United Paulownia Plantation Sdn Bhd v Fgp Ventures Sdn Bhd (WA-24NCC-296-05/2025)

The Defendant entered into nine (9) consecutive joint-venture agreements (“JVA”) with the Plaintiff and GREEN AFFORESTATION INTERNATIONAL NETWORK SDN BHD (“GAIN”) to commence a sustainable timber plantation business (“Project”) on farming, planting, farm managing and harvesting of specific number of RT Paulownia Trees (“Trees”) on certain identified lands (“Plantation”);

The Project comprises of nine phases. Each phase is governed by its respective JVA;

The current dispute is in respect of phase four of the JVA (“JVA Phase 4”);

The terms of the JVA Phase 4 provides that:

There are two (2) cycles for each phase. The duration for each one cycle is forty (40) months;

(ii) The Plaintiff must ensure that 90,000 Trees be planted and harvested during the first cycle (“1st Cycle Minimum Plantation”), failing which the Plaintiff must indemnify the Defendant in respect of any shortfall thereof;

(iii) The Defendant must remit funds to the Plaintiff or GAIN, calculated at RM 30.00 per Tree for the first cycle (“1st Cycle Funds”);

(iv) In consideration of the 1st Cycle Funds paid by the Defendant, a fixed return calculated at RM 62.00 per Tree (“Fixed Return”) must be paid to the Defendant on or before the expiry of forty (40) months from the date of payment of the 1st Cycle Funds;

The Defendant had remitted the sum of RM 2,700,000.00 (being the 1st Cycle Funds under the JVA Phase 4) to the Plaintiff on 23.8.2021 and to GAIN on 2.9.2021;

On 6.9.2021, the Plaintiff issued a letter confirming that the Fixed Return for JVA Phase 4 amounting to RM 7,380,000.00 (“Demanded Sum”) must be paid to the Defendant on or before 2.1.2025 (“Due Date”); The Plaintiff’s proposal to settle the Demanded Sum [4] The Plaintiff had made proposals to settle the Demanded Sum as follows: -

On 26.12.2024, the Plaintiff informed that there will be a delay in the payment of the Demanded Sum due to events that fall within the scope of the force majeure clause under the JVA Phase 4 (“Force Majeure Events”) as follows:

Landslides (caused by heavy rainfall);

(ii) Recurring road damage and inaccessibility (caused by heavy rainfall);

(iii) Wild buffalo attacks on the Plantation;

In reliance of the Force Majeure Events, the Plaintiff requested on 15.1.2025 and 22.1.2025 for an extension of twelve (12) months from the Due Date to pay the Demanded Sum (“1st

On or about 24.3.2025, the Plaintiff proposed to settle the Demanded Sum by way of two (2) installments on 31.9.2025 and 31.5.2026 respectively (“2nd Repayment Proposal”);

On or about 2.4.2025, the Plaintiff revised its proposal by bringing the two (2) installments forward to 15.5.2025 and 15.7.2025 (“3rd Repayment Proposal”);

On 3.4.2025, the Plaintiff requested more time until 10.4.2025 to submit the finalized repayment schedule. The Defendant’s issuance of the s. 466 Notice [5] As no repayment schedule has been accepted or mutually agreed upon by the Plaintiff and the Defendant, the Defendant issued a statutory notice dated 13.5.2025 pursuant to Section 466(1)(a) Companies Act 2016 (“s. 466 Notice”). The Civil Suit [6] Two weeks after the issuance of the s. 466 Notice, the Plaintiff filed the Fortuna Injunction and the Civil Suit: -

Both the Fortuna Injunction and the Civil Suit are premised on the same grounds;

In the Civil Suit, the Plaintiff prays for an extension of eighteen

months from the date of receipt of the 1st Cycle Funds to pay the Demanded Sum (“4th Repayment Proposal”). Summary of the Plaintiff’s case (in supporting Enclosure 1 and 7). [7] The grounds to support the Plaintiff’s application are: -

The s. 466 Notice is not supported by any judgment;

The debt is disputed and pre-mature;

The Plaintiff is an on-going concern;

The Defendant’s demand for payment without harvesting and selling the Trees turns the character of the JVA into an illegal money lending transaction. s. 466 Notice not supported by any judgment [8] The Plaintiff argues that the issuance of the s. 466 Notice without the support of a judgment is mala fide with the intention of pressuring the Plaintiff to pay a disputed debt. In this respect, the Plaintiff relies on the authorities of Keet Gerald Francis Noel John v. Mohd Noor @ Harun Abdullah & Ors [1995] 1 MLJ 193; Mobikom Sdn Bhd v Inmiss Communications Sdn Bhd [2007] 3 MLJ 316. The debt is disputed and pre-mature [9] The Plaintiff also contends that the repayment hinges on the growth, harvesting and sale of the Trees and that the Defendant is not a creditor. In this respect, the Plaintiff relies on the authorities of Metal Reclamation (Industries) Sdn Bhd v. JRC Tenaga Sdn Bhd [2000] 1 AMR 2495; Chang Chan Thong v. Kemajuan Sri Segara Sdn. Bhd. [1996] 2 CLJ 471. Plaintiff is an ongoing concern [10] The Plaintiff avers that: -

