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W-02 (NCC) (W)-1226-07/2022 Kand. 55 04/05/2026 16:41:51 IN THE COURT OF APPEAL OF MALAYSIA (APPELLATE JURISDICTION) CIVIL APPEAL NO: W-02(NCC)(W)-1223-07/2022
W-02(NCC)(W)-1226-07/2022
Court of Appeal of Malaysia27 Apr 2026
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“. The part of the decision in Young v Bristol Aeroplane in regard to the said exceptions to the rule of judicial precedent ought to be accepted by us as part of the common law applicable by virtue of Civil Law Act 1956 vide its s 3. To recap, the relevant ratio decidenci in Young v Bristol Aeroplane is that there are t”
“(2) in an action under s 540(1) of the Companies Act 2016 (CA) regarding the business of a company (X Company) which "has been carried on with intent to defraud the creditors" of X Company or "creditors of any other person or for any fraudulent purpose" -”
“7. I reproduce below O 35 r 3 of the Rules of Court 2012 (RC), s 69(1) of the Courts of Judicature Act 1964 (CJA) and r 7(1) of the Rules of the Court of Appeal 1994 (RCA): "O 35 r 3 RC Adjournment of trial Subject to the provisions of these Rules, the Judge may, if he thinks it is expedient in the inter”
“ts at a higher or the same level in the court structure subject to certain exceptions affecting especially the Court of Appeal. The said exceptions are as decided in Young v Bristol Aeroplane Co Ltd [1944] KB 718. The part of the decision in Young v Bristol Aeroplane in regard to the said exceptions to the rule of judi”
“the litigation please refer to the Court of Appeal's judgment delivered by David Wong Dak Wah JCA (as he then was) in ACFM Engineering & Construction Sdn Bhd v Esstar Vision Sdn Bhd & another appeal [2016] MLJU 1776, at [20]. The $ 2^{n d} $ Rule, in our view, is satisfied, if X is given a right to adduce evidence and”
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W-02 (NCC) (W)-1226-07/2022 Kand. 55 04/05/2026 16:41:51 IN THE COURT OF APPEAL OF MALAYSIA (APPELLATE JURISDICTION) CIVIL APPEAL NO: W-02(NCC)(W)-1223-07/2022
2
ASHAK BIN HASSAN (NRIC NO.:471007-01-5979) ... APPELLANTS AND JALEX SDN. BHD. (CO. NO.: 176538-U) RESPONDENT (HEARD TOGETHER WITH) IN THE COURT OF APPEAL OF MALAYSIA (APPELLATE JURISDICTION) CIVIL APPEAL NO: W-02(NCC)(W)-1226-07/2022 BETWEEN CITY PROPERTIES SDN. BHD. (CO. NO.: 16234-T) ... APPELLANT AND JALEX SDN. BHD. (CO. NO.: 176538-U) RESPONDENT [In the Matter of High Court of Malaya at Kuala Lumpur Civil Suit No.: WA-22NCC-247-06/2017 Between Jalex Sdn. Bhd. (Co. No.: 176538-U) ... Plaintiff
1
City Properties Sdn. Bhd. (Co. No.:16234-T)
2
Yap Wee Chun (NRIC No.: 701014-07-5655)
3
Ashak bin Hassan (NRIC No.:471007-01-5979) ... Defendants] CORAM: WONG KIAN KHEONG, JCA ALWI BIN HAJI ABDUL WAHAB, JCA ONG CHEE KWAN, JCA
1
The above two appeals (2 Appeals) are as follows:
1
Civil Appeal no. W-02(NCC)(W)-1223-07/2022 ( $ 1^{st} $ Appeal) had been filed Mr. Yap Wee Chun and Encik Ashak bin Hassan [Appellants ( $ 1^{st} $ Appeal)] against the High Court's decision made on 21.6.2022 (High Court's Decision); and
2
City Properties Sdn. Bhd. [Appellant (2 $ ^{nd} $ Appeal)] had lodged Civil Appeal no. W-02(NCC)(W)-1226-07/2022 ( $ 2^{nd} $ Appeal) against the High Court's Decision.
2
The 2 Appeals had been heard together on 12.12.2025 [Hearing (2 Appeals)] because the 2 Appeals emanated from one trial conducted in the High Court.
