Ace Holdings Berhad v Lukman Hakimi Bin Abdullah (Berdagang DI Bawah Nama dan Gaya Lh Million Resources) (201803248142 (002857899-H)) (WA-24NCC-939-10/2022)

This Ex-parte Originating Summons (“OS”) was filed on 11.10.2022 by the Plaintiff against the Defendant for a Fortuna Injunction to restrain the Defendant from presenting a winding-up petition against the Plaintiff arising from a Notice dated 19.9.22 issued by the Defendant against the Plaintiff pursuant to s. 465 (1) (e) and s. 466 (1)(a) of the Companies Act 2016 (“CA 2016”) for RM1,163,948.00.

Astonished as to why the OS was filed on an ex-parte basis, I had directed the matter to be heard inter partes.

I had dismissed the OS with costs to the Defendant on 16.1.2023 and given broad reasons for my decision. This judgment contains the full reasons for my decision.

The Plaintiff is a public limited company incorporated in Malaysia.

In 2018, the Plaintiff introduced an investment instrument (“Investment Instrument”), known as Islamic Redeemable Preference Shares (“i-RPS”). [6]

The Subscribers shall be entitled to redeem the i-RPS held by the Subscribers at the redemption price, equivalent to one hundred percent (100%) of the Subscription Price (“Redemption Price”).

(ii) For the purpose of redemption by the Subscribers on Maturity Date, the Subscribers shall issue to the Company a written redemption notice (hereinafter referred to as “Subscriber’s Redemption Notice”) specifying the number of i-RPS to be redeemed on the Maturity Date, which shall not be earlier than thirty (30) days prior to the Maturity Date. The Subscriber’s Redemption Notice once issued shall be final and conclusive and binding upon the Company. The Subscribers shall on or before the Maturity Date, deliver to the Company the share certificate(s) to the i-RPS being redeemed, and on the Maturity Date or against the receipt of the share certificate(s) to the i-RPS being redeemed, whichever is later, the Company shall redeem the i-RPS specified in the Subscriber’s Redemption Notice by paying to the Subscribers the Redemption Price for the i-RPS being redeemed together with all accrued and outstanding Preference Dividend (as defined in Part 7 of Schedule 1 herein) payable to the Subscribers thereon up to the Maturity Date failing which the Company shall pay to the Subscribers late payment interest at the rate of eight percent (8%) per annum calculated daily on all sums due and payable to the Subscribers until the date of actual payment thereof.

(iii) For the purpose of redemption by the Subscribers prior to the Maturity Date, the Subscribers shall issue to the Company the Subscriber’s Redemption Notice specifying the number of i-RPS to be redeemed and the date of redemption (hereinafter referred to as the “Company Redemption Date”), which shall not be earlier than ninety (90) days prior to the intended Company Redemption Date. The Subscriber’s Redemption Notice once issued shall be final and conclusive and binding upon the Company. The Subscribers shall on or before the Company Redemption Date, deliver to the Company the share certificate(s) to the i-RPS being redeemed, and on the Company Redemption Date or against the receipt of the share certificate(s) to the i-RPS being redeemed, whichever is later, the Company shall redeem the i-RPS specified in the Subscriber’s Redemption Notice by paying to the Subscribers the Redemption Price for the i-RPS being redeemed together with the accrued and outstanding Preference Dividend (as defined in Part 7 of Schedule 1 herein) payable to the Subscribers thereon up to the Company Redemption Date failing which the Company shall pay to the Subscribers late payment interest at the rate of eight percent (8%) per annum calculated daily on all sums due and payable to the Subscribers until the date of actual payment thereof. (Emphasis added)

(iv) A penalty of twenty four percent (24%) on the Subscription Price shall be imposed by the Company in the event of any redemption prior to the third (3rd) anniversary of the Issue Date. (emphasis added) 7 Target Annual Return Each Subscription share shall for as long as it is not redeemed, carry and be paid a non-cumulative target return of twelve percent (12%) per annum, which shall be payable annually within fourteen (14) business days from December 2021. (emphasis added) 8 Transferability The provisions relating to the registration, transfer, transmission, certificates, and replacement thereof applicable to the ordinary shares shall apply mutatis mutandis to the i-RPS, provided that the i-RPS are not transferable save and except with the prior written consent of the directors of the Company. 9 Winding Up In the event of any liquidation, dissolution, winding up or other return on repayment of capital of the Company, the Subscribers shall be entitled to have the assets available for distribution among the members applied first in payment of a sum equivalent to the aggregate of the Subscription Price for the i-RPS and any unpaid Preference Dividend in priority to any capital, dividend or other payments to holders of ordinary shares or any other class of shares of the Company save that the Subscribers shall have no other rights to participate in the assets or profits of the Company. 10 Voting Rights The Subscribers shall have the right to receive notices of and attend all general meetings of the Company provided that the i-RPS shall not carry any right to vote at any general meeting of the Company except in any of the following circumstances:

The business of the meeting includes any resolution that varies or abrogates the rights attached to the i-RPS and in this regard, the creation of further shares ranking in any respect in priority to or pari passu with the i-RPS shall be deemed to be a variation or abrogation of the rights attached to the i-RPS;

(ii) The business of the meeting includes any resolution for the liquidation, dissolution or winding up of the Company;

(iii) The business of the meeting includes any resolution to approve a capital reduction or capital repayment or any capital distribution by the Company;

(iv) The business of the meeting includes any proposal to effect any scheme or arrangement; or

In such other circumstances as may be expressly provided under the Companies Act 2016 or any other laws from time to time in respect of the i-RPS. In any of the aforesaid circumstances, if voting by way of show of hand, each Subscriber shall be one (1) vote and if voting by way of poll, each Subscriber shall have one (1) vote for each i-RPS held by him/her/it. [8] On 20.8.2018, the Defendant submitted an offer to subscribe to the Plaintiff’s i-RPS for a sum of RM1,000,000.00, which the Plaintiff accepted vide letter dated 21.8.2018. The parties executed a Binding Term Sheet (“Term Sheet”) which inter alia stipulated:

8.1 the Effective Date is 5.9.2018;

8.2 Target Return means “Each Subscription share shall for as long as it is not redeemed, carry and be paid a non-cumulative target return of twelve percent (12%) per annum, which shall be payable annually within fourteen

business days from December 2021. The Target Return shall be pro-rated accordingly pursuant to the Effective Date.” – section 6 (emphasis added);

8.3 Redemption by the Subscriber - “The Subscriber shall be entitled to redeem the Subscription Shares held by the Subscriber upon the Maturity Date at the Subscription Price. Subject to Section 8 below, in the event of any redemption of the Subscription Share prior to December 31, the Target Return of the same calendar year shall be forfeited by the Company.” – section 7;

