Pelorus Holding Sdn Bhd v Jaffa Roger Dawkins [2020] 12 MLJ 545

 

Pelorus Holding Sdn Bhd v Jaffa Roger Dawkins [2020] 12 MLJ 545

 

High Court

 

 

 

Facts
  1. The Plaintiff entered into a joint-venture agreement (JVA) with the 1st and 2nd Defendants to form a company to carry out a commercial venture i.e. to conduct a business involving livestock supply, integrated farming and breeding etc. The parties agreed that upon the incorporation of the company, named Pelorus-HLG Sdn Bhd, the 3rd Defendant, a company where the 1st and 2nd Defendants were the directors, that carried out the same business as PHLG would cease its operations in order not to compete with the PHLG.

  1. Upon the incorporation of PHLG, the 1st Defendant was the Chief Executive Officer and tasked to manage and operate the day to day affairs of the company.

  1. However the 1st and 2nd Defendants breached the terms in the JVA as follows-

(a)      they failed to repay a sum of RM1 Million advanced to them as a loan for the business venture when the Plaintiff demanded for the repayment;

(b)      they failed to repay the Plaintiff RM 516,972.02 as further loan;

(c)       they were in breach of fiduciary duties as directors when they diverted RM1,188,691.94 from PHLG to the 3rd Defendant in which they have personal interest and;

(d)      they failed to repay the 3rd Defendant’s loan with Agrobank for a sum of RM1,213,,060 that the Plaintiff had advanced to the 1st and 2nd Defendants for the purpose of repaying Agrobank.

  1. The Plaintiff then seeks for a Mareva Injunction against the Defendants in order to restrain the Defendants from disposing or removing the assets of the Defendants from the jurisdiction of the court for the amount of RM3,918,723.96.

1.

 

Issue 1.     Whether the Plaintiff satisfied the requirements for an order in the nature of Mareva Injunction to be granted to the Plaintiff against the Defendants.

 

Ratios 1.     The Plaintiff had satisfied the court that it had a valid cause of action over which this court had jurisdiction-

 

(a)       it had a good, arguable case;

 

(b)       the Defendants’ assets were within the court’s jurisdiction; and

 

(c)       there was a real risk of the assets might be dissipated or removed from jurisdiction which would render the Plaintiff’s action nugatory (worth nothing). The risk was compounded by the fact that D1 was an Australian citizen with a permanent resident status in Malaysia.

 

2.     The balance of convenience favoured the granting of the Mareva injunction. The amount that the Plaintiff sought to injunct was restricted to the amount of its claim. The amount sought by the Plaintiff for the injunction is limited to RM3,918,723.96, as such, any amount that exceeded the said sum will not be affected by the order, if granted. These court has considered the balance of convenience in favour of granting the injunction. The amount that the Plaintiff sought to injunct is the amount the Plaintiff is claiming. In the event the Plaintiff succeeds in its claim, this amount would be able to satisfy the judgment sum. If after the Defendants have disclosed the total amount of their assets and they are not sufficient to match the amount sought by the Plaintiff, the Defendants then could always seek the court to review the sum stated in the injunction order.

 

 

Decision 1.     The court allowed the application to grant Mareva injunction against Defendants but the court modified the spending restrictions on the Defendants. The court took into account the personal financial commitments of the first and second Defendant as well as the running costs of the third Defendant company to meet its daily and monthly expenses.

 

Key Take Away 1.     Order 29 rule 1 Rules of Court 2012 stated that an application for mareva injunction may be made by way of ex parte notice of application supported by an affidavit.

 

  1. Order 29 rule 1(2A) Rules of Court 2012 provide that in urgent cases and before the plaintiff commences any action, the application must be made via a notice of application (Form 57) supported by an affidavit. In most cases, the application is made by an ex parte i.e. made without notifying the Defendant and without requiring the Defendant to be present in court.

–       In the present case, the application was made via inter-partes application.

  1. In most instances, the application is filed even before the Plaintiff files a suit against the Defendant in court.
  2. Order 21 rule 1(2A) Rules of Court 2012 stated that the affidavit in support of the application must contain the following:

 

(a)       the facts giving rise to the claim;

 

(b)       the facts giving rise to the application for an interim injunction;

 

(c)       the facts relied on to justify the application ex parte, including details of any notice given to the other party or, if notice has not been given, the reason for not giving notice;

 

(d)       any answer by the other party (or which he is likely to assert) to the claim or application;

 

(e)       any facts which may lead the Court not to grant the application ex parte or at all; and

 

(f)         the precise relief sought.

 

5.     If the order as per the application is granted by the court were granted, the order (Form 53) will automatically lapse after 21 day.

 

6.     The order must be served to the Defendant within 7 days after it is granted.

 

7.     In the event the application is made before a suit is filed in court, the suit must be filed and issued within 2 days of the granting of the order/ such period as the court sees fit.

 

 

 

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