KRIS HEAVY ENGINEERING & CONSTRUCTION SDN BHD V LEWIS & CO. (2017) 1 LNS 964

[2017] 1 LNS 964 Legal Network Series
IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR
[ORIGINATING SUMMONS NO.: WA-24NCC-9-01/2017]
In the matter of Section 218 (1) (e)

& 218 (2) of the Companies Act
1965
And
In the matter of Section 50 and 51

of the Specific Relief Act 1950
And
In the matter of Order 7, Order 29

rule 1 and Order 92 rule 4, of the
Rules of Court 2012
And
In the matter of Kris Heavy

Engineering & Construction Sdn
Bhd (Company No: 207696-M)
BETWEEN
KRIS HEAVY ENGINEERING &

CONSTRUCTION SDN BHD
(Company No.: 207696-M) … PLAINTIFF
AND
LEWIS & CO.

(ADVOCATES & SOLICITORS) … DEFENDANT
1
BEFORE
YANG ARIF TUAN MOHD NAZLAN BIN MOHD GHAZALI
JUDGE
JUDGEMENT
Introduction
[1] This is an application for a Fortuna injunction filed by the

Plaintiff to restrain the Defendant from presenting a winding up
petition under Section 218 of the Companies Act 1965 against the
Plaintiff. I initially allowed the application at the conclusion of the
ex-parte hearing. At the subsequent inter-parte hearing, I set aside the
ex-parte injunction and dismissed the application of the Plaintiff.
These are my reasons for the dismissal.
Key Background Facts
[2] The Plaintiff is a locally incorporated private limited company.

The Defendant is a law firm partnership. The Plaintiff had retained
the services of the latter in the former‟s successful claim against ABB
Industrial Contracting Sdn Bhd (“ABB”) in Civil Suit S1-22-951-2002
(“Suit 951”) and in its challenge to the appeal filed by ABB in Civil
Appeal W-02(W)-1078-07/2015 (“the Appeal”). The Defendant has
thus been acting for the Plaintiff in respect of Suit 951 since 2002 and
thereafter the Appeal, and had the first bill issued on 3 May 2002
(described in the accompanying cover letter as “estimated costs”) in
respect of the High Court Suit 951 and the second bill on 16 October
2015 on the Appeal. The latter bill is in the form of an undated
“estimated bill” towards professional charges for work done for the
2
amount of RM319,360.00. These bills, particularly the latter, are the

bone of contention between the parties.
[3] By letters dated 12 November 2015, 24 November 2015 and 14

December 2015, the Defendant requested payment of their second bill
in order to enable them to proceed further with the Appeal. In
pursuance of the letter dated 14 December 2015, the Defendant again
requested payment of the same and expressed the intention to file an
application to discharge themselves as solicitors of the Plaintiff for
the Appeal. This was further followed by similar letters from the
Defendant to the Plaintiff dated 8 January 2016 and 26 January 2016.
[4] On 3 February 2016, the Plaintiff made part-payment of

RM15,000.00 towards the second bill. As against further
communication between the parties, and the Defendant‟s subsequent
letter of 12 February 2016 and email of 24 May 2016, the Plaintiff
made further payments of RM15,000.00 on each of 16 April 2016, 27
May 2016 and 18 August 2016 respectively.
[5] On 6 September 2016, the Court of Appeal decided the Appeal

in favour of the Plaintiff. There were further exchange of
correspondence between the parties. By an email dated 12 October
2016, the Defendant reminded the Plaintiff that there were still
outstanding legal fees of RM305,306.00 due for both Suit 951 and the
Appeal.
[6] By a letter dated 28 November 2016, the Plaintiff wrote to the

Defendant in respect of the issue with regard to the second bill which
concerned the Appeal and requested that the fees be taxed. The
Defendant replied on 5 December 2016 expressing disagreement.
[7] In its letter of 13 December 2016, the Plaintiff gave an

undertaking to pay the Defendant‟s professional charges upon the
3
same being taxed, expressing the wish to resolve the matter amicably
without recourse to legal proceedings.
[8] On 21 December 2016, the Defendant made good its demand and
filed its application to discharge as solicitors and served the same on
the Plaintiff; and, crucially, also issued a notice pursuant to Section
218 of the Companies Act 1965 (“the CA”) (“218 Notice”),
demanding payment of the sum of RM305,360.00 from the Plaintiff.
[9] By a letter dated 30 December 2016, the Plaintiff emphasized

that at all material times the Defendant had only provided an
“estimated bill”, and not a final or conclusive bill. The Plaintiff took
the position that given the dispute, the bill ought to be taxed. The
Plaintiff, in its letter of 6 January 2017 to the Defendant‟s solicitors
disputed the sum claimed by the Defendant for the alleged amount of
RM305,360.00 and challenged the validity of the purported 218
Notice.
[10] The Defendant‟s solicitors on 9 January 2017 replied by

insisting on proceeding with the winding-up petition unless the
Plaintiff complied with the 218 Notice.
[11] In reaction thereto, on 10 January 2017, the Plaintiff filed the

present Originating Summons, seeking to restrain the Defendant from
presenting a winding-up petition. On 12 January 2017, I allowed
Enclosure 3, which is the Plaintiff‟s ex-parte application injuncting
the Defendant from presenting the winding-up petition.
[12] This judgment concerns the proceedings on the inter-partes

injunction application (Enclosure 3), the Originating Summons
(Enclosure 1) as well as the Defendant‟s application to set aside the
ex-parte injunction (Enclosure 8), which, given the similarity of
issues, were all heard together.
4
Essence of Contentions of Parties
[13] The Plaintiff submitted that the 218 Notice is defective in law
and hence constitutes an abuse of process by reason there being no
judgment obtained against the Plaintiff in respect of the sum alleged
to be due and owing.
[14] The Plaintiff maintained that since the sums demanded in the
218 Notice is based on an estimated bill (which is being disputed by
the Plaintiff), the Defendant ought to have the quantum therein first
taxed by Court. The Plaintiff claimed that instead, the Defendant
surreptitiously issued a statutory demand in compelling the Plaintiff
to pay a non-judgment sum, thus rendering the 218 Notice mala fide
and an abuse of process.
[15] The Plaintiff further asserted that the Defendant‟s statutory

demand constitutes an „erroneous and excessive claim‟ as the
Defendant has failed to account for the entire amount of RM26,000.00
received in respect of the High Court Suit 519 nor the amount of
RM30,000.00 appropriated by the Defendant for the security for costs
application for the Appeal.
[16] It was also contended that the fees for the High Court Suit
would also not yet due as the Defendant has not provided a final bill
of costs incorporating the mandatory government taxes and in
compliance with the Legal Profession Act 1976.
[17] The Defendant, on the other hand, contended that the position
taken by the Plaintiff is inconsistent with what actually transpired and
the contemporaneous documents. In particular, there was clear
evidence of admission and part-payment of the second bill, and the
alleged dispute concerning the same was only raised by the Plaintiff
much later, after the success of the challenge to the Appeal.
5
[18] The Defendant also asserted that the Plaintiff had misled this
Court in obtaining the ex-parte injunction, given, especially,
according to the Defendant, the failure of the Plaintiff to make a full
and frank disclosure in its application.
Evaluation and Findings of this Court
The Law
[19] The jurisprudential basis of the applicability of Fortuna

injunctions in this country may be traced in part to the eponymous
Australian case of Fortuna Holdings Pty Ltd v. The Deputy
Commissioner of Taxation of the Commonwealth of Australia [1978]
VR 83, a decision of the Supreme Court of Victoria. It established
that an injunction would only be granted in circumstances where to
allow the petition would be an abuse of process as the petition has no
chance of success. And that the plaintiff would have to show that the
petition, if presented, would likely be dismissed. To do this, the Court
would have to consider whether there is a bona fide dispute of debt
based on substantial grounds.
[20] The same principles were adopted and applied by our Court of
Appeal in Mobikom Sdn Bhd v. Inmiss Communications Sdn Bhd
[2007] 3 MLJ 316, here Gopal Sri Ram JCA (as he then was)
summarized the position in the following manner:-
“(3) The kind injunction by which an intended winding-up

petition is sought to be restrained is known as “Fortuna
injunction”. The phrase takes its name from Fortuna
Holdings Pty Ltd v. The Deputy Commissioner of Taxation
where the juridical basis for the relief was first explained.
Fortuna Holdings made it clear that the courts have
established a principle that the presentation of a winding-
6
up petition may be restrained by injunction where its

