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01 Equity - Assignment 1
01 Equity - Assignment 1
LXEB 3110
Assignment (25%)
‘The Courts in their equitable jurisdiction have more scope for developing the
law in a conscionable manner than they have in their common law jurisdiction.’
With reference to the abovementioned statement, the author of this paper will:
1Gary L. McDowell, ‘Equity and the Constitution: The Supreme Court, Equitable Relief and
Public Policy’. 31
2Ibid; Philip H. Pettit, ‘Equity and the Law of Trust’ 7th Edition 4; A Mason, The Place of Equity
and Equitable Doctrines in Contemporary Common Law World: An Australian perspective’.
3 F.W Maitland. Equity, 2nd (Brunyate) ed, 18.
4 Ibid.
5 Refer to question presented of this paper.
PART I
Equitable Jurisdiction
Historically, the court of Chancery did not have any clearly defined
jurisdiction, but dispensed an extraordinary justice remedying the defects of the
common law on grounds of conscience and natural justice. 6 Now, the key
question is, what is conscience? In Cobbe v Yeoman’s Row, Lord Walker
explained that conscience is an ‘objective value judgement on behaviour’.7 In
other words, it is an objective moral baseline against which to judge behaviour.
PART II
Long before Civil Law Act 1956 (hereinafter referred as ‘CLA’). has came
into force, it was said the English rules of equity as administered by the Court
of Chancery, have no application in the Federated Malay States. However, as
per Terrel Ag. CJ in Motor Emporium v Arumugam held that, every court must
have inherent jurisdiction to do justice between the parties, and apply such
principles as are necessary or desirable for attaining such object, and for giving
decisions which are in conformity with the requirements of the social conditions
of the community where the law is administered. In other words, it would be
unreasonable to exclude the English principle in this sense.11
Formal importation of English common law and the rules of equity into
local system was made through CLA. The judges in our country are allowed to
make reference to the court case as administered in England on specified cut-
off-dates.12 It is also worth noting that English law shall only apply when there
is an absence of local statutes and so far as the local circumstances of the
states of Malaysia permit.13
In Lian Keow’s case,16 the court held that NLC does not abrogate the
principles of equity but alters the application particular rules of equity in so far
as is necessary to achieve its special objects. In this way, the court is entitled
to exercise jurisdiction in personam to insist upon proper conduct in accordance
with equitable principles and norms.17
20
Chor Phaik Har v Choong. [1996] 2 MLJ 206 at 217; Boustead Trading Sdn Bhd v Arab-
Malaysian Merchant Bank Bhd [1985] 3 MLJ 331 at p 344.
21Lim Teng Huan v Ang Swee Chuan; Cheng Hang Guan v Perumahan Farlim; Ramsden v
Dyson; Boustead Trading v Arab Malaysia Merchant Bank [1985] 3 MLJ 331
22Amalgamated Investment [1982] 1 QB 84 at p 105. See also Habib Bank Ltd v Habib Bank
AG Zurich [1981] 2 ALL ER 650, where the court held, ‘estoppel by conduct…is essentially the
application of rule by which justice is done where the circumstances of the conduct and
behavior of the party to an action are such that it would be wholly inequitable that he should be
entitled to succeed in the proceeding.’
23 [195] 3 MLJ 331.
Here, the court’s point on this matter, albeit obiter, is important to
illustrate the moving away from the traditional approach of promissory
estoppel24 based on reliance and detriment towards a more flexible notion of
unconscionability.25
In Boustead,26 the court reiterates that this doctrine is of both wide utility
and flexible applicable to prevent a litigant from asserting that there was no
valid and binding contract between him and his opponent, which was
subsequently reiterated in Teh Poh Wah v Seremban Securities Sdn Bhd,27
that this doctrine is no longer restricted to defendant but ‘plaintiff too may have
recourse to it’ which seems to suggest the use of Promissory Estoppel as a
sword instead as a shield.28 These are strong indication to the Malaysian courts’
readiness to extend the use of promissory estoppel to non-contracting parties.29
Over the time, the jurisprudence that was originally applied to trustees
and beneficiaries was extended on a case-by-case basis to other relationships
akin to a trust, which came to be known as a fiduciary relationship. 31 Here,
flexibility of approach is the hallmark of equity. Therefore, equity had refrained
from laying down any strict rules for determining fiduciary relationship.32 This
doctrine had also departed from its traditional relationship and extended to
protect the right of indigenous peoples.33
Hence, it can be seen that the court had develop the law in a
conscionable manner to protect the parties which is in vulnerable position with
the emphasis of flexibility of equity.
a. Injunction
For the purpose of this paper, the author will only focus on the
development of Mareva injunction in Malaysia.
b. Mareva injunction
38 Filati Lastex Elastofibre (M) Sdn Bhd v Nikseng [2009] 8 MLJ 374.
39The reason being is because there are certain losses, i.e. loss of goodwill and reputation are
hard to be taken in to monetary account.
40 Cardile v LED Builders Pty Ltd (1999) [190.5-035].
41 Lister and Co. v Stubbs (1890) 45 Ch.D 1 at p 13 where the court held ‘ you cannot get an
injunction to restrain a man who is alleged to be a debtor from parting with his property.’
