Affin Islamic Bank Berhad v Global Veterinary Sdn Bhd (WA-28NCC-631-06/2025)

This is a petition filed by the Petitioner to wind up the Respondent under section 465(1)(e), read together with section 466(1)(a), of the Companies Act 2016, on the ground that the Respondent is unable to pay its debts.

The Petition is based on a Judgment in Default obtained by the Petitioner against the Respondent on 9 December 2024, which remains valid, binding, enforceable, and unpaid. The said judgment has not been varied or set aside as of the hearing of the Petition. It, therefore, constitutes a final and conclusive debt owed to the Petitioner.

The hearing of the Petition was scheduled for 18 August 2025. The Petitioner’s cause papers were in order, and a Registrar’s Certificate was duly issued pursuant to the Companies (Winding-Up) Rules 1972 (the Rules 1972).

The Respondent filed its Affidavit in Opposition on 15 August 2025, less than seven days prior to the hearing. The Petitioner objected to the admissibility of the said affidavit for non-compliance with rule 30(1) of the Rules 1972, arguing that it was filed out of time and that no application for an extension of time to file the affidavit had been made.

At the hearing on 18 August 2025, learned counsel for the Respondent candidly admitted that the Affidavit in Opposition had been filed late, explaining that his firm had only recently been appointed. He requested time to explore a possible settlement and to file an application for an extension of time to file the Affidavit in Opposition.

The learned counsel for the Petitioner objected, arguing that rule 30(1) of the Rules 1972 is mandatory and that the Affidavit in Opposition, filed out of time without leave, was irregular and should not be admitted. She also emphasised that the Respondent had made several prior promises to settle the debt but had never done so.

The Court granted a final indulgence to the Respondent, instructing it to either (i) settle the outstanding judgment debt or

(ii) file an application for an extension of time to file the Affidavit in Opposition. The hearing of the Petition was adjourned to 29 August 2025.

On the adjourned date, the Respondent failed to settle the debt. The settlement proposal sent on 25 August 2025 was rejected by the Petitioner as unsatisfactory, and no payment was received. The Respondent also failed to file any application for an extension of time to validate its late Affidavit in Opposition.

Since the Petitioner’s cause papers were in order and the Registrar’s Certificate had been issued, the Court proceeded to hear the Petition on its merits.

The Court allowed the Petitioner’s petition to wind up the Respondent. Dissatisfied with the decision, the Respondent appealed to the Court of Appeal. My reasons are outlined below.

Rule 30(1) of the Rules 1972 states: “Affidavits in opposition to a petition that a company may be wound up shall be filed and a copy thereof served on the petitioner or his solicitor at least seven days before the time appointed for the hearing of the petition.” [emphasis added]

The Courts have consistently regarded rule 30(1) of the Rules 1972 as mandatory. In Gulf Business Construction (M) Sdn Bhd v Israq Holding Sdn Bhd [2010] 5 MLJ 34 (CA), the Court of Appeal held that: “[14] Now, a day prior to the scheduled hearing of the petition which was on 2 November 2006, the respondent had on 1 November 2006 purported to file and serve an affidavit in opposition to the petition (‘impugned affidavit’). And during the hearing of the petition on 2 November 2006 before the High Court judge, the petitioner had raised an objection as to the admissibility of the impugned affidavit on the ground of non-compliance with r 30(1) of the Companies (Winding-Up) Rules 1972. Without the benefit of the written grounds of judgment of the High Court judge, we are constrained to hear afresh and we have, as demonstrated, able to do so with ease. Be that as it may, r 30(1) of the Companies (Winding-Up) Rules 1972 states as follows: 30 Affidavits opposing the petition and affidavits in reply

