MAY 22 — Dr Ong Tze Chin, Senior Lecturer at the Faculty of Law, Universiti Malaya has identified public law injunction as a critical tool for regulatory bodies to protect the collective interests of online users. 

Such an injunction should serve “as an immediate ‘emergency brake’, allowing regulators to bypass procedural delays and legally compel platforms to freeze scam accounts or remove deceptive advertisements in real-time”.

It would allow public law enforcement to prevent the “systemic unfair commercial practices that threaten users’ safety and economic stability”.

Citing the so-called landmark case of Zschimmer & Schwarz GMBH & Co. KG Chemische Fabriken v Persons Unknown and Mohammad Azuwan bin Othman (t/a Premier Outlook Services) where the High Court has established a precedent for granting injunctions against “Persons Unknown”, Dr Ong suggested that public law injunctions can be utilised to combat anonymous cybercrime and scam advertising.

“By deploying injunction alongside statutory investigations, it can prevent widespread financial loss while the more time-consuming work of evidence gathering and compliance auditing continues in the background,” wrote Dr Ong.

In Zschimmer & Schwarz, the plaintiff, a German company, was a victim of a cross-border cyber fraud known as “push payment fraud” where through exchanges of emails, the fraudster, who was the first defendant (described as “Persons Unknown”), deceived the plaintiff into making payment of €123,014.65 (RM590,470.32) into a CIMB bank account in Malaysia.

The plaintiff thought it was making a genuine payment to its South Korean counterparty for a commission payment. Instead, the fraudster siphoned the plaintiff’s monies away. The CIMB bank account was in the name of the second defendant, a sole proprietor.

The judgment of the High Court was in respect of two broad reliefs sought by the plaintiff on an urgent ex parte basis via a hearing through the e-review platform, the first of which was a proprietary injunction and Mareva injunction relief against the defendants.

Judicial Commissioner Ong Chee Kwan (now Judge of Court of Appeal) ruled that the court could grant parallel reliefs of a proprietary injunction and a Mareva injunction, which is a freezing injunction, as often done in fraud cases. 

The learned judge further ruled that the balance of convenience was in favour of the grant of the proprietary injunction. 

The plaintiff’s monies had been paid out under a false premise. These monies should be injuncted pending the determination of the plaintiff’s action against the defendants.

As for the requirements for the grant of a Mareva injunction, the learned ruled that the plaintiff had not only met the requirements under Order 29 rule 1(2A) of the Rules of Court 2012 (ROC), but had also incorporated the necessary guidelines and safeguards in the order for a Mareva injunction.

Given that the defendants were likely to have assets in the jurisdiction and that there was already actual dissipation of assets, and not just the risk of assets being removed from the jurisdiction — requirements for the grant of a Mareva injunction – the learned judge granted the reliefs sought by the plaintiff.

Be that as it may, the injunctions granted by the learned judge were clearly ex parte pursuant to an ex parteapplication — that is, an application made by a party to the cause or matter without the attendance of the other party. 

The reference by the learned judge to Order 29 rule 1(2A) ROC makes it even more explicit that the injunctions were ex parte as rule 1(2A) is relevant to ex parte applications only. It has no application or relevance in inter partes applications.

The quagmire is this: the general lifespan of an ex parte injunction is 21 days and this period is mandatory. 

Consequently, an ex parte injunction will automatically lapse at the end of that period. 

In the absence of any application to revoke or set aside the injunction, it will automatically lapse at the end of 21 days from the date on which it was granted, unless extended by an inter partes application.

Were injunctions granted by the learned judge extended by an inter partes application?

Clearly, there are limitations to the so-called public law injunctions such as those granted by the High Court in Zschimmer & Schwarz.

* This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.