1. Introduction
The principal remedy of common law is the award of damages to which a plaintiff is entitled to as of right upon proof of breach, whereas in equity, a remedy is not only given for a breach but also to prevent the breach of another person’s right.
2. Reception of Equitable Remedy in Malaysia
In Malaysia, the law relating to remedies is found in varies sources. Some are statutory, and some are adapted from the common law being the principles of the common law and equity. During the period when then English courts were split into courts of common law and of equity, each branch developed different remedies. Even though the courts are no longer divided in this way, it is still convenient to distinguish between common law and equitable remedies, since their separate histories led to different rules about when they will be applied.
3. Injunction
Injunction is an order given upon the court’s discretion to direct a person to perform a specified act or to restrain a person to whom it is directed from performing a specified act or from breaching his obligation. The discretion here means, according to Jessel MR is not according to the caprice of the judge, but according to sufficient legal reasons or on settled legal principles.
Injunction is not stipulated in the Contracts Act 1950 (‘CA’) by mainly governed by the Specific Relief Act 1950 (‘SRA’). In a very strict sense, injunction is not really a remedy but more like a preventive relief. According to Section 50 of SRA, the power to issue an injunction was given to the High Court. It was clear that the plaintiff’s claim for perpetual injunction can only be heard by the High Court while Subordinate Court has no jurisdiction to grant injunction.
There is various classification of injunction. In one classification, thru Section 50 of the SRA, it stated that ‘Preventive relief is granted… by injunction, temporary or perpetual.’ Thus, an injunction may be temporary (interim/interlocutory) or perpetual (final). By a further classification, injunction may be found to be either prohibitory or mandatory. In addition, an injunction may or may not be described as issuing quia timet, according to whether the breaches of rights complained of are merely anticipated, on the other hand.
Temporary injunction is governed under Section 51(1) of the SRA where it can be granted at any period after legal action has commenced. The purpose is to preserve the status quo of the parties in pending trial. The terms for temporary injunction often used interchangeably but may be distinguished as: interlocutory injunction where an order to preserve a particular set of circumstances due to pending full trial of matters in dispute and interim injunction is an order of restraining defendant only until after a named day or further order will be given.
For the principle which govern the granting of temporary injunction, the court shall determine whether there is a serious question which is required to be tried, and if the answer is in affirmative, the court will weigh whether the balance of convenience support the granting of the order or dismissing the application for interlocutory injunction.
Supreme court fully approved the decision in American Cyanamid and where in emphasizing the importance of ascertaining that there is a serious question to be tried, the supreme court laid down the two prerequisites: (1) the plaintiff’s case must raise serious issues to be tried; and (2) the trial of the main suit is likely to take place in the sense the plaintiff’s case shows that they are genuinely concerned to pursue the claim to trial and they are seeking the injunction as a means of holding operation of pending the trial.
Jemuri Serjan CJ (Borneo) in refusing the grant of an interlocutory injunction, following Lord Diplock in the American Cyanamid case, stated that if the material available to the court fail to disclose that the plaintiff has any real prospect of succeeding in his claims for a permanent injunction, then the application must fail.
After establishing that there is a serious question to be tried, the other guidelines must be invoked, that is: (a) whether damages can be adequate remedy; (b) where does the ‘balance of convenience’ lies; and (c) whether there are any special factors. Balance of convenience concerns with the weighing the risk of success or failure on the part of the plaintiff vis-à-vis the defendant with the consequential harm that each may suffer if the injunction is granted or refused.
Gopal Sri Ram had gone to set out a discretionary test saying that “judge would be entitled to take into account all discretionary considerations, such as, delay in the making of the application or any adequate remedy that would satisfy the plaintiff’s equity, such as an award of monetary compensation… Any question going on the public interest may, and in appropriate cases should, be taken into account.”
The relevant considerations in court’s exercise of its discretion include first, adequacy of damages. Again, in Alor Janggus, the Supreme Court recognizes that there are losses which cannot be calculated or quantified monetarily, such as loss of goodwill and trade reputation. Second, thru a Malaysian High Court case, the court considered the question of public policy to the effect an injunction against the defendant bank that would impede the development of the Islamic corporate financing sector in the country where the injunction would delay in recovery of loan and not compensated by penalty interest.
Other considerations can be seen in the same case of Tahan Steel where Abdul Ishak J stated that the plaintiff must be prepared to what is right and fair and must shows that its past record in the transaction is clean. This constitutes in the equitable maxim of coming to the court with the clean hands. In this case, the court held that there was more than an impending breach; in fact, there was already a pre-existing breach on the part of the plaintiff and therefore, the court refused to grant the injunction sought.
Delay is also a relevant element to be considered where the effect of delay on the part of plaintiff seeking interlocutory injunction may be calculated to throw considerable doubt upon the reality of his alleged injury. In Alor Janggus, the Supreme Court held that injunction will not be granted if the plaintiff, having sufficient notice of the defendant’s intention to commit the act sought to be restrained, is guilty for unreasonable delay in applying to the court. Further in considering the lapse of time, delay commences to runs from the discovery of circumstances giving the title to the relief.
In the case of interlocutory mandatory injunction, the court has the jurisdiction to grant a temporary mandatory injunction before trial but such jurisdiction shall rarely be exercised except when the case is a very clear one. The court must feel a high degree of assurance that such an injunction will be granted during trial. In fact, the court must consider how the interest of all parties could be best protected, looking at the difficulties faced if the mandatory injunction is granted.
In a High Court case, it is bound with Gibb & Co where the Federal Court had applied a stricter test in the grant of an interlocutory mandatory injunction. Also, in another decided case, with regard to the application for interlocutory prohibitory injunction, the court had applied the principle in the American Cyanamid case, whether there was a serious question to be tried and whether damages were an adequate remedy and the balance of convenience of the case. As regards to the application of interlocutory mandatory injunction, it was said that the principles in American Cyanamid were not applicable. The injunction could not be granted except where the case was very clear and must be decided urgently. The court must be very satisfied that the injunction would be granted during trial.
