Vertex Central Industries Sdn Bhd v Posim Marketing Sdn Bhd (DA-24NCC-4-03/2026)

The Plaintiff commenced this Originating Summons seeking, amongst others, a Fortuna injunction to restrain the Defendant from presenting and/or proceeding with a winding-up petition against the Plaintiff based on a statutory demand dated 4.3.2026 issued pursuant to s. 466(1)(a) of the Companies Act 2016.

Plaintiff further seeks to restrain the Defendant from taking any further steps in the winding-up proceedings, including the advertisement and gazetting of the petition. It is not disputed that the Defendant had in fact filed Winding-Up Petition No. DA- 28NCC-16-03/2026 on 30.3.2026, prior to being served with the present Originating Summons.

Having considered the affidavits filed by the parties, the written submissions, the authorities cited and the applicable legal principles, I am unable to agree with the Plaintiff's contention that this is an appropriate case for the grant of a Fortuna injunction. I therefore dismissed the application with costs. These are my grounds.

The Defendant had commenced proceedings against the Plaintiff and two guarantors in the Sessions Court and obtained a default judgment on 7.7.2025.

Following the entry of the judgment, the Plaintiff applied to set aside the default judgment. That application was dismissed by the Sessions Court on 2.10.2025. The Plaintiff subsequently appealed to the High Court, which was then dismissed on 12.2.2026.

Dissatisfied with the decision of the High Court, the Plaintiff filed a further appeal to the Court of Appeal. The appeal is pending as at the date of hearing of this application.

On 4.3.2026, the Defendant served a statutory demand pursuant to s. 466(1)(a) of the Companies Act 2016 claiming the sum of RM509,962.20. The Plaintiff did not satisfy the statutory demand. Instead, the Plaintiff commenced the present proceedings seeking a Fortuna injunction on the basis that the debt remains disputed and that the winding-up proceedings would cause irreparable prejudice to its business.

It is undisputed that as at the hearing of the present application:

The default judgment had not been set aside;

No stay of execution had been obtained; and

The judgment debt remained unpaid. Issue for determination

The sole issue before this Court is whether the Plaintiff has satisfied the requirements for the grant of a Fortuna injunction to restrain the Defendant from pursuing winding-up proceedings against the Plaintiff.

The principles governing a Fortuna injunction are well established. In Mobikom Sdn Bhd v Inmiss Communications Sdn Bhd [2007] 3 MLJ 316; [2007] 3 CLJ 295, the Court of Appeal adopted the principles laid down in Fortuna Holdings Pty Ltd v Deputy Commissioner of Taxation [1978] VR 83. Those principles were subsequently affirmed by the Court of Appeal in Pacific & Orient Insurance Co Bhd v Muniammah Muniandy [2010] MLJU 2207; [2011] 1 CLJ 947.

Broadly speaking, a Fortuna injunction may be granted in two situations. First, where the proposed winding-up petition has no chance of success and its presentation may cause irreparable damage to the company. Secondly, where a creditor seeks to employ winding-up proceedings in respect of a debt that is bona fide disputed on substantial grounds.

It is also trite that where the debt relied upon is a valid and enforceable judgment debt, the debt cannot ordinarily be regarded as a debt that is bona fide disputed.

In Pacific & Orient Insurance Co Bhd v Muniammah Muniandy (supra), the Court of Appeal held: [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." (emphasis added)

Similarly, in Klass Corp (M) Sdn Bhd v MKRS Management Sdn Bhd [2018] 9 MLJ 305; [2018] 7 CLJ 303, Mohd Nazlan Ghazali J said: [34] The overriding question of whether the debt is disputed, arising from the test of whether the petition would be bound to fail, in this case is readily answered in an unequivocal 'No', on both counts. There is the judgment debt which means there is no bona fide dispute, and there is no stay, which in effect reinforces the absence of a bona fide dispute..." (emphasis added)

These authorities establish two important propositions. First, a valid and enforceable judgment debt is not a disputed debt unless it has been stayed or set aside. Secondly, the mere filing of an appeal does not convert a judgment debt into a debt that is bona fide disputed.

The Plaintiff's case rests substantially on two related propositions. First, that the debt remains disputed because the Plaintiff has filed an appeal to the Court of Appeal against the dismissal of its application to set aside the default judgment. Secondly, that the judgment relied upon by the Defendant is merely a default judgment and not a judgment obtained after a full trial and is therefore a disputed debt. The Plaintiff therefore contends that the intended winding-up petition has no prospect of success and ought to be restrained pending disposal of the appeal.

For reasons which will be explained in this following paragraphs, I am unable to accept those submissions.

The debt relied upon by the Defendant is no longer an ordinary contractual debt whose existence remains to be determined. The debt has crystallised into a judgment debt following the entry of the default judgment on 7.7.2025. More importantly, the Plaintiff's attempt to set aside that judgment has already been considered and rejected by both the Sessions Court and the High Court. As matters presently stand, the judgment remains valid, enforceable and binding upon the parties.

The Plaintiff seeks to distinguish the authorities relied upon by the Defendant on the basis that the judgment in question is a default judgment rather than a judgment obtained after a full trial. I do not find that distinction to be material. The authorities do not turn on the manner in which the judgment was obtained. Once judgment has been entered and remains operative, the legal consequences flowing from that judgment continue to apply unless and until the judgment is set aside by a competent court.