3
After the Hearing (2 Appeals), we reserved our decision regarding the 2 Appeals.
4
My learned brother, Ong Chee Kwan JCA, had previously forwarded to me a draft judgment regarding the 2 Appeals (Draft).
5
I agree with the Draft and wish to discuss the following two matters in this judgment (This Judgment):
1
whether the court should exercise its discretion to adjourn the hearing of an appeal when a party's learned counsel was ill and such fact was confirmed by a medical certificate (MC); and
2
in an action under s 540(1) of the Companies Act 2016 (CA) regarding the business of a company (X Company) which "has been carried on with intent to defraud the creditors" of X Company or "creditors of any other person or for any fraudulent purpose" -
a
does s 540(1) CA impose liability for X Company's debts on another company?; or
b
is s 540(1) CA only applicable to individuals only? B. Can the court adjourn the hearing of an appeal based solely on a learned counsel's MC?
6
In this case, the solicitors for the Appellants $ (1^{\mathrm{st}} $ Appeal) applied to adjourn the hearing of the 2 Appeals on the sole ground that the learned lead counsel for the Appellants $ (1^{\mathrm{st}} $ Appeal) was ill [Adjournment Application $ (1^{\mathrm{st}} $ Appeal)]. To support the Adjournment Application $ (1^{\mathrm{st}} $ Appeal), a MC was tendered to confirm the illness of the learned lead counsel for the Appellants $ (1^{\mathrm{st}} $ Appeal).
7
I reproduce below O 35 r 3 of the Rules of Court 2012 (RC), s 69(1) of the Courts of Judicature Act 1964 (CJA) and r 7(1) of the Rules of the Court of Appeal 1994 (RCA): "O 35 r 3 RC Adjournment of trial Subject to the provisions of these Rules, the Judge may, if he thinks it is expedient in the interest of justice, adjourn a trial not more than three times, unless the circumstances otherwise require, and upon such terms, if any, as he thinks fit. s 69 CJA Hearing of appeals.
1
Appeals to the Court of Appeal shall be by way of rehearing, and in relation to such appeals the Court of Appeal shall have all the powers and duties, as to amendment or otherwise, of the High Court, together with full discretionary power to receive further evidence by oral examination in court or through a remote communication technology, by affidavit, or by deposition taken before an examiner or commissioner. r 7 RCA Power of Court to amend, admit further evidence, or draw inferences of fact
1
The Court shall have all the powers and duties, as to amendment or otherwise, of the appropriate High Court, together with full discretionary power to receive further evidence by oral examination in Court, by affidavit, or by deposition taken before an examiner or Commissioner." (emphasis added).
8
In Abdul Rahman bin Soltan & Ors v FELDA Land Development Authority & Anor and 2 other appeals [2023] 4 MLJ 318, at [36] and [37], the Court of Appeal decided as follows: [36] The High Court has a discretion under O 35 r 3 RC to adjourn the hearing of a trial. By virtue of s 69(1) CJA and r 7(1) RCA, the Court of Appeal "shall have all the powers" of the High Court. Consequently, it is not disputed that the Court of Appeal has a discretionary power to adjourn the hearing of appeals under s 69(1) CJA and r 7(1) RCA read with O 35 r 3 RC. [37] With regard to the exercise of an appellate court's power to adjourn the hearing of an appeal, we rely on the following 4-1 majority judgment of the Federal Court in Dato' Sri Mohd. Najib Bin Hj Abdul Razak v Public Prosecutor (Review Application) [2023] 3 MLJ 40, at [135] and [136]: [135] The law on adjournments is settled. It is this. The court has the absolute discretion in allowing or refusing an application for adjournment. The fact of the prosecution having not raised any objections to the applicant's counsel's application for adjournment is neither here nor there. The court is not bound to adjourn the hearing of a case as a matter of course merely because the other side has no objections. That the grant or refusal of an adjournment is an exercise of discretion of the court was clearly pronounced by this court in Halaman Perdana Sdn Bhd & Ors v Tasik Bayangan Sdn Bhd [2014] 4 MLJ 1; [2014] 3 CLJ 681: [21] As regards the prayer to set aside the first decision, we are of the view that it was obviously not within the ambit of r 137. The grant or refusal of an adjournment was entirely an exercise of discretion by the learned judges who heard the leave application. (Emphasis added.) [136] Of course, it goes without saying such discretion should be exercised judiciously. KJ Aiyar Judicial Dictionary (14th Ed) defined judicial discretion as follows: The judicial discretion is the discretion to know through the law what is just. It must be exercised with vigilance and circumspection according to justice, common sense, and sound judgment (Sarpanch Lonand Gram Panchayat v Ramgiri Goswami AIR 1968 SC 222) ... The discretion which the court has to exercise is a judicial discretion. That discretion has to be exercised on well settled principles. Therefore, the court has to consider the nature of obligation in respect of which performance is sought, circumstances under which the decision came to be made, the conduct of parties, and the effect of the court granting the decree ... " (emphasis added).
