The court directed that Enclosure 3 be heard S/N 8sgslSDc4EiZ7juZsp4oQ inter partes before me. The court also directed that Enclosure 1 and Enclosure 3 be heard together. Respective parties’ submissions [19] The Plaintiff's submissions centered on their request for a Fortuna injunction to prevent the Defendant from proceeding with winding-up proceedings. They argued that there was a substantial dispute over the judgment debt, particularly noting that the amount awarded (approximately RM1.7 million) exceeded what was originally claimed in the pleadings by about RM1.5 million. The Plaintiff emphasised they were a solvent company with multiple ongoing construction projects and maintained that allowing the winding-up petition to proceed would cause irreparable damage to their business. They also pointed out that they had pending claims against both the Defendant and an investment company, suggesting alternative means of resolving the dispute besides winding-up proceedings. [20] The Defendant's submissions focused on the undisputable nature of the judgment debt, which had been affirmed by both the High Court and Court of Appeal after a full trial. They argued that the Plaintiff's pending application for leave to appeal to the Federal Court did not create a genuine dispute over the debt. The Defendant emphasised that they had properly served notice under Sections 465 and 466A of the Companies Act, which created a legal presumption that the Plaintiff was unable to pay its debts. They further argued S/N 8sgslSDc4EiZ7juZsp4oQ that the Plaintiff had failed to provide concrete evidence of their solvency or ability to pay the debt, noting that the Plaintiff had not made any payment toward the judgment debt despite having multiple opportunities to do so. Based on these grounds, they asked the court to dismiss both the main application (Enclosure 1) and the interim injunction application (Enclosure 3). Analysis and findings of the court Enclosure 1 Lack of bona fide dispute over the judgment debt [21] The Plaintiff contends that there exists a bona fide dispute regarding the judgment debt of RM1,771,200.00 awarded to the Defendant. The Plaintiff argues that this sum was excessive and not properly pleaded in the Defendant's counter-claim, being based merely on quotations despite the existence of other lower quotations. Further, the Plaintiff asserts that the counter-claim was premature as no actual rectification works were carried out by any third party, and consequently, no actual loss was suffered by the Defendant. The Plaintiff has filed an application for leave to appeal to the Federal Court, scheduled for hearing on 10.10.2024. S/N 8sgslSDc4EiZ7juZsp4oQ [22] The Defendant maintains that the judgment debt of RM1,771,200.00 awarded by the High Court on 28.7.2021 and affirmed by the Court of Appeal on 30.5.2024 is an indisputable debt. The Defendant argues that the Plaintiff is attempting to challenge the merits of decisions made after a full trial and appeal, and that the mere filing of an application for leave to appeal does not create a bona fide dispute over the judgment debt. The Defendant emphasises that no stay of execution has been obtained against the High Court judgment. [23] I find merit in the Defendant's position. The principle governing Fortuna injunctions in relation to disputed debts was clearly articulated by the Court of Appeal in Pacific & Orient Insurance Co Bhd v Muniammah Muniandy [2011] 1 CLJ 947, where Ramly Ali JCA (as he then was) held that for a Fortuna injunction to be granted, the applicant must satisfy both limbs: first, that the intended petition has no chance of success as a matter of law and fact, and second, that the presentation of such petition might produce irreparable damage to the company. [24] In the present case, the debt arose from a judgment obtained after a full trial where the High Court considered the evidence, including the quotations for rectification works, and made a considered decision to award RM1,771,200.00 to the Defendant. This decision was subsequently scrutinised and affirmed by the Court of Appeal. The Plaintiff's arguments essentially seek to re-S/N 8sgslSDc4EiZ7juZsp4oQ litigate matters that have been judicially determined through two tiers of courts. [25] The Court of Appeal in Mobikom Sdn Bhd v Inmiss Communications Sdn Bhd [2007] 3 CLJ 295 established that a Fortuna injunction may be granted where there is a genuinely disputed claim. However, where