Seawealth Nautical Sdn Bhd V Kekal Kaya Marin Sdn Bhd

  

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DALAM MAHKAMAH TINGGI MALAYA DI KUALA LUMPUR

 

(BAHAGIAN DAGANG)

 

SAMAN PEMULA NO: D-24NCC-21-2010

 

Dalam perkara antara lain Seksyen 218(1)(e) dan Seksyen 218(2), Akta Syarikat 1965;

 

Dan

 

Dalam perkara antara lain Aturan 5 Kaedah 4, Aturan 28 dan Aturan 92 Kaedah 4 Kaedah-Kaedah Mahkamah Tinggi, 1980

 

Antara

 

SEAWEALTH NAUTICAL SDN BHD … PLAINTIF

 

(NO. SYARIKAT: 860526-A)

 

DAN

 

KEKAL KAYA MARIN SDN BHD

 

(NO. SYARIKAT: 810440-M)

 

DEFENDAN

 

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GROUNDS OF DECISION

 

This is a proper case for the court to exercise its jurisdiction to grant a “Fortuna” injunction, on principles which have been accepted by the Court of Appeal in Mobikom v Imiss Communication [2007] 3 CLJ 295 (approving and adopting the principles in Fortuna Holdings Pty Ltd. v The Deputy Commissioner of Taxation [1978] VR 83).

 

A presentation of a Winding-Up Petition may be restrained by injunction where its presentation would amount to an abuse of the court’s process. The facts of this case falls within the second principle in “Fortuna” i.e. here there is clearly a disputed claim where the Defendant is using a procedure which will invariably produce irreparable damage to the company rather than by a suitable alternative procedure.

 

The Defendant should commence a proper suit and obtain a proper judgment before proceeding with winding-up proceeding. That, in the circumstances of this case, would be the suitable alternative procedure.

 

I am mindful of the statement made in Maril-Rionabel (M) Sdn Bhd & Anor v Perdana Merchant Bankers Bhd & Other Appeal

 

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[2001] 4 MLJ 187 where Abdul Hamid Mohamad, JCA (as His Lordship then was) said:

 

It is timely that the court come out strongly against the unhealthy trend in the way Winding-Up Petitions are often conducted. Instead of defending the petition proper at the hearing of the petition, the Respondent makes all kinds of interlocutory application that would invariably stall the hearing of the petition proper. Such practice is unfair to the petitioners and clogging the court docket.” (Headnote 3 summary the views presented on pp. 203 – 205 of the report).

 

This is mere observation (dictum), rather that being part of the ratio decidendi in that case. While there could be instances where undeserving interlocutory applications are made to delay or stall the hearing of a Winding-Up Petition, much will depend on the precise circumstances of the case. It cannot be construed as excluding the court’s jurisdiction to order a “Fortuna Injunction” in a proper case.

 

Where the presentation of a Winding-Up Petition will be clearly abusive of court process and is used for an obviously collateral purpose, the court must be mindful of the dire commercial consequences to the company petitioned against or intended to be petitioned against.

 

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The availability of a Fortuna Injunction has been reaffirmed in such cases as Tan Kok Tong v Hoe Hong Trading Co. Sdn. Bhd.

 

[2007] 2 CLJ 305 (Court of Appeal) and Safeguards Corp. Sdn. Bhd. v Rampai Tour Centre [ 2009] 1 MLJ 129 (High Court). In the latter decision, Kang Hwee Gee J stressed on the aspect of the petition, if presented, would have no chance of success since the debt is disputed on substantial grounds, which is the test to apply in cases such as this, and not merely the normal test of “serious question to be tried”, i.e. the American Cynamid test.

 

It is pertinent to note and reinstate the practical effect of allowing a petition to be presented when a debt is bona fide disputed on substantial grounds, as explained by Mohd Ghazali J (as he then was) in Metal Reclaimation (Industries) Sdn Bhd v JRC Tenaga [2006] 6 CLJ 290:

 

“A Winding-Up Petition is not a legitimate means of seeking to enforce payment of a debt which has not been clearly determined; otherwise the courts, when faced with a Winding-Up Petition on a debt which is not based on a judgment debt, would first have to establish the debt due, viz, whether the alleged debt claimed is the actual amount owing based on the evidence available. The courts which hear Winding-Up Petitions will then be put to unnecessary strain if a petition to wind-up is based not upon a judgment

 

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debt but purely on a s 218(2) (a) notice….” (at p.

 

298). The learned judge in fact also quoted Rgby J in In re Ban Hong Co. Ltd. [1959] MLJ 100 where it was said “a Winding-Up Petition is not to be used as machinery to try a common law action.”

 

Granted a judgment debt is not a prerequisite, to proceed on a non-judgment debt requires more than a more mechanical adherence to the statutory provision of Section 218(2)(a). If the debt is bona fide disputed on substantial grounds, and if, in certain cases a petition if presented will be bound to fail, the courts can, and should, restrain the Creditor from presenting a Winding-Up Petition, and if presented, to restrain further proceedings on it, to prevent abuse of the court’s process.

 

On the evidence before me in this application, it is demonstrably clear the debt is vigorously disputed. The Defendant is a sub-contractor doing wiring works on a shipping vessel. The Plaintiff is the main contractor. All that the Defendant has been able to show is its invoices to purportedly establish a sum due on a bare allegation that works have been done as per contract. The Plaintiff has now produced a “Job Progress and Completion Status” document verified by a “Marine Surveyor” for the employer, which proves there is as yet no satisfactory completion of the works, which are still subject to testing and commissioning. How could a Section 218 Notice be served in such circumstances?

 

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For these reasons, I allow the Plaintiff’s application as Prayer in Enclosure 1 (Originating Summons) Prayer 1, with costs RM5000 to be paid by the Defendant to the Plaintiff within one month from the date of this Order.

 

Dated 26th May 2010. Sgd. ( MOHAMAD ARIFF BIN MD. YUSOF ) HAKIM MAHKAMAH TINGGI DAGANG NCC 3 KUALA LUMPUR

 

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COUNSELS

 

For the plaintiff:

 

For the defendant:

 

Wan Mohamad Amin & Norliyana Rosalam Messrs. Wan M Amin & Associates

 

S. Ashok

 

Messrs. TK Wong Tan & Associates

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