8.4 Early Redemption by the Subscriber - “In the event of any early redemption of the Subscription Share prior to the third (3rd) anniversary of the Effective Date, the Company shall be entitled to claim the entire sum of the Target Return which has been paid to the Subscriber prior to the date of the early redemption (“Paid Return”) by deducting the sum of Paid Return from the Subscription Price and a further sum of six percent (6%) of the Subscription Price shall be forfeited by the Company as payment of administrative charges and management fee incurred by the Company.” – section 8. [9] By letter dated 28.09.2021 which is more than 3 years from the Effective Date, the Defendant has requested to redeem the i-RPS. [10] By letter purportedly dated 06.09.2021, the Plaintiff acknowledged the redemption notice but notified that it had to delay the payment for the redemption of the i-RPS due to unforeseen circumstances arising from the Covid-19 pandemic and that it would “endeavour to have the redemptions made by the end of December 2021 and we humbly seek your kind indulgence and patience as we work on your redemptions with the least amount of delay.” In the said letter, the Plaintiff informed that the redemption sum is RM1,119.582.00 calculated up to 31.12.2021 and particularised as follows: a) Redemption Price of RM1,000,000.00; b) Pro-rated Preference Dividend of RM118,356.00; and c) Late Payment Interest of RM1,226.00. [11] The Defendant agreed in writing to the redemption sum on 13.10.2021, witnessed by the Plaintiff’s representative, one Elina Raihana (exhibit CCM 9 in Enc. 2). [12] By letter dated 3.11.2021 (exhibit LHA7), the Plaintiff interalia informed the Defendant that the payment for the redemption of the i-RPS will be further delayed until the end of June 2022, sought the Defendant’s patience and indulgence and further informed that the redemption sum to be paid to the Defendant is RM1,163,948.00 calculated up to 30.6.2022 and particularised as follows: a) Redemption Price of RM1,000,000.00; b) Pro-rated Preference Dividend of RM118,358.00; and c) Late Payment Interest of RM45,592.00. [13] The redemption sum of RM1,163,948.00 was not made by the Plaintiff to the Defendant at end of June 2022. [14] The Defendant through his solicitors issued a statutory notice of demand dated 19.9.2022 to the Plaintiff pursuant to s. 465 (1) and s. CA 2016 (“Notice”) to demand payment of the outstanding sum of RM1,163,948.00. [15] The Plaintiff by their solicitor’s letter dated 27.9.2022, disputed that the outstanding sum is owing and demanded a withdrawal of the Notice immediately; such withdrawal to be notified to the Plaintiff’s solicitors by 30.09.2022. The withdrawal was not forthcoming, and hence the present OS. The Plaintiff’s case [16] The Plaintiff in summary contended that there is a prima facie bona fide dispute of debt on substantial grounds based on the following:

The Notice issued by the Defendant is defective;

(ii) The Plaintiff disputed the amount claimed by the Defendant and postulated that the computation of the amounts stated in the Plaintiff’s letters is merely a targeted and/or estimated sum based on forecast, assumptions and previous projections and not a guaranteed sum;

(iii) The Defendant is bound by the terms and conditions set out in the Plaintiff’s PPM 2018 and the Term Sheet governing the subscription of the i-RPS which set out the risks and/or factors that may result in a complete loss of investment;

(iv) the Notice is tainted with an ulterior motive to coerce and/or oppress the Plaintiff into redeeming the Defendant’s i-RPS subscription and an abuse of process; and

The Plaintiff is commercially solvent; winding up will cause irreparable damage to the Plaintiff’s reputation, jeopardize the Plaintiff’s ongoing operations and banking facilities and as a result cause serious repercussion on the livelihood of the Plaintiff’s employees. Defendant’s contentions [17] The Defendant in resisting the Fortuna Injunction application postulated that:

The Defendant is entitled to issue the Notice for the debt;

(ii) the Notice is valid, and any technical objection regarding the Notice raised by the Plaintiff is baseless and without merit;

(iii) The Outstanding Sum of RM1,163,948.00 demanded in the Notice by the Defendant had been acknowledged by the Plaintiff, is due and owing; there is no bona fide dispute of the debt:

That the redemption is made by the Defendant well over three (3) years from the Effective Date, as stipulated in Section 8 of the Binding Term Sheet;

The Plaintiff itself in their 2 letters dated 6.9.2021 and 03.11.2022 acknowledged the Defendant’s Redemption Notice and the outstanding amount of RM1,163,948.00 payable by end June 2022; and

a Winding Up Petition, if presented, by the Defendant will have a high chance of success. Law and Decision of the Court [18] I had recently in United Malaya Stores Sdn Bhd v. S Selapa Sivalingam & Anor [2022] 6 CLJ 469 at paragraphs [17] and [18] set out the legal principles to be considered when an application for a Fortuna injunction is made: “[17] The legal principles that warrant the grant of a Fortuna injunction are well settled as elucidated in the following cases:

Fortuna Holdings Pty Ltd v. The Deputy Commissioner of Taxation of the Commonwealth of Australia [1978] VR 83: The decisions of the courts have established the principle that the presentation of a winding-up petition may be restrained by injunction where its presentation would amount to an abuse of the process of the court. The courts apply this principle similarly to restrain the advertisement of a petition already presented. The principle enables companies to be protected from threatened or apprehended oppression and damage from abuse of court process. The basis on which the courts have intervened in the cases cited by counsel, has been that presentation of a winding-up petition might of itself cause irreparable damage to the company. Given that basis, the application of the principle which entitles the courts to intervene to prevent abuse of process, depends on the existence of different elements in two distinct situations considered in the authorities. For convenience I will refer to the applications of the principle in the two situations as the first and second branches of the principle. First branch of principle The first branch applies in cases where the presentation of the petition might produce irreparable damage to the company and where the proposed petition has no chance of success... Second branch of principle The second branch applies in cases where a petitioner proposing to present a petition 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. It may apply in cases where the petition, if presented, has a chance of success. In some cases, both the first and the second branches of the principle apply.

(ii) Mobikom Sdn Bhd v. Inmiss Communications Sdn Bhd [2007] 3 CLJ 295; [2007] 3 MLJ 316, Gopal Sri Ram JCA (later FCJ) explained the basis as follows: [5] The kind of injunction by which an intended winding-up petition is sought to be restrained is known as a ‘Fortuna injunction’ taking its name from the case in which the juridical basis for the relief was first explained. See, Fortuna Holdings Ptv Ltd v. The Deputy Commissioner of Taxation (1978) VR 83. In that case, McGarvie J discussed the basis on which a court acts to restrain the presentation of a winding-up petition and the two branches of the principle that guide courts in the grant of an injunction... [8] In a later passage McGarvie J summed up the two branches of the principle as follows: The first branch applies to cases where the petitioner is incapable of success as a matter of law or through absence of supporting evidence. Where the petitioner is not entitled to present a petition or where the ground alleged is not a ground which can found a winding-up order, the petition is incapable of success as a matter of law, if there is no sufficient evidence to establish an otherwise sufficient ground, the petition is incapable of success for that reason. Thus, the first branch applies where the proposed petition cannot succeed. The second branch applies to cases where there is a more suitable alternative means of resolving the dispute involved in a disputed claim against the company. They are not necessarily cases in which, as a matter of law or through absence of evidence, there is an inherent incapacity of success. They may be cases where the petitioner is entitled to present the petition, the ground is sufficient in law and there is evidence to support the ground. They are cases, though, where, due to the availability of the more suitable alternative remedy, the court hearing the petition would in the circumstances, in the exercise of its discretion, decline to make a winding-up order, at least while the circumstances remain as they are at the time of the application for an injunction. Thus, the second branch applies where, because of the availability of a suitable alternative procedure, the petition is unlikely to succeed in the circumstances existing at the time.