presentation would amount to an abuse of the process of
the court. It was also clear that two distinct branches
emanate from the principle - of which the first applies in
cases where the presentation of the petition may produce
irreparable damage to the company and where the proposed
petition has no chance of success, and the second 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”.
[21] The Court of Appeal again had the occasion to consider the
application of a Fortuna injunction, where in the case of Pacific &
Orient Insurance Co Bhd v. Muniammah Muniandy [2011] 1 CLJ 947,
Ramly Ali JCA (as he then was) provided most instructively the
following explanation:-
“[25] An application for an injunction to restrain an

intended winding-up petition against a company is known
as a “Fortuna injunction”, taking its name from the case of
Fortuna Holdings Pty Ltd v. The Deputy Commissioner of
Taxation [1978] VR 83. In that case the court laid down
the basis on which a court acts to restrain the presentation
of a winding-up petition and the two principles that guide
courts in the grant of an injunction to that effect. (see also:
Mobikom Sdn Bhd v. Inmiss Communications Sdn Bhd
[2007] 3 CLJ 295 (Court of Appeal).
[26] The first principle laid down in that case is 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
7
has no chance of success. In order to succeed in getting

injunction under this principle, the applicant must satisfy
both limbs of the principle ie:
(i) 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.
8
[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.”
[22] The Court of Appeal in Tan Kok Tong v. Hoe Hong Trading Co
Sdn Bhd [2007] 4 MLJ 355 further explained that the Court exercises
its inherent jurisdiction when issuing such an injunction to restrain
the presentation of a winding-up in order to prevent an abuse of
process. The test when granting the injunction is whether there is
bona fide dispute of the debt. Gopal Sri Ram JCA (as he then was)
held:
“[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 AII 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.” (emphasis added)
[23] Thus, in light of the foregoing authorities, it is settled law that

the Courts may grant a Fortuna injunction to prevent the presentation
of a winding-up petition on the basis of either the petition has no
9
chance of success and might produce irreparable damage to the

company, or that an assertion of a disputed claim is made in the
petition by way of a procedure that might produce irreparable damage.
The Courts must be satisfied that the plaintiff has established a prima
facie case of an abuse of process by the presentation of a petition
particularly on the basis of a disputed debt; and the serious question
to be tried test established in American Cynamid Co (No. 1) v. Ethicon
Ltd [1975] 1 All ER 504 is not applicable.
Whether there is Bona fide dispute on the Debt
[24] The primary question for determination is thus whether the

amount as claimed by the Defendant in the winding-up notice can, as
contended by the Plaintiff, in law be considered as bona fide disputed
on substantial grounds.
[25] The Plaintiff advanced the principal argument that there exists a
bona fide dispute as to the quantum of fees payable and even
questioned whether there is a debt due from the Plaintiff to the
Defendant. The Plaintiff referred to the case of Christopher Michael
Cheow v. ANS Builders Sdn Bhd [2012] 10 MLJ 359 where the High
Court held that the dispute must be bona fide in both a subjective and
objective sense, and that it must be honestly believed to exist and
must be based on substantial or reasonable grounds.
[26] This, in my view, is a self-evident truism. For a bona fide

dispute does not automatically arise whenever there are opposing
assertions. The issue of whether or not there is a bona fide dispute
depends entirely on evidence (see Chip Yew Brick Works Sdn. Bhd. v.
Chang Heer Enterprise Sdn Bhd [1988] 1 CLJ 5). As such, in order to
oppose a winding-up petition, the Defendant must be able to raise a
bona fide dispute in both a subjective and objective sense, and that it
must be honestly believed to exist and must be based on substantial or
10
reasonable grounds (see also BMC Construction Sdn Bhd v. Dataran

Rentas Sdn Bhd [2001] 1 MLJ 356).
[27] As a corollary, in challenging the winding-up notice, the Court

ought to be satisfied that there is something that should be tried,
either before the Court itself, or in an action, or by some other
proceeding. The Supreme Court in Morgan Guaranty Trust Co of New
York v. Lian Seng Properties Sdn Bhd [1991] 1 MLJ 95 held that the
debt must be disputed on substantial grounds, and cited with approval
the following part of the judgment of Jessel M.R in Re Great Britain
Mutual Life Assurance Society [1880] 16 Ch D 246:-
“….in my opinion it is not sufficient for the respondents,

upon a petition of this kind, to say „ e dispute the claim‟.
They must bring forward a prima facie case which satisfies
the court that there is something which ought to be tried,
either before the court itself, or in an action, or by some
other proceeding”.
[28] As mentioned, the Plaintiff sought to fortify its argument by

referring to various emails and letters wherein the Plaintiff has
amongst others, disputed the quantum in the estimated bills, and
furthermore requested that the bills be taxed. Reference was made in
particular to the email dated 13 October 2016, and letters dated 28
November 2016, 13 December 2016, 24 December 2016, 30 December
2016 and 6 January 2017.
[29] Do these documents demonstrate that the debt is bona fide

disputed on substantial grounds? My short answer is in the negative.
The reasons are various. First, when examination of the evidence is
undertaken, the relevance of the existence of contemporaneous
documents would be a key consideration (see Tindok Besar Estate Sdn
Bhd v. Tinjar Co [1979] 2 MLJ 229). A significant finding that could
be readily made in respect of all the emails and letters referred to by
11
the Plaintiff is that these were issued by the Plaintiff only after the
Appeal has been disposed of, and in favour of the Plaintiff to boot.
[30] Secondly, having examined the affidavit of parties, it is quite

manifest that the Plaintiff had in fact made several part-payments
towards the first and the second bill, even though these were each
described as “Estimated Bill”. There is no dispute that these payments
were effected in pursuance of these bills. For the first bill, as stated
earlier, the part-payments were made in 2003 and 2004, whilst for the
second bill, on four occasions in 2016, the last being in August 2016.
[31] As such, it cannot be doubted that these part-payments signify a

form of an acknowledgement and admission of indebtedness on the
part of the Plaintiff.
[32] Thirdly, again I emphasize that in respect of the reliance of the

documents contemporaneous to the alleged relevant act, there was,
prior to the disposal of the Appeal, already evidence that the Plaintiff
had never raised any objection or notified its disagreement on the said
bills. Objections started to surface soon after the conclusion of the
hearing of the Appeal. All along, and throughout the period until the
disposal of the Appeal, the reason for non-payment towards the
settlement of the bills, as expressed to the Defendant by the Plaintiff,
had always been plain and consistent; namely the Plaintiff‟s limited
financial means to settle the outstanding sum set out in the estimated
bills.
[33] The legal principle of estoppel should rightfully operate to

prevent and disapprove of the inequitable conduct of the Plaintiff in
attempting to mount such a challenge at this juncture. Thus the
Plaintiff is estopped from now denying its indebtedness when it had
already paid certain amounts towards settlement of the bills and more
so as the Plaintiff had decided not to dispute whilst insisting on the
Defendant continue to act for the Plaintiff, only conveniently changed
12
its position very soon after the Appeal was successfully dealt with by
the Defendant.
[34] In this context, reference ought to be made to the decision of the