9
Premised on s 69(1) CJA and r 7(1) RCA read with O 35 r 3 RC, the Court of Appeal has a discretion to allow or dismiss an application to adjourn the hearing of an appeal.
10
We have decided as follows regarding the Adjournment Application (1 $ ^{st} $ Appeal):
1
the Hearing (2 Appeals) would proceed whereby learned lead counsel for the Appellant $ (2^{\mathrm{nd}} $ Appeal) and respondent in the 2 Appeals (Respondent) would submit orally (Oral Submissions);
2
the "second chair" for the Appellants ( $ 1^{\mathrm{st}} $ Appeal) { $ 2^{\mathrm{nd}} $ Chair [Appellants ( $ 1^{\mathrm{st}} $ Appeal)]} -
a
was not required to submit orally; and
b
could attend the Hearing (2 Appeals), listen and record the Oral Submissions;
3
the Appellants ( $ 1^{\mathrm{st}} $ Appeal) was given a right to file one additional written submission after the Hearing (2 Appeals) (Additional Written Submission); and
4
the Court of Appeal would deliver a decision on the 2 Appeals after the filing and service of the Additional Written Submission {Court of Appeal's Decision [Adjournment Application (1 $ ^{st} $ Appeal)]}.
11
Our reasons for the Court of Appeal's Decision [Adjournment Application (1 $ ^{st} $ Appeal)] are as follows:
1
the 2 Appeals concerned transactions which had occurred from 2012 to 2016. Hence, it is in the interest of justice for an expeditious Hearing (2 Appeals);
2
the two notices of appeal for the $ 1^{\mathrm{st}} $ and $ 2^{\mathrm{nd}} $ Appeal had been filed on 30.6.2022 and 1.7.2022 respectively. In other words, the 2 Appeals had remained in the docket of the Court of Appeal for more than three years before the Hearing (2 Appeals); and
3
the Court of Appeal's Decision [Adjournment Application ( $ 1^{\mathrm{st}} $ Appeal)] would not cause any prejudice or injustice to the Appellants ( $ 1^{\mathrm{st}} $ Appeal) because-
a
in support of the $ 1^{\mathrm{st}} $ Appeal, the Appellants $ (1^{\mathrm{st}} $ Appeal) had filed two lengthy written submissions, namely-
i
the first written submission contained 129 paragraphs in 57 pages; and
II
(ii) there were 39 paragraphs in 18 pages in the second written submission;
b
the $ 2^{\mathrm{nd}} $ Chair [Appellants ( $ 1^{\mathrm{st}} $ Appeal)] was allowed to attend the Hearing (2 Appeals) and record the Oral Submissions; and
c
after the $ 2^{\mathrm{nd}} $ Chair [Appellants ( $ 1^{\mathrm{st}} $ Appeal)] had recorded the Oral Submissions, the Appellants ( $ 1^{\mathrm{st}} $ Appeal) were conferred a right to file and serve the Additional Written Submission. Consequently, the Appellants ( $ 1^{\mathrm{st}} $ Appeal) had filed and served the Additional Written Submission which contained 61 paragraphs in 21 pages. With regard to oral and written submissions, we refer to the following judgment of the Court of Appeal in SKN Land & Development Sdn Bhd v Crest Worldwide Resources Sdn Bhd (in liquidation) (Mudajaya Corporation Bhd and Ors, interveners) and another appeal [2026] 2 MLJ 156, at [29] to [32] which has conferred a Right (Oral Submission) on any party in the winding up proceedings. [29] The WU [Winding Up] Court had allowed the Appellant to file affidavits to support the Appellant's Application. The Appellant was also accorded the right to file written submission in support of the Appellant's Application (Appellant's Written Submission). The first issue that arises in the 1 $ ^{st} $ Appeal is whether the 2 $ ^{nd} $ Rule mandatorily requires the WU Court to give all the parties in the Appellant's Application a right to submit orally with regard to the Appellant's Application [Right (Oral Submission)]. [30] Firstly, the [Companies Act] and WUR [Companies (Winding Up) Rules 1972] do not confer a Right (Oral Submission) on any party in the Appellant's Application. [31] Secondly, our research has not revealed any winding up case which had been decided in-
1
this country; and
2
any other country with winding up legislation which is similar to our winding up law [32] Thirdly, according to the $ 2^{n d} $ Rule as decided by cases, a party in court proceedings (X) has a right to -
1
adduce evidence in the proceedings; and
2