The Plaintiff is an on-going company and is actively carrying on business of the Plantation;

Plaintiff did not pay the alleged debt because it is insolvent;

There is no evidence to show that the Plaintiff is commercially insolvent. [11] In this respect, the Plaintiff relies on the following authorities: ASM Development (KL) Sdn Bhd v. Econpile (M) Sdn Bhd [2020] MLJU 282; Maril-Rionebel (M) Sdn Bhd v Perdana Merchant Bankers Bhd [2001] 4 MLJ 187; Sri Hartamas Development Sdn Bhd v MBF Finance Bhd [1992] 1 MLJ 313; Re Southard & Co Ltd [1979] 3 All ER 556; Kim Wah Theatre Sdn Bhd v Fahlum Development Sdn Bhd [1990] 2 MLJ 511; Deputy Commissioner of Taxation v Guy Holdings Pty Ltd (1994) 12 ACLC 966; Re International Electric Co Limited 20 DLR 451; Re Lympne Investments Ltd [1972] 2 All ER 385; Azman & Tay Associates Sdn Bhd v Sentul Raya Sdn Bhd [2002] 4 AMR 4161; Malaysian Resources Corporation Bhd v Juranas Sdn Bhd [2002] 3 AMR 3276; Dynaworth Shipping Sdn Bhd v Ling Chung Ann [2001] 3 MLJ 399. Illegal money lending transaction [12] The Plaintiff avers that:

The sum of RM 2,700,000.00, which is the 1st Cycle Funds, with the expectation of Fixed Return of RM 7,380,000.00 is an illegal loan in the form of investment;

The illegal loan is not enforceable and contravenes the Moneylenders Act 1950 and Section 24 of the Contract Act 1950. [13] In this respect, the Plaintiff relies on the following authorities: Lee Kuang Gen v. Tan Sri Dato’ Seri Dr M Mahadeva Mahalingam & Other Appeals [2024] 2 CLJ 20; Ngui Mui Khin & Anor v. Gillespie Bros & Co LTD [1979] 1 MLRA 313; Triple Zest Trading & Suppliers Sdn Bhd & Ors v. Applied Business Technologies Sdn Bhd [2023] 10 CLJ 187. Summary of the Defendant’s case (in opposing Enclosure 1 and 7) s. 466 Notice not supported by any judgment [14] The Defendant argues that a creditor is not required to obtain judgment before instituting winding up proceedings against a company. In this respect, the Defendant relies on the following authorities: Megasteel Sdn Bhd v Perwaja Steel Sdn Bhd [2008] 4 CLJ 352; Lafarge Concrete (M) Sdn Bhd v Gold Trend Builders Sdn Bhd [2012] 6 MLJ 817. The debt is disputed and pre-mature [15] The Defendant contends that there is no bona fide dispute over the

The terms of the JVA Phase 4 is clear and undisputed;

The Defendant has remitted the 1st Cycle Funds;

The Plaintiff has confirmed that the Fixed Return must be paid by the Due Date; [16] The Defendant also contends that the Plaintiff had made proposals in the form of the 1st Repayment Proposal, 2nd Repayment Proposal, 3rd Repayment Proposal and 4th Repayment Proposal. [17] The Defendant also argues that by seeking an extension of time to pay the Demanded Sum in the Civil Suit goes to confirm that the Demanded Sum is not disputed. In this respect, the Defendant relies on the following authorities: V Medical Services (M) Sdn Bhd v Swissray Asia Healthcare Co Ltd [2025] 2 MLJ 744; CIMB Bank Bhd v Anthony Lawrence Bourke & Anor [2019] 2 MLJ 1; Delta Drive (M) Sdn Bhd v Hong Leong Finance Bhd [2008] 4 MLJ 400; Sepang International Circuit Sdn Bhd v M7 Racing Sdn Bhd [2020] 9 MLJ 577; Menta Construction Sdn Bhd v SPM Property & Management Sdn Bhd & Anor [2017] MLJU 526. Plaintiff is an ongoing concern [18] The Defendant also avers that it is irrelevant for the Plaintiff to allege that it is a going concern when it refuses to pay the Demanded Sum. The Plaintiff will be deemed to be insolvent when it is not ready, willing or able to meet the current debt as they fall due. In this respect, the Defendant relies on the case of Gulf Business Construction (M) Sdn Bhd v Israq Holding Sdn Bhd [2010] 5 MLJ