there exists a judgment debt that has been affirmed on appeal, the element of genuine dispute becomes significantly more difficult to establish. The Plaintiff's pending application for leave to appeal to the Federal Court does not automatically create a bona fide dispute over the judgment debt, particularly in the absence of a stay of execution. [26] Furthermore, after taking into account the Plaintiff's statutory notice dated 25.7.2024 and the Defendant's set-off calculations as evidenced in their solicitors' letter dated 1.8.2024, there remains an undisputed sum of RM1,259,333.07 due and owing to the Defendant. This sum exceeds the statutory threshold under Section 466(1)(a) of the Companies Act 2016, and the Plaintiff has failed to make any payment despite having ample opportunity to do so. [27] The Plaintiff's attempts to challenge the basis of the judgment debt by questioning the absence of actual rectification works or losses are matters that should have been - and indeed were - argued during the trial and appeal. These arguments cannot now be resurrected to S/N 8sgslSDc4EiZ7juZsp4oQ create a bona fide dispute over a judgment debt that has been affirmed on appeal. In these circumstances, I find that there exists no bona fide dispute over the judgment debt that would justify the grant of a Fortuna injunction. Failure to demonstrate commercial solvency [28] The Plaintiff contends that it is a solvent company actively engaged in numerous ongoing construction projects worth millions of ringgit. In support of its position, the Plaintiff points to several ongoing projects including works at Pavilion Damansara Heights valued at RM100,614,708.00, development works at Persiaran Stonor worth RM21,000,000.00, and MRT Line 2 contracts valued at RM4,340,000.00 and RM5,699,000.00 respectively. The Plaintiff further argues that it has claims against the Defendant both directly and indirectly, including through proceedings involving Vistasik. [29] The Defendant maintains that the Plaintiff has failed to prove its commercial solvency and has not demonstrated any ability to meet the current statutory demand. The Defendant emphasises that after setting off the amounts claimed in the respective statutory notices, the Plaintiff still owes RM1,259,333.07 to the Defendant. The Defendant contends that the Plaintiff's failure to make any payment towards the judgment debt, despite having multiple opportunities to do so, indicates commercial insolvency. S/N 8sgslSDc4EiZ7juZsp4oQ [30] Having carefully considered the submissions and evidence before me, I find that the Plaintiff has failed to demonstrate its commercial solvency. The principles governing commercial insolvency are well-established. As held by the Federal Court in Lian Keow Sdn Bhd (in liquidation) & Anor v Overseas Credit Finance (M) Sdn Bhd & Ors [1988] 2 MLJ 449, the pertinent question is not whether the company's assets exceed its liabilities, but whether there are presently available funds to meet the demanded debt. The mere possibility of future realisable assets is insufficient. [31] This principle was reinforced by the Court of Appeal in Gulf Business Construction (M) Sdn Bhd v Israq Holding Sdn Bhd [2010] 5 MLJ 34, where it was held that a company may simultaneously be insolvent and wealthy - the critical test being whether it can meet current demands upon it, regardless of whether it has assets which, if realised, would enable it to discharge its liabilities in full. [32] In the present case, while the Plaintiff has highlighted several ongoing projects with substantial contract values, it has not demonstrated any present ability to satisfy the judgment debt. The Court of Appeal in Lafarge Concrete (M) Sdn Bhd v Gold Trend Builders Sdn Bhd [2012] 6 MLJ 817 explained that the failure to pay a demanded sum within 21 days imposes a presumption of insolvency which the company bears the burden of rebutting. The Plaintiff has not discharged this burden. S/N 8sgslSDc4EiZ7juZsp4oQ [33] Significantly, despite having opportunities to make payments towards the judgment debt of RM1,771,200.00 which was awarded by the High Court on 28.7.2021 and affirmed by the Court of Appeal on 30.5.2024, the Plaintiff has failed to make any payment whatsoever. The Plaintiff's reliance on potential future income from ongoing projects and claims against the Defendant through separate proceedings does not address its present inability to meet its current