Affidavits in opposition to a petition that a company may be wound up shall be filed and a copy thereof served on the petitioner or his solicitor at least seven days before the time appointed for the hearing of the petition. [15] The impugned affidavit should be filed and a copy thereof served on the petitioner or the petitioner’s solicitor at least seven days before the hearing date of the petition. This was not done. We were told that the objection was upheld by the High Court judge and rightly so. The mandatory nature of r 30(1) of the Companies (Winding-Up) Rules 1972 was highlighted by Siti Norma Yaakob JCA (later Chief Judge Malaya) in Crocuses & Daffodils (M) Sdn Bhd v Development & Commercial Bank Bhd [1997] 2 MLJ 756 (CA). [16] The ‘literal’ rule or the ‘plain meaning’ rule as is known in America is best illustrated by referring to the speech of Tindal CJ in The Sussex Peerage (1844) 11 Cl & Fin 85 at p 143. There His Lordship said this: ... the only rule for the construction of Acts of Parliament is, that they should be construed according to the intent of the Parliament which passed the Act. If the words of the statute are in themselves precise and unambiguous, then no more can be necessary than to expound those words in their natural and ordinary sense. The words themselves alone do, in such case, best declare the intention of the lawgiver. [17] In our judgment, the clear and unambiguous words employed in r 30(1) of the Companies (Winding-Up) Rules 1972 must be given effect and, accordingly, the impugned affidavit cannot be relied upon in opposing the petition to wind up the respondent.” [emphasis added]

Likewise, in Kilang Kelapa Sawit Selumpur Sdn Bhd (in liquidation) (receiver appointed) v Revenue Direction Palm Oil Mill (M) Sdn Bhd (formerly known as Revenue Direction Sdn Bhd) [2019] 8 MLJ 46 (HC), Vazeer Alam J stated: “[13] The petition was fixed for hearing on 10 July

The respondent did not file any notice of intention to oppose the petition. However, on the eve of the hearing, the respondent appeared on the petition through its solicitors, Messrs Joshua & Assocs, and filed an affidavit in opposition dated 9 July 2018. [14] This affidavit in opposition was objected to by learned counsel for the petitioner on grounds that it contravened the provisions of r 30 of the Companies (Winding-Up) Rules 1972, that reads:

Affidavits in opposition to a petition that a company may be wound up shall be filed and a copy thereof served on the petitioner or his solicitor at least seven days before the time appointed for the hearing of the petition. In Crocuses & Daffodils (M) Sdn Bhd v Development and Commercial Bank Bhd [1997] 2 MLJ 756; [1997] 3 CLJ 485 Siti Norma Yaakob JCA (as she then was) said: By their words and expression, r 30(1) is mandatory in nature and as such, the learned judge was correct when he refused to admit all four affidavits in opposition for non-compliance of that particular rule. The fact that the four affidavits were only relied upon on 24 November 1995 does not alter the position as such affidavits were intended for use in the earlier hearings which never took place as all the earlier hearings were adjourned for some reason or other. As such I agree with the contention of learned counsel for the petitioner that the respondent’s affidavit filed on 9 July 2017, ie a day before the hearing of the petition, cannot be admitted as it contravenes the mandatory requirement in r 30(1) of the Companies (Winding-Up) Rules 1972 that any affidavit in opposition must be filed at least seven days before the hearing date. Hence, it is quite evident that the respondent had not validly filed affidavit opposing the petition, and the petition should be considered only on the cause papers filed by the petitioner. See also The Ayer Molek Rubber Company Berhad v Mirra Sdn Bhd [2007] MLJU 704; [2008] 2 CLJ 459 (CA); Dataprep (Malaysia) Sdn Bhd v Utas Lambang Sdn Bhd [2009] 7 CLJ 163 (HC); Anvest Corp Sdn Bhd v Wong Siew Choong Sdn Bhd [2008] 3 MLJ 334; [2008] 3 CLJ 317 (CA).” [emphasis added]