Illegal money lending transaction [19] Additionally, the Defendant argues that: -

Prior to the issuance of the s. 466 Notice, the Plaintiff had never asserted the correctness of the Demanded Sum;

The Fixed Return for phases 1, 2, and 3 had been fully repaid without this issue being raised by the Plaintiff;

The Plaintiff is approbating and reprobating by claiming that the JVA Phase 4 constitutes an illegal money lending transaction, but, on the other hand, relying on the Civil Suit to enforce an extension of time;

The JVA Phase 4 is, in form and substance, a genuine commercial agreement. [20] In this respect, the Defendant relies on the following authorities: David Wong Hon Leong v Noorazman bin Adnan [1995] 4 CLJ 155; Jetara Sdn Bhd v Maju Holdings Sdn Bhd [2007] 3 CLJ 1; PECD Construction Sdn Bhd v Freehold Point Sdn Bhd [2008] MLJU 127; Firdaus Khan bin Parit Khan & Anor v CIMB Bank Bhd [2024] 4 MLJ 474; Datuk Yap Pak Leong v Sababumi (Sandakan) Sdn Bhd [1997] 1 CLJ 23; PB Securities Sdn Bhd v Autoways Holding Bhd [2000] 4 MLJ 417; Tenaga Nasional Bhd v Irham Niaga Sdn Bhd & Anor [2011] 1 MLJ 752. Force majeure [21] The Defendant avers that: -

For the Plaintiff to rely on the Force Majeure Events, the burden lies on the Plaintiff to prove;

Save for the purported landslides, none of the Force Majeure Events falls within the definition contemplated in Clause 2.4 of the JVA Phase 4;

There is absence of evidence adduced by the Plaintiff to show that the Force Majeure Events occurred on the Plantation;

If the Force Majeure Events are genuine, the Plaintiff ought to have notified the Defendant as soon as it becomes aware of the same;

The Trees would have reached its maturity when the Force Majeure Events were first raised by the Plaintiff. [22] In this respect, the Defendant relies on the following authorities: Intan Payong Sdn Bhd v Goh Saw Chan Sdn Bhd [2005] 1 MLJ 311; Pacific & Orient Insurance Co Bhd v Muniammah Muniandy [2011] 1 CLJ 947; Gogung Fusion Restaurant (KLCC) Sdn Bhd & Ors v Suria KLCC Sdn Bhd [2021] MLJU 2345; Progressive Ocean Sdn Bhd v Northern Corridor Implementation Authority [2016] MLJU 304; Golden Bay Realty Pte. Ltd. v Orchard Twelve Investments Pte. Ltd. [1990] 3 CLJ (Rep) 499. Findings by the Court [23] The background facts are clear. There is also no dispute to the terms of the JVA Phase 4. The remittance of the 1st Cycle Funds and the repayment of the Demanded Sum by the Due Date is also not disputed. [24] This is compounded by the fact that the Plaintiff had proposed the 1st Repayment Proposal, the 2nd Repayment Proposal, the 3rd Repayment Proposal and the 4th Repayment Proposal. s. 466 Notice not supported by any judgment [25] I agree to the Defendant’s contention that a creditor is not required to obtain judgment before instituting winding up proceedings against a company. In this respect, I also accept the authorities cited by the Defendant. The debt is not disputed [26] It is clear that the Demanded Sum is not disputed. I also agree with the Defendant’s contention that by seeking an extension of time to pay the Demanded Sum in the Civil Suit goes to confirm that the Demanded Sum is not disputed. In this respect, I accept the authorities cited by the Defendant. Plaintiff is an ongoing concern [27] I agree that it is irrelevant for the Plaintiff to allege that it is a going concern when it refuses to pay the Demanded Sum. I accept the principles in the cited case of Gulf Business Construction (M) Sdn Bhd v Israq Holding Sdn Bhd. Illegal money lending transaction [28] The Plaintiff is clearly approbating and reprobating by claiming that the JVA Phase 4 constitutes an illegal money lending transaction, but, on the other hand, relying on the Civil Suit to enforce as extension of time. In this respect, I accept the legal authorities cited by the Defendant. Force majeure [29] There is an absence of evidence adduced by the Plaintiff to show that the Force Majeure Events occurred on the Plantation. I also agree that, save for the purported landslides, none of the Force Majeure Events falls within the definition contemplated in the JVA Phase 4. Conclusion [30] Accordingly, for the reason above, Enclosures 1 and 7 are dismissed with costs fixed at RM 10,000.00 subject to allocator. Dated the 6th day of October 2025 …………………………………….. DR. SEOW HOCK PENG JUDICIAL COMMISSIONER HIGH COURT (COMMERCIAL DIVISION NCC2 & ADMIRALTY) HIGH COURT OF KUALA LUMPUR IN THE FEDERAL TERRITORY, MALAYSIA Counsel for Plaintiff: Mr. Tang Kim Choong (Messrs. K C Tang & Co.) Counsel for Defendant: Mr. Wong Mun Hoe together with Ms. Tong Joe Jye (Messrs. Munhoe)