42 Nippon Yusen Kaisha v Karageorgis [1975] 3 ALL ER 282.
43 Mareva Compania Naviera S.A International Bulkcariers S.A [1975] 1 WLR 1093.
44 [1975] 3 ALL ER 282
assets of a defendant in advance of judgment, or to restrain the disposal of
them…It seems to me that the time has come when we should revise our
practice.’
Two common features of the early cases on Mareva injunction are that
they involved shipping disputes and defendants who were located outside
England. Now, the use of the Mareva injunction was soon extended to other
areas of commercial disputes.47
45
Ninemia Maritime Corporation v Trave Schiffahrtsgessellschaft MBH & Co KG [1984] 1 ALL
ER 398.
46Pressurefast Ltd v Hall and Brushett Ltd (Court of Appeal) Transcript No. 336 of 1993 (March
9,1993), the court was in the view that they will consider the totality of the circumstances
surrounding the case before proceeding to grant a Mareva Injunction.
47 Chartered Bank v Daklouche [1980] 1 ALL ER 205.
48 Zuraidah Ali: ‘Mareva Injunction as a Preventive Relief: The Malsysia Experience’ (2009) 17
IIUMLJ 225.
49 Zainal Abidin bin Haji Abdul Raphman v Century Hotel Sdn Bhd [1982] 1 MLJ 260.
50 In his judgment, Raja Azlan CJ held that ‘In such a situation where foreign businessmen
including foreign multinational corporations have injected large sums of money and have
substantial assets in this country, it would be a potential vehicle of injustice if the plaintiff is
denied the facilities afforded by a Mareva injunction against the foreign defaulter who may try
to dissipate his funds and assets in this country.’
51Schedule of the Courts of Judicature Act 1964, Order 92 Rule 4 of the Rules of High Court
1980, Order 29 of the Rules of High Court and s 50 of the SRA. When Order 92 Rule 4 of the
injunction is no longer an issue as it has been proven in a series of cases in
Malaysia.52
Rules of the High Court 1980 provides ‘ For the removal of doubts it is hereby declared that
nothing in these rules shall be deemed to limit or affect the inherent powers of the Court to
make any order as may be necessary to prevent in justice or to prevent an abuse of the process
of the court.’
52
Zainal Abidin (supra 48); Pacific Centre Sdn Bhd v United Engineers Malaysia Bhd [1984] 2
MLJ 143; Aspatra Sdn Bhd & 21 Ors v Bank Bumiputra Malaysia Bhd & Anor [1988] 1 MLJ 97.
53 Bank Bumiputra Malaysia Berhad & Ors v Lorraine Osman & Ors [1985] 2 MLJ 236.
54 Kwasho International (HK) Ltd v Jayawealth Sdn Bhd & Ors [1992] 2 CLJ 1213 at p 1217.
55 Dato Kam Woon Wah v Mohd Jalil bin Sarip [1998] 2 MLJ 201.
56Here, the judge refused to follow the decision in Lee Kuan Yew v Tang Lian Hong. While the
court applied the conventional approach of good arguable case, or that there are serious
questions to be tried. Further, they have to prove by ‘solid evidence’ that there is a real risk of
a defendant dissipating his assets here and abroad, before a judgement or award is satisfied.
57 RHB Bank Bhd v Zalifah Juan & Anor [2005] 4 CLJ 430.
all such applications.58 It has been reiterated by Gopal Sri Ram JCA in Hock
Hua Bank (Sabah)’s case, 59 that a higher standard of proof is required for
Mareva injunction as compared to usual application for an ordinary injunction.
CONCLUSION
All in all, it can be seen that Mareva injunction is one of the powerful
tools in the form of preventive relief in Malaysia as it can be extended to cover
fields from commercial law to personal disputes which is indeed ‘one of the
law’s two nuclear weapons’. 60 However, as Mareva injunction can have
significant repercussions on the defendant, the court shall examine the case
scrupulously before granting a Mareva injunction.61
58Aspatra v Bank Bumiputra Malaysia Berhad [1988] 1 MLJ 97; Algemene Bank Nederland
N.V v metromewah Sdn Bhd & 3 ors [1991] 2 CLJ 1493; Ang Chee Huat v Engelbach Thomas
Joseph [1995] 2 MLJ 83; Creative Furnishing Sdn Bhd v Wong Koi [1989] 2 MLJ 153; Pacific
Centre Sdn Bhd v United Engineers (Malaysia) Bhd [1984] 2 MLJ 143; Yukilon Manufacturing
Sdn Bhd [No.4] & Anor v Dato Wong Gek Meng & Ors [1998] MLJU 60.
59 Hock Hua Bank (Sabah) v Yong Liuk Thin [1995] 2 MLJ 213.
60 Bank Mellat v Nikpour [1985] FSR 87.
61 Wako Merchant Bank (Singapore) Ltd v Lim Lean Heng & Ors [2003] 5 MLJ 233.
LIST OF CASES
Algemene Bank Nederland N.V v Metromewah Sdn Bhd & 3 ors [1991] 2 CLJ
1493.
