WEALTHY GROWTH SDN BHD (No.Syarikat: 740335-V) 1. LEE SUI CHIN 2. LAI YAN LUN 3. NEOH CHEE KEONG 4. LAU HOH CHU 5. WOO CHAN YUE 6. PHUAH KIN YEN 7. KWON LAI FURN 8. CHAN CHING YEE 9. TAN KEAN AN 10. SEASON CASKET INDUSTRY SDN BHD 11. WANG C

JA-24NCC-33-12/2019 23 November 2020 ---------------------------------------------------------------------------------------------------------------------------- IN THE HIGH COURT OF MALAYA IN JOHOR BAHRU IN THE STATE OF JOHOR DARUL TAKZIM, MALAYSIA ORIGINATING SUMMONS NO: JA-24NCC-33-12/2019 Dalam Perkara Mengenai Seksyen 465 dan 466 Akta Syarikat 2016; Dan Dalam Perkara Seksyen 50 dan 51 Akta Relif Spesifik 1950 Dan Dalam Perkara Mengenai Aturan 7, Aturan 29 dan Aturan 92 Kaedah- Kaedah Mahkamah 2012 Dan Dalam Perkara Mengenai Notis Seksyen 465 dan 466 Akta Syarikat 2016 terhadap Wealthy Growth Sdn Bhd (No.Syarikat: 740335-V) BETWEEN WEALTHY GROWTH SDN BHD (No.Syarikat: 740335-V) ... APPLICANT AND 1. LEE SUI CHIN 2. LAI YAN LUN 3. NEOH CHEE KEONG 4. LAU HOH CHU 5. WOO CHAN YUE 6. PHUAH KIN YEN EVROL MARIETTE PETERS JC 1 JA-24NCC-33-12/2019 23 November 2020 ---------------------------------------------------------------------------------------------------------------------------- 7. KWON LAI FURN 8. CHAN CHING YEE 9. TAN KEAN AN 10. SEASON CASKET INDUSTRY SDN BHD 11. WANG CHIAO WEN 12. LEE SIEW FONG 13. LIH YONG MIN 14. TAN SIAU PIANG 15. LIEW JIN FUNG 16. LYE WIL LIAM 17. LING Al LI 18. HEW SIEW BEE 19. TEW KOK FUI 20. CHOO CHUON WEI 21. NG SIN MEI 22. CHOONG WAI KEEN 23. ANGGIE TAN 24. CHONG MENG HUAT 25. FRANCIS NICHOLAS MADRIGAL 26. CHONG SZE KANG 27. TEOH SOAN HOONG 28. TIN CHIN KIOWNG 29. JONATHAN DAS A/L DEVADAS 30. WONG MUN CHOON 31. NG LEE CHOON 32. WONG CHONG GUAN 33. TAY LEE PING 34. TANG SOK CHENG EVROL MARIETTE PETERS JC 2 JA-24NCC-33-12/2019 23 November 2020 ---------------------------------------------------------------------------------------------------------------------------- 35. TANG CHEE KEONG 36. KEE KING HUAT 37. HO YING HOWE …RESPONDENTS ------------------------------------------------------------------------------------------------ GROUNDS OF JUDGMENT ------------------------------------------------------------------------------------------------ Introduction [1] This is the Applicant's application (“this Application”) in enclosure 22, for an Erinford Injunction against the Respondents, to restrain the latter from advertising the winding-up petition, pending the Applicant’s appeal to the Court of Appeal, against the decision of this Court on 17 June 2020, in dismissing the Applicant’s application for a Fortuna Injunction. The background facts [2] The Applicant is a Developer, and the Respondents are individual purchasers who had entered into individual Sales and Purchase Agreements for the purchase of individual properties developed by the Applicant in the development project known as D'Summit Residences@Johor Bahru ("the Properties"). However, in January 2018, the Respondents filed claims in the Tribunal for Homebuyer Claims (“the Tribunal”) against the Applicant for failing to comply with the approved building plan in the Agreements. The Tribunal allowed the claims, as a result of which the Applicant filed an application for EVROL MARIETTE PETERS JC 3 JA-24NCC-33-12/2019 23 November 2020 ---------------------------------------------------------------------------------------------------------------------------- judicial review (“the Judicial Review application”), which was subsequently dismissed by the High Court on 11 November 2019. Dissatisfied, the Applicant filed an appeal to the Court of Appeal. [3] The Respondents then issued statutory notices dated 4 December 2019, pursuant to section 466 (Definition of ‘inability to pay debts’) of the Companies Act 2016 (“the Statutory Notices”). As a result thereof, the Applicant filed an application for a Fortuna Injunction which was dismissed by this Court on 17 June 2020. On 3 July 2020, the Applicant filed an appeal against such dismissal. [4] Meanwhile, on 22 June 2020, the Respondents proceeded to file a winding-up petition against the Applicant ("the winding-up proceedings”). The Applicant then attempted to make