A bona fide dispute over a debt can justify a Fortuna injunction preventing winding-up proceedings, particularly when a cross-claim exceeds the disputed amount.

Introduction

[1] The parties herein have entered into a construction contract where the Defendant (hereinafter referred to as "PTE") had been appointed by the Plaintiff (hereinafter referred to as "SFSB") as the main contractor for a construction project in Penang.

[2] A dispute arose between the parties which led to adjudication proceedings and an adjudication award was handed down on the 22 February 2022. That adjudication award has been the subject matter of various court proceedings to date. There are also currently pending arbitration proceedings between the parties.

[3] PTE then had on 27 October 2022 served a Statutory Notice pursuant to s 466(1)(a) of the Companies Act 2016 (hereinafter referred to as " CA 2016") seeking payment of a sum of RM563.983.10 being the payment due under Payment Certificate No 16 for works done by them on the said project (hereinafter referred to as 'the alleged debt').

[4] SFSB then immediately filed this application on 11 November 2022 for what is commonly referred to as a Fortuna injunction seeking the following relief:

(a) a Declaration that the Defendant's demand against the Plaintiff by way of the Statutory Notice issued under s 466(1)(a) of the Companies Act 2016 dated 27 October 2022 for a claim amounting to RM563,983.10 ("Statutory Notice dated 27 October 2022") is a disputed debt and null and void;

(b) a Declaration that the Defendant is not entitled to present a winding up petition for the winding up of the Plaintiff pursuant to the Statutory Notice dated 27 October 2022;

(c) an Injunction be granted to restrain the Defendant whether by themselves, their employees, servants or agents or otherwise, from presenting any petition under ss 465 and 466 of the Companies Act 2016 to wind up the Plaintiff pursuant to the Statutory Notice dated 27 October 2022;

(d) an interim Injunction be granted to restrain the Defendant whether by themselves, their employees, servants or agents or otherwise, from presenting any petition under ss 465 and 466 of the Companies Act 2016 to wind up the Plaintiff pursuant to the Statutory Notice dated 27 October 2022 pending the disposal of the Plaintiff's Application herein;

(e) an Injunction be granted to restrain the Defendant whether by themselves, their employees, representatives, agents or solicitors from presenting any petition under s 465 and 466 of the Companies Act 2016 to wind up the Plaintiff pursuant to the Statutory Notice dated 27 October 2022;

(f) in the event the Defendant has already presented a Winding Up Petition against the Plaintiff, an Injunction be granted to restrain the Defendant whether by themselves, their employees, representatives, agents or solicitors from proceeding with the Winding Up Petition which may be presented to this Honourable court or to any court against the Plaintiff based on the entire amount which is demanded by way of the Statutory Notice dated 27 October 2022;

(g) the costs of and occasioned by the Originating Summons be paid by the Defendant to the Plaintiff; and

(h) that parties be at liberty to apply.

[5] The application was supported by an affidavit and parties thereafter exchanged affidavits setting out therein the background facts and their respective positions/contentions.

[6] Upon full consideration of the facts and the applicable law and upon hearing learned Counsel with the aid of their extensive written submissions, I had on 13 January 2023 allowed SFSB's application and issued the injunction sought and granted order in terms of the Plaintiff's Originating Summons.

[7] I will now provide detailed reasons for having allowed SFSB's ap