High Court awards injunctive relief, declaratory relief and damages to Petronas Gas in claim against factory operators

On 8 April 2019, the Johor Bahru High Court awarded injunctive relief, declaratory relief and damages to Petronas Gas Bhd (‘plaintiff’) against DWZ Industries (Johor) Sdn Bhd and DWZ Industries Sdn Bhd (‘defendants’) in a case that involved the illegal release of untreated hazardous and toxic waste from a factory onto neighbouring lands and inland waters. The case has just been reported in Petronas Gas Bhd v DWZ Industries (Johor) Sdn Bhd & Anor [2020] 2 CLJ 694 and is one of the few reported decisions in Malaysia for a civil action for damages arising from breaches of the Environmental Quality Act 1974.
The plaintiff was the owner of a strip of land under which ran a pipeline used by the plaintiff to transport natural gas. This particular pipeline was part of a large pipeline network that stretched from Segamat to Plentong. The defendants, who were related companies, owned an adjacent piece of land upon which they operated a factory to carry out their business of providing surface finishing for metal parts and electroplating services.
In October 2015, a field joint in the pipeline ruptured and burst, causing a large gas cloud to spew from the ground. Consequently, the plaintiff decommissioned the pipeline to carry out excavation and rectification work. During the excavations it was discovered that a foreign liquid substance (‘industrial effluent’) was seeping out of a hole in the trench wall of the excavated area. This led to investigations by the plaintiff together with the Department of Environment which found an illegal underground by-pass located on the plaintiff’s land that was leading from the defendants’ factory towards a nearby river. There was residual industrial fluid in this illegal by-pass with an extremely acidic rating of pH2.
The plaintiff brought a claim against the defendants, alleging that the discharge of industrial effluent from the defendants’ factory by way of the illegal by-pass on the plaintiff’s land had leaked thereby causing the field joint in the pipeline to corrode and rupture. In its defence, the defendants averred that the damage to the pipeline was instead due to the absence of a heat shrink leave on the damaged field joint, and that the corrosion had occurred due to the naturally acidic nature of the soil.
The High Court took a robust objection against the discharge of such harmful and dangerous chemicals, and therefore found the defendant to be liable for negligence, trespass, and under the Rylands v Fletcher rule. As such, the High Court awarded damages to the plaintiff for inter alia the cost of remedial work, consumable items and raw materials, the cost of the plaintiff’s man-hours expended, the cost of replacement of the damaged pipe, and the cost of permanent repair works on the pipeline.  
Further, the High Court issued declarations that the defendants had unlawfully entered the plaintiff’s land to construct the illegal by-pass and that the defendants had wrongfully discharged industrial effluent onto the plaintiff’s land. The High Court also issued permanent injunctions to restrain the defendants or their agents from entering the plaintiff’s land to construct any form of piping, and from discharging any further industrial effluent or any other substance onto the plaintiff’s land.
The plaintiff was represented by our Partners Ivan Loo and Shannon Rajan, Senior Associate Tatvaruban Subramaniam, and Associate Eric Gabriel Gomez.