obligations. [34] In these circumstances, I find that the Plaintiff is commercially insolvent within the meaning of section 466(1)(a) of the Companies Act 2016. The existence of potentially valuable contracts and future claims does not negate the present reality that the Plaintiff appears unable to meet its current financial obligations, including the judgment debt owed to the Defendant. Statutory presumption of inability to pay debts under section 466(1)(a) of the Companies Act 2016 [35] The Plaintiff argues that the statutory notice dated 15.7.2024 was issued by the Defendant for the purpose of exerting undue pressure on the Plaintiff to pay a disputed sum. The Plaintiff contends that it has issued its own statutory notice dated 25.7.2024 against the Defendant for the sum of RM881,506.93, and that when both notices are considered together, the statutory presumption should not arise. S/N 8sgslSDc4EiZ7juZsp4oQ [36] The Defendant submits that after setting off the amounts claimed in both statutory notices, there remains an outstanding sum of RM1,259,333.07 due from the Plaintiff to the Defendant. The Defendant maintains that this sum significantly exceeds the statutory threshold of RM50,000.00 prescribed under section 466(1)(a) of the Companies Act 2016, and the Plaintiff's failure to pay this sum within 21 days of the notice triggers the statutory presumption of inability to pay debts. [37] I find merit in the Defendant's position. The Federal Court in Malaysian Air Charter Company Sdn Bhd v Petronas Dagangan Sdn Bhd [2000] 1 MLRA 649 has established that a notice of demand under section 218(2)(a) of the Companies Act of 1965 (in pari materia with section 466(1)(a) of the Companies Act of 2016) need not specify the exact sum due as at the date of demand. What is critical is that the sum due exceeds the statutory threshold (presently RM50,000.00) and remains unpaid after demand without reasonable explanation to the satisfaction of the court. [38] In the present case, the Defendant's statutory notice dated 15.7.2024 was based on the High Court judgment dated 28.7.2021, which awarded RM1,771,200.00 to the Defendant. This judgment was subsequently affirmed by the Court of Appeal on 30.5.2024. Even after accounting for the Plaintiff's cross-claim through its statutory notice dated 25.7.2024, the net sum of RM1,259,333.07 remains due to S/N 8sgslSDc4EiZ7juZsp4oQ the Defendant, as evidenced by the Defendant's solicitors' letter dated 1.8.2024. [39] The Court of Appeal in Lafarge Concrete emphasised that where there has been a failure to pay a demanded sum within 21 days, the presumption that the company is insolvent and unable to pay its debts arises automatically. The burden falls on the company to rebut this presumption. In the present case, the Plaintiff has not made any payment towards the judgment debt despite having multiple opportunities to do so. [40] As highlighted in Poney Garments Sdn Bhd, there is no requirement for a petitioning creditor to prove insolvency under any other sub-paragraph of Section 466(1) before the court may make up its mind to wind up a company under sub-paragraph (a) of that subsection. The statutory presumption, once triggered, stands unless rebutted. [41] The Plaintiff's pending application for leave to appeal to the Federal Court does not affect this position. As noted in Klass Corporation (M) Sdn Bhd v MKRS Management Sdn Bhd [2018] 7 CLJ 303, the jurisprudence developed under the former Companies Act 1965 continues to apply to the corresponding provisions in the Companies Act 2016, as these provisions are drafted in virtually identical fashion. The statutory presumption under section 466(1)(a) remains unrebutted, and the Plaintiff has not obtained any stay of execution of the judgment debt. S/N 8sgslSDc4EiZ7juZsp4oQ [42] Accordingly, I find that the statutory presumption of inability to pay debts under section 466(1)(a) of the Companies Act 2016 has been triggered and remains unrebutted by the Plaintiff. Irrelevance of irreparable damage in the context of an undisputed judgment debt [43] The Plaintiff contends that the presentation of a winding-up petition would cause irreparable damage to its business operations and reputation. In its affidavit evidence, the Plaintiff points to several ongoing construction projects, including works at Pavilion Damansara Heights valued at RM100,614,708.00, and argues that the advertisement of a winding-up petition would result