Court orders freeze on construction firm’s bank account

|     Fadley Faisal     |

ON FEBRUARY 13, the High Court granted an interlocutory injunction order against the construction company, Greatearth (B) Sdn Bhd.

The injunction application was filed by the plaintiffs, HSE Engineering Sdn Bhd and FEBC International JLT, in two separate actions.

Greatearth (B) Sdn Bhd, a subsidiary of the Singaporean construction company called Greatearth Construction Pte Ltd, is known for carrying out large-scale housing and infrastructure projects in Brunei Darussalam.

In these two actions, from the relevant cause papers, Greatearth (B) Sdn Bhd was the main contractor of a variety of projects to which it subcontracted to both the plaintiffs respectively, for mechanical and electrical services, and the supply and installation of loose furniture.

Upon completion of the works carried out by the plaintiffs, Greatearth (B) Sdn Bhd acknowledged and agreed that there was an outstanding debt of approximately BND4.4 million to HSE Engineering Sdn Bhd and around BND400,000 to FEBC International JLT.

In both instances, Greatearth (B) Sdn Bhd failed to settle the outstanding debts, even after receiving full payment from the Brunei government for some of the contracts.

In HSE Engineering Sdn Bhd’s case, both parties went above and beyond by entering into an assignment agreement where Greatearth (B) Sdn Bhd would issue payment instructions to its bank to transfer, by way of an unconditional and irrevocable assignment, approximately BND2.299 million to HSE Engineering Sdn Bhd within seven working days from the date of receipt of payment from the Brunei government.

In January this year, both plaintiffs eventually came to knowledge that Greatearth (B) Sdn Bhd had been paid by the Brunei government in late December 2018, as anticipated. However, Greatearth (B) Sdn Bhd had failed to notify the plaintiffs of the relevant payment and further failed to take steps to settle the outstanding debt as agreed and/or intimated.

Further, HSE Engineering Sdn Bhd had evidence that Greatearth (B) Sdn Bhd had instructed its bank to cancel the irrevocable assignment.

Following the breaches, both plaintiffs without delay applied for various interlocutory injunctions against Greatearth (B) Sdn Bhd, as they believed that there was a risk of dissipation of assets by Greatearth (B) Sdn Bhd.

Justice Gareth John Lugar-Mawson, amongst others, ordered a Mareva injunction, which is often referred to as a ‘freezing order’, of approximately BND4.8 million in Greatearth (B) Sdn Bhd’s bank account and a further mandatory injunction compelling Greatearth (B) Sdn Bhd to return the sum of BND180,267.33, which had been withdrawn, back into its bank account.

The Justice was satisfied that not only was there a risk of dissipation of assets in Greenearth (B) Sdn Bhd’s avoidance to pay the outstanding debt, but there was in fact real dissipation of assets in the sum that the company was required to return.

Costs have also been awarded to both the plaintiffs.

The plaintiffs in both actions were represented by lawyer Roy Prabhakaran of Yusof Halim & Partners, while the defendant was represented by lawyer AJ Wong of CCW Partnership.