(iii) Pacific & Orient Insurance Co Bhd v. Muniammah Muniandy [2011] 1 CLJ 947; [2010] MLJU 2217, the Court of Appeal in referring to the Fortuna and Mobikom cases explained the application of the two branches as follows: [26] The first principle laid down in that case in that an injunction of that nature may be granted by court where the presentation of the petition might produce irreparable damage to the company and where the proposed petition has no chance of success. In order to succeed in getting injunction under this principle, the applicant must satisfy both limbs of the principle i.e.:

the intended petition has no chance of success, as a matter of law as well as a matter of fact; and

(ii) the presentation of such petition (which has no chance of success) might produce irreparable damage to the company. (See: Re A Company [1894] 1 Ch 349; Charles Forte Investment Ltd v. Amanda [1964] 1 Ch 240; [1963] 2 All ER 940 and Bryanston Finance Ltd v. De Vries (No 2) [1976] 2 WLR 41; [1976] 1 All ER 25). [27] This principle is not applicable to the present case. The respondent herein had obtained a valid and enforceable judgment against the insured as well as the insurer (appellant). The intended petition if filed is not bound to fail. He has a good chance to succeed. Therefore, whether or not it causes irreparable damage is of no consequence. Thus, the injunction applied for by the appellant in the present case, cannot be granted by court under this principle. [28] The second principle established in the Fortuna case is that an injunction of that nature may be granted in cases where a petitioner proposing to present a petition 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. [29] This principle applies only to disputed debt. It does not apply to cases where the debt in question is undisputed. As long as the debt cannot be disputed, it is not consequence whether or not it will cause irreparable damage to the company, if presented. A valid and enforceable judgment of court as in the present case, (unless set aside or stayed) cannot be considered a disputed debt. The law is settled on this point. Therefore, an order for injunction as prayed for by the appellant in the present case, also cannot be granted under this principle. [18] The Court of Appeal in Tan Kok Tong v. Hoe Hong Trading Co Sdn Bhd [2007] 2 CLJ 305; [2007] 4 MLJ 355 made clear that in considering a Fortuna injunction, the principle in American Cynamid Co v. Ethicon Ltd [1975] AC 396 does not apply: [8] When deciding whether to grant an injunction to restrain a petition that is based on a statutory demand for a debt, the court must be satisfied that the debt is bona fide disputed on substantial grounds (see Stonegate Securities Ltd v. Gregory [1980] 1 All ER 241). It is not enough that there is a serious question to be tried. In other words, this is one of those cases to which the general test laid down in American Cynamid Co v. Ethicon Ltd [1975] AC 396 does not apply. In Molop Corp Sdn Bhd v. Uniperkasa (M) Sdn Bhd [2003] 1 LNS 280; [2003] 6 MLJ 311, Low Hop Bing J (as he then was) correctly held as follows (at p. 321): In Natseven TV Sdn Bhd v. Television New Zealand Ltd [2001] 4 CLJ 722, I had the occasion to consider and determine the burden of proof cast on the plaintiff in an application for interlocutory injunction to restrain the presentation of a winding-up petition, in the following words: I agree with the reasons given by the English and New Zealand Court of Appeal respectively and by Abdul Malik J and hold that for the purpose of obtaining an interim injunction to restrain the defendant from proceeding with the winding-up petition, the burden of proof cast on the plaintiff is only discharged by reference to the standard of proof or test in adducing evidence to establish a prima facie case and that the principle relating to the test of ‘serious question to be tried’ in American Cynamid Co v. Ethicon Ltd [1975] AC 396; [1975] 1 All ER 504 as applied in Keet Gerald Francis Noel John v Mohd Noor bin Abdullah & Ors [1995] 3 BLJ 254; [1995] 1 MLJ 193 is not applicable as the applications there were not applications to restrain winding-up petitions or proceedings, such as in the instant case before me. Illustration of a prima facie case may be provided by necessary evidence that there is a bona fide dispute by the plaintiff in relation to the statutory demand or that the plaintiff is solvent.” (Emphasis added) [19] As made clear by the Court of Appeal in Tan Kok Tong’s case in approving Low Hop Bing J (as he then was)’s pronouncements in Molop Corp Sdn Bhd, the Plaintiff here, as the applicant seeking to obtain an injunction to restrain the Defendant from proceeding with the winding up petition, is cast the burden of proof to adduce evidence to establish a prima facie case that there is a bona fide dispute in relation to the statutory demand made by the defendant or that the plaintiff is solvent. [20] In this context, I would thus at the outset state that the Plaintiff’s arguments that the Defendant has not shown that the Plaintiff is commercially insolvent is utterly misconceived and seek in effect to reverse the burden of proof, which is impermissible in law. [21] The right to present winding up proceedings without resorting to first obtaining a judgment is clearly recognised by law. I have discussed in United Malaya Stores (supra) that there is no necessity for a creditor to obtain a judgment before serving a statutory demand: “[22] To my knowledge, there are at least four Court of Appeal cases which made clear that for the purposes of s. 466(1)(a), there is no necessity for a creditor to obtain a judgment before serving a statutory demand:

in Maril-Rionebel (M) Sdn Bhd & Anor v. Perdana Merchant Bankers Bhd & Other Appeals [2001] 3 CLJ 248; [2001] 4 MLJ 187, Gopal Sri Ram JCA (as he then was) explained as follows: But a petition for winding-up is not execution. For a winding-up petition is not based upon any judgment of a court. Normally, it is based on the inability of a company to pay its debts as and when they fall due. Such inability is normally evidenced by the company’s inability to satisfy or compound a notice of demand issued pursuant to s. 218 of the Companies Act. But the issuance of such a notice is not a sine qua non for the presentation of a winding-up petition. What is needed is compelling evidence of the company’s inability to pay its debts as and when they fall due.

(ii) in Syarikat Mohd Noor Yusof Sdn Bhd v. Polibina Engineering Enterprise Sdn Bhd [2005] 2 CLJ 676; [2006] 1 MLJ 446, Mohd Ghazali Yusoff JCA stated: We are aware that it is not provided under the Act that a petitioner must be armed with a judgment debt prior to the filing of a petition to wind up a company....

(iii) in Megasteel Sdn Bhd v. Perwaja Steel Sdn Bhd [2008] 4 CLJ 352, Gopal Sri Ram JCA (as he then was) held as follows: A creditor, generally speaking, does not have to obtain judgment before instituting winding-up proceedings against a company. That is the purpose for which s. 218(2)(a) of the Companies Act, 1950 was enacted.