Court of Appeal in KGN Jaya Sdn Bhd vs. Pan Reliance Sdn Bhd
[1996] 1 MLJ 233, which held as follows:-
“We are of the view that it would be a travesty of justice if

we were to accede to the appellant‟s arguments. We are
left in no doubt that the undisputed facts of this case admit
of the conclusion that the respondent was, by the conduct
of the appellant, lulled into the belief that the appellant
had no challenge to the accounts, leave alone the legal
relationship between the parties.
To put it another way, the appellant, by its silence coupled

with other circumstances of the case, encouraged the
respondent to believe that it intended to raise no challenge
to the existence of a prior legal relation between the
parties or to the figure which the account showed as owing
by it. Having do so, it ought not to be permitted to now
contend otherwise.
It follows that it does not, therefore, lie in the mouth of the

appellant to now deny the respondent‟s claim. It would be
plainly inequitable to do so. An examination of the facts
leads us to this conclusion. The legal basis upon which
such a conclusion may be sustained is well-settled and it is
now beyond question. See Boustead Trading [1985] Sdn
Bhd v. Arab-Malaysian Merchant Bank Berhad [1995] 3
MLJ 331.”
[35] Nor can the Plaintiff validly contend that it is only disputing the
amount of debt and not the fact of indebtedness. Evidence of part-
13
payments undisputed, the issue would thus appear to be one of a

disagreement on the quantum of indebtedness. The Plaintiff never
credibly denied it was liable for the professional fees incurred by the
Defendant in the latter‟s successful representation of the former.
[36] This is because the Federal Court in the case of Malaysia Air
Charter Company Sdn Bhd v. Petronas Dagangan Sdn Bhd [2000] 4
CLJ 437 has ruled that a notice of demand under Section 218(2)(a) of
the CA need not specify the exact sum due as at the date of the
demand since for so long as the sum due exceeds RM500 and remains
unpaid, after a demand has been made, without a reasonable
explanation to the satisfaction of the Court, there is “neglect” to pay
such sum within the meaning of the said section. The Federal Court
was of the view that commercial reality demanded that preference be
accorded to an interpretation that will remove unmeritorious
respondents from the temptation to undertake an investigation into the
exactness of the debt claimed to be owing on the relevant date.
[37] This follows the English case of Re Tweeds Garages Ltd [1962]
1 All ER 121 which held that where there was no doubt that
petitioners were creditors for a sum which would otherwise entitle
them to a winding-up order, a dispute as to the precise amount owed
was not a sufficient answer to the petitioner such that a winding-up
order would be granted. And in the instant case, the Plaintiff has also
not averred that the debt owing was less than RM500.
[38] Thus, the Defendant‟s reference to the case of JB Kulim

Development Sdn Bhd v. Great Purpose Sdn Bhd [2002] 2 MLJ 298 is
no less apposite. In that case the Court had not only found that there
was no bona fide dispute to the debt, but also observed that a dispute
as to the amount of the debt is an insufficient ground to dismiss a
winding-up petition so long it exceeds that statutory amount of
RM500. Equally pertinent is the case of Mageleine Investments Pte
14
Ltd v. Swiss Levingston (Property Consultants) Pte Ltd [1990] 1 MLJ

470 where the Singapore High Court refused an injunction to restrain
a winding-up after finding that the correspondences showed that the
plaintiff did not contemporaneously - at the material time - deny the
debt due and owing to the defendant and had only denied liability.
[39] There are two other significant considerations which are borne
out of the affidavit evidence of the parties which further weaken the
case of the Plaintiff. First, it was crucially only until towards the end
of November 2016 after the successful defence of the Appeal against
the Plaintiff conducted by the Defendant that the Plaintiff for the first
time indicated that there were purportedly issues to the bills as well as
suggested that they be taxed. It is also to be noted that this was,
interestingly, as well as I may add, conveniently, only raised by the
Plaintiff after it had appointed new solicitors to secure the
replacement of the Defendant. There were never any issues raised
prior, because the non-payment had before then always been
predicated on lack of funds.
[40] Secondly, as correctly highlighted by the Defendant, the

directors of the Plaintiff had further, also during the same period after
the issuance of the bills, but before November 2016, expressed their
gratitude towards the Defendant‟s assistance and urged the Defendant
to continue to act for them in the Appeal. There was never any dispute
raised in respect of the bills. In fact the Plaintiff insisted, implored
even, for the Defendant to continue to act for them in the Appeal
despite the Defendant‟s offer to waive the balance outstanding on the
first bill (Suit 951) should the Plaintiff take the file away. Further, the
Plaintiff‟s contention that the Defendant failed to account for the
RM26,000 paid for the first bill and the appropriation of RM30,000
earlier deposited as security for cost for the Appeal is quite plainly
unsubstantiated and, indeed credibly rebutted by the Defendant. Nor
is the assertion of the bills not incorporating government taxes
15
meritorious for any tax liability would be for the Defendant to

account to the relevant authorities. As such, on the evidence, the
existence of a bona fide dispute on substantial ground is
unsubstantiated and must fail.
No Bona fide dispute – No application for taxation
[41] There is, however one other principal argument that the Plaintiff
is relying on: in that it is entitled to insist on the Defendant providing
a final bill of costs, in accordance with the Rules of Court 2012, for
the purposes of taxation.
[42] In the first place, the Plaintiff asserted that the estimated bills
do not meet the requirements as to a “bill of costs” for the purposes of
the LPA and/or the Rules of Court as it is said not to be a detailed
statement of the professional work done by a solicitor for his client.
The Plaintiff‟s liability to pay the Defendant thus arises only when a
bill of cost is issued in accordance with the Rules of Court 2012
and/or the Legal Profession Act 1976 (“the LPA”).
[43] I am of the view however that of greater relevance is Section

126 of the LPA which essentially renders the period for taxation in
this case to have expired. Section 126 of the LPA, inter alia, provides
as follows:-
(1) An order for the taxation of a bill of costs delivered by

any advocate and solicitor may be obtained by a petition as
a matter of course by the party chargeable therewith, or by
any person liable to pay the cost either to the party
chargeable or to the advocate and solicitor, at any time
within six months from the delivery of the bill, or, by the
advocate and solicitor after the expiration of one calendar
month, and within a year from, the delivery.
16
(2) The order shall contain such directions and conditions

as the court thinks proper, and any party aggrieved by any
order of court may apply by summons in chambers that the
same may be amended or varied or set aside.
(3) In any case where an advocate and solicitor and his

client consent to taxation of a solicitor‟s bill the Registrar
may proceed to tax the bill notwithstanding that there is no
order therefore.
[44] The request by the Plaintiff to have the bills taxed was first
raised in November 2016 whilst the second bill had been issued on 16
October 2015, a period of more than one year. And at the hearing of
this Enclosure 1, no application had even been filed by the Plaintiff to
have the bills taxed.
[45] On this issue of the one-year time limit to seek an order for
taxation, however, the Plaintiff referred to the Court of Appeal
decision in Tan Tek Sin & Anor v. Tetuan Nora Hayati & Assoc (sued
as a firm) [2015] 2 MLJ 1 where Azahar Mohamed JCA (as his
Lordship then was) held relevantly as follows:-
[25] With all respect, we disagree with the contentions of

the defendant. The first important point to note is that the
sum reflected in the bill did not immediately crystallise
and become a debt due to the defendant merely upon the
expiry of the one year period after the delivery of the bill
on 1 November 2012 to the plaintiffs. This is the general
principle of law as can be seen in Pembinaan Lian Keong
Sdn Bhd v. Yip Fook Thai (practising as Messrs Yip & Co)
[2005] 5 MLJ 786; [2005] 6 CLJ 34, where the High Court
held that there is no deeming provision in the LPA, by
virtue of which the court could hold that if the party
chargeable fails to petition for an order for taxation within
17
one year from the delivery to him of the bill of costs the
amount stated in the bill would ipso facto be converted
into a debt due and payable to the advocate and solicitor.
[26] Undeniably s. 128 of the LPA prescribes a time limit

for an aggrieved party to refer a bill of costs for taxation
and in particular provides that such order for taxation shall
not in any event be made after the expiry of one year from
the delivery of the bill of costs. There is indeed no
provision under the LPA that specifically provides for
extension or enlargement of time to file an application for
taxation of a bill of costs, after one year from its delivery
to the aggrieved party.
[27] The question then arises whether court has the power
by virtue of its inherent jurisdiction to depart from the
provisions of statute, where the circumstances so
require……..
………………………………………
[29] It is therefore clear on principle and authorities that

that even though more than one year had lapsed since the
delivery of the bill to the plaintiffs, the court could
exercise its discretion in invoking the inherent jurisdiction
to grant an order to compel the defendant to prepare a
detailed bill of costs.
[30] Applying the principles from the authorities that we

have adverted to earlier, the most important question
which we must now ask is whether there were special
circumstances in the present case which would require the
exercise of the court‟s inherent jurisdiction to grant an
order to compel the defendant to prepare a detailed bill of
18
costs even if more than one year had lapsed since the
delivery of the bill to the plaintiffs.
[46] Thus, the Plaintiff submitted that the sum reflected in the
estimated bill did not immediately crystallize and become a debt due
to the Defendant merely upon the expiry of the one year period after
the delivery. And further, the Courts have an inherent jurisdiction to
grant an order to compel the Defendant to prepare a detailed bill of
costs even if more than one year had lapsed since the delivery of the
bill to the Plaintiff. This was also the position taken in Mindvalley
Labs Sdn Bhd v. Messrs Rao & Kamal (a legal firm in partnership)
[2017] 1 AMR 159.
[47] There is in my view no argument that the debt stated in the bills
would not necessarily or automatically crystallize upon the expiry of
the one-year period stated in Section 128(2) of the LPA. The more
pertinent issue in the instant case however is that the part-payments
and the absence of dispute (prior to the disposal of the Appeal)
evidenced the absence of a bona fide dispute as the debt. Equally of
significance is the fact that the Plaintiff had not taken any steps to
have the bills taxed, either before or after the expiry of the one-year
period. Thus Tan Tek Sin does not fully advance the case of the
Plaintiff.
[48] In the more relevant context of a proceedings for a Fortuna

