Chin Wai Hong v Mr. Lim Guan Hoe (1St Defendant);, 12-08-2014

• Judge: WONG KIAN KHEONG
• Judgment Date: 12 August 2014
• Court: High Court (Malaysia)
• Record Number: 22NCC-249-07/2014

46

IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR

(COMMERCIAL DIVISION)

CIVIL SUIT NO: 22NCC-249-07/2014

BETWEEN

1 CHIN WAI HONG

(No K/P: 751001-08-5227)

2 BEH LEE LEE

(No. K/P: 801027-07-5556) ...PLAINTIFFS

AND

1. LIM GUAN HOE

(No. K/P: 821202-14-5389)

2. WONG YOKE MEI

(No. K/P: 850729-14-5206) ...DEFENDANTS

GROUNDS OF JUDGMENT

(Plaintiffs’ application for interlocutory injunctions)

A. First suit

1. On Wednesday, 9.7.2014, Ms. Beh Lee Lee (Ms. Beh) filed an action in Kuala Lumpur High Court Civil Suit No. 22NCC-247-07/2014 (1^st Suit) against the following persons:

(a) Mr. Lim Guan Hoe (1^st Defendant); and

(b) Ms. Wong Yoke Mei (2^nd Defendant).

2. On the next day, Thursday, 10.7.2014, Ms. Beh made an ex parte application with a certificate of urgency (certified by Ms. Beh’s learned counsel) for, among others, the following orders pending the disposal of the 1^st Suit (1^st Application):

(a) a mandatory injunction to compel the Defendants to hand over “immediately within 24 hours” a resolution (2^nd Resolution) of Tian Yik (M) Sdn. Bhd. (TYSB) to Ms. Beh from the date of service of the mandatory injunction;

(b) an injunction to restrain “immediately” the Defendants from operating TYSB’s bank accounts and bank facilities (TYSB’s Bank Accounts);

(c) a mandatory injunction to compel TYSB to adhere to an earlier resolution of TYSB made in May 2014 regarding the conduct of TYSB’s Bank Accounts (1^st Resolution);

(d) an injunction to restrain immediately the Defendants from having access to TYSB’s stocks in TYSB’s store (TYSB’s Stocks); and

(e) a mandatory injunction to compel the Defendants to co-operate “immediately” with Ms. Beh to pay off TYSB’s debts with TYSB’s funds.

3. The cause papers for the 1^st Suit and the 1^st Application (1^st Cause Papers) were brought to my attention at about 3 pm, Thursday, 10.7.2014. After perusing the 1st Cause Papers, at about 3.30 pm the same day, I directed the following (1^st Direction):

(a) the 1^st Cause Papers should be served on the Defendants’ solicitors and if the Defendants were not legally represented, the 1^st Cause Papers should be served personally on the Defendants; and

(b) the 1^st Application be heard inter partes on short notice at 2.30 pm, Monday,14.7.2014. I am aware that Order 32 rule 3 of the Rules of Court 2012 (RC) requires not less than 2 clear days of service of a notice of application. Nonetheless, in view of the fact that a certificate of urgency had been filed in respect of the 1^st Application, I directed a hearing of the 1^st Application on the following Monday.

B. Discontinuance of 1^st Suit and commencement of second action

4. Despite the 1^st Direction, at about 3.30 pm, Friday, 11.7.2914, I was given –

(a) a notice of discontinuance of the 1^st Suit filed in the morning on 11.7.2014 which stated that Ms. Beh discontinued the 1^st Suit with no order as to costs and with liberty to file afresh (Discontinuance of 1^st Suit);

(b) a second suit (2^nd Suit ) filed by Mr. Chin Wai Hong (Mr. Chin) and Ms. Beh against the Defendants. The contents of the statement of claim (SOC) in the 1^st and 2^nd Suits are essentially the same except that Mr. Chin is now a co-plaintiff with Ms. Beh in the 2^nd Suit (Plaintiffs); and

(c) a second ex parte application (2^nd Application) for the same interlocutory relief as the 1^st Application save that Mr. Chin is now a co-applicant with Ms. Beh in the 2^nd Application and the affidavit in support had been affirmed by both Plaintiffs (Plaintiffs’ Affidavit). A second certificate of urgency was affirmed by the same learned counsel for the Plaintiffs. The 2^nd Application however omitted to state about the 1^st Suit, 1^st Application, 1^st Direction and Discontinuance of 1^st Suit (I will discuss about this omission later).