(iv) in Lafarge Concrete (Malaysia) Sdn Bhd v. Gold Trend Builders Sdn Bhd [2011] 1 LNS 1763; [2012] 6 MLJ 817, Jeffrey Tan JCA pronounced: [6] Before we proceed to answer those questions, we should perhaps say that ‘a creditor is not required to obtain a judgment before serving a statutory demand...’ (The Law of Company Liquidation (4th Ed), by Andrew R Keay at p. 83) and ‘whether or not judgment had been obtained, an unpaid creditor is, as a general rule, entitled to a winding-up order against a company which is insolvent’ (The Law of Company Liquidation (4th Ed), by Andrew R Keay at p 91). Where there is no judgment, it is not uncommon for companies to argue that the debt is disputed. But ‘in order to oppose a winding-up petition, the respondent must raise a bona fide dispute in both a subjective and objective sense. It must be honestly believed to exist and must be based on substantial or reasonable grounds - BMC Construction Sdn Bhd v. Dataran Rentas Sdn Bhd [2001] 1 CLJ 591; [2001] 1 MLJ 356’ (Chan & Koh on Malaysian Company Law (2nd Ed), at para 22.145). (Emphasis added)” [22] Since deciding the United Malaya Stores case, my attention was drawn to another Court of Appeal case in more recent years - SSM Management Sdn Bhd v Aeon Big (M) Sdn Bhd (formerly known as Magnificient Diagraph Sdn Bhd) [2019] 4 MLJ 826; [2019] 5 CLJ 695, where the Court of Appeal similarly held that: “[14] It was also pointless to argue that there must be a judgment for the sum of RM 1.1. million before winding-up proceedings can be commenced. It is trite law that a creditor is not required to obtain a judgment before issue the statutory demand. (see Morgan Guaranty Trust Co of New York v Lian Seng Properties Sdn Bhd [1991] 1 MLJ 95; Lafarge Concrete (M) Sdn Bhd v Gold Trend Builders Sdn Bhd [2012] 6 MLJ 817). Of course, if there is a judgment, a debtor would be hard-pressed to argue that the debt in question is disputed. Conversely, a debtor would be better placed to argue a bona fide dispute exists when there is no judgment. Even then, the debtor must provide cogent reasons to show the existence of a bona fide dispute. The primary consideration is whether there is compelling evidence of an inability to pay a debt when it falls due whether under a judgment or otherwise. “ [23] In my view, arising from the parties’ contentions, the issues here boil down to 3:

Whether the s. 466 statutory notice is valid;

(ii) Whether there is a bona fide dispute of the debt justifying the grant of a Fortuna injunction; and

(iii) Whether the Plaintiff is commercially solvent. [24] The second issue will entail consideration of the terms of PPM 2018 and the Term Sheet as to what the parties have contractually agreed to, the effect of the 2 letters dated 6.9.2021 (purported date) and 03.11.2022, and in this regard, whether the Defendant’s claim is only a targeted and/or estimated sum as postulated by the Plaintiff. The Preliminary Objection to Defendant’s Affidavit in Reply [25] Before I deal with the issues, I should deal with the Plaintiff’s preliminary objection to Defendant’s Affidavit in Reply in enc. 7 which was filed in the English language - that it cannot be read as it was not filed in the national language as required by Order 92 rule 1 of the Rules of Court 2012 (“ROC 2012”). [26] I had dismissed the preliminary objection as:

firstly, pursuant to O.41 r 4 ROC 2012, an affidavit may with leave of the Court, be filed or used in evidence notwithstanding any irregularity in the form thereof;

(ii) second, the Plaintiff has not shown how it was prejudiced;

(iii) third, the Defendant did file the affidavit in the national language in Enc. 21 before the OS was heard; and

(iv) I have borne in mind that the matter should be heard on the merits instead; that the overriding interest of justice must be the focus. The Court of Appeal in Redang Paradise Vacation Sdn Bhd v Yap Chuan Bin & Other Appelas

10 CLJ 296 elucidated: “[2] The appeals essentially involved application of common-sense principles in decision-making process and construction of Rules of Court (RC 2012) to attain substantive justice. [4] The RC 2012, to ensure the merits of the case or appeal is heard to attain substantive justice, have introduced a number of provisions to fortify the principles. Cases now have to be heard on merits and cannot be dismissed for non-compliance of rules unless there are exceptional reasons to do so. For example, O.1A of RC 2012 asserts: ORDER 1A Regard shall be to justice (O. 1A) In administering these Rules, the Court or a Judge shall have regard to the overriding interest of justice and not only to the technical noncompliance with these Rules. And O.2 asserts: ORDER 2 Non-compliance with Rules (O. 2 r. 1)

Where, in beginning or purporting to begin any proceedings or at any stage in the course of or in connection with any proceedings, there has, by reason of anything done or left undone, been non-compliance with the requirement of these Rules, the non-compliance shall be treated as an irregularity and shall not nullify the proceedings, any step taken in the proceedings, or any document, judgment or order therein.

These Rules are a procedural code and subject to the overriding objective of enabling the Court to deal with cases justly. The parties are required to assist the Court to achieve this overriding objective.

The Court or Judge may, on the ground that there has been such noncompliance as referred to in paragraph (1), and on such terms as to costs or otherwise as it or he thinks just, bearing in mind the overriding objective of these Rules, exercise its or his discretion under these Rules to allow such amendments, if any, to be made and to make such order, if any, dealing with the proceedings generally as it or he thinks fit in order to cure the irregularity.” Whether the s. 466 statutory notice is valid? [27] In this case, it is common ground that there is no judgment on the debt. The fact that there is no judgment in my view does not translate to a dispute on the debt as set out in para 21 above. [28] The thrust of the Plaintiff’s arguments that the Notice is invalid are as follows:

The Defendant’s solicitors merely sent the Statutory Demand to the Plaintiff’s business address, and not the Plaintiff’s registered address;

(ii) There is no proper signature on the said AR Registered Card bearing tracking number RW078398642MY (“AR Registered Card”) where the Defendant claimed that the purported Statutory Demand was served at the Defendant’s registered address; the last 4 digits of the NRIC no. of the recipient known as “Yee Quan” as stated on the AR Registered Card is “6018”, whereas the NRIC No. of a similar name being “Yee Quan” as stated in the Statutory Demand served by hand at the Plaintiff’s registered address at page 83 of the Defendant’s Affidavit in Reply is “6015”; and

(iii) The Notice purportedly dated 19.9.2022 was maliciously backdated and misleading; even if the Notice was served at the Plaintiff’s registered address by hand, it was only carried out 7 days after the Plaintiff’s Fortuna Application was filed. [29] Section 466 of the CA 2016 provides for when a company may be deemed ‘unable to pay its debts’. The relevant parts read: “466 Definition of ‘inability to pay debts’

