A Fortuna Injunction can be granted if a winding-up petition is based on a disputed debt, preventing irreparable harm to the company.

Introduction

[1] The Plaintiff in its Originating Summons sought a Fortuna Injunction to restrain the Defendants from presenting a winding up petition against it.

[2] This Court allowed the Plaintiff's application and the Defendants have filed an appeal against that decision.

The Pertinent Issues

[3] The principal issue for determination is whether the Plaintiff is entitled to the relief sought.

[4] Arising from the above dominant issue is the following subsidiary question, namely, whether there is an undisputed debt.

The Apposite Background Facts

[5] The origin of this case can be traced to as far back as 23 years ago.

[6] It involved claims initiated by the Defendants, who were purchasers of commercial properties in a development project developed by the Plaintiff.

[7] The Plaintiff had abandoned the construction of the development project and this resulted in the Defendants initiating proceedings vide Civil Suit MT-3-22-573-2003 against the Plaintiff. The Plaintiff had sought to terminate the Sale and Purchase Agreements and for damages to be assessed.

[8] On 3 December 2010, the High Court granted judgment in favour of the Defendants and ordered for damages to be assessed.

[9] That decision of the High Court was affirmed by the Court of Appeal on 3 October 2011.

[10] On 29 July 2011, the Defendants filed an application for assessment of damages.

[11] On 17 September 2019, the learned Senior Assistant ordered the Plaintiff to pay to the Defendants damages for (i) the out-of-pocket expenses; (ii) the total bank loan sum pursuant to the respective Loan Agreements; (iii) pre judgment interest at the rate of 10% per annum under s 11 of the Civil Law Act 1956 ; and (iv) post judgment interest of 5% per annum under O 42 r 12 of the Rules of Court 2012, calculated from 4 December 2010 until full settlement by the Plaintiff.

[12] As of the date of the Order made by the learned Senior Assistant Registrar, the total sums payable by the Plaintiff to the Defendants was RM10,365,862.00.

[13] It is crucial to note that the Plaintiff had appealed against the decision of the Senior Assistant Registrar's Order relating to the s 11 of the Civil Law Act 1956 and the O 42 r 12 of the Rules of Court 2012 interest claims to the High Court where the High Court allowed the Plaintiff's appeal on the s 11 of the interest claims but dismissed the Plaintiff's appeal on the O 42 r 12 of the Rules of Court 2012 interest claims Both the Plaintiff and Defendants appealed against the decision of the High Court and on 16 January 2023, the Court of Appeal reinstated the Senior Assistant Registrar's Order of 17 July 2019.

[14] It should also be noted that pending the disposal of the abovementioned appeals, the parties had also entered into a Consent Order for a conditional stay of the Senior Assistant Registrar's Order of 17 July 2019.

[15] One of the key terms of the Consent Order which was dated 19 February 2020 was that the judgment sum of RM10,365,862.00 be deposited into the fixed deposit joint interest-bearing solicitors' account to the Defendants.

[16] Upon all the appeals having been disposed off (by the Court of Appeal) on 16 January 2023, the parties agreed for the AmBank Berhad to release the Judgment Sum of RM10,365,862.00 together with the interest accrued in the fixed deposit joint interest-bearing solicitors' account to the Defendant