in the freezing of banking facilities, difficulties in paying employees' salaries, and severe damage to its commercial reputation in the construction industry. [44] The Defendant submits that where there exists a valid and enforceable judgment debt, the question of irreparable damage becomes irrelevant. The Defendant relies on the judgment debt of RM1,771,200.00 awarded by the High Court on 28.7.2021 and affirmed by the Court of Appeal on 30.5.2024, arguing that potential damage to the Plaintiff's business interests cannot override the Defendant's right to enforce this judgment debt. S/N 8sgslSDc4EiZ7juZsp4oQ [45] I find the Defendant's position to be well-founded in law. The Court of Appeal in Pacific & Orient Insurance established that where a valid and enforceable judgment exists, the intended petition is not bound to fail and the question of whether it causes irreparable damage becomes wholly irrelevant. This principle has been recently reaffirmed in Poney Garments, where the court emphasised that if a debt cannot be bona fide disputed on substantial grounds, the potential for irreparable damage is immaterial to the court's consideration. [46] The Court of Appeal in Mobikom identified two distinct situations where a Fortuna injunction may be granted: firstly, where the intended petition has no chance of success and might cause irreparable damage, and secondly, where a petitioner asserts a disputed claim which might produce irreparable damage rather than pursuing available alternative remedies. Neither situation applies in the present case, as the Defendant's claim is founded upon a judgment debt that has been affirmed on appeal. [47] While I acknowledge the concerns raised by S Nantha Balan JC (as his Lordship then was) in Sanjung Suria Sdn Bhd v PLB-KH Bina Sdn Bhd [2013] CLJU 1004 regarding the severe consequences of winding-up proceedings, these considerations must yield to the principle that a judgment creditor should not be impeded from enforcing a valid judgment debt. The present case is distinguishable from S/N 8sgslSDc4EiZ7juZsp4oQ situations involving disputed debts or where alternative remedies might be more appropriate. [48] The Plaintiff's pending application for leave to appeal to the Federal Court does not alter this position. No stay of execution has been obtained, and the mere possibility of a future appeal cannot negate the present enforceability of the judgment debt. As emphasised in Poney Garments, if the petitioner has some prospects of obtaining a winding-up order, the petition should be allowed to proceed in accordance with the Companies Act 2016, without being stifled by an injunction. [49] Therefore, while I am mindful of the potential commercial impact on the Plaintiff's business operations, I find that these considerations cannot override the Defendant's right to enforce its judgment debt through the statutory mechanism of winding-up proceedings. The principle established in Pacific & Orient Insurance must prevail: where there exists a valid and enforceable judgment debt, the question of irreparable damage becomes irrelevant to the court's consideration. Enclosure 3 [50] Enclosure 3 was heard together with Enclosure 1 and he grounds advanced by the Plaintiff in support of Enclosure 3 are materially identical to those put forward for Enclosure 1. These grounds primarily rest on: S/N 8sgslSDc4EiZ7juZsp4oQ a) The alleged existence of a bona fide dispute regarding the judgment debt of RM1,771,200.00; b) The Plaintiff's purported solvency; and c) The potential irreparable damage to the Plaintiff's business if a winding-up petition is presented. [51] Having dismissed Enclosure 1 for the reasons set out in my earlier grounds, it follows that Enclosure 3 must also fail. The interim injunction sought in Enclosure 3 was specifically intended to preserve the status quo pending the determination of Enclosure 1. With the dismissal of the substantive application in Enclosure 1, the interim relief sought in Enclosure 3 has also become academic. [52] Having found that the Plaintiff failed to establish grounds for the substantive injunction sought in Enclosure 1, there can be no basis for granting the interim injunction sought in Enclosure 3 and Enclosure 3 is dismissed. Conclusion [53] For the reasons set out above, I find that the Plaintiff has failed to establish grounds for either the substantive Fortuna injunction sought in Enclosure 1 or the interim injunction sought in