a judicial proceeding pending at the institution of the suit in which the injunction is sought; unless such a restraint is necessary to prevent a multiplicity of proceedings;" (b) to stay proceedings in a court not subordinate to that from which the injunction is sought; (c) to restrain persons from applying to legislative body; (d) to interfere with the public duties of any department of any Government in Malaysia, or with the sovereign acts of a foreign Government; (e) to stay proceedings in any criminal ; (f) to prevent the breach of a contract the performance of which would not be specifically enforced; (g) to prevent, on the ground of nuisance, an act of which it is not reasonably clear that it will be a nuisance(h) to prevent a continuing breach in which the applicant has acquiesced; (i) when equally efficacious relief can certainly be obtained by any other usual mode of proceeding except in case of breach of trust; (j) when the conduct of the applicant or his agent has been such as to disentitle him to the assistance of the court; (k) where the applicant has no personal interest in the matter Lastly, S.55 SRA states, Notwithstanding section 54(f), where a contract comprises an affirmative agreement to do a certain act, coupled with a negative agreement, express or implied, not to do a certain act, the circumstance that the court is unable to compel specific performance of the affirmative agreement shall not preclude it from granting an injunction to perform the negative agreement, Provided that the applicant has not failed to perform the contract so far as it is binding on him. Section 55 of SRA only applies to an application for a perpetual injunction, that is an injunction granted at the final hearing of the suit. A classic case on s55 is Pertama Cabaret Nite Club Sdn Bhd v Roman Tam [1981]1 MLJ 149, FC, where the facts are quite similar to Illustration (c): "A contracts with B to sing -for twelve months at B's theatre and not to sing in public elsewhere. B cannot obtain specific performance of the contract to sing, but he is entitled to an injunction restraining A from singing at any other place of public entertainment". In this case, the respondent, a wellknown singer from Hong Kong had signed a contract to sing at the appellants' night club for a number of days. It was a term of the agreement that in the event of breach, the respondent would not perform in Kuala Lumpur during the period fixed in the contract or three months thereafter. The respondent declined to honour his contract with the appellant and sang at another night club. The appellants applied for an injunction to restrain the respondent from appearing at any opera, theatre, concert hall or other public or private entertainment in Kuala Lumpur. The High Court dismissed the appellants' application, and the appellants appealed to the Federal Court. The Federal Court held that specific performance cannot be granted in relation to the agreement that the respondent was to appear and sing in the appellants' night club as this agreement relied on the personal volition of the respondent. But, together with this agreement, there was a negative undertaking by the respondent not to sing anywhere else in Kuala Lumpur for a certain period. Thus, an injunction can be granted to prevent the respondent from doing so. The Federal Court referred to Illustration (c) of s 55, Lumley v Wagner [1843-601 All ER 368 and The Broome (Selangor) Rubber Plantations v RH Whitley (1919) 1 FMSLR 365.

An attempt to imply a negative agreement was unsuccessful in Dato' HM Shah & Ors v Dato' Abdullah bin Ahmad [1991]1 MLJ 91, SC. In this case, the respondent was appointed as the executive chairman and managing director of a company for a period of 3 years from January 1, 1989 to December 31, 1991. The company later removed the respondent as chairman and appointed the first appellant in his place and also suspended the respondent of his executive powers and duties as managing director of the company. The respondent sought injunctive relief and the High Court held that there was an implied negative agreement that the company would not employ another person as its chairman and managing director until the expiry of the plaintiff's period of employment. Supreme Court allowed the appellant's appeal and held that the provision in s 55 does not state that every affirmative agreement includes, by necessary implication, a negative agreement to refrain from doing certain things. This is a question of interpretation in each case whether a particular contract can be said to have a negative covenant, express or implied. The Court also noted that the agreement between the respondent and the company was not the same as any ordinary employer/employee agreement and that in each of the authorities cited to the court, the implied stipulation was against the employee, not the employer. There are some situations where the court cannot grant an injunction to perform a negative agreement. One circumstance is where the defendant has no other option but to perform the contract or to be unemployed. In Ehrman v Bartholomew [1898] 1 Ch 671, the defendant agreed to devote all his attention and time to the business of the plaintiff and agreed not to directly or indirectly employ himself in any other business, or transact any business with any other person other than the plaintiff for a term of 10 years. The plaintiff applied for an injunction to enforce the negative agreement. The Court held that granting the injunction was not appropriate because the effect would be that the defendant had to work with the plaintiff or remain unemployed. The above case maybe contrasted with Warner Brothers v Nelson [1937]1KB 209 where the defendant was an artist and had agreed to provide his service as an artist to the plaintiffs for a period of 52 weeks. The defendant also agreed not to provide such similar service to any other parties during the said period. When the defendant breached the agreement, the plaintiffs obtained an injunction to prevent the defendant from working for another person. The Court allowed the injunction as the effect of the injunction did not force the defendant to work with the plaintiff or become unemployed. In this case, the defendant can still find a job with other persons other than being an artist.

Question 2 Explain the situations where injunction cannot be granted as provided for under Section 54 Specific Relief Act 1950. Support your answer with decided cases. S54 is mainly about the circumstances when injunctions cannot be granted. Section 54(a) of SRA states that an injunction cannot be granted (a) to stay a judicial proceeding pending at the institution of the suit in which the injunction is sought, unless such a restraint is necessary to prevent a multiplicity of proceedings.In the Malaysia case of BSNC Leasing Sdn Bhd v Sabah Shipyard Sdn Bhd & Ors Sabah Shipyards (SS) entered into a hire purchase agreement with BSNC to cover half the cost of turbines bought from WT. Due to the economic crisis, SS could not meet the monthly payment. Article 176(10) of Companies Act states that parties can go to the court to stop anyone from taking legal proceedings against itself from creditors.27 Under this article, BSNC could not sue SS as it was protected. SS sold the barge with the turbine to another company who leased it to an Ecuadorian company. BSNC commenced proceedings in Ecuadorian court and obtained an order to seize the barge. SS asked for an injunction in Malaysian court to stop BSNC with their actions in Ecuador. Gopal Sri Ram J held that the authority for the Malaysian court to grant an anti-suit injunction is provided in S52(3)(e) and S54(a) Specific Relief Act 1950. It was oppressive and vexatious to have proceedings in Ecuador as the foreign suit started by BSNC was a way to get around the High Court’s decision. So the court held in favour of SS and granted a mandatory injunction directing BSNC to discontinue all Ecuadorian proceedings Section 54(b) of SRA states that an injunction cannot be granted (b) to stay proceedings in a court not subordinate to that from which the injunction is sought.In the case of Bina Satu Sdn Bhd v Tan Construction [1988] 1 MLJ 533 The plaintiff owed the defendants a certain amount of money. The defendants demanded payment and the plaintiff was unable to pay the money. The defendants petitioned the court to wind up the plaintiff claiming that the plaintiff was unable to pay its debts. The plaintiff sought an injunction to restrain the defendants from petitioning the court to wind up the plaintiff. The defendants submitted on a preliminary point, namely, that the power to grant the injunction sought was not founded upon statute but an inherent jurisdiction which power had been excluded by statutory prohibition, namely, s 54(b) of the Specific Relief Act 1950. The court held that s 54(b) should be read as having reference to only perpetual injunctions. In the present case, the injunction sought was a temporary injunction; (2) s 54(b) relates to injunctions imposed on other courts and not to inj...