Amalgamated Investment [1982] 1 QB 84.
Ang Chee Huat v Engelbach Thomas Joseph [1995] 2 MLJ 83.
Aspatra Sdn Bhd & 21 Ors v Bank Bumiputra Malaysia Bhd & Anor [1988] 1
MLJ 97.
Bailey v Angove’s PTY Ltd [2016] UKSC 47.
Bato Bagi & Ors v Kerajaan Negeri Sarawak & Anors [2011]
Beddow v Beddow (1858) 25 Beav 140.
Boustead Trading Sdn Bhd v Arab-Malaysian Merchant Bank Bhd [1985] 3 MLJ
331.
Boustead Trading v Arab Malaysia Merchant Bank [1985] 3 MLJ 331.
Cardile v LED Builders Pty Ltd (1999) HCA 18.
Chartered Bank v Daklouche [1980] 1 ALL ER 205.
Cheng Hang Guan v Perumahan Farlim [1993] 3 MLJ 352.
Chor Phaik Har v Choong. [1996] 2 MLJ 206.
Cobbe v Yeoman’s Row Management Ltd [2008] 1 WLR 1754.
Creative Furnishing Sdn Bhd v Wong Koi [1989] 2 MLJ 153.
Dato Kam Woon Wah v Mohd Jalil bin Sarip [1998] 2 MLJ 201.
Dawsons Bank v Nippon Menkwa Kabushiki Kaisha LR 62 IA 100.
Ewing v Ewing & Ors (1883) 9 App. Cas 34, 40.
Filati Lastex Elastofibre (M) Sdn Bhd v Nikseng [2009] 8 MLJ 374.
Gardner v Siau Kuan Chia (1912) Innes 159;
Habib Bank Ltd v Habib Bank AG Zurich [1981] 2 ALL ER 650.
Haywood v Cope (1878) 9 Ch D 89.
HG Warren v Tay Seng Geok & Ors. [1965] 1 MLJ 44.
Hock Hua Bank (Sabah) v Yong Liuk Thin [1995] 2 MLJ 213.
Hospital Products Ltd v US Surgical Corporation (1984) 156 CLR 41.
Hughes v Metropolitan Railway Co (1877) 2 AC 439.
Kwasho International (HK) Ltd v Jayawealth Sdn Bhd & Ors [1992] 2 CLJ 1213.
Lamare Dixon [1873] LR 6 HL 414.
Lian Keow Sdn Bhd & Anor v Overseas Credit Finance (M) Sdn Bhd & Ors
[1988] 2 MLJ 449.
Lim Teng Huan v Ang Swee Chuan [1992] 1 WLR 1306.
Lister and Co. v Stubbs (1890) 45 Ch.D 1.
Malayan United Finance Bhd v Tay Lay Soon [1991] MLJ 504.
Mareva Compania Naviera S.A International Bulkcariers S.A [1975] 1 WLR
1093.
Motor Emporium v Arumugam [1933] MLJ 276.
Ninemia Maritime Corporation v Trave Schiffahrtsgessellschaft MBH & Co KG
[1984] 1 ALL ER 398.
Nippon Yusen Kaisha v Karageorgis [1975] 3 ALL ER 282.
Oh Hiam & Ors v Tham Kong [1980] 2 MLJ 164.
Pacific Centre Sdn Bhd v United Engineers (Malaysia) Bhd [1984] 2 MLJ 143
Pacific Centre Sdn Bhd v United Engineers Malaysia Bhd [1984] 2 MLJ 143
Pressurefast Ltd v Hall and Brushett Ltd (Court of Appeal) Transcript No. 336
of 1993 (March 9,1993)
Ramsden v Dyson (1866) L.R. 1 H.L 129.
Registrar of Titles, Johore v Temenggong Securities Ltd [1976] 2 MLJ 44.
RHB Bank Bhd v Zalifah Juan & Anor [2005] 4 CLJ 430.
Sagong Tasi & Ors v Government of Selangor & Anors [2002] 2 MLJ 591;
Teh Poh Wah v Seremban Securities Sdn Bhd [1996] 1 MLJ 701.
Tengku Abdullah Ibni Sultan Abu Bakar v Mohammad Latiff [1995] 3 CLJ 77.
Than Kok Leong v Low Kim Hai [1983] 1 MLJ 187.
UMBC Bhd & Anor v Pemungut Hasil Tanah, Kota Tinggi [1984] 2 MLJ 87.
Wilkins & Ors v Kannammal [1951] MLJ 99.
Wong See Leng v Sarawhathy Ammal (1954) MLJ 20.
Yukilon Manufacturing Sdn Bhd [No.4] & Anor v Dato Wong Gek Meng & Ors
[1998] MLJU 60.
Zainal Abidin bin Haji Abdul Raphman v Century Hotel Sdn Bhd [1982] 1 MLJ
260.
LEGISLATIONS
BOOKS
3. Mohsin Hingun, Wan Azlan Ahmad. ‘Equity and Trusts in Malaysia’ 2nd
Edition. Chapter XIII ‘Injunction’.
ARTICLES