1. ) YONG YEH FONG 2. ) CHAN KWANG HAU 3. ) KEE JOO EE 4. ) TEE WEI KANG 5. ) FOO KHAR YI 6. ) CHONG SIAU XIAN 7. ) HONG TEIN HWEE 8. ) TAN ZHENG HAO 9. ) KELVIN TING CHENG TAT 10. ) YANG WEN BIN 11. ) LIEW PUA KANG 12. ) CHEN XIAO HUI 13. ) SOO CHING GUAN 14. ) NG KUAN YEONG 15. ) KANNY CHAN WEE SIONG 16. ) ELILIA SEOW 17. ) TEOH JIE SHENG 18. ) LOI WEI LUN 19. ) LIM JIN HOWE 20. ) HON FANG TING 21. ) HON JING KANG 22. ) HON SHUN XIN v WILLIAM CHEONG WAI LUN

Case Significance

Illustrates the requirements for a Mareva injunction in an investment-fraud claim — a good arguable case, assets within the jurisdiction, a real risk of dissipation shown by evidence of a lack of probity, and a plaintiff's undertaking as to damages whose sufficiency need not be proved before the order is granted.

This High Court decision in the Commercial Division at Kuala Lumpur concerns an application for a Mareva injunction to freeze a defendant's assets pending trial. The plaintiffs were a group of individual investors who had invested a total of about USD328,445.87 between January 2022 and September 2023 through one of their number, who was the defendant's point of contact. They alleged that the defendant had made fraudulent misrepresentations that induced them to invest in a scheme, and that by late September 2023 the investment had suffered a total loss. An earlier ex parte freezing order had lapsed for want of timely service and was set aside by consent after the defendant entered an appearance, and the plaintiffs then pursued the application on an inter partes basis.

The court applied the well-established principles governing Mareva relief, whose purpose is to preserve a defendant's assets and prevent their dissipation before judgment. It considered whether the plaintiffs had a good arguable case, whether the defendant had assets within the jurisdiction, whether there was a real risk of dissipation, the evidence of the defendant's lack of probity, and the sufficiency of the plaintiffs' undertaking as to damages. On the undertaking, the court noted that a plaintiff is not generally required to prove its sufficiency before an injunction is granted and will not usually be denied relief merely because the undertaking has little value, having regard to the essential justice of the case; a defendant challenging it must show a real risk of loss.

Satisfied that the elements were met and that the order contained the usual procedural safeguards — allowances for the defendant's ordinary business, living expenses and legal fees, and disclosure of assets — the court granted the Mareva injunction, freezing the defendant's assets up to USD400,000 within and outside the jurisdiction until trial or further order, with costs of RM5,000.00. The judgment illustrates the requirements for Mareva relief in an investment-fraud claim.