Injunction, like in the instant case, the High Court in Templer Park
Golf & Resort Bhd & Anor v. Tetuan George Varughese [2010] 8 CLJ
754 stated thus:-
“When the dispute is to solicitor‟s bill, different

jurisprudence applies as solicitors are a protected species,
subject to the scrutiny by solicitors disciplinary board
and/or the court in relation to bills of work done as
provided for in LPA 1976. Dispute as to solicitor‟s bills
19
must be challenged according to law and the mere

assertion that the bills are bona fide disputed and the
plaintiffs being ready and willing to deposit the sum
claimed cannot be a ground to grant a “fortuna
injunction”.”
[49] Templer Park also referred to the case of Pembinaan Lian Keong
Sdn Bhd v. Yip Fook Thai [2005] 6 CLJ 34 where it was held that the
winding-up notice was unwarranted since the solicitor‟s bill was at all
material times vigorously resisted by the plaintiff in that action who
was also seeking for an order to restrain the petition. The High Court
in Templer Park however found that in Templer Park the bills were
not resisted from the first instance and followed Vije & Co v.
Cooperative Central Bank Ltd [1991] 2 CLJ 1403 which ruled that a
defendant is not entitled to challenge the bills after the lapse of one
year from delivery. Thus the High Court in Templer Park concluded
that:-
“(iii) On the facts of the case it is clear that the

defendant‟s claim stands in law to be bona fide and the
plaintiff‟s claim that the sum claimed is bona fide disputed
is not supported with contemporary objections against the
bills and the line of arguments raised by the plaintiffs
militates against the relevant provisions of LPA 1976. And
in consequence the plaintiffs‟ application must be
dismissed with direction as they have stated that they are
in a position to settle the bills.”
[50] Even more recently in Tetuan Kang & Kang v. Kirana Studio
Sdn Bhd [2015] 1 CLJ 431 the High Court found as follows:-
“[33] … An invoice delivered by a solicitor to his client

becomes a bona fide bill by virtue of the rebuttable
presumption encapsulated in s. 124(2) of the LPA. The
20
presumption is triggered in the absence of any objection or

challenge to the solicitors‟ bill. The bill is valid for
purposes of s. 124. The client has one year from the date
of delivery of the bill to tax the bill if he disputes the
amount claimed. If the client does not avail himself of this
procedure, his remedy under the LPA to challenge the bill
is extinguished by s. 128(2) of the LPA. This provision
provides that the power to order an assessment shall not be
exercisable on an application made by the client after the
expiration of twelve months from the delivery of the bill.
No taxation outside this period is permissible.
[34] Turning to the facts in this instant case. The

defendant did not seek taxation of the invoice at any point
in time and the period mentioned in s. 128(2) of the LPA
has expired. By operation of the statutory prohibition in s.
128(2), the amount claimed in the invoice has become final
and payable. It cannot be disputed or challenged.”
[51] Nevertheless, I agree that in light of the Court of Appeal

decision in Tan Tek Sin & Anor v. Tetuan Nora Hayati & Assoc (sued
as a firm) [2015] 2 MLJ 1 referred to above, the Court has an inherent
jurisdiction to grant an order to compel a defendant to prepare a
detailed bill of costs even if more than one year had lapsed since the
delivery of the bill to the client.
[52] But I reiterate that in the context of a true challenge against the
bills issued by solicitors in the Fortuna injunction application
situations, I find the law to be clear. Thus, as correctly submitted by
the Defendant, yet another decision of the High Court in Ng Kim
Hoong & anor v. Tetuan YH Teh & Quek [2015] 10 CLJ 561 further
fortifies the case of the Defendant, where it was held as follows:-
21
“The series of emails by the petitioners on 23 October

2012, without any interference from the respondent,
showed that the petitioners did not object to the agreement
on fees that the respondent had with their late father. The
petitioners also knew that the respondent was privy to
those emails. Hence, the first petitioner‟s failure to object,
once he was informed of the fees, meant, as submitted by
the respondent, that he have unequivocal acceptance and
approval of the agreement, upon which the respondent has
relied. I therefore agree with the respondent that to renege
on the agreement is inequitable and malicious.”
[53] Accordingly, whilst the Court of Appeal in Tan Tek Sin

establishes that the Court has in special circumstances the inherent
jurisdiction to compel preparation of a detailed bill of costs even if
more than one year has lapsed since delivery, the more pertinent issue
in the instant case is the complete failure on the part of the Plaintiff to
initiate any steps to have the bills taxed; not within the one-year
statutory period under the LPA, which coincidentally only just
expired after the Plaintiff first suggested it be taxed, or even during
the period subsequent thereto, and until the instant hearing. This is
not to mention that nor has the Plaintiff in advance shown a
semblance of any special circumstances to justify the Court exercising
its inherent jurisdiction to separately allow taxation beyond the time
limit.
[54] As such, the Plaintiff‟s argument concerning the taxation of the

estimated bills too must fail. It has not been demonstrated that its
opposition to the amount claimed by the Defendant in the bills was
genuine in the absence of any conduct on its part to dispute the same
at the material time, but instead only express its disagreement very
much later, thus a clear afterthought of a contrived assertion, created
only when circumstances suited the Plaintiff. It is manifest that there
22
is no bona fide dispute on substantial ground shown by the Plaintiff to

justify the continued granting of the Fortuna Injunction.
Solvency of the Petitioner Established?
[55] The Defendant further submitted that the Plaintiff had not shown
irreparable damage in the event the injunction is not granted. This
according to the Defendant is borne out of the Plaintiff‟s inability to
repay the Defendant‟s outstanding bills, as well as the Defendant‟s
averment that the Plaintiff‟s business at its business address has not
been operating for some time.
[56] In an attempt to demonstrate its solvency and prevent the

presentation of a winding-up petition, the Plaintiff exhibited its
company search results (which however were based on financial
statements ended 2014) which showed:-
(a) The Plaintiff‟s RM25,000,000.00 authorized capital

and RM5,100,020 issued capital;
(b) The total current assets of the Plaintiff exceeds

RM10,000,000.00; and
(c) The Plaintiff has a total of 14 charges with reputable

financial institutions in Malaysia, seven of which
have been fully satisfied.
[57] Furthermore, the executive director of the Plaintiff has also

averred that the Plaintiff is presently engaged in one litigation matter
and three arbitration proceedings wherein the Plaintiff‟s total claim is
in excess of an aggregate amount of approximately RM15,000,000.00.
This, the Plaintiff submitted, showed that it is not insolvent and is
capable for paying any of its debts when they fall due.
23
[58] This assertion by the Plaintiff is lacking in substance. For it is,

in any event, now settled law that the issue on the inability to pay
debt is to be considered in the commercial context, which is the
neglect to pay current demands regardless of whether the debtor is in
possession of assets which, if realized would permit it to discharge its
liabilities. The test of commercial insolvency simply means that the
respondent company is not able to meet current debts when they fall
due (see System Communication Engineering Sdn Bhd v. Zabidin Sdn
Bhd [1999] 1 AMR 1187).
[59] This is the reason why it has been said that a company could be
both insolvent but wealthy at the same time (see, for example, the
Privy Council decision in Malayan Plant (Pte) Ltd v. Moscow
Narodny Bank Ltd [1980] 2 MLJ 53 and the Supreme Court decision
in Sri Hartamas Development Sdn Bhd v. MBF Finance Bhd [1992] 1
CLJ 637).
[60] It is absolutely inadequate that the assets might be realizable at

some future date after the debts have become due and payable (see the
Supreme Court decision in Lian Keow Sdn Bhd (in Liquidation) &
Anor v. Overseas Credit Finance (M) Sdn Bhd [1988] 2 MLJ 449 and
the Court of Appeal decision in Lafarge Concrete (M) Sdn Bhd v.
Gold Trend Builders Sdn Bhd [2012] 6 MLJ 817).
[61] It is entirely insignificant that the Plaintiff in the instant case

claimed to own assets or that it believed it would recover damages in
the future. The crucial point is that the Plaintiff still at present does
not have the ability to pay the amount claimed by the Defendant to be
due and owing to the Defendant, and manifestly falls within the
definition of “unable to pay its debt” pursuant to Section 218(1)(e)
and 218(2) of the CA. For the same reason, it is insufficient for a
debtor company to assert that it has other assets locked up elsewhere
which can sufficiently meet its liabilities. The test of commercia l
24
solvency requires immediate availability of assets to pay current

liabilities when they fall due. As I have emphasized in WWTAI
Finance Ltd v. IES Energy Holdings Sdn Bhd [2017] AMEJ 0277, it is
cash-flow solvency that matters; not balance sheet solvency.
[62] Nor can the Plaintiff legitimately contend that it is solvent

