1. ) Chung Yoo Hock v Zumatex Engineering Sdn Bhd (WA-28NCC-706-07/2024)

CHUNG YOO HOCK

OCEANERGY GASES SDN. BHD. [Company No.: 201101041819 (969942-A)] …PETITIONERS AND ZUMATEX ENGINEERING SDN. BHD. [Company No.: 200101010176 (545932-K)] … RESPONDENT GROUNDS OF JUDGMENT [1] These Grounds concern a Petition presented by the Petitioners (“Oceanergy Parties”) in Enclosure 1 (“Encl 1”) to wind up the Respondent (“Zumatec”) under section 465 of the Companies Act 2016 (“CA 2016”). I granted the Petition under Encl 1 and hence this appeal. [2] Also, Zumatec filed an application to stay this Petition (“Encl 21”) pending the determination of Suit 590 (as identified in para 14 below). I dismissed Encl 21. This dismissal has not been appealed and I say no more about this nor the total of four (4) unsuccessful applications for stay in several Courts including the Court of Appeal. [3] All references to sections are with reference to CA 2016, save where the context otherwise provides. [4] The contents of this Judgment are set out below. Contents Page BACKGROUND FACTS 3 The 619 Judgment 3-5 Zumatex’s Suit 590 5-7 The Opposition to the Petition 7-8 ZUMATEX UNABLE TO PAY ITS DEBTS 8 Section 466(1)(a) & Statutory Minimum 8-10 The 619 Judgment Stands 10 Presumption of Insolvency Unrebutted 11-12 CONCLUSION 12 BACKGROUND FACTS The 619 Judgment [5] The High Court in KL C/S No.: WA-22NCVC-619-08/2019 (“Suit 619”) delivered its Judgment dated 6.5.2024 (“the 619 Judgment”) [Encl 1, pp 28–30] awarding the following in favour of the Oceanergy Parties against Zumatex:

RM4,746,561.22 (para 2(a) of the 619 Judgment) as monies owed under the oral Joint Venture Collaboration Agreement made in 2015;

RM1,711,979.50 for the security deposits paid by the Oceanergy Parties for gas projects (para 2(b) of the 619

RM1,174,845.00 for the project bank guarantees given by the Oceanergy Parties to the banks for gas projects (para 2(c) of the 619 Judgment);

RM448,339.44 being damages for breach of the Joint Venture Collaboration Agreement (para 2(d) of the 619 Judgment);

interest at the rate of 5% per annum on the Judgment Sum from the date of the 619 Judgment until the date of full and final settlement (para 2(e) of the 619 Judgment);

costs of RM200,000.00 (para 3 of the 619 Judgment). [6] The total principal sum due under the 619 Judgment exclusive of interest is RM8,281,725.16 (“619 Judgment Sum”). [7] By a Notice of Demand dated 5.7.2024 under sections 465 and 466 of Act (“Notice”) [Encl. 1, pp 74–76], the Petitioners demanded the sum of RM5,428,042.71 from Zumatex, being sums claimed under para 2(a), 2(d), interest under para 2(e) and costs under para 3 of the 619 Judgment less sums under orders and allocatur fees under Suit 619 and a sum due under Civil Appeal No.: W-02(IM)(NCvC)- 856-07/2020, see para 7 of the Petitioner’s Submissions at Encl 39. [8] The Notice excluded the sums due under para 2(b) and 2 (c) of the 619 Judgment. The reason is that these sums are challenged in Suit 590 (see para 14 below). [9] The Notice was served on 5.7.2024; Zumatec failed to pay or secure the demanded sum within the requisite twenty-one (21) days. [10] Thus, the Petition (Encl 1) was presented on 30.7.2024 on the basis that Zumatex is indebted to the Oceanergy Parties for the sum of RM5,430,889.23 (“the Outstanding Sum”) (as at 30.7.2024) being part of the 619 Judgment Sum comprising:

para 2(a) of the 619 Judgment of RM4,746,561.22;

para 2(d) of the 619 Judgment of RM448,339.44;

para 2(e) of 619 Judgment for interest at the rate of 5% per annum on the 619 Judgment Sum from the date of the 619 Judgment until the date of full and final settlement in the sum of RM60,488.57 (6.05.2024 to 30.07.2024 [85/365 x 5% x RM5,194,900.66 (RM4,746,561.22 + RM448,339.44)]); and,

para 3 of the 619 Judgment costs of RM200,000.00. [11] The difference in the sum stated in the Notice and under the Petition (see para 18 below) appears to be attributed to interest under para 2(e). [12] However, the sums stated in the Notice and the Petition did not include sums awarded under paras 2(b) and 2(c) of the 619 Judgment. These are the subject of challenge in Suit 590 (see para 14 below). [13] Appeals have been filed against the 619 Judgment:

Zumatex’s appeal in Civil Appeal No.: W-02(NCvC)(W)-954- 06/2024 against paras 2(a) to (d) and 3 of the Judgment (“Appeal 891”);

the Oceanergy Parties’ appeal in Civil Appeal No.: W- 02(NCvC)(W)-891-05/2024 against para 1 of the 619 Judgment (“Appeal 954”). Zumatex’s Suit 590 [14] Zumatex’s claim in KL Suit No.: WA-22NCvC-590-09/2024 (“Suit 590”) is an attack on part of the 619 Judgment, primarily on the basis that the Oceanergy Parties intentionally concealed material facts. [15] Suit 590 was filed by Zumatex on 10.9.2024, praying for, inter alia:

a declaration that the Oceanergy Parties obtained paras 2(b) and 2(c) of the 619 Judgment by fraud, intention to deceive and/or dishonesty, which are invalid and ought to be immediately set aside [Encl. 18, pp 20–21 at para (1)].

in the alternative, a declaration that the said para 2(b) for the sum of RM420,000.00 and 2(c) for the sum of RM400,000.00, were obtained by the Oceanergy Parties fraudulently, with an intention to deceive and/or with dishonesty, and are invalid and ought to be immediately set aside [Encl 18, p 21 at paras

(2)(i) – (ii)]. [16] It is critical to appreciate that Suit 590 only challenged the orders in paras 2(b) and 2(c) of the 619 Judgment. [17] This means that there is no dispute or challenge by Zumatex as to the liability of Zumatex for the debts under paras 2(a), 2(d), 2(e) and 3 of the 619 Judgment. As such, I accept Counsel for the Petitioner’s submission that Zumatex must thereby be taken to have admitted such debts, clearly and unequivocally within Malayan Banking Berhad v Red Box (Malaysia) Berhad [2000] MLJU 108, at p 14 of the Lexis Report. [18] In the absence of an appeal or a stay, these debts under paras 2(a), 2(d), 2(e) and 3 are due and payable and comprise RM5,430,889.23 (the “Outstanding Sum”). This sum differs from the sum under the Notice, it appears, by reason of interest only. Nothing turns on this. The Opposition to the Petition [19] Zumatex’s primary ground to oppose the Petition is that the 619 Judgment is bona fide disputed [Encl 18, p 4 at para 10] and is being challenged in Suit 590. [20] But, as must now become apparent, Zumatex in Suit 590 does not challenge the entirety of the 619 Judgment. The difficulty Zumatex faces is that a dispute on one (1) part of the 619 Judgment does not cause the entire Petition to fall. The balance of the undisputed debts forming the basis of the Petition, remain undisputable. [21] In Arkema Technochemicals Sdn Bhd v NSE Energy Sdn Bhd [2021] MLJU 378 at paras 13, 16, 21, 22, the applicant there sought to terminate a winding up as an appeal against the underlying judgment (which was the basis of the winding up petition) was allowed in part. In the end, the underlying judgment was only varied by the Court of Appeal. The judgment nevertheless “… remained a valid judgment albeit with different figures therein and should be obeyed.” (see para 22). The application to terminate the winding up order was dismissed. [22] As such, even if Suit 590 were to succeed, where at best, paras 2(b) and 2(c) of the 619 Judgment were set aside, this does not vitiate the entire 619 Judgment but the setting aside will only operate as a variation thereof. [23] The debts under the unchallenged paras 2(a), (d), (e) and 3 of the 619 Judgment remain due and payable. The total debt payable thereunder is the Outstanding Sum of RM5,430,889.23. [24] The sum stated in the Notice remains above the threshold of RM50,000.00 prescribed by the Minister under section 466(1)(a) of CA 2016 read together with Federal Gazette No. 4159 dated 22.3.2021. And may found the basis of the Petition, see para 16 of Arkema (supra). ZUMATEX UNABLE TO PAY ITS DEBTS Section 466(1)(a) & Statutory Minimum [25]