A company shall be deemed to be unable to pay its debts if —

the company is indebted in a sum exceeding the amount as may be prescribed by the Minister and a creditor by assignment or otherwise has served a notice of demand, by himself or his agent, requiring the company to pay the sum due by leaving the notice at the registered office of the company, and the company has for twenty-one days after the service of the demand neglected to pay the sum or to secure or compound for it to the satisfaction of the creditor;

execution or other process issued on a judgment, decree or order of any Court in favour of a creditor of the company is returned unsatisfied in whole or in part, or

it is proved to the satisfaction of the Court that the company is unable to pay its debts and in determining whether a company is unable to pay its debts the Court shall take into account the contingent and prospective liabilities of the company. (Emphasis added) [30] The Federal Court in Lai Yak Kee v Pembinaan Cemerlang Sdn Bhd [2012] 1 LNS 1464 has set out the requirements for a valid demand as follows: "For the demand to be effective it must comply with the prescribed requirements of the sub-section and these are as follows: - 1) The demand Must be in writing under the hand of the creditor or his authorised agent; 2) It must specify the sum due; 3) The demand must be served on the company by leaving it at its registered office." [31] In this case, it is not denied by the Plaintiff that the business and registered office addresses as set out in the SSM search at Exhibit LHA 12 are in fact the correct business and registered office addresses of the Plaintiff. I find from the contents of Ex LHA 12 and LHA 13 that the Plaintiff was in fact properly served the Notice on 26.09.2022 at its business address and on 28.09.2022 at its registered address as set out in the SSM search. The Notice did specify clearly the sum of RM1,163,948.00 due. As such, I am of the view that the Notice has satisfied the 3 requirements in Lai Yak Kee (supra). I thus find that the requirements of s. 466(1) (a) CA 2016 have been met and the Notice is valid and effective. This complaint is a non-starter. [32] The attempt by the Plaintiff or its counsel to tar the Defendant’s solicitors with the allegation that the Notice is maliciously backdated is emphatically rejected as the Plaintiff is only deemed unable to pay its debts after 21 days of receipt of the Notice as opposed to date of the Notice. The plain wording of the Notice itself as well as the unambiguous provision of s. 466(1) (a) is manifestly clear. Whether the Debt is Bona Fide Disputed? [33] The Plaintiff’s counsel’s argument that the subscription was not a guaranteed return on the initial price paid, but a target return that was stated in PPM 2018 and the Term Sheet as it carries the risk of a total loss of investments; that “Target Return” should not be equated as guaranteed returns and as such, the amounts stated in the Plaintiff’s 2 letters dated 6.9.2021 (purported date) and 03.11.2022 are merely a targeted and/or estimated sum and not a guaranteed return, do not resonate with this Court at all for the following reasons. [34] Firstly, the crux of the dispute between the parties here is whether the sum of RM1,163,948.00 is due to the Defendant. This in substance revolved around the construction of the PPM 2018, the Term Sheet and the 2 letters dated 6.9.2021 (purported date) and 03.11.2022. [35] I had referred to the date of the 1st letter of 6.9.2021 as a purported date as its contents clearly acknowledged the Defendant’s redemption notice dated 28.09.2021. It is inherently probable that the letter is in fact issued in October as the Plaintiff would not have prophetic powers to acknowledge the Defendant’s redemption notice 3 weeks ahead of the same. In clinging on to the date of 6.9.2021, I find that the Plaintiff’s attempt to spin a yarn that the Defendant only requested that his i-RPS subscription be redeemed vide letter dated 28.9.2021 after the receipt of the Plaintiff’s letter dated 6.9.2021 where the Defendant agreed to the delay for the redemption and is “approbating and reprobating”, is fascinating to say the least. [36] As for construction of the PPM 2018, the Term Sheet and the 2 letters dated 6.9.2021 (purported date) and 03.11.2022, it will be convenient to say a few words about the interpretation of contracts. [37] When looking at a contract, the Court needs to:

consider the whole contract;

(ii) give effect to every clause; and

(iii) bring each clause into harmony with the other clauses. See - City Investment Sdn Bhd v Koperasi Serbaguna Cuepacs Tanggungan Bhd [1985] 1 CLJ (Rep) 77 and Lucy Wong Nyuk King (F) & Anor v Hwang Mee Hiong (F) [2016] 3 MLJ 689. [38] The Federal Court in Lucy Wong Nyuk King (F) & Anor v Hwang Mee Hiong (F) [2016] 3 MLJ 689 at page 700 said: "[34] … it is an established principle of construing a contract that, among others, a contract must be construed as a whole, in order to ascertain the true meaning of its several clauses, and also, so far as practicable, to give effect to every part of it. Each clause in an ordinary commercial contract should be so interpreted as to bring them into harmony with the other clauses of the contract (see National Coal Board v Wm Neill & Son (St Helens) Ltd [1984] 1 All ER 555 which was cited in Royal Selangor Golf Club v Anglo-Oriental (M) Sdn Bhd [1990] 2 MLJ 163; [1990] 3 CLJ Rep 37 and Mulpha Pacific Sdn Bhd v Paramount Corp Bhd [2003] 4 MLJ 357). In Australian Broadcasting Commission v Australasian Performing Right Association Limited (1973) 129 CLR 99, it was held that the whole of the contract has to be considered, since the meaning of any one part of it may be revealed by other parts, and the words of every clause must if possible be construed so as to render them all harmonious one with another. [35] Professor McMeel in The Construction of Contracts (Interpretation, Implication and Rectification) (2nd Ed, 2011) explains in clear words this long-standing canon of construction at para 1.73 as follows: Both the traditional and the modern approaches to construction stress the importance of having regard to the instrument as a whole. It is important not to fixate on one particular word or phrase and thereby neglect the overall purpose of the document or to give disproportionate importance to one phrase or clause. This is a long-standing rule. [36] As stated by Lewison in The Interpretation of Contracts (5th Ed) at para 7.02 that in order to arrive at the true interpretation of a document, a clause must not be considered in isolation, but must be considered in the context of the whole of the document. In Chamber Colliery Co Ltd v Twyerould (1893) [1915] 1 Ch 268n (which was cited by Lewison), Lord Watson said: I find nothing in this case to oust the application of the well-known rule that a deed ought to be read as a whole, in order to ascertain the true meaning of its several clauses; and that the words of each clause should be so interpreted as to bring them into harmony with the other provisions of the deed, if that interpretation does no violence to the meaning of which they are naturally susceptible.” [39] 4 years later, the Federal Court in a judgment delivered by Azahar Mohamed FCJ (CJM later) in the case of Wong Yee Boon v Gainvest Builders (M) Sdn Bhd [2020] 3 MLJ 571 reiterated the principles in the Lucy Wong Nyuk King case. [40] It is also trite that when interpreting the meaning of the words used in a contract, they should be construed in their grammatical and ordinary meaning, except to the extent that some modification is necessary in order to avoid absurdity, inconsistency or repugnancy - The Interpretation of Contracts by Kim Lewinson; Malaysian Newsprint Industries Sdn Bhd v Perdana Cigna Insurance Bhd & Ors [2008] 2 MLJ 256 CA. [41] It is also a basic rule in the law of contract that what have been agreed by contracting parties should be given effect to. The Federal Court in Michael C. Solle vs. United Malayan Banking Corporation [1986] 1 MLJ 45 said as follows: “The principles of construction to be applied to the undertaking are similar to those applied to an ordinary contract. The intentions of the parties are to be gathered from the language used. They are presumed to have intended what they said. The common and universal principle is that an agreement ought to receive that construction which its language will admit, which will best effectuate the intention of the parties, to be collected from the whole agreement.” [42] The construction of the PPM 2018, the Term Sheet and the 2 letters dated 6.9.2021 (purported date) and 03.11.2022 in this case is a question of law to be determined by the court. It is not for the parties or their counsel to say what the documents say or mean - Silver Concept Sdn Bhd V Brisdale Rasa Development Sdn Bhd (Formerly Known As Ekspidisi Ria Sdn Bhd) [2005] 4 MLJ 101 CA. Silver Concept (supra) was referred to by the Federal Court in Far East Holdings Bhd & Anor v Majlis Ugama Islam dan Adat Resam Melayu Pahang and other appeals [2018] 1 MLJ 1 where Jeffrey Tan, FCJ delivering the judgment of the court authoritatively said: “[156] It must be more than settled that the construction of a document is a question of law. In Munusamy v Public Services Commission [1964] 1 MLJ 239, where on the construction of an article of the Constitution which forbids the dismissal or reduction in rank of certain persons unless a certain condition is complied with, that is that the person concerned be given a reasonable opportunity of being heard, Thomson LJ said ‘That question of construction is a question of law …’. In Citicorp Investment Bank (Singapore) Ltd v Wee Ah Kee [1997] 2 SLR 759, Yong Pung How CJ said ‘we must approach the construction of the document, which is a question of law, untrammelled by any concession as to the meaning of the agreement that might have been given by the court below’. ‘It is trite that a question of construction is a question of law and not fact (see Bahamas International Trust Co Ltd and another v Threadgold [1974] 1 WLR 1514 (HL)’ (Bintulu Development Authority v Pilecon Engineering Bhd [2007] 2 MLJ 610 per Nik Hashim JCA, as he then was, delivering the judgment of the court). In Bahamas International Trust Co Ltd and another v Threadgold, Lord Diplock said ‘that the construction of a written document is a question of law’, which was followed in Tan Suan Heoh v Lim Teck Ming & Ors [1987] 2 MLJ 466, NVJ Menon v The Great Eastern Life Assurance Co Ltd [2004] 3 MLJ 38, Silver Concept Sdn Bhd v Brisdale Rasa Development Sdn Bhd (formerly known as Ekspidisi Ria Sdn Bhd) [2005] 4 MLJ 101, Padiberas Nasional Bhd v Kontena Nasional Bhd [2010] 3 MLJ 134, and The Government of India v Cairn Energy India Pty Ltd & Anor [2011] 6 MLJ 441 and Tun Dr Mahathir bin Mohamad & Ors v Datuk Seri Mohd Najib bin Tun Hj Abdul Razak [2017] 9 MLJ 1). In Desa Teck Guan Koko Sdn d v Sykt Hap FohBh Hing (suing as a firm) [1994] 2 MLJ 246, Ian Chin J opined that ‘……” [43] With the foregoing principles in mind, and having considered the cause papers and the parties’ submissions, I am of the considered view and is inclined to accept the Defendant’s arguments that upon a proper construction of the documents involved:

