A Fortuna injunction may be granted where no contractual relationship exists to support a claim of debt, thereby preventing abuse of process.

Introduction

[1] This is an application for a Fortuna injunction filed by the Plaintiff to restrain the Defendant from presenting a winding up petition under s 218 of the Companies Act 1965 against the plaintiff.

Key Background Facts

[2] The Plaintiff is the employer, owner and developer of a project known as the Residensi Tribeca which consists of a 37 storey block of service apartments at Jalan Imbi in Kuala Lumpur ("the Project").

[3] The Plaintiff appointed HVC Hundred Vision Construction Sdn Bhd ("HVC") as the main contractor for the Project. The main contractor was a turnkey contractor for the entire project covering all the construction works. HVC in turn engaged the Defendant as a subcontractor for earthworks, which included reinforced concrete drain diversions, piling and basement substructure works.

[4] The Project is being administered by Veritas Architects Sdn Bhd ("the Architect") and Dr C C Wong Jurutera Perunding as the consultant engineer. The valuation of works on the site is carried out by Perunding Kos T&K Sdn Bhd ("the Quantity Surveyor").

[5] During the course of the construction works, specifically the piling activities carried out by the Defendant, one of the buildings adjacent to the project site, owned by Wagner Piano Sdn Bhd ("Wagner Piano") was claimed to have suffered damage, resulting in the latter instituting a suit to restrain the construction works and claim damages.

[6] There was a delay to the completion of the works by the Defendant with the Architect issuing a Certificate of Non Completion to the main contractor to certify the delay and the imposition of Liquidated Ascertained Damages (LAD). No Certificate of Non Completion was issued to the Defendant. In fact, a Certificate of Practical Completion was issued on 13 March 2015 by the Architect to HVC in relation to the scope of work of the Defendant.

[7] The Defendant, however, on 29 June 2015 issued a Notice pursuant to s 218 of the Companies Act 1965 ("the s 218 Notice") claiming payment of the sum of RM3,976,313.38 from the Plaintiff said to be due under Interim Certificates No. 15, 16 and 17.

[8] The Plaintiff then issued a response on 16 July 2015 stating that the s 218 Notice was issued in bad faith and that there was no debt due from the Plaintiff to the Defendant under the Interim Certificates, highlighting in particular that:-

(i) The interim certificates on which the s 218 Notice was based were qualified and subject to deductions for LAD in the amount of RM1,230,000.00;

(ii) There were damages for defective works in the amount of RM100,000.00;

(iii) The sum was subject to deductions resulting in damage to neighbouring properties as result of poor workmanship including the damage to Wagner Piano where a liability of RM3,825,224.40 has arisen;

(iv) The Plaintiff was entitled to set off a sum of RM1,558,961.12 with respect to the works done by the Defendant.

[9] The Plaintiff then filed these proceedings for a declaration that the s 218 Notice was void and of no effect and for an injunctive relief pending the hearing of the Plaintiff's originating summons.

Summary Of Contentions By Parties

[10] The thrust of the arguments advanced by the Plaintiff to support its application for a Fortuna injunction are twofold. The first is that there is no privity of contract between the Plaintiff and the Defendant to justify the latter issuing a notice of winding up under s 218 of the Companies Act 1965 ("the CA ") dated 29 June 2015 ("the s 218 Notice") in the first place. Secondly, the Plaintiff has a cross-claim against the Defendant in that the amount being claimed in the s 218 Notice is premised on the non-payment of the interim certificates number 15, 16 an