(which it is not, as found earlier) but refuse to pay up, unless it could
show that there is a bona fide dispute on the debt claimed. Again, it
has been established that there is no such genuine dispute. It is not
open to the Plaintiff to assert that it is able to pay the debt but
chooses not to at the same time. As I have observed in Pengkalen
Holiday Resort Sdn Bhd v. Perbadanan Pengurusan Paradise
Apartment Lagoon (North) & Anor [2016] 1 LNS 1114, the solvency
of a company would count for nothing if it persists in non-payment or
that it is nevertheless not ready, willing and able to meet the demand
of the petitioning creditor.
No necessity for Judgment before initiating winding -up
[63] I should also for completeness deal with one other contention of
the Plaintiff which argued that the winding-up notice is an abuse of
process since it is not based on any judgment. This is plainly not a
meritorious argument. The law is well settled that there is no
necessity for a creditor to obtain a judgment before serving a statutory
demand under Section 218(1) of the CA. In Megasteel Sdn Bhd v.
Perwaja Steel Sdn Bhd [2008] 4 CLJ 352 the Court of Appeal
instructively 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, 1965 was enacted. ”
25
(see also the Court of Appeal decision in Lafarge Concrete (M) Sdn
Bhd v. Gold Trend Builders Sdn Bhd [2012] 6 MLJ 817).
[64] In addition, it has also been established that a winding-up

petition is not a form execution such that it is not necessarily based
on any judgment of the Court (see the Court of Appeal decision in
Maril-Rionebel (M) Sdn Bhd & Anor v. Perdana Merchant Bankers
Bhd & Other Appeals [2001] 3 CLJ 248). It is fundamentally premised
on the inability of a company to pay its debts when they fall due.
[65] The Plaintiff‟s reference to my decision in Bakti Dinamik Sdn

Bhd v. Bauer Malaysia Sdn Bhd [2016] 10 CLJ 247 in support of its
contention is therefore misconceived. In its written submissions, the
Plaintiff reproduced the following two paragraphs of the said
decision:-
[66] In my view, considering the nature and context of the

claims between the parties in the instant case, there is
nothing preventing the defendant from pursuing what is
probably a more efficient dispute resolution mechanism,
by making an adjudication claim pursuant to the
Construction and Industry Payment and Adjudication Act
2012 (“CIPAA”). This could be the more suitable
alternative procedure for the defendant to assert its claim,
instead of inflicting upon the plaintiff undue pressure via a
winding-up notice through the medium of the winding-up
court that could occasion irreparable damage to an
otherwise commercially solvent company. At its core,
there is no judgment debt in the instant case, and it is not
out of place for me to refer to the New Zealand case of Re
Prime Link Removals Ltd [1987] 1 NZLR 510 which
considered s. 218 (a) of the New Zealand Companies Act
1955 which is in pari materia with s. 218(2) of the
26
Malaysian Companies Act 1965, and held instructively as

follows:
A claim against a company for damages for breach of

contract, not converted to a judgment debt but still
wholly prospective and contingent, is not a sum then
due by which the company is indebted in terms of
section 218(a) of the Act. Failure to meet a demand
for such a claim is not a neglect to pay the sum in
terms of section 218 (a)...
[67] Further, in the case of Seawealth Nautical Sdn Bhd v.

Kekal Kaya Marin Sdn Bhd [2011] 9 CLJ 577 the High
Court emphasised that although a judgment debt is not a
pre-requisite, to proceed with a winding-up petition on a
non-judgment debt requires more than a mechanical
adherence to the statutory provision of s. 218(2)(a) notice.
If the debt is bona fide disputed on substantial grounds,
and if, in certain cases a petition if presented, will be
bound to fail, the courts can, and should, restrain the
creditor from presenting a winding-up petition, and if
presented, to restrain further proceedings on it, to prevent
abuse of the court‟s process.
[66] However, it will be readily observed that the first paragraph

referred to a New Zealand case that states that failure to fulfill a
winding notice on a claim for damages which has not yet been
converted into a judgment is not a neglect to pay the sum specified in
the winding-up notice. This is a general statement and is consistent
with the principle that the test is whether there is bona fide dispute of
the debt on substantial grounds. As I have stated earlier in this
judgment, the existence of a judgment debt would ordinarily suggest
that there is no bona fide dispute. The converse is not necessarily
27
true. The absence of a judgment debt may, but not necessarily indicate
that there is such a bona fide dispute. Such a determination, as
emphasized earlier, is a matter of evidence.
[67] The second paragraph then makes it crystal clear that a judgment
debt is not a pre-requisite, and that the critical question would still be
whether there exists a bona fide dispute of the debt being claimed. In
Bakti Dinamik, I found that, on evidence, there was indeed a bona fide
dispute on the debt, and an important basis was the absence of a
contractual nexus between the petitioner and the respondent company
vis-à-vis the debt claimed in the relevant winding-up notice filed by
the petitioner in that case.
[68] It bears emphasis that prima facie a creditor who is not paid has
a right to file a petition for a winding-up order (see the Supreme
Court decision in Morgan Guaranty Trust Co of New York v . Lian
Seng Properties Sdn Bhd [1991] 1 MLJ 95). This is a statutory right.
Upon the expiration of the 21-day period as set out in the Section 218
Notice and the judgment debt remains unpaid, the debt becomes “due
and payable” and the respondent is deemed to be unable to pay its
debts. Consequently, the petitioner succeeds in acquiring the status of
a “creditor” for the purposes of winding-up proceedings pursuant to
Section 218(1) (e) and (i) of the CA. Thus, the absence of a judgment
debt is no bar to the statutory right of the Defendant to pursue
winding-up proceedings.
Non-Compliances with Mandatory Requirements for Ex -Parte

Injunction
[69] Separately, I find much support for the finding that the ex-parte
injunction earlier secured by the Plaintiff had also not strictly adhered
to the relevant provisions in the Rules of Court 2012 (“RC 2012”) and
28
the requirement for a full and frank disclosure which thus did not in
the first place justify the granting of the said injunction.
[70] Order 29 Rule 1(2A) of the RC 2012 sets out the mandatory
requirements for a concise and clear statement in the affidavit
supporting an ex-parte application which includes in sub-paragraph
(2A) (c) thus:-
“The facts relied on to justify the application ex-parte,

including details of any notice given to the other party, or
if notice has not been given, the reason for not giving
notice”.
[71] Under Order 29 r. 1(2) it is specified that an application for an

injunction may be made ex-parte, “where the case is one of urgency”.
In the first place, in the instant case, the Plaintiff in the affidavit in
support of the ex-parte application did not state the reason for the
urgency or the need for the secrecy in the making of the application
ex-parte. It could not have been unknown to the Plaintiff that the
winding-up petition that the Plaintiff sought to restrain could only be
filed if there is non-payment of the debt demanded in the notice after
the expiry of the statutory period of three weeks. But despite having a
good three weeks to act, the Plaintiff decided to file the application
on ex-parte basis just a day before the deadline sans any explanation
in the said supporting affidavit as why it did not or could not act
sooner.
[72] I cannot but refer to the decision of the Court of Appeal in