The subscription can be redeemed at any time except that if it is redeemed prior to the third (3rd) anniversary of the Effective Date, the Paid Return and six percent (6%) of the invested sum will be forfeited – section 8 of the Term sheet as opposed to section 6 (iv) schedule of PPM 2018 where a penalty of 24% on the Subscription Price will be imposed;

(ii) Both “Target Annual Return” stated in section 7 schedule of PPM 2018 and “Target Return’ in section 6 of the Term Sheet states in clear, unambiguous and unmistakable language that: “Each Subscription share shall for as long as it is not redeemed, carry and be paid a non-cumulative target return of twelve percent (12%) per annum, which shall be payable annually within fourteen

business days from December 2021. The Target Return shall be pro-rated accordingly pursuant to the Effective Date.”

(iii) One the Redemption Notice is received, Section 6 (iii) of the Schedule to PPM 2018 is engaged, and in the language used, makes it obligatory on the Plaintiff to pay the sums now demanded by the Defendant as it provides:

The Subscriber’s Redemption Notice once issued shall be final and conclusive and binding upon the

the Company shall redeem the i-RPS specified in the Subscriber’s Redemption Notice by paying to the Subscriber the Redemption Price for the i-RPS being redeemed together with the accrued and outstanding Preference Dividend (as defined in Part 7 of Schedule 1) payable to the Subscribers failing which the Company shall pay to the Subscriber late payment interest at the rate of eight percent (8%) per annum calculated daily on all sums due and payable to the Subscriber until the date of actual payment thereof. (Emphasis added)

(iv) I find that the word “shall” employed in sections 6 and 7 schedule of PPM 2018 and section 6 of the Term Sheet is mandatory in nature, and not directory. [44] In my view, although the word “Target” is used when spelling out what the subscriber is entitled too by way of annual return, one needs to look behind the term or label of “Target” to the substance of what the parties had agreed as to the annual return to be paid to the subscriber. In the sage words of Gopal Sri Ram JCA (as he then was) in the very first sentence of the judgment in Ang Beng Teik v Pan Global Textile Bhd, Penang [1996] 3 MLJ 137, His Lordship stated: “The law is filled with cases where a miscarriage of justice has occurred because regard is had to labels and not substance.” [45] Similarly, Mohamed Dzaiddin SCJ in Malayan Banking Bhd v PK Rajamani [1994] 1 MLJ 405 SC, at p 410 said: “…The law will always look beyond the terminology of the document to the actual facts of the situation and it is no longer a question of words but substance (see Woo Yew Chee v Yong Yong Hoo [1979] 1 MLJ 131 and Addiscombe Garden Estates Ltd v Crabbe [1958] 1 QB 513; [1957] 3 All ER 563; [1957] 3 WLR 980).” [46] After carefully reviewing the PPM 2018, the Term Sheet, in a simple exercise of construction, it is plain to me that the Defendant has the right to exercise a right of redemption, and once the right is exercised, which in this case is after 3 years of the Effective Date, the Plaintiff must pay to the Defendant the redemption price being the initial investment sum of RM1,000,000.00, the preference dividend as contracted, and late payment of interest for delay, if any at the contracted rate. There is simply no window of opportunity for the Court to rewrite the agreement between the parties. [47] It is to be noted that up to that point, of the 2 letters dated 6.9.2021 (purported date) and 03.11.2021, the Plaintiff sought to do just that – to comply with the agreement; these letters are clear and unequivocal admissions of the debt by the Plaintiff. By these letters, the Plaintiff has acknowledged the following:

the Defendant’s Redemption Notice;

the amount of Redemption Price of i-RPS of RM1,000,000;

the amount of Pro-rated Preference Dividend of RM118,356.00 as at 26th December 2022; and

