Chapter 24 - Fortuna Injunction

Question 1

FORTUNA INJUNCTION

Overview

Answer 1

1) Definition, scope & objective
2) Grounds to grant
3) Jurisdiction to grant
4) Recent application

Question 2

FORTUNA INJUNCTION

Definition

Answer 2

• A specie of an anti-suit injunction.

- It is applied for when a company wishes to restrain a creditor form presenting a Winding-up Petition against it.

Question 3

FORTUNA INJUNCTION

Scope

Answer 3

Fortuna Holdings Pty Ltd v Deputy Federal
Commissioner of Taxation:

• The kind of injunction by which an intended winding up petition is sought to be restrained;
• When a court restrains the presentation of a winding up petition to that court, it exercises part of its inherent jurisdiction to prevent abuse of its process.
• Existing proceedings may be stayed or dismissed, or documents delivered as a step in the proceedings may be struck out.

Question 4

FORTUNA INJUNCTION

Objective

Answer 4

Fortuna Holdings Pty Ltd v Deputy Federal Commisioner of Taxation:

• Enables companies to be protected from threatened or apprehended oppression and damage from abuse of court process.

Question 5

FORTUNA INJUNCTION

Grounds to grant

Answer 5

Fortuna Holdings Pty Ltd v Deputy Federal Commissioner of Taxation:

• Where the winding-up petition, if presented, has no chance of success or is bound to fail; or
• The creditor is intending to present a winding-up petition on a disputed claim, which will produce irreparable damage to the Company, rather than by a suitable alternative procedure.
• a Fortuna Injunction will be granted when the Notice is based on a clearly disputed debt.
• This is because the proper alternative in such cases would be for the creditor to commence a civil suit and obtain a judgment before attempting to wind-up the company.

Question 6

FORTUNA INJUNCTION

Jurisdiction to grant

Answer 6

Mobikom Sdn Bhd v Inmiss Communications Sdn Bhd:

• A court has jurisdiction and power to grant an anti-suit injunction whenever the interests of justice call for or demand it.

A Fortuna injunction may be granted:

• to prevent multiplicity of proceedings by restrain the institution or prosecution of a suit in a foreign jurisdiction where this would lead to a multiplicity of proceedings; or
• if it is found that there is a bona fide dispute about the debt on which the notice of demand issued under S.218 of the Companies Act is based.

Question 7

FORTUNA INJUNCTION

Recent application

Answer 7

Pacific & orient Insurance Co. Bhd, v Muniammah Muniandy (2011):

• Anti-suit or Fortuna injunction may be granted by court where the presentation of the petition might produce an irreparable damage to the company;
• This is so where the proposed petition has no chance of success at all;
• OTF, Fortuna injunction is not available since the respondent had obtained a valid and enforceable judgment against the appellant.
• The intended petition, if filed, is not bound to fail & the appellant instead has a good chance to succeed;
• Therefore whether or not it caused irreparable damage is of no consequence.
  Therefore, injunction applied ought to be dismissed.