Arthur Anderson & Co v. Interfood Sdn Bhd [2005] 2 CLJ 889 which
has held as follows:-
“Another obvious omission in the application and the

supporting affidavit was a statement or reason as to the
nature of the urgency thereby justifying the application to
29
be made ex-parte. There was no explanation given for the

gap of about one month between the affirmation of the
affidavit in support and the actual filing of the application.
The time gap, in our view, did not indicate any urgency in
the matter. Indeed the respondent could not for that reason
be heard to say subsequently that the matter was urgent.”
[73] In the subsequent affidavits to support its underlying originating

summons in Enclosure 1 and in its resistance to the setting aside
application by the Defendant, the Plaintiff sought to explain the
urgency by reason of the absence of the deponent of the affidavits for
the Plaintiff from the country. Even if this was true, it still is a patent
non-compliance with Order 29 r. 1 (2A) since the affidavit in support
of the ex-parte application did not contain such explanation.
[74] In any event, in my view, it should be exceptionally rare, if not

totally inappropriate for an application for Fortuna Injunction be dealt
with in an ex-parte basis. As I mentioned, there is always the three
week period that must first expire before a petition can be presented.
Thus, a respondent company which is truly concerned with such a
threat can easily and quickly file an injunction application. Even if it
is to be on a certificate of urgency to secure an early hearing date, it
does not have to be on an ex parte basis. In most cases, the petitioner,
when served with the cause papers, would agree to an ad interim
injunction pending exhaustion of affidavit exchange for inter-partes
hearing of the injunction application proper. A Fortuna injunction
situation would not give rise to concerns usually associated with
Mareva injunction or Anton Piller orders which require immediate
preservation of secrecy and asset.
[75] Thus, even though intended and filed as an ex-parte application,

the Court could direct, as I did in this instant case, the Plaintiff to
nevertheless serve the cause papers to the Defendant. The Defendant‟s
30
counsel did appear at the hearing to assist the Court (obviously at that
stage in the absence of any affidavit in reply) but stated he had no
instruction to agree to an ad interim position. It should be emphasized
that the presence of the Defendant did not turn the ex-parte
proceeding into an inter-partes hearing. It merely became an ex- parte
hearing with notice to the Defendant (see Dato’ Oon Ah Baa & Ors v.
Eagle & Pagoda Brand Teck Aun Medical Factory & Ors [2003] 7
CLJ 81).
[76] Secondly, the affidavit in support of the ex-parte application

was also defective by reason of its failure to provide a clear and
concise statement of any notice given to the Defendant or, if notice
has not been given, the reason for not giving notice to the Defendant
and any answer by the Defendant (or which it is likely to assert) to the
claim or application.
[77] In this connection, it is to be observed that the Court of Appeal

has in Westform Far East Sdn Bhd v. Connaught Heights Sdn Bhd
[2010] 2 CLJ 541 ruled that it is mandatory under Order 29 r. 1(2A)
(c) of the RC 2012 that the supporting affidavit in an ex-parte
application must contain a clear and concise statement about the
reason(s) why notice has not been given.
[78] In the instant case, counsel for the Plaintiff at the hearing made
two arguments on this point. First, it was submitted that notice had
been given to the Defendant as in its letter dated 30 December 2016
disputing the Section 218 notice, the Plaintiff stated that it reserved
all its rights to institute legal proceedings in response to the winding-
up notice. This, according to the Plaintiff constituted sufficient notice
under Order 29 r. 1 (2A).
[79] This line of argument is misconceived. In our justice system,

legal proceedings are predicated on an adversarial approach. A
litigant must have the right to be heard and present his case in the
31
relevant proceeding instituted by the opponent. An ex-parte hearing is

an exception and must always be expeditiously followed-up with the
proceedings proper, inter-partes. The proceeding in the instant case is
specifically for the application for an injunction. That is the whole
subject matter of Order 29 of the RC 2012. The obligation to give
notice to the other party or the Defendant herein is necessarily that
concerning the specific injunction application being filed. This
obligation cannot be validly discharged by making reference only
generally to the possibility of filing legal actions.
[80] The second contention by the Plaintiff on this issue was that the
Plaintiff did as a matter of fact serve the cause papers to the
Defendant whose counsel did appear at the ex-parte hearing. This
assertion is similarly short on substance. The Plaintiff served the
papers only because of a direction given by this Court. Moreover, as
mentioned earlier, the proceeding remained ex-parte in nature, albeit
with notice to the other party. More significantly, in violation of the
strict requirement of Order 29 r. 1 (2A), there is still absolutely no
explanation in the Plaintiff‟s affidavit in support, as to why the
Defendant could not be notified of the Plaintiff‟s application for
injunction, which thus resulted in the ex-parte hearing on an urgent
basis.
[81] In the High Court decision in University of Malaya Medical

Centre v. Choo Chee Kon & Anor [2008] 3 MLJ 278 Mohd
Hishamudin J (as he then was) made the following analysis and
observations which bear useful extraction:-
[19] In the present case, in seeking to set aside the ex-

parte injunction order of 21 October 2004, the defendants
contend, among others, that the plaintiff had failed to give
notice of the ex-parte application to the defendants when
the plaintiff applied for the ex-parte injunction order; or,
32
alternatively to explain satisfactorily as to why such a

notice was not given to them. The giving of notice of the
ex-parte application (or the furnishing of an explanation in
the ex-parte application where such notice was not given)
is required by O. 29 r. 1(2A)(c) of the RHC.
[20] In my judgment, there is a merit in the defendants‟

contention that the plaintiff‟s failure to give notice was not
justified. The plaintiff‟s solicitors had received the
instructions to obtain the interlocutory relief on 20
October 2004 and had also on that day completed the bulk
of the court papers for filing. On the morning of 21
October 2004, Professor Dato‟ Dr Mohd Amin signed his
affidavit in support of the plaintiffs ex-parte application.
Later that morning, the caesarean section was performed
successfully, and the defendants‟ baby was born at about
11am. Unknown then to the defendants, the plaintiff‟s ex-
parte application was filed, and hearing to determine the
plaintiff‟s application for ex-parte injunctive relief was set
for 2.15pm on that day (21 October).
[21] Hence, on 20 October 2004 the plaintiff and their

solicitors were making the necessary preparation for the
filing of the ex-parte application and they expected to file
the ex-parte application the following day, 21 October
2004, at the Civil Division of the High Court of Kuala
Lumpur at Wisma Denmark via a certificate of urgency,
hoping to get a hearing if possible on the 21 October itself.
This being the scenario, the plaintiff could have - and
should have - notified the defendants on the 20 October
itself of its intention to file at the Civil Division registry
of the High Court Kuala Lumpur at Wisma Denmark the
ex-parte application on the next day, 21 October, on a
33
certificate of urgency, so that the defendants could have

alerted their solicitors; and so that the defendants‟ counsel
could appear before the court at the hearing of the ex-parte
application and to apply to be given the opportunity to be
heard on an ex-parte opposed basis. But the plaintiff‟s
doctors or solicitors chose not to inform the defendants of
the ex-parte application. Even in the morning of 21
October when the solicitors for the plaintiff was set to file
the ex-parte application, the defendants were still not
informed - although the plaintiff had ample opportunity to
do so, if the plaintiff had taken the matter of giving notice
seriously; which as a matter of law the plaintiff should -
all the more so where in this case the plaintiff was
conscious of the fact that the defendants were seriously
against the giving of blood transfusion to their baby - not
on any irrational ground - but on the ground of religious
belief as Jehovah Witnesses…..
[22] Now, with regard to the plaintiff‟s claim that it was

unable to communicate with its solicitors on 21 October
prior to the hearing at 2.15pm, I find it difficult to accept
this assertion; for between 11am and 2.15pm that day there
must have been contact between the plaintiff and its legal
counsel because the latter was apparently able to advise
the court (during the hearing in chambers at 2.15pm) that
the defendants‟ baby had been born on 11am.
[23] In my judgment, there was no satisfactory explanation

whatsoever proffered to the court as to why the defendants
were not given notice on 20 October 2004 (or at the very
least on the morning of 21 October). The plaintiff‟s
affidavit in support at encl 2, which was affirmed by
34
Professor Dato‟ Dr Mohd Amin bin Jalaludin on 21