Merger Insight Builders Sdn Bhd [2023] MLJU 3 at paras 2, 12 and In that case, the plaintiff similarly filed a suit to impeach an earlier judgment in the defendant’s favour, on the basis of the defendant obtaining the judgment by fraud and suppression of material facts. In considering whether there is a bona fide disputed debt, the High Court held, while noting that the plaintiff sought to impeach the earlier suit, the judgment still stands until set aside. Thus, the High Court held that the plaintiff was not entitled to rely on the suit to impeach the judgment. [34] Similarly, notwithstanding Suit 590 is still pending and remaining, Zumatex may not rely on Suit 590 as a basis of resisting the Petition. Presumption of Insolvency Unrebutted [35] In examining Zumatex’s financial statements, the financial position of Zumatex remains dire and it cannot be said that the presumption of insolvency (as per para 26 above) has been rebutted. This is after taking into account Zumatex’s contingent and prospective liabilities, Zumatex’s own evidence adduced in its affidavits, particularly Zumatex’s Financial Statements for the Year Ended 31.12.2022 (“2022 AFS”) [Encl 18, pp 52 to 84]. [36] Zumatex’s total liabilities for the financial years ended 2022 and 2021 was RM6,361,403.00 and RM6,745,099.00 respectively [Encl 18, at p 64]. [37] Zumatex’s total profit and comprehensive income for the financial year ended 31.12.2022 is only RM66,288.00 [Encl 18 at p 65]. A sum far short of the Outstanding Sum of RM5,430,889.23. [38] In the report of the Companies Commission of Malaysia dated 30.7.2024, Zumatex’s total non-current and current liabilities are RM401,705.00 and RM7,318,171.00 respectively. Further, Zumatex’s total profit after tax is only RM179,688.00 [Encl 1, at p 19]. This again, is far short of the Outstanding Sum. [39] Even if Zumatex’s total net assets were taken into account, i.e. its total assets of RM9,462,601.00 as against its total liabilities of RM6,361,403.00 [Encl 18, at p 64], the net assets of RM3,101,198.00 are still insufficient to meet the principal 619 Judgment Sum of RM8,281,725.16, and indeed the Outstanding Sum of RM5,430,889.23. [40] In my judgment, Zumatex has not rebutted the presumption that it is unable to its debts as and when they become due. CONCLUSION [41] Zumatex has defaulted in paying the 619 Judgment Sum and defaulted on paying the sum demanded under the Notice. Lastly, the Petitioner stresses that Zumatex has admitted that it was not in a position to pay the 619 Judgment Sum in its own affidavits affirmed on 20.6.2024 [Encl. 1 para 14, and Ex K para 8] and 19.7.2024 [Encl. 20, Ex C-3, p 30 at paras 15(b) and (c)]. [42] As such, section 466(1)(c) was satisfied. [43] In the circumstances, I made the order to wind up Zumatex under Encl 1, paras 16.1, 16.2 with costs of RM5,000 subject to allocatur. Dated 9th May 2025 ...................t.t........................... YA Tuan Saheran Suhendran Judicial Commissioner, High Court of Malaya, Kuala Lumpur. Wong Yan Zhang + Kang Mei Yee [Gan Partnership (Kuala Lumpur)] for the Petitioners Bahari Yeow + Ling Siew Hui [Rosli Dahlan Saravana Partnership (Kuala Lumpur)] for the Respondent Cases Referred to: • Arkema Technochemicals Sdn Bhd v NSE Energy Sdn Bhd [2021] MLJU 378 • BM City Realty and Construction Sdn Bhd v Merger Insight Builders Sdn Bhd [2023] MLJU 3 • Chip Yew Brick Works Sdn Bhd v Chang Heer Enterprise Sdn Bhd [1988] 2 MLJ 447 • Malayan Banking Berhad v Red Box (Malaysia) Berhad [2000] MLJU 108 • MBSB Bank Bhd v Erakemas Sdn Bhd [2024] 9 CLJ 245 • Pacific & Orient Insurance Co Bhd v Muniammah Muniandy [2011] 1 CLJ 947 • Re Tweeds Garages Ltd [1962] 1 Ch 406 • Sungei Rinching Sdn Bhd v Sri Keluarga Sdn Bhd [1996] 2 MLJ 199 Legislation referred to: • Companies Act 2016 (“CA 2016”) • Companies Act 1965 Decision date: 15th April 2025