payment of a sum of MYR906,946.46, but was rejected by the Respondents via letter dated 26 June 2020. On 3 July 2020, the Applicant attempted again to settle payment, by sending a cheque in the amount of MYR956,398.40, to include interests, and costs. However, the Respondents agreed to accept payment on condition that the Applicant withdraw their appeals to the Court of Appeal. [5] The Applicant proceeded to file this Application on 3 July 2020, which was allowed for the following reasons. The applicable law [6] Although an Erinford Injunction is derived from the case of Erinford Properties Ltd v Cheshire County Council [1974] 2 All ER 448 (“the EVROL MARIETTE PETERS JC 4 JA-24NCC-33-12/2019 23 November 2020 ---------------------------------------------------------------------------------------------------------------------------- Erinford decision”), the starting point is Order 29 of the Rules of Court 2012 (“Rules of Court”) which reads: Order 29 – Interlocutory injunctions, interim preservation of property Rule 1 Application for injunction (1) An application for the grant of an injunction may be made by any party to a cause or matter before or after the trial of the cause or matter, whether or not a claim for the injunction was included in that party's originating process, counterclaim or third party notice, as the case may be. [7] I am mindful that the main consideration in an application for an Erinford Injunction is the nugatoriness or otherwise of the appeal. However, it is pertinent to note that the courts in Malaysia have further extended these considerations to include the balance of convenience, and hence the discretion vested in the court to consider the comparative effects of granting or refusing an Erinford Injunction, and maintaining the status quo pending the appeal. [8] The High Court may have its reasons for refusing to grant a Fortuna Injunction, but that does not prevent it from granting an Erinford Injunction to preserve the status quo pending the appeal to the Court of Appeal against such refusal. Furthermore, Order 29 rule 1 of the Rules of Court, does not prohibit the Court from granting an Erinford Injunction if warranted by the circumstances. Contentions, evaluation, and findings Whether there was delay in filing this Application EVROL MARIETTE PETERS JC 5 JA-24NCC-33-12/2019 23 November 2020 ---------------------------------------------------------------------------------------------------------------------------- [9] The Respondents relied on Cocoa Processors Sdn Bhd v United Malayan Banking Corporation Bhd & Ors (NO 2) [1989] 1 CLJ [Rep] 436, to contend that there was inordinate delay on part of the Applicant in filing this Application on 3 July 2020, as the winding-up petition had already been filed on 22 June 2020, after the Applicant’s application for the Fortuna Injunction was dismissed on 17 June 2020. [10] I am unable to agree with the Respondents, since the purported delay was only slightly more than two weeks after the Applicant’s application for the Fortuna Injunction was dismissed on 17 June 2020. Furthermore, the Applicant had attempted (in vain), in those two weeks, to make the necessary payment, albeit it was after the expiry of the time period stipulated in the Statutory Notices. Whether the Court was precluded from granting this Application [11] The Respondents submitted that this Court did not have the jurisdiction to grant the Erinford injunction on the basis of section 54(b) of the Specific Relief Act 1950, which reads: Section 54 – Injunction when refused An injunction cannot be granted- … (b) to stay proceedings in a court not subordinate to that from which the injunction is sought; … EVROL MARIETTE PETERS JC 6 JA-24NCC-33-12/2019 23 November 2020 ---------------------------------------------------------------------------------------------------------------------------- [12] I am unable to agree with this submission as the jurisdiction of this Court had been clearly encapsulated by Nik Hashim FCJ in the Federal Court case of Subashini Rajasingam v. Saravanan Thangathoray & Other Appeals [2008] 2 CLJ 1, in adopting the following passage of Megarry J in the Erinford decision: ... where the application is for an injunction pending an appeal, the question is whether the judgment that has been given is one on which the successful party ought to be free to act despite the pendency of an appeal. One of the important factors in making such a decision, of course, is the possibility that the judgment may be reversed or varied. Judges must decide cases even if they are hesitant in their conclusions; and at the other extreme a judge may be very clear in his conclusions and yet on appeal be held to be wrong. No human being is infallible, and for none are there more public and authoritative explanations of their errors than for judges. A judge who feels no doubt in dismissing a claim to an interlocutory injunction may, perfectly consistently with his decision, recognise that his decision might be reversed, and that the comparative effects of granting or refusing an injunction pending an appeal are such that it would be right to preserve the status quo pending the appeal... [Emphasis added.] [13] The Respondents had also relied on rule 24 of the Winding-Up Rules 1972, in contending that this Court had no power to prevent the petition from being advertised, in light of the word ‘shall’ in the provision, which reads: Rule 24. Advertisement of petition Every petition shall be advertised in Form 4 seven clear days or such longer time as the Court may direct before the hearing, as follows: (a) once in the Gazette and twice at least in two local newspapers circulating in Malaysia or in such other newspapers as the Court may direct; (b) the advertisement shall state the day on which the petition was presented and the name and address of the petitioner and of his solicitor and local agent (if any) and contain a note at the foot thereof, stating that any person who intends to EVROL MARIETTE PETERS JC 7 JA-24NCC-33-12/2019 23 November 2020 ---------------------------------------------------------------------------------------------------------------------------- appear on the hearing of the petition, either to oppose or support, must send notice of his intention to the petitioner or to his solicitor or local agent, within the time and in the manner prescribed by rule 28, and an advertisement of a petition for the winding-up of a company by the Court which does not contain the note shall be deemed irregular; and if the petitioner or his solicitor does not within the time hereby prescribed or within such extended time as the Registrar may allow duly advertise the petition in the manner prescribed by this rule the appointment of the time and place at which the petition is to be heard, shall be cancelled by the Registrar and the petition shall be removed from the file unless the Judge or the Registrar shall otherwise direct. [Emphasis added.] [14] In my view, Rule 24 is merely a general rule that prescribes a time- period for the petition to be advertised. It does not contemplate a situation where the party against which the winding-up order is sought, has made payment with a view to settle the debt. Rule 24, therefore, cannot be interpreted to preclude the Court from granting an injunction in appropriate circumstances. In any event, an Erinford Injunction is merely an interlocutory order which, in this case, purports to stay the winding-petition from being advertised and proceeded with, pending the disposal of the appeal against the decision of this Court in dismissing the Applicant’s application for a Fortuna Injunction. [15] In resisting this Application, the Respondents had relied on several cases including Maril-Rionebel (M) Sdn Bhd & Anor v. Perdana Merchant Bankers Bhd & Other Appeals [2001] 3 CLJ 248, Azman & Tay Associates Sdn Bhd v. Sentul Raya Sdn Bhd [2002] 4 CLJ 391, Chip Yew Brick Works Sdn Bhd v. Chang Heer Enterprise Sdn Bhd EVROL MARIETTE PETERS JC 8 JA-24NCC-33-12/2019 23 November 2020 ---------------------------------------------------------------------------------------------------------------------------- [1988] 1 CLJ Rep 5, People Realty Sdn Bhd v. Red Rock Construction Sdn Bhd [2008] 1 CLJ 632, and Klass Corporation (M) Sdn Bhd v. MKRS Management Sdn Bhd [2018] 7 CLJ 303. [16] After careful perusal