Although the judgment in question is a judgment in default, it remains a good judgment and is enforceable unless it is set aside or stayed. However, it is not in dispute that the said judgment has not been set aside or stayed. Therefore, it follows that it is valid and enforceable.

The Plaintiff repeatedly asserts that it was never served with the writ and statement of claim and that serious injustice would result if winding-up proceedings are allowed to continue pending the appeal before the Court of Appeal. Those contentions undoubtedly form part of the Plaintiff's appeal. It is also noteworthy that these contentions have thus far failed before both the Sessions Court and the High Court. This Court cannot proceed on the assumption that the appeal will eventually succeed. To do so would effectively amount to determining the merits of the pending appeal in advance.

In my view, the Plaintiff's reliance on the appeal to justify the dispute as to the debt is misconceived. The law draws a distinction between an appeal against a judgment and a stay of execution of that judgment. Whilst the Plaintiff is entitled to pursue its appeal before the Court of Appeal, the filing of the appeal does not suspend the legal effect of the judgment.

As at the date of hearing of this application, the default judgment obtained by the Defendant on 7.7.2025 remains intact, enforceable and not stayed. The Defendant is therefore entitled to rely upon that judgment as the foundation of the statutory demand and the subsequent winding-up petition. To hold otherwise would mean that every judgment debtor could effectively neutralise the winding-up jurisdiction of the Court merely by filing a notice of appeal. Such a proposition is inconsistent with the authorities and cannot be accepted.

Applying the above principles to the facts before me, I find that the debt relied upon by the Defendant is not a debt that is bona fide disputed on substantial grounds. It is a judgment debt that remains valid, enforceable and not stayed.

It therefore cannot be said that the proposed winding-up petition is bound to fail. The petition is founded upon a judgment debt exceeding the statutory threshold prescribed under the Companies Act 2016. The debt remains unpaid. No stay has been obtained. No order setting aside the judgment has been mad. In those circumstances, the Defendant is merely exercising a statutory remedy available to it as a judgment creditor.

I also do not find that the winding-up proceedings are being employed as a means of determining a disputed debt. Liability has already culminated in a judgment. Whether that judgment should ultimately stand is a matter that falls exclusively within the jurisdiction of the Court of Appeal. Until then, the Defendant remains entitled to rely upon the judgment.

The Plaintiff further contends that winding-up proceedings would cause irreparable harm to its business, reputation and commercial standing. The Plaintiff points to its ongoing business operations, its relationships with customers and suppliers and the adverse impact that winding-up proceedings may have upon its employees and business reputation.

It cannot be denied that the presentation of a winding-up petition may have serious commercial consequences. However, the Plaintiff's reliance on irreparable harm overlooks a fundamental aspect of the Fortuna principles. Irreparable harm is not a standalone ground for relief. The first limb of the Fortuna principle requires the Plaintiff to establish both that the proposed petition has no chance of success and that irreparable damage may result from its presentation.

The Plaintiff has failed to satisfy the first requirement. Any inconvenience or irreparable harm that the Plaintiff claims that it could suffer are natural consequences flowing from its failure to satisfy the judgment debt and complying with the statutory demand. Granting of a fortuna injunction is not the only way of preventing the inconvenience or irreparable harm. It can also be avoided if the Plaintiff satisfies the judgment debt.

Indeed, the Plaintiff's own evidence suggests that it possesses substantial assets and enjoys significant revenue. If that is so, it becomes difficult to understand why a judgment debt of RM509,962.20 remains unpaid. As observed in the authorities relied upon by the Defendant, a company seeking to avoid the consequences of winding-up proceedings based upon a valid judgment debt may simply satisfy the judgment whilst pursuing its appellate remedies.

Whilst the Court is not insensitive to the commercial consequences that may follow from winding-up proceedings, those consequences cannot override the Defendant's statutory right to pursue a winding-up petition founded upon a valid and enforceable judgment debt.

Further, the Plaintiff seeks relief on the basis that it may succeed in the Court of Appeal at some future date. That possibility exists in every appeal. However, until the judgment is stayed or set aside, it remains valid and enforceable. The law does not permit this Court to disregard an existing judgment merely because an appeal is pending.

Having considered the totality of the evidence, the submissions of the parties and the applicable authorities, I am satisfied that the Plaintiff has failed to satisfy the requirements for the grant of a Fortuna injunction.

In the circumstances, the Plaintiff's application is dismissed with costs of RM10,000.00. This Grounds of Judgment is dated 24.6.2026 Pesuruhjaya Kehakiman Mahkamah Tinggi (3) Kota Bharu Kelantan PIHAK-PIHAK: Peguam bagi pihak Plaintif: Tetuan Rafizah Azwan & Associates Lot 3803, Tingkat 2, Jalan Hospital, 15200 Kota Bharu, Kelantan. Peguam bagi pihak Defendan: Tetuan Cheong Yee & Partners 5F-19, IOI Business Park, No.1, Persiaran Puchong Jaya Selatan, Bandar Puchong Jaya, 47100 Puchong, Selangor.