the amount of Late Payment Interest of RM45,592.00 as at 30th June 2022. [48] Further, both letters sought the Defendant’s kind indulgence and patience on 2 occasions, initially till end December 2021 and then until June 2022 to effect payment. Glaringly, there was not a whisper in the Plaintiff’s 2 letters to deny its liability to make the refund of the initial investment together with agreed returns and payment of interest for late payment. This is not a case where the Plaintiff stated no sums are owing. The Plaintiff clearly stated it owed the sum outstanding but merely asked for time to pay. [49] Obviously any further extension of time after 30.6.2022 to be given by the Defendant to the Plaintiff is a matter of indulgence and would not admit of a complete loss of investment as now posited by the Plaintiff. To now willy nilly recant its earlier position and renege on its obligations to pay the Defendant by contending that such subscription was never a guaranteed return but merely an estimate and/or a targeted sum based on forecast, assumptions and previous projections is absolutely untenable, a flagrant breach of the PPM 2018 and Term Sheet, an afterthought, and a misconceived one at that. [50] I find this Plaintiff’s contention to be inconsistent with the contemporaneous documents and undisputed facts in relation to the Defendant’s subscription Indeed the importance and superiority of contemporaneous documents cannot be over emphasised as made clear by the Federal Court in Tindok Besar Estate Sdn Bhd v Tinjar Co [1979] 2 MLJ 229. [51] It simply does not lie in the Plaintiff’s mouth to now say the investment by its nature is risky and can result in a total loss. Whilst it is not unusual in making investments that there is some element of risk, but in the circumstances of this case, by elevating the risk to a level that can result in a total loss of the investment as a belated reason not to pay the Defendant, is a complete volte face, and antithetical to the mandatory obligations of the Plaintiff as expressed in the PPM 2018 and Term Sheet. Such a stance does not resonate with this Court for it pricks the conscience of any reasonable or sensible person. It would be indeed unjust to the Defendant. [52] In law, parties are bound by the terms of the contract they have entered into and it is axiomatic that the duty of the court is to give effect to the clear intention of the parties as expressed in clear and unambiguous language. See e.g. Setapak Heights Development Sdn Bhd v Tekno Kota Sdn Bhd [2006] 2 CLJ 337 CA at [27]; Dato’ Sivananthan a/l Shanmugam v Artisan Fokus Sdn Bhd [2016] 3 MLJ 122 CA at [31], Michael C. Solle vs. United Malayan Banking Corporation [1986] 1 MLJ 45. [53] Not only that. Crucially, I observe that the letters were not written without prejudice. The Plaintiff is thus bound by its own admissions and acknowledgements based on the established laws. See e.g. Ong Yew Teik v. Kamal Y P Tan [2019] 4 MLRA 51; [2019] 1 LNS 50 CA: “[71] With this timeline and the several matters that had to be organised and attended to before any transfer of the shares could be made, the appellant's case that on 6 November 2006, the respondent signed all three Acknowledgments which contained the sums, now adjusted, was clearly the version that was proved. The evidence led by the appellant were cogent and credible, supported by contemporaneous documentary evidence coming from third parties such as the lawyers who dealt with the documentation and even from the respondent himself. All these material and corroborative evidence were unfortunately, not considered or evaluated properly by the learned judge. Ultimately, the share was transferred to the respondent through Roger. It was never the agreement nor the pleaded defence that the ECT shares were to be transferred for free. The respondent is therefore bound to the admission found in the Acknowledgment. The learned judge was thus plainly wrong in dismissing the claim when the weight of the evidence before the court was overwhelmingly in support of the appellant's claim.” Plaintiff is commercially Solvent? [54] The Plaintiff’s assertion that it is solvent because it has RM1.358million cash in the bank which is more than enough to pay the Defendant and other realisable assets is in my respectful view flawed and fell short of establishing its solvency. Such an assertion cannot on its own, in my respectful opinion, defeat the position of an undisputed debt, and the presumption of insolvency against it, and cannot give the Plaintiff any basis or right to a Fortuna injunction when it persists in not paying. I am mindful that it is trite that once a company has failed to comply with the statutory demand, there is a presumption of insolvency against it. The onus then shifts to the company to show that it is able to pay all its debts at the material time. [55] This is because, firstly, case laws make clear that the test of commercial solvency or cashflow insolvency require immediate availability of assets to pay current liabilities and not at a future date after the debts have become due and payable. In this regard, the Supreme Court held in Sri Hartamas Development Sdn Bhd v. MBf Finance Bhd [1992] 1 CLJ (Rep) 303: "In dealing with "commercial insolvency", that is, of a company being unable to meet current demands upon it, we would respectfully follow the Privy Council in the Malayan Plant case and cite the following observations from Buckley on the Companies Act (13th Edn) at p 460: In such a case it is useless to say that if its assets are realized there will be ample to pay twenty shillings in the pound: this is not the test. A company may be at the same time insolvent and wealthy. It may have wealth locked up in investments not presently realizable; but although this be so, yet if it has not assets available to meet its current liabilities it is commercially insolvent and may be wound up." (Emphasis added) [56] The Court of Appeal in Lafarge Concrete Sdn Bhd v. Gold Trend Builders Sdn Bhd [2012] 6 MLJ 817; [2012] 5 AMR 104 also explained the test on commercial solvency: “[17] 'In short, the question is not whether the debtor's assets exceed his liabilities as appeared in the books of the debtor, but whether there are moneys presently available to the debtor, or which he is able to realise in time, to meet the debts as they become due. It is not sufficient that the assets might be realisable at some future date after the debts have become due and payable' (Lian Keow Sdn Bhd (In Liquidation) & anor v Overseas Credit Finance (M) Sdn Bhd [1988] 2 MLJ 449, 454, per Seah SCJ). 'The test of commercial insolvency simply means that the respondent company is unable to meet current debts as they fall due' (System Communication Engineering Sdn Bhd v Zabidin Sdn Bhd [1999] MLJU 55; [1999] 1 AMR 1187 per Abdul Malik Ishak J, as he then was). '… the test for the insolvency of the respondent does not depend on the presence of their realisable assets' (Hotel Royal Ltd Bhd v Tina Travel & Agencies Sdn Bhd).: …………. [20] The winding up order should have been made even if the respondent was solvent (Cornhill Insurance plc v Improvement Services Ltd and ors [1986] 1 WLR 114, where it was held by Harman J that where a creditor's debt is clearly established, then the creditor has the right to present a winding up petition and obtain relief even though the company was solvent). 'Where the creditor's debt is clearly established it seems to me to follow that this court would not, in general, at any rate, interfere though the company would appear to be solvent … to persist in non-payment … would itself either suggest inability or that the application was an application that the court should give the debtor relief which it itself could provide, but would not provide, by paying the debt' (Mann v Goldstein [1968] 1 WLR 1091 per Ungoed-Thomas J). The solvency of a company counts for nothing if it is not ready, willing and able to meet the demand of the creditor. The discretion to refuse winding up could be exercised if the respondent was ready, willing and able to meet the demand of the appellant (see Imperial Hydropathic Hotel Company, Blackpool, The v Hampson,Re (1882) 23 Ch D 1; [1883] 49 LT 147, 151, where the company was solvent and the creditor accepted the proposal to pay the debt within one month, the Court of Appeal (Jessel MR, Cotton and Bowen UJ) ordered the debt to be paid within one month, in default of which 'there will be the usual winding up order'). But it was not that in the instant case. [21] There was no genuine dispute. The respondent was insolvent. The respondent was not ready, willing and able to meet the demand. Winding up should have been the foregone conclusion.” [57] Second, a company cannot be said to be solvent when it asserts that it is able to pay the debt but continue not to do so. As such, even if the Plaintiff is solvent as alleged, its refusal to pay, cannot give it any basis or right to a Fortuna Injunction. The principle that ‘the solvency of a company counts for nothing if it is not ready, willing and able to meet the demand of the creditor’ was applied in Pengkalen Holiday Resort Sdn Bhd v Perbadanan Pengurusan Paradise Apartment Lagoon (North) & Anor [2016] 1 LNS 1114, Klass Corp (M) Sdn Bhd v MKRS Management Sdn Bhd [2018] 9 MLJ 305 , United Malaya Stores (supra); CME Group Bhd v Bellajade Sdn Bhd [2022] MLJU 928 and KYS College Sdn Bhd v MBSB Bank Bhd (formerly known as Asian Finance Bank Bhd) [2022] MLJU