In the recent case of Miramas Engineering Sdn Bhd v Akar Builders Sdn Bhd [2024] MLJU 1488 (HC), a similar stance was reaffirmed. The High Court held: “[14] The record shows that the Respondent’s affidavit in opposition was filed on the late evening of 4 March 2024. It has not been served on the Petitioner or his solicitor as at the date of hearing of 5 March 2024. [15] This is a clear violation of Rule 30(1) of the CWUR, which mandates the filing of at least seven days before the time appointed for the hearing of the petition. The purpose of this rule, in my view, is to ensure that all parties have adequate time to prepare and respond to the contents of the affidavit, thus promoting fairness and efficiency in the proceedings. Noncompliance with this rule can result in the affidavit being disregarded. [16] The mandatory nature of r.30(1) was discussed by Siti Norma Yaakob JCA (later Chief Judge of Malaya) in Crocuses & Daffodils M) Sdn Bhd v. Development & Commercial Bank Bhd [1997] 2 MLJ 756 where it was held, at page 762: “By their words and expression, r. 30(1) is mandatory in nature and as such the learned Judge was correct when he refused to admit all four affidavits in opposition for non- compliance of that particular rule. The fact that the four affidavits were only relied upon on 24 November 1995 does not alter the position as such affidavits were intended for use in the earlier hearings which never took place as all the earlier hearings were adjourned for some reason or other.” [17] That said, I am mindful of the case of Kilo Asset Sdn Bhd v Hew Tai Hong [2015] MLJU 1270, in which the Federal Court held that: “... notwithstanding the fact that the time limit in rule 30 is expressed to be mandatory in terms, in our judgment we find that under rules 193 and 194 of the Winding-Up Rules and sections 221(2)(b) and 355 of the Companies Act 1965, the Court is empowered to abridge or extend time for the purpose of curing non-compliance of provisions such as rule 30(2).” [18] The circumstances in this case however, did not present an opportunity for me to exercise my discretion. On the day of the hearing, learned counsel for the Respondent, Mahsuri binti Hussein informed the Court that her legal firm had only recently been appointed to represent the Respondent in this matter. This might suggest a reason for the delayed filing. Despite this recent appointment, learned counsel did not apply for an extension of time or an abridgement of the time required for the filing of the Respondent’s affidavit in opposition. [19] The absence of such an application precludes this Court from exercising its discretion to address the non-compliance with Rule 30(1). Without a formal request to extend or abridge the filing deadline, this Court is constrained by the mandatory nature of the rule. Consequently, the Respondent’s affidavit in opposition, filed on the eve of the hearing date, was disregarded altogether due to its procedural non-compliance.”

The rationale underlying rule 30(1) of the Rules 1972 is to ensure procedural fairness and prevent prejudice or ambush. Parties must have adequate time to respond to affidavits before the hearing. FINDINGS OF THE COURT Non-compliance with rule 30(1) of the Rules 1972

It is undisputed that the Respondent’s Affidavit in Opposition was filed three days before the hearing date, which clearly violates rule 30(1) of the Rules 1972. Based on the authorities mentioned above, the rule is mandatory and must be upheld. The Affidavit in Opposition filed late cannot be admitted or relied upon by the Court.

The Respondent was given ample opportunity by this Court to rectify the non-compliance, but failed to act. The Respondent neither applied for an extension of time to file the Affidavit in Opposition nor provided any formal justification for the delay. Consequently, the Court entirely disregarded the Respondent’s Affidavit in Opposition. Petition founded on an undisputed judgment debt

The Petition is based on a Judgment in Default obtained by the Petitioner against the Respondent. That said, judgment is currently valid, binding, enforceable, and outstanding. There is no stay against the judgment, and it has not been set aside at the time of the hearing.

