The court ruled that a director lacks standing to issue a winding-up petition on behalf of the company when the debt is owed to a tax authority and not directly to the director, thereby allowing the Fortuna Injunction.

A. Introduction

[1] The plaintiff filed an originating summons, seeking a Fortuna Injunction to restrain the defendant from presenting a winding-up petition against it.

[2] After considering the evidence before the court and hearing submissions of counsel, the court allowed the originating summons. These are the grounds of the decision.

Background Facts

[3] The defendant was the chief executive officer and director of the plaintiff. On 7 August 2023, he issued a statutory notice under s 466(1)(c) of the Companies Act 2016 (" CA ") against the plaintiff ("Winding-Up Notice").

[4] In the Winding-Up Notice, the defendant demanded that the plaintiff pays the amount of RM26,101,328.73 ("Debt") to the Royal Malaysian Customs Department ("RMCD"). Attached to the Winding-Up Notice is a copy of a foreign travel restriction notice issued by the RMCD under s 49 of the Goods and Services Tax Act 2014 ("GST Act"), which states that the defendant and other directors of the plaintiff are prohibited from travelling abroad, due to the non-payment of the Debt to the RMCD.

[5] The plaintiff filed this action, seeking a Fortuna Injunction to restrain the defendant from presenting a winding-up petition against the plaintiff, premised on the Winding-Up Notice.

C. Principles On The Grant Of A Fortuna Injunction

[6] The court's power to grant injunctions is established under ss 50 and 51(2) of the Specific Relief Act 1950 (" SRA "). Section 50 of the provides that:

"Preventive relief is granted at the discretion of the court by injunction, temporary or perpetual."

[7] Section 51 of the SRA deals with temporary and perpetual injunctions, with s 51(2) providing that:

"A perpetual injunction can only be granted by the decree made at the hearing and upon the merits of the suit; the defendant is thereby perpetually enjoined from the assertion of a right, or from the commission of an act, which would be contrary to the rights of the plaintiff."

[Emphasis Added]

[8] From the above provisions, this court is empowered to grant an injunction against the defendant. In this case, an injunction is sought to restrain the presentation of a winding-up petition against the plaintiff.

[9] The court's power to restrain the presentation of a winding-up petition can be traced back to the Australian case upon which the Fortuna Injunction derived its name, Fortuna Holdings Pty Ltd v. Deputy Federal Commissioner Of Taxation [1976] 2 ACLR 349. The Supreme court of Victoria held that a Fortuna Injunction may be granted:

a. Where the presentation of the petition might produce irreparable damage to the company and where the proposed petition has no chance of success; and

b. Where a petitioner has chosen to assert a disputed claim by a procedure which might produce irreparable damage to the company rather than by a suitable alternative procedure.

[10] The principles set out in Fortuna Holdings (supra) have been recognised by the Malaysian courts, including in Mobikom Sdn Bhd v. Inmiss Communications Sdn Bhd ; ; and Pacific & Orient Insurance Co Bhd v. Muniammah Muniandy ; .

D. Considerations And Findings

Grounds Relied On By The Plaintiff In Seeking A Fortuna Injunction

[11] With the principles on the grant of a Fortuna Injunction in mind, I will move on to consider the grounds relied on by the plaintiff in seeking a Fortuna Injunction against the defendant. Essentially, the plaintiff relied on the two principles set out in Fortuna Holdings (supra), contending as follows:

a. That the proposed winding-up petition against the defendant has no chance of success. The plaintiff argued that the defendant lacked locus standi to issue the Winding-Up Notice or to present a wind