[58] I thus find that solvency has no bearing on the Plaintiff’s ability to pay its debts when there is neglect or refusal to pay a legitimate debt. In the result, the Plaintiff’s posit of solvency must fail. Irreparable damage? [59] I find the Plaintiff’s claim of irreparable damage and hardship cannot override the Defendant’s statutory right as a creditor to enforce the debt owed, much less constitute any real ground for a Fortuna Injunction. The Court of Appeal in Pacific & Orient Insurance Co Bhd v Muniammah Muniandy (supra) at [29] made plain that if the intended petition is not bound to fail and instead has a good chance of success, then whether or not the petition will cause irreparable damage is immaterial and of no consequence. The Plaintiff’s fears can all be addressed by paying up – see Ming Ann Holdings Sdn Bhd v. Danaharta Urus Sdn Bhd [2002] 3 MLJ 49; [2002] 3 CLJ 380: “On the facts, the grounds relied on by the applicant are nothing more than 'fear of losing'; fear of losing business, fear of losing customers, fear of losing suppliers, fear of losing goodwill, fear of not being able to collect its dents from third parties, in case the applicant company is wound up. All that the applicant has to do to avoid such ‘fears’ is to settle the judgment debt.” Balance of convenience and damages is an adequate remedy [60] The Plaintiff’s submission on this topic is with respect, wide off the mark as the Court of Appeal in Tan Kok Tong’s case at para 8 of the judgment as alluded earlier, made clear that in considering whether to grant a Fortuna Injunction, the principles in American Cynamid Co v Ethicon Ltd [1975] AC 396 as to whether there is a serious question to be tried, whether damages is an adequate remedy, and the balance of convenience test are not applicable. [61] For completeness’ sake, I am of the view that the Plaintiff’s postulation that the Notice is tainted with an ulterior motive to coerce and/or oppress the Plaintiff into redeeming the Defendant’s i-RPS subscription and an abuse of process is bereft of merit. Prima facie a creditor who is not paid has a right to file a petition for a winding-up order whatever may be his other motives - Morgan Guaranty Trust Co of New York v Lian Seng Properties Sdn Bhd [1991] 1 MLJ 95 SC. [62] Instead, I find there could be no doubt that this OS is filed by the Plaintiff as an artful machination to buy itself time. When the process of the court is invoked, not for the genuine purpose of obtaining the relief claimed, but for a collateral purpose, it becomes an abuse of process. The categories of abuse are not closed. When abuse is revealed, the court has a duty, not a discretion, to dismiss the action: Hunter v Chief Constable of Midlands Police [1982] AC 529, per Lord Diplock at 536D. Following Lord Diplock, the inevitable consequence in the instant action must be a dismissal of the Plaintiff’s OS. [63] In any case, on the evidence and material placed before this Court, the Plaintiff has not satisfied the Court on a balance of probabilities that the Defendant’s intended petition has no chance of success, as a matter of law as well as a matter of fact; and that the presentation of such petition (which has no chance of success) might produce irreparable damage to the Plaintiff. The Plaintiff has not satisfied the two principles laid down in the Fortuna Holdings case (supra) to warrant a grant of an injunction to prevent the Defendant from presenting a winding-up petition against the Plaintiff. [64] For reasons given, I am not convinced there is any basis to restrain the intended Winding-up Petition. I thus exercised my discretion to dismiss the OS with costs subject to allocator. Dated 26th March 2023 - signed - ……………………….. Liza Chan Sow Keng Judge High Court of Malaya at Kuala Lumpur COUNSEL: For the Plaintiff : Choy Moon Moon (together with her, Dato' Seri Rajan Navaratnam) Messrs Shahrizat Rashid & Lee For the Defendant : Muhammad Fareez Shah (together with him, Syakira Azam) Messrs Fareez Shah & Partners CASES REFERRED: United Malaya Stores Sdn Bhd v. S Selapa Sivalingam & Anor [2022] 6 CLJ 469 Mobikom Sdn Bhd v. Inmiss Communications Sdn Bhd [2007] 3 CLJ 295; [2007] 3 MLJ 316 Pacific & Orient Insurance Co Bhd v. Muniammah Muniandy [2011] 1 CLJ 947; [2010] MLJU 2217 SSM Management Sdn Bhd v Aeon Big (M) Sdn Bhd (formerly known as Magnificient Diagraph Sdn Bhd) [2019] 4 MLJ 826; [2019] 5 CLJ 695 Redang Paradise Vacation Sdn Bhd v Yap Chuan Bin & Other Appelas

10 CLJ 296 City Investment Sdn Bhd v Koperasi Serbaguna Cuepacs Tanggungan Bhd [1985] 1 CLJ (Rep) 77 Lucy Wong Nyuk King (F) & Anor v Hwang Mee Hiong (F) [2016] 3 MLJ 689 Wong Yee Boon v Gainvest Builders (M) Sdn Bhd [2020] 3 MLJ 571 Malaysian Newsprint Industries Sdn Bhd v Perdana Cigna Insurance Bhd & Ors [2008] 2 MLJ 256 Michael C. Solle vs. United Malayan Banking Corporation [1986] 1 MLJ 45 Silver Concept Sdn Bhd V Brisdale Rasa Development Sdn Bhd (Formerly Known As Ekspidisi Ria Sdn Bhd) [2005] 4 MLJ 101 Far East Holdings Bhd & Anor v Majlis Ugama Islam dan Adat Resam Melayu Pahang and other appeals [2018] 1 MLJ 1 Setapak Heights Development Sdn Bhd v Tekno Kota Sdn Bhd [2006] 2 CLJ 337 Dato’ Sivananthan a/l Shanmugam v Artisan Fokus Sdn Bhd [2016] 3 MLJ 122 Ong Yew Teik v. Kamal Y P Tan [2019] 4 MLRA 51; [2019] 1 LNS 50 Lafarge Concrete Sdn Bhd v. Gold Trend Builders Sdn Bhd [2012] 6 MLJ 817; [2012] 5 AMR 104 Pengkalen Holiday Resort Sdn Bhd v Perbadanan Pengurusan Paradise Apartment Lagoon (North) & Anor [2016] 1 LNS 1114 Klass Corp (M) Sdn Bhd v MKRS Management Sdn Bhd [2018] 9 MLJ 305 CME Group Bhd v Bellajade Sdn Bhd [2022] MLJU 928 KYS College Sdn Bhd v MBSB Bank Bhd (formerly known as Asian Finance Bank Bhd) [2022] MLJU 3470 Ming Ann Holdings Sdn Bhd v. Danaharta Urus Sdn Bhd [2002] 3 MLJ 49; [2002] 3 CLJ 380 American Cynamid Co v Ethicon Ltd [1975] AC 396 Morgan Guaranty Trust Co of New York v Lian Seng Properties Sdn Bhd [1991] 1 MLJ 95 Hunter v Chief Constable of Midlands Police [1982] AC 529 STATUTES/LEGISLATION REFERRED: Order 41 Rule 4, O 92 r. 1 of the Rules of Court 2012