Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2024 MarsdenLR 1442

HIGH COURT (KUALA LUMPUR)
ATAN MUSTAFFA YUSSOF AHMAD, J
WRP Asia Pacific Sdn Bhd – Plaintiff
Versus
Ahmad Zul-Qarnain bin Ibrahim (on behalf of the Mental Health Committee of Datoâ Puan Sri Hamidah bt Abdullah vide Court Order dated 04.05.2021 in Kuala Lumpur) – Defendant
ORIGINATING SUMMONS NO WA-24NCC-315-07 OF 2024

Advocates:
Aqila Zulaiqha Zulkifli (with Mathew Thomas Philip and Lee Sin Yee) (Thomas Philip) for the plaintiff.
Gideon Tan (with Yip Man Fei) (Gideon Tan Razali Zaini) for the defendant.

A court lacks jurisdiction to grant an injunction restraining winding-up proceedings initiated in another court, as statutory obligations under applicable rules must be observed.

Headnote:(A) Companies Act 2016 - Section 466 - Companies (Winding-Up) Rules 1972 - Application to restrain winding-up petition - Court's jurisdiction to grant injunctive relief and its applicability when another court has adjudicated the winding-up petition - It was determined that the court lacks jurisdiction to restrain proceedings of another court regarding winding-up matters, reaffirming the mandatory nature of advertisement under Rule 24. (Paras 24, 25, 26, 44)

(B) Balance of interests - The court must consider the rights of the judgment creditor versus the potential prejudice to the debtor - A winding-up petition does not constitute a mode of execution, and the judgment debt remains undisputed unless stayed or set aside. (Paras 39, 41, 43)

Facts of the case:
The plaintiff filed for an injunction to restrain a winding-up petition due to an unpaid judgment debt while awaiting a stay application. The defendant countered, asserting the petition was properly filed. (Paras 1-10)

Findings of Court:
The plaintiff's application for injunctive relief was dismissed as the court does not have the jurisdiction to interfere with winding-up proceedings already initiated in a different court, and the defendant's actions were not abusive of process. (Paras 45-46)

Issues: Whether the court has jurisdiction to restrain winding-up proceedings; if the defendant's filing of the petition constitutes an abuse of process given the plaintiff's pending stay application. (Paras 1, 39)

Ratio Decidendi: The court concluded that an injunction against a winding-up petition may not be granted as Rule 24 imposes a mandatory obligation to advertise and that the action taken by the defendant was permissible under the Companies Act. (Paras 26, 43)

Result: Plaintiff's application dismissed; defendant's motion to strike out the summons granted.

Table of Content
1. application for injunctive relief and jurisdiction. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10)
2. plaintiff's arguments for injunction and alleged complicity. (Para 12 , 13 , 14 , 15 , 16 , 17)
3. defendant's claims against injunctive relief. (Para 18 , 19 , 20 , 21 , 22 , 23)
4. court's observations on its jurisdiction and obligations. (Para 24 , 25 , 26 , 27 , 28 , 29)
5. discussion on appropriate forum for injunction application. (Para 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38)
6. analysis of potential abuse of process relating to petition. (Para 39 , 40 , 41 , 42 , 43 , 44)
7. court's conclusion and dismissal of the plaintiff's application. (Para 45 , 46)

JUDGMENT

[1]This judgment concerns an application to restrain a winding-up petition filed pursuant to an unpaid judgment debt, where the judgment debtor has both appealed against the judgment and applied for a stay of execution. The key issues before this court are whether it has jurisdiction to grant injunctive relief to restrain winding-up proceedings in another court, and if so, whether such relief should be granted in the present circumstances. The matter arose after the defendant obtained judgment following a full trial, but before the hearing of the plaintiffs stay application and while its appeal remains pending. At the heart of the dispute is whether the winding-up petition constitutes an abuse of process, and whether Rule 24 of the Companies (Winding-Up) Rules 1972, which requires advertisement and gazetting of a winding-up petition, is mandatory in nature and precludes injunctive relief. The circumstances require this court to balance the competing interests of a judgment creditors right to enforce its judgment against the potential prejudice to a judgment debtor if a winding-up petition proceeds while substantive challenges to the underlying judgment remain undetermined.

Background facts

[2]The Plaintiff, WRP Asia Pacific Sdn Bhd (Company No. 147817-V), is a company incorporated in Malaysia. The Defendant, Ahmad Zul-Qarnain bin Ibrahim, is a Malaysian citizen who is the legal representative of his mother, Dato Puan Sri Hamidah binti Abdullah (PSH), who was declared a mentally disordered person on 4.5.2021 via a Court Order in Kuala Lumpur High Court Suit No. WA-24NCvC-1940-10/2020.

[3]On 15.2.2022, the Defendant commenced an action against the Plaintiff and others in the Kuala Lumpur High Court via Suit No. WA-22NCC-68-02/2022 (Suit 68). On 15.3.2024, the High Court delivered judgment in favour of the Defendant, ordering the Plaintiff to pay:

a)A sum of RM7,986,119.34 (for the period from 1.1.2017 to 27.12.2021)

b)Interest at 5% per annum on the judgment sum from the date of judgment until full settlement

c)Costs of RM50,000.00

[4]On 3.4.2024, the Plaintiff filed an appeal against the judgment in the Court of Appeal via Appeal No. W-02(NCC)(W)-563-04/2024. The hearing of this appeal has been fixed for 25.7.2025.

[5]On 12.6.2024, the Plaintiff filed an application for stay of execution of the judgment (Stay Application). This application is fixed for hearing on 10.10.2024.

[6]On 5.6.2024, the Defendant issued a notice pursuant to Section 466 (1)(a)Companies Act 2016Court (Winding Up No. WA-28NCC-601-07/2024) (Petition). The Petition was served on the Plaintiff on 5.7.2024 and is fixed for hearing on 12.9.2024.

[7]On 12.7.2024, the Plaintiff filed this Originating Summons seeking to restrain the Defendant from proceeding with the Petition, advertising it, and/or taking further steps based on the petition. This application was supported by an affidavit affirmed by Lee Chia Chit, a director of the Plaintiff.

[8]On 18.7.2024, the Defendant filed an application to strike out the Plaintiffs Originating Summons in Enclosure 8, supported by the Defendants affidavit of the same date.

[9]The Plaintiff subsequently filed an affidavit in reply on 26.7.2024, maintaining its position regarding the injunctive relief sought.

[10]The hearing date of 10.10.2024 for the Stay A

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2024 MarsdenLR 1442

A court lacks jurisdiction to grant an injunction restraining winding-up proceedings initiated in another court, as statutory obligations under applicable rules must be observed.

Cases Referred (5)