Perpetual injunction is governed in Sections 52-55 of the SRA. Section 51(2) provides that a perpetual injunction can only be granted by the decree made at the hearing and upon the merits of the suit of each case. In the case of Neoh Siew Eng, water supply for the tenant was stopped due to corroded pipes and the landlord did not repair until a court interim order was issued. The court held that a tenant has right to obtain damages and a perpetual injunction to direct the landlord to ensure the continuity of water supply to the said premises.
Sections 52-55 are limited to perpetual injunctions and not applicable to interlocutory injunctions. In Keet Gerald Francis Noel John, Gopal Sri Ram JCA had agreed with the decision of Edgar Joseph Jr where it said that Section 54 of SRA applies only to applications for a temporary injunction as the instant case. It is clear from a reading of Chapters IX and X of the Act which are entitled “of injunction generally” and “of perpetual injunctions” respectively. Perpetual injunctions may either be mandatory or prohibitory provided in Sections 52-53 of the SRA.
In the case of Mareva Compania Naviera, Lord Denning said that if it appears that debt is due and owing, and there is a danger that the debtor may dispose of his assets so as to defeat it before judgement, the court has jurisdiction in a proper case to grant an interlocutory injunction, or in this case latter called Mareva injunction, as to prevent him from disposing of those assets.
The purpose of a Mareva injunction is to prevent the defendant from defeating the judgement obtained against him by removing his assets out of the jurisdiction of the court or dissipating the assents from the jurisdiction of the court. It is also known as “the freezing order” where it is only to restrain the defendant from dissipating its assets, and does not create a lien or any proprietary right nor does it gives plaintiff security or priority over the assets frozen by the injunction.
A Mareva injunction cannot be misused whereby it may be used to compel the defendant to pay. In the case of Art Trend Ltd, it was held that the Mareva injunction must be set aside as it has been misused by the plaintiff to force the defendant to pay the monies owed.
The guidelines for an application of Mareva injunction were set out in the case of Third Chandris Shipping Corp & Ors where the plaintiff must satisfy the following matters: –
i. provide full and frank disclosure on all matters within his knowledge which are material for the judge to know
ii. provide the full details of his claim against the defendant
iii. provide reasons to believe that the defendant has assets within the jurisdiction of the court
iv. provide reasons to believe that there is a risk that the assets will be removed before the judgement is satisfied
v. provide an undertaking on damages
The jurisdiction to grant Mareva injunction in Malaysia can be seen in the case of Zainal Abidin bin Haji Abdul Rahman where the Federal Court held that the High Court in Malaysia has the jurisdiction to grant a Mareva injunction in appropriate circumstances as the provisions of paragraph 6 of the Schedule to the Courts of Judicature Act 1964 are equivalents to the provisions of Section 45 of the UK Supreme Court of Judicature (Consolidation) Act 1925 and was of the view that “we have a good deal of commercial activity involving foreign parties and the application of the Mareva doctrine is likely to play an important role.”
Mohamed Azmi SCJ in the case of Aspatra Sdn Bhd is in the same opinion of the case above saying that the provisions of Courts of Judicature Act 1964 to be read together with Order 29 of the Rules of the High Court 1980 and Section 50 of the SRA is wide enough to confer the necessary jurisdiction to issue the Mareva injunction prayed for, although Parliament may find it necessary in future to impose whatever limitation it may deem fit in the exercise of that discretionary power.
The Anton Piller Order was originally given in the case of Anton Piller KG where it was an ex parte injunction designed to prevent destruction of articles or documents in one party’s possession which are prejudicial to his case. It was held that the ex parte order requiring the defendant to allow the plaintiff to enter the premises to examine the relevant documents and articles. This is an injunction to prevent breach of copyright or acts of piracy. An Anton Piller order is a hybrid between injunction and discovery process in extremely exceptional circumstances where the ordinary process of getting infringing articles or evidence to be in the possession defendant is not satisfactory.
The application of the Anton Piller order in Malaysia can be seen in the case of Lian Keow where Yusof Rashid J stated that in the most exceptional circumstances, the court has the jurisdiction to order defendant to permit the plaintiff’s representative to enter the defendant’s premises to inspect and remove vital material which the defendant might destroy or dispose of so as to defeat the ends of justice before inter parties application for injunction could be made. In the case of Television Broadcasts Ltd & Ors, the Anton Piller order was granted as the court held that in a piracy case, the criminal law can be sometime be too slow and cumbersome at times for it to be effective.
Omrod J outlined certain conditions in Anton Piller KG of when can Anton Piller order be granted: –
(a) the plaintiff should have an extremely strong prima facie case
(b) the actual and potential damage must be very serious for the appellant
(c) defendant has incriminating articles in his possession
(d) there is a real possibility that he may destroy such material before and application or notice can be made
The court has discretion to grant Anton Piller order to ensure the safety of a document which though by itself is not the subject of the act, was the best possible evidence and the applicant genuinely feared the defendant would destroy it before the hearing.
4. Conclusion
Equitable remedies arise because of the limited effectiveness of the remedy of damages in some cases. Equitable remedies are not usual remedy but rather will be granted in aid of common law rights only when the remedy available at common law that is still inadequate in the circumstances to compensate the plaintiff. Equity acts only as a supplement to the law rights, and will only intervene when necessary to do so.
The principle applied by the courts to decide whether or not to grant relief in the given circumstances, regardless of the relief being sought, reflects one universal underlying factor, namely, a general obligation to relieve against unconscionable conduct.