and scrutiny of those authorities, my view is that the facts of those cases are entirely different from the current scenario. In the present case, what must be emphasised is that the Applicant had attempted to make payment, but that the Respondents had agreed to accept it conditionally. I am, therefore, disinclined to accept the submission of the Respondents based on those authorities. Whether the Respondents lacked bona fide [17] The Applicant argued that the Respondents, in imposing such condition to accepting payment from the Applicant, had lacked bona fide, bearing in mind that such condition was beyond the purview of the Statutory Notices. [18] The Respondents, however, argued that the payment should have been made in full and final settlement, which meant that all appeals lodged by the Applicant should be withdrawn. I am unable to agree with the Respondents, since the payment made by the Applicant was to settle the amount stated in the Statutory Notices, and not pursuant to a consent order or settlement agreement. The Respondents’ demand also had the effect of impinging on the Applicant’s constitutional right to continue with any appeal whatsoever at the Court of Appeal. In my view, therefore, the Respondents’ conduct in insisting on continuing EVROL MARIETTE PETERS JC 9 JA-24NCC-33-12/2019 23 November 2020 ---------------------------------------------------------------------------------------------------------------------------- winding-up proceedings against the Applicant, was unfathomable and inequitable, and cannot be condoned by this Court. [19] On this point, I found instructive the Federal Court case of Blue Valley Plantation Bhd v Periasamy all Kuppannan & Ors [2011] 5 CLJ 481, in the following passage by Zaki Tun Azmi CJ: In my opinion the respondents before us had acted in a vexatious manner and abused the process of the court by continuing to seek for the appellant to be wound up even after the appellant had in good faith paid the money into court. Although there may not have been such reason when originally filing the petition to wind up the appellant, once the respondents insisted on persisting with the petition, they can be deemed to have acted in a vexatious manner. This is a ground for striking out the petition to wind up the appellant. In other words, although at the filing of any action, the petitioner may have acted in good faith, subsequent conduct or action by him may provide grounds for the other party to seek to strike out the action. The application to strike out the petition was filed soon after the tender for payment of respondents' claim was deposited in court. Therefore, there was no undue delay on the part of the appellant. [Emphasis added.] [20] Reference was made also to Bina Satu Sdn. Bhd v Tan Construction [1988] 1 CLJ (Rep) 384, where, in adopting the case of Re A Company [1984] 2 CH 349, it was stated by VC George J: Section 23(2) of the Courts of Judicature Act 1964 provides confirmation that the Court continues to enjoy its inherent powers. This includes the power to restrain any abuse of its proceedings. A classic illustration of the abuse of Court proceedings is provided in Re A Company (1984) 2 CH 349 where it was held that where a petition against a company is presented ostensibly for a winding up order but in reality for another purpose such as to bring pressure to bear on the company, the Court has an inherent jurisdiction to prevent such an abuse of process and will do so by injunction. EVROL MARIETTE PETERS JC 10 JA-24NCC-33-12/2019 23 November 2020 ---------------------------------------------------------------------------------------------------------------------------- [Emphasis added.] [21] It is, therefore, imperative upon this Court, in the dispensation of justice, to prevent any form of abuse of the process of the court, and to allow this Application. The balance of convenience [22] The Respondents argued that in the final analysis, the consideration was whether there was a possibility that the decision in dismissing the application for Fortuna Injunction would be reversed, and it was their contention that it would not, bearing in mind that the Applicant had not complied with the Statutory Notices. [23] Be that as it may, in my view, as stated by Megarry J in the Erinford decision, ‘judges must decide cases even if they are hesitant in their conclusions; and at the other extreme a judge may be very clear in his conclusions and yet on appeal be held to be wrong. No human being is infallible, and for none are there more public and authoritative explanations of their errors than for judges.’ [24] As such, I have to also consider the comparative effects of my decision in this Application. The factor that had to be considered was the prejudice that the Applicant would suffer if this Application was not allowed. The Applicant, as a developer, would not be able to deal with the release of strata titles for all the properties in the Project if the Applicant was wound up. This, in my view, would be disadvantageous to the Respondents as well. EVROL MARIETTE PETERS JC 11 JA-24NCC-33-12/2019 23 November 2020 ---------------------------------------------------------------------------------------------------------------------------- [25] Furthermore, it would appear that whilst the Respondents’ claim could ultimately be satisfied by way of damages, any loss or damage to the Applicant would be beyond monetary compensation. If the winding-up proceedings were allowed to proceed, before the disposal of the appeal, it would prejudice the Applicant's rights, as the harm, once the winding-up petition is advertised and proceeded with, cannot be undone. It would be akin to attempting to un-ring a bell, which has already been rung. The Respondents, on the other hand, would not be prejudiced as this Erinford Injunction is merely interlocutory. In fact, the Respondents are in a favourable position as the Applicant had in fact made payment. [26] Counsel for the Respondents contended that this Application cannot be allowed as it is too late in the day, and that the proverbial horse had left the barn. However, I am unable to agree, and in using the same metaphor, it is my view that although that horse has bolted, what the Applicant is seeking to do, at this point, is to arrest, what may very well be an unruly horse, before it reaches its destination and wreaks havoc. Conclusion [27] In the upshot, based on the aforesaid reasons, and after careful scrutiny of all the evidence before this Court, both oral and documentary, and submissions of both parties, this Application was allowed with costs. Dated: 23 November 2020 EVROL MARIETTE PETERS JC 12 JA-24NCC-33-12/2019 23 November 2020 ---------------------------------------------------------------------------------------------------------------------------- ………SIGNED…………… (EVROL MARIETTE PETERS) Judicial Commissioner High Court, Johor Bahru Counsel: For the Applicant – Jasbeer Singh, K Rajasegaran and A Shymala; Messrs A Rahim & Co. For the Respondents – Johanan Puthucheary and Vivian Kong; Messrs Nadzarin Kuok Puthucheary & Tan Cases referred to:  Azman & Tay Associates Sdn Bhd v. Sentul Raya Sdn Bhd [2002] 4 CLJ 391  Bina Satu Sdn. Bhd v Tan Construction [1988] 1 CLJ (Rep) 384  Blue Valley Plantation Bhd v Periasamy all Kuppannan & Ors [2011] 5 CU 481  Celcom (Malaysia) Bhd v. Inmiss Communication Sdn. Bhd (2003) 3 CU 85  Chip Yew Brick Works Sdn Bhd v. Chang Heer Enterprise Sdn Bhd [1988] 1 CLJ Rep 5  Cocoa Processors Sdn. Bhd. v. United Malayan Banking Corp. Bhd. & Ors. [1989] 1 CLJ Rep 436  Erinford Properties Ltd v Cheshire County Council [1974] 2 All ER 448 EVROL MARIETTE PETERS JC 13 JA-24NCC-33-12/2019 23 November 2020 ----------------------------------------------------------------------------------------------------------------------------  Klass Corporation (M) Sdn Bhd v. MKRS Management Sdn Bhd [2018] 7 CLJ 303  Maril-Rionebel (M) Sdn Bhd & Anor v. Perdana Merchant Bankers Bhd & Other Appeals [2001] 3 CLJ 248  People Realty Sdn Bhd v. Red Rock Construction Sdn Bhd [2008] 1 CLJ 632  Subashini Rajasingam v. Saravanan Thangathoray & Other Appeals [2008] 2 CLJ 1 Legislation referred to:  Companies Act 2016, sections 465, 466, 615  Rules of Court 2012, Order 29  Winding-Up Rules 1972, rule 24  Specific Relief Act 1950, section 54(b) EVROL MARIETTE PETERS JC 14