The law clearly states that a judgment debt is an undisputed debt. In Pacific & Orient Insurance Co Bhd v Muniammah Muniandy [2010] MLJU 2217, the Court of Appeal held: “[22] The status of the judgment on the insurer under s. 96(1) of the Road Transport Act 1987 is the same with status of the said judgment on the insured earlier granted in favour of the respondent. Unless set aside or stayed by proper authority, the said judgment remains. Upon the respondent obtaining the judgment against the insured, the debt ceased to be a disputed debt. Thereafter the question whether the debt or amount due was bona fide disputed became non-issue. This is so even though the appellant had filed an appeal against the said judgment because the filing of an appeal does not have the effect of reverting the status of the judgment debt to its original status as a disputed debt before judgment was obtained. The filing of an appeal does not make a valid and enforceable judgment a disputed debt. (see: SBSK Plantations Sdn Bhd v. Dynasty Rangers (M) Sdn Bhd [2002] 2 CLJ 329). [23] In the instant case, the respondent has the right to proceed to issue a statutory notice under s. 218(2)(a) of the Companies Act 1965. Upon the expiration of the 21 days period as set out in the statutory notice and the amount claimed remaining unpaid, the debt becomes ‘due and payable’ and the appellant as the insurer is deemed to be unable to pay its debts. Consequently, the respondent acquires the status of ‘creditor’ for the purpose of winding up proceedings under s. 217(1)(h) and 218(1)(e) of the Companies Act 1965.” [emphasis added]

Therefore, a winding-up petition based on an unsatisfied judgment debt gives rise to a statutory presumption of insolvency under section 466(1)(a) of the Companies Act 2016. The debtor cannot oppose the petition simply by offering to negotiate or claiming that payment might be made.

In Klass Corp (M) Sdn Bhd v MKRS Management Sdn Bhd [2018] 9 MLJ 305, the High Court held that once a judgment is obtained, the debtor’s failure to satisfy it within the statutory period creates a presumption of inability to pay its debts under section 466(1)(a) of the Companies Act 2016. Unless the judgment is set aside or stayed, the debt cannot be disputed.

In Gulf Business Construction (M) Sdn Bhd v Israq Holding Sdn Bhd (supra), the Court of Appeal further observed that the presumption of inability to pay arises automatically once the debtor fails to comply with a statutory demand based on a judgment debt, and the Court is justified in granting a winding-up order. The Court of Appeal stated: “[11] The failure on the part of the company to pay as demanded would trigger the presumption that the company is unable to pay its debt. This presumption is, however, rebuttable. The onus shifts onto the company to show that it is able to pay the debt (PT Anekapangan Dwitama v Far East Food Industries Sdn Bhd). Thus, the inability to pay on the part of the company gives the requisite jurisdiction of the court to make a winding up order against the company (Securicor (M) Sdn Bhd v Universal Cars Sdn Bhd [1985] 1 MLJ 84).” [emphasis added]

In the present case, it is not disputed that the Petitioner, through its solicitors Messrs. Shukor Baljit & Partners, issued and served upon the Respondent a Statutory Notice of Demand dated 10 February 2025, pursuant to sections 465(1)(e) and 466(1)(a) of the Companies Act 2016 (the said Notice). The Notice was duly served at the Respondent’s registered address and business address by personal service on 14 February 2025 and by registered post on 12 February 2025.

The 21-day period has lapsed since the service of the said Notice. However, the Respondent has failed to pay the debt, whether in whole or in part, or to make any bona fide offer to settle the debt. In these circumstances, failure to pay within the stipulated 21 days will give rise to the statutory presumption that the Respondent is unable to pay its debts, thereby conferring on the Court the jurisdiction to grant a winding-up order.

This statutory presumption is rebuttable, and it is the responsibility of the Respondent to prove that, at the relevant time, it was able to pay its debts as they became due. However, in this case, the Respondent has not provided any evidence to rebut the presumption or to demonstrate that it was capable of settling the debt mentioned in the said Notice.

The Court therefore finds that the Respondent is unable to pay its debts within the meaning of section 465(1)(e) read with section 466(1)(a) of the Companies Act 2016.

Accordingly, for the reasons stated above, I therefore ordered that the Petitioner’s Petition Enclosure 1 to wind up the Respondent be granted, with costs of RM5,000.00. Dated 30 OCTOBER 2025 -sgd-JAMHIRAH ALI JUDGE HIGH COURT OF MALAYA KUALA LUMPUR To the parties’ solicitors: For the Petitioners : Vugaraya Rajalingam (Messrs. Shukor Baljit & Partners) For the Respondent : Kenshunjeet Singh (Messrs. Gunaseelan & Associates)