1. ) AHMAD SAHRIN BIN HUSSIN 2. ) AHMAD ZULFAISAL BIN JAMALUDIN v 1. ) MUHAMMAD BIN ABDULLAH 2. ) AZMARK HOLDINGS SDN BHD

Case Significance

Applies the Keet Gerald framework to refuse an interlocutory injunction in a corporate control dispute, holding that statutory records contradicting a claimed shareholding, the adequacy of damages, the balance of convenience and a want of full and frank disclosure all weighed against equitable relief.

This High Court decision at Shah Alam concerns an appeal against the refusal of an interlocutory injunction in a corporate control dispute. The plaintiffs sought a wide-ranging injunction to restrain the defendants from carrying out any business transactions, dealings or use of assets through a company, Sixtyninez Development Sdn Bhd, from the filing of the writ until the final disposal of their main action. In that action the plaintiffs sought, among other things, to invalidate a share acquisition offer, to remove the first defendant as managing director, to cancel shareholdings held by the second defendant and to be reinstated to management, asserting that they had retained ownership or a beneficial interest in the company and that the defendants had misused it. The defendants responded that the plaintiffs had resigned as directors years earlier and had divested all their shares, and that the company had been lawfully acquired and managed. Applying the established framework for interlocutory injunctions, including the guidance in Keet Gerald Francis Noel John v Mohd Noor bin Abdullah, the Court examined whether there was a bona fide serious question to be tried, whether the plaintiffs had the locus standi and the legal or beneficial interest they claimed, whether damages would be an adequate remedy, and where the balance of convenience lay. It found that the company's statutory records contradicted the plaintiffs' claim to a continuing interest, that damages would be an adequate remedy, and that the balance of convenience decisively favoured the defendants, since granting the injunction would paralyse the company's operations while its refusal caused the plaintiffs no real prejudice. The Court also noted that equitable relief requires clean hands and full and frank disclosure, which was wanting where the plaintiffs had failed to disclose material facts including substantial payments received. An interlocutory injunction being a discretionary and temporary remedy, the Court declined to grant one that would have caused far greater injustice to the defendants than any the plaintiffs could credibly claim. The appeal was dismissed.