5. The same solicitors acted in the 1^st and 2^nd Suits.

6. After perusing the cause papers for the 2^nd Suit and 2^nd Application (2^nd Cause Papers), I gave the same direction for the 2^nd Cause Papers to be served on the Defendants or their solicitors and for the 2^nd Application to be heard inter partes at 2.30 pm, Monday, 14.7.14 (the initial hearing date for the 1^st Application).

C. Plaintiffs’ claim

7. According to the SOC and the Plaintiffs’ Affidavit –

(a) the Plaintiffs are husband and wife. The Defendants are married to each other;

(b) each of the Plaintiffs and Defendants holds 25% of the shares in TYSB. Ms. Beh and the Defendants are directors of TYSB;

(c) Ms. Beh was tasked with the internal management of TYSB as well as the responsibility to make all purchases for TYSB. The 1^st Defendant was in charge of all dealings between TYSB and external parties, including TYSB’s sales;

(d) the 1^st Resolution provided that TYSB’s Bank Accounts were to be jointly operated by –

(i) Ms. Beh; AND

(ii) either the 1^st or 2^nd Defendant;

(e) in March 2014, the Plaintiffs and Defendants agreed (Alleged Agreement) –

(i) to cease the business of TYSB in June 2014 and to wind up TYSB;

(ii) the 1^st Defendant was required to sell all of TYSB’s Stocks by June 2014; and

(iii) after paying off TYSB’s creditors, any balance of TYSB’s Stocks and cash would be divided to the Plaintiffs and Defendants according to their shareholding; and

(f) at about the end of June 2014, the Plaintiffs found out that the Defendants had breached the Alleged Agreement (Alleged Breach) by –

(i) substituting the 1^st Resolution with the 2^nd Resolution without the Plaintiffs’ knowledge and consent;

(ii) the 1^st Defendant established 2 other entities which conducted the same business as TYSB and took away TYSB’s clients without the Plaintiffs’ knowledge and consent; and

(iii) the Defendants had taken away TYSB’s Stocks without the Plaintiffs’ knowledge and consent.

8. It is to be noted that despite the Plaintiffs’ above allegations –

(a) the Alleged Agreement and the 1^st Resolution were not exhibited in the 2^nd Application; and

(b) the 2^nd Resolution was not signed

(Infirmities in Plaintiffs’ Case).

D. Hearing of 2^nd Application

9. At the hearing of 2^nd Application at 2.30 pm, Monday, 14.7.2014, only the Plaintiffs’ learned counsel was present. According to her, the 2^nd Cause Papers had only been served on the Defendants’ solicitors in the morning of 14.7.2014.

10. In view of the short service of the 2^nd Cause Papers, I directed the hearing of the 2^nd Application be adjourned to 3 pm, Friday, 18.7.2014.

11. The Plaintiffs’ learned counsel applied for an ad interim order of all the prayers of the 2^nd Application pending the disposal of the 2^nd Application.

12. The court clearly has the jurisdiction to grant an ad interim injunction or holding over injunction pending the disposal of the interlocutory injunction application –

(a) s 51(1) of the Specific Relief Act 1950 (SRA) provides as follows -

“Temporary injunctions are such as 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.”

(emphasis added); and

(b) the Court of Appeal’s judgment in RIH Services (M) Sdn Bhd v Tanjung Tuan Hotel Sdn Bhd [2002] 3 CLJ 83, at 91-92.

13. I declined to grant an ad interim order for reasons which I will discuss later in this judgment.

14. At 3 pm, Friday, 18.7.2014, the Defendants’ learned counsel was not present despite the assurance of the Plaintiff’s learned counsel that the 2^nd Cause Papers had been served on the Defendants’ solicitors.

15. I was mindful that the Plaintiffs’ Affidavit had not been rebutted by any affidavit from the Defendants and was therefore deemed to have been accepted by the Defendants (Federal Court’s judgment in Sunrise Sdn Bhd v First Profile (M) Sdn Bhd & Anor [1997] 1 CLJ 529, at 535). Despite the unrebutted Plaintiffs’ Affidavit and the oral submission by the Plaintiffs’ learned counsel, I was unable to accede to the 2^nd Application. This is due to the following brief reasons (which I will elaborate below):

(a) damages was an adequate remedy for the Plaintiffs in this case;

(b) the Plaintiffs did not have an unusually strong and clear case for this court to grant interlocutory mandatory injunctions;

(c) the Plaintiffs’ inequitable conduct disentitled them from seeking for the equitable relief of interlocutory injunctions and

(d) the 2^nd Application sought interlocutory relief in respect of TYSB’s Bank Accounts, TYSB’s Stocks, the 1^st and 2^nd Resolutions but TYSB had not been sued as a co-defendant in this case.

E. Remedy of damages is adequate in this case

16. It is clear that in...