The Ayer Molek Case | Part One
Preface: Some time ago, some friends and I noticed there is no comprehensive account of our Malaysian legal history available. There is a void in our national consciousness about the history and developments of its laws, the legal environment and culture in which those developments took place in relation to the bar and bench and its significant personalities. Below is my experiment at writing a chapter about a case I thought was significant in Malaysian legal history to see what it might look like. I have split up the essay into three parts because it is long. This case begins on 10 April 1995. The High Court ordered an ex-parte mandatory injunction order forcing Ayer Molek to register the transfer of 540,000 ordinary shares of Ayer Molek to Insas Berhad and Megapolitan Nominees Sdn Bhd (IBMN); and after that, Ayer Molek had to issue new certificates to IBMN within two days of receiving the share certificates (‘the 10.4.2015 Injunction Order’). The Ayer Molek case is infamous in the annals of Malaysian legal history. So naturally, it possesses several notable features worth discussing. That is what this essay seeks to explore. Two days later, on 12 April 1995, Ayer Molek filed an urgent application to set aside the 10.4.2015 Injunction Order (‘the Setting Aside Application’). It was fixed for hearing the next day, 13 April 1995. However, when the Setting Aside Application came up for hearing the judge, Azmel Maamor J, adjourned it for hearing to 27 April 1995 – 2 weeks later. The adjournment meant Ayer Molek had to comply with the very order it was seeking to set aside. Naturally, Ayer Molek immediately applied for a stay of the ex-parte mandatory order pending the hearing and decision of the Setting Aside Application (‘the Stay Application’). The judge refused the stay application. That and the late hearing date meant Ayer Molek had no choice but to comply with the ex-parte mandatory order. The refusal of the Stay Application was unfair. And it was impossible for Justice Azmel to be unaware of the prejudicial effect his decision had on Ayer Molek. He was, by then, an experienced High Court Judge who graduated with a Bachelor of Laws from the University of Singapore and completed a Masters in International Law in Brussels, Belgium. IBMN was represented by V. Sivaparanjothi and Adam bin Bachek from Messrs V.K. Lingam & Co. According to VK Lingam, he was instructed by Michael Lim, a senior partner in Messrs Shearn Delamore. Insas Berhad was associated with Vincent Tan. Ayer Molek was represented by Loh Siew Cheang and Loo Fong Meng from Messrs Cheang & Ariff. The application for stay of the ex-parte mandatory order in the Court of Appeal On 14 April 1995, Ayer Molek complied with the 10.4.2015 Injunction Order and issued the new shares to IBMN. On 18 April 1995, Ayer Molek appealed against the order dismissing its adjournment application and filed an application for a stay of the ex-parte mandatory order pending their appeal before the Court of Appeal. The bench for the stay application comprised NH Chan, Siti Norma bt Yaakob and KC Vohrah JJCA. KC Vohrah in an article titled, In the Court of Appeal, during the winds of change, which was published in an in-house publication of the Malaysian judiciary in 2014 titled Court of Appeal, 1994 – 2014, 20th Anniversary to mark the Court of Appeal’s 20th anniversary, wrote that Eusoff Chin CJ called a judge into his chambers before the appeal was heard. ‘He (Eusoff) said the papers were related to the Ayer Molek case and he indicated that the appeal had no merit.’ KC Vohrah did not name which judge was called to see Eusoff Chin. He wrote about it being clear the High Court Judge was patently unfair. Although the judgment appears in NH Chan’s name alone, KC Vohrah explained three of them wrote their respective parts of the judgment. NH Chan focused on the abuse of process in the High Court. Siti Norma queried the applications being heard in the Special and Appellate Powers Division of the High Court instead of the Commercial Division. ‘I wrote on the company law aspects of the case involving the transfer of shares’, wrote KC Vohrah. He recalled NH Chan weaving their respective parts into a blistering criticism against the High Court for perpetrating an injustice, which begins ablaze in the opening two paragraphs: This is a motion by the appellants to stay an ex parte mandatory injunction pending appeal to the Court of Appeal. But this case is more than that. This is a case about an injustice which has been perpetrated by a Court of law. This is also a case about abuse of the process of the High Court and, therefore, it concerns the inherent power which any Court of justice must possess to prevent misuse of its procedure and in which the Court has a duty to exercise this salutary power. Although the ex parte mandatory injunction should not have been granted in the circumstances of this case in the first place, that is not the injustice which is revealed in this case. The injustice is manifest: it is to be seen in the form in which the order is framed, the terms of which pre-empt the defendants from exercising their right to apply to discharge an ex parte injunction obtained behind the backs of the defendants. Here the plaintiffs through their legal advisers have abused the process of the High Court by instigating the injustice through misuse of the Court’s procedure by manipulating it in such a way that it becomes manifestly unfair to the defendants. By doing what they did these unethical lawyers have brought the administration of justice into disrepute among right thinking people. [Emphasis mine] NH Chan wrote the following in his judgment about the ex-parte mandatory order: The ex parte order in the instant case which compels compliance of it within two working days and the subsequent conduct of the
