A Fortuna Injunction requires proof of irreparable damage and no chance of success for the winding up petition; failure to establish a bona fide dispute on the debt results in dismissal of the injunction application.

Introduction

[1] It is axiomatic that the raison d'etre for the granting of an injunction to restrain a presentation of a winding up petition, commonly referred to as a Fortuna Injunction, is to prevent an abuse of process of court. In Fortuna Holdings Pty Ltd v. The Deputy Commissioner of Taxation of the Commonwealth of Australia [1978] VR 83, the juridical basis for the relief was elucidated by McGarvie J of the Supreme court of Victoria. In this regard, a Fortuna Injunction deserves it rightful place in the annals of civil practice and procedure. Its continued application warrants support. While a Fortuna Injunction may prevent one party from abusing the process of court and inflict irreparable harm on the other party, it may, needless to say, be equally exploited or abused by a party seeking such an order.

[2] This court notes with curiosity the increasing number and the regularity in which applications for Fortuna Injunctions have been and are being filed by parties seeking intervention by the Courts. This can only mean one of two things. It is either attempts by parties to abuse the process of court through the filing of unfounded winding up petitions have increased with marked frequency or groundless applications to prevent parties from rightfully presenting their petitions for winding up have congruently increased. The latter too is an abuse of the process of court.

The Ex Parte Application Before This court

[3] The plaintiff vide an Ex Parte Originating Summons application filed on 19 April 2023 had sought a Fortuna Injunction against the defendant. A certificate of urgency that accompanied the Ex Parte Originating Summons was filed on the same date.

[4] The hearing of the ex parte application took place on 20 April 2023. I allowed the ex parte application and fixed 2 May 2023 to hear the application inter partes, that is, within fourteen days from the date of the order that I have made. This is mandated by O 29 r 1(2BA) of the Rules of court 2012.

The Inter Partes Application Before This court

[5] On 1 May 2023, the defendant had filed two Notices of Application in encls 6 and 7. The application in encl 6 was for the setting aside of the Ex Parte Order made on 20 April 2023. The order sought in encl 7 was for the original Ex Parte Originating Summons to be struck out. Counsel for the defendant objected to the application in encl 7 and the parties were directed to exchange affidavits and file their written submissions and authorities by 9 May 2023, with the hearing for both encls 6 and 7 adjourned to 10 May 2023.

[6] On 10 May 2023, after hearing the submissions by counsel for the opposing parties, I allowed the defendant's application in encl 6 and dismissed the plaintiff's application in encl 1 with costs. The reasons for the dismissal of the application are clarified in the ensuing paragraphs.

The Basis For The Plaintiff's Application

[7] In support of its application for a Fortuna Injunction to prevent the defendant from filing a petition to wind up the plaintiff company, the plaintiff had relied on the following grounds, namely, that:

(1) The defendant had issued a statutory notice of demand under s 466 of the Companies Act 2016 ;

(2) The defendant's notice of demand was based on two Adjudication Awards dated 5 December 2022 and 29 December 2022;

(3) The said Adjudication Awards are disputed by the plaint