submit on any issue which arises in the litigation please refer to the Court of Appeal's judgment delivered by David Wong Dak Wah JCA (as he then was) in ACFM Engineering & Construction Sdn Bhd v Esstar Vision Sdn Bhd & another appeal [2016] MLJU 1776, at [20]. The $ 2^{n d} $ Rule, in our view, is satisfied, if X is given a right to adduce evidence and present written submission in support of X's case. In other words, if X is afforded a right to file written submission, the court has a discretion to dispense with oral submission by X. Whatever oral submission which can be made in support of X's case, can be easily reduced to writing in X's written submission. Needless to say, written submission saves precious judicial time and ensures an optimal disposal of cases. Furthermore, parties can save time, costs and effort if the court relies solely on written submission of the parties. Premised on the above reasons, the $ 2^{n d} $ Rule was not breached by the WU Court because the Appellant's Written Submission had already been filed in the WU Court." (emphasis added). C. Whether s 540(1) CA is only confined to individuals
12
I reproduce below -
1
s 540 CA; and
2
ss 2(1)(a), (3)(a), (b), the definition of "person" in s 3 and 17A of the Interpretation Acts 1948 and 1967 (IA) s 540 Responsibility for fraudulent trading "CA (2016)
1
If in the course of the winding up of a company or in any proceedings against a company it appears that any business of the company has been carried on with intent to defraud the creditors of the company or creditors of any other person or for any fraudulent purpose, the Court on the application of the liquidator or any creditor or contributory of the company, may, if the Court thinks proper so to do, declare that any person who was knowingly a party to the carrying on of the business in that manner shall be personally responsible, without any limitation of liability, for all or any of the debts or other liabilities of the company as the Court directs.
2
Where a person has been convicted of an offence under subsection 539(3) in relation to the contracting of such a debt as is referred to in that section, the Court on the application of the liquidator or any creditor or contributory of the company may, if the Court thinks proper so to do, declare that the person shall be personally responsible without any limitation of liability for the payment of the whole or any part of that debt.
3
When the Court makes any declaration under subsection (1) or (2), the Court may give such further directions as it thinks proper for the purpose of giving effect to that declaration, and in particular may make provision for making the liability of any person under the declaration a charge on any debt or obligation due from the company to the person, or on any charge or any interest in any charge on any assets of the company held by or vested in the person or any corporation or person on his behalf, or any person claiming as assignee from or through the person liable or any corporation or person acting on his behalf, and may from time to time make such further order as is necessary for the purpose of enforcing any charge imposed under this subsection.
4
For the purposes of subsection (3), "assignee" includes any person to whom or in whose favour by the directions of the person liable the debt, obligation or charge was created, issued or transferred or the interest created, but does not include an assignee for valuable consideration and consideration by way of marriage, given in good faith and without notice of any of the matters on the ground of which the declaration is made.
5
Where any business of a company is carried on with the intent or for the purpose mentioned in subsection (1), every person who was knowingly a party to the carrying on of the business with that intent or purpose, commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding ten years or to a fine not exceeding one million ringgit or to both.
6
This section shall have effect notwithstanding that the person concerned is criminally liable under this Act in respect of the matters on the ground of which the declaration is made.
