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2009 MarsdenLR 2759

COURT OF APPEAL PUTRAJAYA
WESTFORM FAR EAST SDN BHD – Appellant
Versus
CONNAUGHT HEIGHTS SDN BHD – Respondent
[Civil Appeals Nos: W-03-212-2006 W-03-213-2006 W-03-214-2006 & W-03-215-2006]



Compliance with procedural rules for ex parte injunctions is mandatory; failure to notify adversely affects the validity of such applications.

Headnote:(A) Companies Act 1965 - Section 218 - Appeals against High Court orders for inter partes injunctions restraining winding-up petitions - Compliance with r. 1(2A)(c) of the Rules of the High Court 1980 held as mandatory; failure to give notice for ex parte injunctions deemed fatal - Grounds of judge's decision emphasised importance of a genuine bona fide dispute to prevent abuse of court process. (Paras 1, 2, 25, 40-42)

(B) Appeal - Legal principles governing injunctions to restrain winding-up petitions - Right of a would-be petitioner to apply for winding-up orders upheld unless abuse of process is established. (Paras 80-82)

Facts of the case:
Defendant filed s. 218 notices alleging debts owed by respondent; respondent contested those debts asserting genuine disputes and sought injunctions to prevent winding-up petitions based on the alleged debts. (Paras 12-18, 52-58)

Findings of Court:
High Court's exercise of discretion in granting inter partes injunctions was justified as the potential petitions were found to constitute abuses of process due to substantive debts owed by the defendant counter to those claimed. (Paras 40-42, 92)

Issues: Whether genuine disputes existed regarding the debts claimed by the defendant and the implications of the lack of notice on ex parte applications. (Paras 40-41, 75)

Ratio Decidendi: Ex parte applications must comply with procedural rules, particularly with regard to notice requirements; injunctions against winding-up petitions must be based on principle that petitions should not be abused and prima facie disputes must be demonstrated. (Paras 57-58, 91)

Result: Appeals W-03-213-2006 and W-03-214-2006 allowed; appeals W-03-212-2006 and W-03-215-2006 dismissed.

Table of Content
1. four appeals filed by the appellant. (Para 1 , 2)
2. importance of notice in ex parte injunctions. (Para 3 , 4 , 5 , 6)
3. details of contracts and agreements between parties. (Para 8 , 12)
4. justification for urgency in requesting injunction. (Para 9 , 10 , 11)
5. arguments concerning the existence of a bona fide dispute. (Para 18 , 19 , 20)
6. disputed debts outlined by the respondent. (Para 30 , 31)
7. court's discretion in granting injunction applications. (Para 40 , 41)
8. requirement for presenting sufficient urgency in ex parte applications. (Para 66 , 67 , 68)
9. evaluation of abuse of process in relation to winding up petitions. (Para 80 , 84 , 91)
Suriyadi Halim Omar JCA:

[1] There were four appeals filed by the defendant (hereinafter referred to as the appellant) before us viz .:

i. W-03-212-2006 against the learned judge's order dated 20 November 2006, which inter alia granted an inter partes injunction restraining the appellant from presenting a winding-up petition against the plaintiff (hereinafter referred to as the respondent) for the sum of RM3,371,251.17 stated in a notice under s. 218 of the Companies Act 1965 under interim certificate 42;

ii. W-03-213-2006 against the learned judge's orders inter alia for not holding that failure to give notice to the appellant for the earlier ex parte application for injunction based on the above notice of s. 218 of the Companies Act 1965 was fatal;

iii. W-03-214-2006 against the learned judge's order dated 20 November 2006 dismissing the appellant's application to set aside the ex parte injunction order of 25 August 2006 relating to a notice under s. 218 of the Companies Act 1965 for a sum of RM711,993.69; and

iv. W-03-215-2006 filed by the appellant against the learned judge's order dated 20 November 2006, which inter alia granted an inter partes injunction to restrain the appellant from presenting a winding-up petition against the respondent for the above sum of RM711,993.69.

[2] We heard all the four appeals and at the conclusion of the hearing unanimously dismissed appeals W-03-212-2006 and W-03-215-2006. By majority, we likewise dismissed W-03-213-2006 and W-03-214-2006. Deposits of these appeals went towards the account of taxed costs.

[3] Before touching on the facts of the appeals I would like to briefly discuss the issue of want of notice for the ex parte injunctions, which was vehemently ventilated by the appellant. The appellant had submitted with particular reference to appeals W-03-213-2006 and W-03-214-2006 that the learned judge had erred when he failed to hold that the respondent's failure to give notice to the appellant for the respective ex parte applications was fatal. The basis of this legal argument was the case of University of Malaya Medical Centre v. Choo Chee Kon & Anor, 2007 MarsdenLR 433 where Hishamudin Mohd Yunus J (as he then was), had opined that on the facts of that case the failure to give notice was clearly not satisfactory. The learned judge had remarked:

In my judgment, compliance with r. 1(2A)(c) is mandatory. If there had been non-compliance, it is a very serious breach of the Rules of the High Court and the ex parte order must be set aside. This approach is consistent with the policy behind the introduction of r. 1 (2A). I therefore, set aside the ex parte injunction order due to non-compliance of r. 1(2A)(c) of the RHC.

[4] Prior to making the above remark, and in support of it, the learned judge had referred to the Malaysian High Court Practice , 2001 Desk Edition 1 at p. 1032 before concluding r. 1(2A)(c) of the Rules of the High Court 1980 being mandatory. The said p. 1032 reads:

The requirements in r. 1(2A) are mandatory. Thus, where a plaintiff fails to give notice of an application made ex parte out of fear that it will defeat the purpose of the proceedings, the plaintiff must state in his supporting affidavit the reasons why notice in advance was not given to the defendant. As the introductory sentence in r. 1(2A) states t

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