October 2004, at para 23 merely states:
“I have been advised by the doctors treating the

second defendant that they have informed the
defendants that the plaintiff intend to obtain a court
order to proceed with treatment including blood
transfusion on the baby but due to time constraint
and because the final attempt on 20 October 2004 to
resolve the matter failed, therefore the plaintiff had
no time to give notice to the defendants regarding the
plaintiffs application to obtain an ex-parte
interlocutory injunction order.”
[24] This is too vague an explanation and too lame an

excuse. The legal burden is on the plaintiff to satisfy the
court as to why it failed to give notice to the defendants.
In my opinion, in the present case, the duty to give notice
arises on 20 October itself when the plaintiff made the
decision to file the ex-parte application on 21 October. In
my judgment, upon examining the explanation furnished in
the above para 23, I find that the plaintiff has failed to
furnish a satisfactory explanation as to why notice of the
ex-parte application was not given to the defendants. The
plaintiff alleges that there was „time constraint‟. Why was
there „time constraint‟ (kesuntukan masa)? The plaintiff
must give the court a clear explanation, - not a general or a
vague explanation. My finding is that clearly there is no
satisfactory explanation given by the plaintiff. In arriving
at my finding, besides scrutinising para 23, I also take into
account of the following facts. The defendants were not
elusive parties; nor were they strangers to the plaintiff.
Indeed, the second defendant was the patient of the
35
plaintiff hospital, who was admitted to the plaintiff

hospital as early as 4 October; and the first defendant was
her husband who had shown deep concern over his wife‟s
health and medical condition; and both defendants could
have been easily contacted by the plaintiffs officers or
doctors. They had been cooperative (save for their
religious beliefs - being Jehovah Witnesses) with the
hospital‟s medical team and has had a series of discussions
with the medical team. On examining the above para 23 it
is clear to me that the plaintiff has taken the legal duty to
inform the defendants of the ex-parte application, or the
legal duty to explain to the court for the omission in giving
such notice, very lightly. In my judgment, the averment at
para 23 is nothing but a mere lip service effort.
[25] Thus, there is clear non-compliance of O. 29 r.

1(2A)(c) of the RHC. Order 29 r. 1(2) and (2A)(c) of the
RHC stipulates:
(2) Where the applicant is the plaintiff and the case

is one of urgency such application may be made ex-
parte by summons supported by an affidavit but,
except as aforesaid, such application must be made
by summons.
(2A) The affidavit in support shall contain a clear

and concise statement:
(c) of the facts relied on as justifying

application ex-parte, including details of any
notice given to the defendant or, if none has
been given, the reason for giving none;
36
[26] According to the Malaysian High Court Practice ,

2001 Desk Ed 1, at p 1032, para [29.1.17]:
The requirements in r. 1(2A) are mandatory. Thus,

where a plaintiff fails to give notice of an application
made ex-parte out of fear that it will defeat the
purpose of the proceedings, the plaintiff must state in
his supporting affidavit the reasons why notice in
advance was not given to the defendant. As the
introductory sentence in r. 1(2A) states that the
affidavit „shall contain a clear and concise
statement‟, the statement must be stated clearly and
concisely and may not be implied: Delimec Hygiene
Sdn Bhd v. EMIC (M) Sdn Bhd [2001] 5 MLJ 186 at p
197.
The consequence of the plaintiffs failure to comply

with r. 1(2A) is that the injunction must be
discharged. To do otherwise would defeat the policy
behind the introduction of r. 1(2A): UMAS Sendirian
Berhad v. RHB Bank Berhad & Anor [2001] 1 AMR
1024.
[27] In my judgment, compliance with r. 1(2A)(c) is

mandatory. If there had been non-compliance, it is a very
serious breach of the RHC and the ex-parte order must be
set aside. This approach is consistent with the policy
behind the introduction of r. 1(2A). I therefore, set aside
the ex-parte injunction order due to non-compliance of r.
1(2A)(c) of the RHC.
[82] In the instant case, it is unnecessary to attempt to dwell much

into the details of the affidavit in support, for, unlike in University of
Malaya Medical Centre v. Choo Chee Kon & Anor where the averment
37
in the said paragraph 23 was found wanting, the affidavit in support

herein made absolutely no mention of why notice of the injunction
application could not be given to the Defendant.
[83] The importance of strict adherence to the mandatory

requirements of Order 29 was again reiterated by the Court of Appeal
in Motor Sports International Ltd (Servants or agents at Federal
Territory of Labuan) & Ors v. Delcont (M) Sdn Bhd [1996] 2 MLJ 605
where Gopal Sri Ram JCA (as he then was) held as follows:-
Before us, Encik Robert Lazar who appeared for the

appellants advanced a number of grounds on which the
injunction should be dissolved. However we find it
necessary to deal with only three of them.
First, he submitted that the affidavit in support of the ex-

parte summons on which the respondent obtained the
injunction did not comply with the requirements of O. 29 r.
2A. For completeness, we reproduce that rule below:
…………………………..
The provisions of O. 29 r. 2A were introduced by

amendment in order to ensure that ex-parte injunctions of
any sort were not granted willy-nilly, but only in cases
where they were truly called for. In order to ensure that the
policy behind the introduction of r. 2A is not defeated,
high courts must demand strict compliance with its terms.
More so, when the relief applied for is in the nature of a
Mareva or an Anton Piller type of injunction because of
the incalculable harm and damage that may be caused to a
defendant by the grant of either of these orders.
38
Having perused the affidavit in question, we find that there

has not been even a feeble attempt to meet the
requirements of r. 2A, especially sub-paragraph (d)
thereof. On this ground alone, the ex- parte injunction
ought to have been dissolved by the learned judge.
[emphasis added]
[84] Order 29 r. 1 (2A) embodies the fundamental principle that an

applicant must make full and frank disclosure of all material facts
when applying ex-parte. The matters must be stated expressly and not
by way of implication, and all material facts, especially those which
may be deemed to be not favourable to the Plaintiff herein must be
specifically highlighted. This is to prevent the application from
misleading the Court.
[85] Additionally, there is merit in the Defendant‟s submission that

the Plaintiff had failed to disclose or had otherwise withheld
substantial amount of documentary evidence. This included especially
evidence of part-payments highlighted earlier. In addition, the
Plaintiff also now attempted to present even a different version of
events not previously averred in the affidavit in support. Thus, for
example is the assertion, wholly unsupported, that the bills were
intended to fix a ceiling which would allow the Defendant a purported
flexibility to negotiate downwards.
[86] I ought to add in this regard that the Court of Appeal decision in
PECD Bhd & Anor v. Amtrustee Bhd & other appeals [2010] 1 CLJ
940 is most instructive, for it held as follows:
“[27] …The failure to make such full and frank disclosure

renders the ex-parte order obtained liable, and rightly, set
aside. (See Kosma Palm Oil Mill Sdn Bhd & Ors v.
Koperasi Serbausaha Makmur Bhd [2004] 1 CLJ 239;
39
Castle Inn Sdn Bhd v. Bumiputra-Commerce Bhd Bank

[2009] 2 CLJ 445.).
[28] On this ground alone these appeals can and are

dismissed. Notwithstanding this, the other issues raised are
of some importance which must also be addressed.”
[87] Accordingly, in my judgment these various non-compliances

with the mandatory requirements of Order 29 r. 1 (2A) render the
Plaintiff to be undeserving of the ex-parte injunction which should
rightfully be now set aside.
Conclusion
[88] In view of the foregoing, it is my judgment that there is no

justifiable basis for the granting of a Fortuna injunction as there is, on
evidence, no bona fide dispute on the sums claimed in the bills issued
by the Defendant and in any event neither has the Plaintiff shown it
will suffer irreparable damage should a winding-up petition be
presented by the Defendant.
[89] Accordingly, I dismiss the application for the injunction in

Enclosures 1 and 3 and allow Enclosure 8, and therefore set aside the
ex-parte injunction previously granted.
[90] I also order costs against the Plaintiff in respect of all three
enclosures.
Dated: 5 APRIL 2017
40
(MOHD NAZLAN MOHD GHAZALI)

Judge
High Court NCC1
Kuala Lumpur
COUNSEL:
For the plaintiff - Nadesh Ganabaskaran; M/s Malek Paulian & Gan,
Kuala Lumpur
For the defendant - Tharminder Singh; M/s Izral Partnership, Kuala

Lumpur
Case(s) referred to:
Fortuna Holdings Pty Ltd v. The Deputy Commissioner of Taxation of

the Commonwealth of Australia [1978] VR 83
Mobikom Sdn Bhd v. Inmiss Communications Sdn Bhd [2007] 3 MLJ