7
On the hearing of an application under subsection (1) or (2), the liquidator may give evidence or call witnesses himself. IA s2. Application
1
Subject to this section, Part I of this Act shall apply for the interpretation of and otherwise in relation tos 3. Definitions
a
this Act and all Acts of Parliament enacted after 18 May 1967;
3
Part 1 shall not apply where there is s 3. Definitions
a
express provision to the contrary; or
b
something in the subject or context inconsistent with or repugnant to its application. The following words and expressions have the meanings hereby respectively assigned to them, that is to says 17A. Regard to be had to the purpose of Act In the interpretation of a provision of an Act, a construction that would promote the purpose or object underlying the Act (whether that purpose or object is expressly stated in the Act or not) shall be preferred to a construction that would not promote that purpose or object." "person" includes a body of persons, corporate or unincorporate; (emphasis added).
13
The learned lead counsel for the Appellant $ (2^{n d} $ Appeal) had submitted that the learned High Court Judge had erred in law by deciding that the phrase "any person" in s 540(1) CA includes a company, such as the Appellant $ (2^{n d} $ Appeal). Reliance had been placed by the Appellant $ (2^{n d} $ Appeal) on the following judgment of the Court of Appeal in Zamzam Arabic Food Holding Sdn Bhd & Anor v Johanjana Corporation Sdn Bhd [2022] 5 MLJ 302, at [23(a)] [25] to [28] and [31]: "[23] The three main issues raised in this appeal are as follows:
a
whether the second defendant company is 'a person' under s 540(1) [CA]; [25] Learned counsel for the second defendant submitted that s 540(1) only applies to a person, ie, director and/or shareholder of the company who carried out the business of the company with intent to defraud a creditor. It was submitted that a plain reading of s 540(1) clearly shows that any offence or wrong doing is intended against an individual person and not against a corporation or a company. It is submitted that the second defendant, as a company, does not have a mind and/or knowledge of its own to carry on its business with intent to defraud a creditor. It was submitted that the plaintiff is attempting to strain the statute to implicate the second defendant and this amounts to an abuse of court process. [26] As the word 'person' is not defined in the [CA], learned counsel for the plaintiff relies on s 3 [IA] which defines the word 'person' to include a body of persons, corporate or unincorporate. Reading s 540(1) together with s 3 [IA], learned counsel for the plaintiff contended that s 540(1) applies to a real person and a company. The learned JC accepted the plaintiff's contention. [27] We agree with the submission of the learned counsel for the second defendant. We take the view that s 3 [IA] could not be read into s 540(1) [CA] as it would give effect to inconsistent meanings to s 540(1). The underlying purpose of s 540(1) is to impose a personal responsibility and liability on the director and/or the person who controls the company and not the company itself for carrying on the business of the company with intent to defraud a creditor. The word in s 540(1) is plain and unambiguous. The word 'person' in s 540(1) in its ordinary and natural meaning meant 'a real person'. He could be a director, managing director or person in control of the company. Therefore, to give effect to s 540(1), the court must apply the ordinary meaning of 'person' and not the meaning assigned to it by the plaintiff. [28] To accede to the plaintiff's contention would render s 540(1) meaningless because s 540(1) had penal consequences. Only a real person could have an intention to defraud a creditor. Such an intention does not exist in a company. For example, the act of purchasing goods with knowledge or intention of not paying for the goods because the company had no funds can only be made by a director of the company who carries on the business in that manner because a company does not have a mind to cheat: see Kawin Industrial Sdn Bhd (in liquidation) v Tay Tiong Soong [2009] 1 MLJ 723; LMW Electronics Pte Ltd v Ang Chuang Juay & Ors [2010] 1 MLJ 185. [31] We, therefore, find that the learned JC had erred in law in accepting the plaintiff's contention that the word 'person' in s 540(1) [CA] include a company. For this reason, we find there is merit in the first issue raised by the second defendant. We hold that the word 'person'in s 540(1) [CA] does not include a company. It therefore follows that the plaintiff did not have a cause of action against the second defendant, which is a company." (emphasis added).