Keet Gerald Francis Noel John v. Mohd Noor @ Harun Abdullah & Ors [1995] 1 MLJ 193 2. Mobikom Sdn Bhd v Inmiss Communications Sdn Bhd [2007] 3 MLJ 316 3. Metal Reclamation (Industries) Sdn Bhd v. Jrc Tenaga Sdn Bhd [2000] 1 AMR 2495 4. Chang Chan Thong v. Kemajuan Sri Segara Sdn. Bhd. [1996] 2 CLJ 471 5. ASM Development (KL) Sdn Bhd v. Econpile (M) Sdn Bhd [2020] MLJU 282 6. Maril-Rionebel (M) Sdn Bhd v Perdana Merchant Bankers Bhd [2001] 4 MLJ 187 7. Sri Hartamas Development Sdn Bhd v MBF Finance Bhd [1992] 1 MLJ 313 8. Re Southard & Co Ltd [1979] 3 All ER 556 9. Kim Wah Theatre Sdn Bhd v Fahlum Development Sdn Bhd [1990] 2 MLJ 511 10. Deputy Commissioner of Taxation v Guy Holdings Pty Ltd (1994) 12 ACLC 966 11. Re International Electric Co Limited 20 DLR 451 12. Re Lympne Investments Ltd [1972] 2 All ER 385 13. Azman & Tay Associates Sdn Bhd v Sentul Raya Sdn Bhd [2002] 4 AMR 4161 14. Malaysian Resources Corporation Bhd v Juranas Sdn Bhd [2002] 3 AMR 3276 15. Dynaworth Shipping Sdn Bhd v Ling Chung Ann [2001] 3 MLJ 399

Lee Kuang Gen v. Tan Sri Dato’ Seri Dr M Mahadeva Mahalingam & Other Appeals [2024] 2 CLJ 20 17. Ngui Mui Khin & Anor v. Gillespie Bros & Co LTD [1979] 1 MLRA 313 18. Triple Zest Trading & Suppliers Sdn Bhd & Ors v. Applied Business Technologies Sdn Bhd [2023] 10 CLJ 187 19. Megasteel Sdn Bhd v Perwaja Steel Sdn Bhd [2008] 4 CLJ 352 20. Lafarge Concrete (M) Sdn Bhd v Gold Trend Builders Sdn Bhd [2012] 6 MLJ 817 21. V Medical Services M Sdn Bhd v Swissray Asia Healthcare Co Ltd [2025] 2 MLJ 744 22. CIMB Bank Bhd v Anthony Lawrence Bourke & Anor [2019] 2 MLJ 1 23. Delta Drive (M) Sdn Bhd v Hong Leong Finance Bhd [2008] 4 MLJ 400 24. Sepang International Circuit Sdn Bhd v M7 Racing Sdn Bhd [2020] 9 MLJ 577 25. Menta Construction Sdn Bhd v SPM Property & Management Sdn Bhd & Anor [2017] MLJU 526 26. Gulf Business Construction (M) Sdn Bhd v Israq Holding Sdn Bhd [2010] 5 MLJ 34 27. David Wong Hon Leong v Noorazman bin Adnan [1995] 4 CLJ 155 28. Jetara Sdn Bhd v Maju Holdings Sdn Bhd [2007] 3 CLJ 1 29. PECD Construction Sdn Bhd v Freehold Point Sdn Bhd [2008] MLJU 127 30. Firdaus Khan bin Parit Khan & Anor v CIMB Bank Bhd [2024] 4 MLJ 474 31. Datuk Yap Pak Leong v Sababumi (Sandakan) Sdn Bhd [1997] 1

PB Securities Sdn Bhd v Autoways Holding Bhd [2000] 4 MLJ 417 33. Tenaga Nasional Bhd v Irham Niaga Sdn Bhd & Anor [2011] 1 MLJ 752 34. Intan Payong Sdn Bhd v Goh Saw Chan Sdn Bhd [2005] 1 MLJ 311 (High Court)

Pacific & Orient Insurance Co Bhd v Muniammah Muniandy [2011] 1 CLJ 947 (Court of Appeal)

Gogung Fusion Restaurant (KLCC) Sdn Bhd & Ors v Suria KLCC Sdn Bhd [2021] MLJU 2345 37. Progressive Ocean Sdn Bhd v Northern Corridor Implementation Authority [2016] MLJU 304; Golden Bay Realty Pte. Ltd. v Orchard

Section 466(1)(a) Companies Act 2016 2. Moneylenders Act 1950 3.