316
Pacific & Orient Insurance Co Bhd v. Muniammah Muniandy [2011] 1

CLJ 947
Tan Kok Tong v. Hoe Hong Trading Co Sdn Bhd [2007] 4 MLJ 355
American Cynamid Co (No. 1) v. Ethicon Ltd [1975] 1 All ER 504
Christopher Michael Cheow v. ANS Builders Sdn Bhd [2012] 10 MLJ

359
Chip Yew Brick Works Sdn. Bhd. v. Chang Heer Enterprise Sdn Bhd
[1988] 1 CLJ 5
41
BMC Construction Sdn Bhd v. Dataran Rentas Sdn Bhd [2001] 1 MLJ
356
Morgan Guaranty Trust Co of New York v. Lian Seng Properties Sdn

Bhd [1991] 1 MLJ 95
Re Great Britain Mutual Life Assurance Society [1880] 16 Ch D 246
Tindok Besar Estate Sdn Bhd v. Tinjar Co [1979] 2 MLJ 229
KGN Jaya Sdn Bhd vs. Pan Reliance Sdn Bhd [1996] 1 MLJ 233
Malaysia Air Charter Company Sdn Bhd v. Petronas Dagangan Sdn

Bhd [2000] 4 CLJ 437
Re Tweeds Garages Ltd [1962] 1 All ER 121
JB Kulim Development Sdn Bhd v. Great Purpose Sdn Bhd [2002] 2

MLJ 298
Mageleine Investments Pte Ltd v. Swiss Levingston (Property

Consultants) Pte Ltd [1990] 1 MLJ 470
Tan Tek Sin & Anor v. Tetuan Nora Hayati & Assoc ( sued as a firm)
[2015] 2 MLJ 1
Mindvalley Labs Sdn Bhd v. Messrs Rao & Kamal (a legal firm in
partnership) [2017] 1 AMR 159
Templer Park Golf & Resort Bhd & Anor v. Tetuan George Varughese
[2010] 8 CLJ 754
Pembinaan Lian Keong Sdn Bhd v. Yip Fook Thai [200 5] 6 CLJ 34
Vije & Co v. Cooperative Central Bank Ltd [1991] 2 CLJ 1403
Tetuan Kang & Kang v. Kirana Studio Sdn Bhd [2015] 1 CLJ 431
42
Ng Kim Hoong & anor v. Tetuan YH Teh & Quek [2015] 10 CLJ 561
System Communication Engineering Sdn Bhd v. Zabidin Sdn Bhd

[1999] 1 AMR 1187
Malayan Plant (Pte) Ltd v. Moscow Narodny Bank Ltd [1980] 2 MLJ
53
Sri Hartamas Development Sdn Bhd v. MBF Finance Bhd [1992] 1

CLJ 637
Lian Keow Sdn Bhd (in Liquidation) & Anor v. Overseas Credit
Finance (M) Sdn Bhd [1988] 2 MLJ 449
Lafarge Concrete (M) Sdn Bhd v. Gold Trend Builders Sdn Bhd
[2012] 6 MLJ 817
WWTAI Finance Ltd v. IES Energy Holdings Sdn Bhd [2017] AMEJ
0277
Pengkalen Holiday Resort Sdn Bhd v. Perbadanan Pengurusan

Paradise Apartment Lagoon (North) & Anor [2016] 1 LNS 1114
Megasteel Sdn Bhd v. Perwaja Steel Sdn Bhd [2008] 4 CLJ 352
Maril-Rionebel (M) Sdn Bhd & Anor v. Perdana Merchant Bankers

Bhd & Other Appeals [2001] 3 CLJ 248
Bakti Dinamik Sdn Bhd v. Bauer Malaysia Sdn Bhd [2016] 10 CLJ
247
Arthur Anderson & Co v. Interfood Sdn Bhd [2005] 2 CLJ 889
Dato’ Oon Ah Baa & Ors v. Eagle & Pagoda Brand Teck Aun Medical
Factory & Ors [2003] 7 CLJ 81
43
Westform Far East Sdn Bhd v. Connaught Heights Sdn Bhd [2010] 2
CLJ 541
University of Malaya Medical Centre v. Choo Chee Kon & Anor

[2008] 3 MLJ 278
Motor Sports International Ltd (Servants or agents at Federal

Territory of Labuan) & Ors v. Delcont (M) Sdn Bhd [1996] 2 MLJ 605
PECD Bhd & Anor v. Amtrustee Bhd & other appeals [2010] 1 CLJ
940
Legislation referred to:
Legal Profession Act 1976, ss. 126, 128(2)
Companies Act 1965, s. 218 (1)(e), (1)(i), (2)(a)
Rules of Court 2012, O. 29 r. 1(2), (2A)(c)
44

KRIS HEAVY ENGINEERING & CONSTRUCTION SDN BHD V LEWIS & CO. (2017) 1 LNS 964

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KRIS HEAVY ENGINEERING & CONSTRUCTION SDN BHD V LEWIS & CO. (2017) 1 LNS 964

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[2017] 1 LNS 964 Legal Network Series

IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR

[ORIGINATING SUMMONS NO.: WA-24NCC-9-01/2017]

In the matter of Section 218 (1) (e)

In the matter of Section 50 and 51

In the matter of Order 7, Order 29

In the matter of Kris Heavy

KRIS HEAVY ENGINEERING &

LEWIS & CO.

YANG ARIF TUAN MOHD NAZLAN BIN MOHD GHAZALI

[1] This is an application for a Fortuna injunction filed by the

Key Background Facts

[2] The Plaintiff is a locally incorporated private limited company.

amount of RM319,360.00. These bills, particularly the latter, are the

[3] By letters dated 12 November 2015, 24 November 2015 and 14

[4] On 3 February 2016, the Plaintiff made part-payment of

[5] On 6 September 2016, the Court of Appeal decided the Appeal

[6] By a letter dated 28 November 2016, the Plaintiff wrote to the

[7] In its letter of 13 December 2016, the Plaintiff gave an

[9] By a letter dated 30 December 2016, the Plaintiff emphasized

[10] The Defendant‟s solicitors on 9 January 2017 replied by

[11] In reaction thereto, on 10 January 2017, the Plaintiff filed the

[12] This judgment concerns the proceedings on the inter-partes

Essence of Contentions of Parties

[15] The Plaintiff further asserted that the Defendant‟s statutory

Evaluation and Findings of this Court

[19] The jurisprudential basis of the applicability of Fortuna

“(3) The kind injunction by which an intended winding-up

up petition may be restrained by injunction where its

“[25] An application for an injunction to restrain an

[26] The first principle laid down in that case is that an

has no chance of success. In order to succeed in getting

(i) the intended petition has no chance of success, as

(ii) the presentation of such petition (which has no

(see: Re A Company [1894] 1 Ch 349; Charles Forte

[27] This principle is not applicable to the present case.

[28] The second principle established in the Fortuna case

[29] This principle applies only to disputed debt. It does

“[8] When deciding whether to grant an injunction to

[23] Thus, in light of the foregoing authorities, it is settled law that

chance of success and might produce irreparable damage to the

Whether there is Bona fide dispute on the Debt

[24] The primary question for determination is thus whether the

[26] This, in my view, is a self-evident truism. For a bona fide

reasonable grounds (see also BMC Construction Sdn Bhd v. Dataran

[27] As a corollary, in challenging the winding-up notice, the Court

“….in my opinion it is not sufficient for the respondents,

[28] As mentioned, the Plaintiff sought to fortify its argument by

[29] Do these documents demonstrate that the debt is bona fide

[30] Secondly, having examined the affidavit of parties, it is quite

[31] As such, it cannot be doubted that these part-payments signify a

[32] Thirdly, again I emphasize that in respect of the reliance of the

[33] The legal principle of estoppel should rightfully operate to

[34] In this context, reference ought to be made to the decision of the

“We are of the view that it would be a travesty of justice if

To put it another way, the appellant, by its silence coupled

It follows that it does not, therefore, lie in the mouth of the

payments undisputed, the issue would thus appear to be one of a

[38] Thus, the Defendant‟s reference to the case of JB Kulim

Ltd v. Swiss Levingston (Property Consultants) Pte Ltd [1990] 1 MLJ

[40] Secondly, as correctly highlighted by the Defendant, the

meritorious for any tax liability would be for the Defendant to