Law firm succeeds in setting aside restraining order for filing winding-up petition against Country Heights over legal fees owed

• Country Heights, in a statement issued to Bursa Malaysia last month, said the petition arises from the company’s failure to settle a sum of RM425,060 that arose from the legal service provided for the corporate exercise that had been aborted since it had taken too long to be completed.

SHAH ALAM (Sept 9): The High Court here has allowed Messrs Chellam Wong to set aside a restraining order obtained by public-listed Country Heights Holdings Bhd (KL:CHHB) for filing a winding-up petition against it (Country Heights) over RM425,060 in unpaid debt since September 2023, over legal services the law firm had provided in relation to the company’s corporate exercise.

Judicial Commissioner Choong Yeow Choy had dismissed the Fortuna injunction on July 15, after the court had earlier granted Country Heights the injunction on an ex-parte basis on April 22 this year.

A Fortuna injunction is a restraining order to prevent a creditor from filing winding-up proceedings against the applicant.

Choong, in his written judgement dated Sept 6 which was released on Monday, ruled that the debt issued by the law firm was not in dispute, and hence set aside the restraining order and ordered Country Heights to pay RM10,000 in costs.

Choong said Messrs Chellam Wong had issued its latest invoice to Country Heights on Sept 22, 2023, which was duly acknowledged by the company receiving it.

“More than eight months have passed since then. In addition, Country Heights was estopped from raising any disputes in relation to the invoices as in an email dated Nov 9, 2023, from the deponent of the company’s affidavit. The deponent has stated that the invoice has been passed on to its finance department for processing.

“The deponent, being the head of legal (department) of Country Heights, had not questioned the work of the Messrs Chellam Wong, nor disputed the validity of its appointment or charges at any time. Based on the totality of the evidence before this court, it is satisfied that the debt was not disputable,” Choong said.

Following the decision, Messrs Chellam Wong filed a winding-up petition at the KL High Court against Country Heights on July 22.

The purported unpaid legal service

The law firm claimed that it was appointed by Country Heights for the provision of legal services for the “sale & purchase of assets and due diligence exercise for Country Heights in respect of Mines Resort Sdn Bhd (Dream City), Mines Wonderland Sdn Bhd, Mines Waterfront Business Park Sdn Bhd, Mines Excellence Golf Resort Bhd, Country Heights Venture Sdn Bhd, and Castlepark Sdn Bhd”, which is termed as its corporate exercise.

Messrs Chellam Wong claimed that it received a letter of appointment (LOA) dated April 8, 2021, in which Country Heights had agreed to the fee of RM400,000.

It claimed that the LOA was executed by Country Heights director and chief executive officer Jared Lim at the material time, and was copied to Country Heights officers and consultants involved in the corporate exercise.

The law firm issued its first invoice on May 5, 2021, to the sum of RM53,512, but did not receive a reply. A second and third final invoice was issued on Feb 21, 2022, and Sept 21, 2023, where the final invoice supersedes and encompasses the first and second invoices to the sum of RM425,060, which it further claimed it did not receive a reply or dispute.

A statutory demand was issued by Messrs Chellam Wong on March 20, 2024, and subsequently, Country Heights sought the Fortuna injunction which was filed in April.

Choong dismissed the Fortuna injunction, following hearings in May and July.

Subsequently, Messrs Chellam Wong filed a winding-up petition against Country Heights on July 22 at the Kuala Lumpur High Court, where it sought Country Heights to be wound-up under provisions of the Companies Act 2016, and that an official receiver be appointed as liquidator, the costs of the petition and other relief granted by the court.

Country Heights, in a statement issued to Bursa Malaysia last month, said the petition arises from the company’s failure to settle a sum of RM425,060 that arose from the legal service provided for the corporate exercise that had been aborted since it had taken too long to be completed.

“Nevertheless, the company views the interest of its shareholder to address this petition in an appropriate manner,” Country Heights had said.

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