14
Firstly, the Respondent's learned lead counsel had invited this court to find that the Appellant ( $ 2^{\mathrm{nd}} $ Appeal) was estopped from contending that the phrase "any person" in s 540(1) CA excludes companies due to the following reason:
1
the Appellant $ (2^{n d} $ Appeal) had successfully applied to the High Court to strike out this suit against the Appellant $ (2^{n d} $ Appeal) on the ground that s 540(1) CA only applied to natural persons and not to corporations {Striking Out Application [Appellant $ (2^{n d} $ Appeal)]};
2
the High Court had allowed with costs the Striking Out Application [Appellant ( $ 2^{\mathrm{nd}} $ Appeal)] {High Court's Striking Out Order [Appellant ( $ 2^{\mathrm{nd}} $ Appeal)]}; and
3
the respondent had appealed to the Court of Appeal against the High Court's Striking Out Order [Appellant ( $ 2^{n d} $ Appeal)] and this appeal was allowed with costs by the Court of Appeal {Court of Appeal's Decision [Appellant ( $ 2^{n d} $ Appeal)]}. There is no written judgment for the Court of Appeal's Decision [Appellant ( $ 2^{n d} $ Appeal)]. I am not able to accede to the above contention. This is because the following appellate cases have decided that if there is no written judgment regarding a court's decision, from the view point of the doctrine of stare decisis, there is no ratio decidendi of that court's decision which is legally binding on other courts-
a
the 2-1 majority judgment of the Federal Court delivered by Abdul Rahman Sebli CJ (Sabah and Sarawak) in Tetuan Wan Shahrizal, Hari & Co v Public Prosecutor [2023] 4 MLJ 1, at [11] to [23]; and
b
two decisions of the Court of Appeal in -
i
Mohamed Fayadh bin Abdul Gaffor & Ors v Liberty Insurance Bhd [2024] 6 MLJ 519, at [19(1)]; and
II
(ii) Motor Insurers' Bureau of Singapore v Pacific & Orient Insurance Co Bhd [2025] 5 MLJ 657, at [30].
15
With respect, I am not able to agree with Zamzam Arabic Food Holding. In my view, the phrase "any person" in s 540(1) CA includes non-individuals, such as companies, registered societies and registered co-operative societies. The following reasons support this view:
1
the legislature has employed a very wide term "any" in s 540(1) CA. The broad meaning of the word "any" had been explained by Augustine Paul FCJ in the Federal Court case of Metramac Corp Sdn Bhd (formerly known as Syarikat Teratati KG Sdn Bhd) v Fawziah Holdings Sdn Bhd [2006] 4 MLJ 113, at [41] and [42], as follows - [41] ... Bindra's Interpretation of Statutes (9th Ed) in commenting on the word 'any' says at p 1469: 'Any' is a word which excludes limitation or qualification. It connotes wide generality. [42] In Aerlinte Eireann Teoranta v Canada (Minister of Transport) (1990) 68 DLR (4th) 220, Heald JA said at p 225: In summary, then, the appellants' initial submission is to the effect that airlines can only be charged for airport facilities and services which they actually use. I am unable to agree with this submission. The trial judge carefully examined the language used in s 5 and concluded that the word 'any' as used in s 5 should be interpreted to mean 'all', 'each and every' or 'whichever'. He added (AB vol 19, p 3409): 'Thus 'at any airport' in s 5 includes among others the meaning 'at each and every, or whichever, airport' at which the Minister provides every and all, or whichever, facilities and services.' I agree with the conclusion of the trial judge." (emphasis added);
2
s 540(6) CA has clearly provided that s 540 CA [including s 540(1) CA] "shall have effect notwithstanding that the person concerned is criminally liable under [CA] in respect of the matters on the ground of which the declaration is made". It is therefore clear that s 540(1) CA applies to "any person", including a company (Company Y), even if Company Y "is criminally liable under [CA] in respect of the matters on the ground of which the declaration is made";
3
if Parliament had intended to confine the application of s 540(1) CA to "individuals", Parliament would have expressly provided as such in that statutory provision;
4
s 540(3) CA has used the phrase "any corporation", not once but twice. This fact is significant for the following two reasons-
a
our legislature is aware of the difference between the effect of the wide phrase "any person" in s 540(1) CA and the specific phrase "any corporation" in s 540(3) CA; and
b
in Lee Lee Cheng v Seow Peng Kwang [1960] 1 MLJ 1, at 3, Thomson CJ (as he then was) held in the Federation of Malaya's Court of Appeal that when different words are used by the legislature in the same statute, those different words are intended by the legislature to have different meanings in that statute;
5
by virtue of s 2(1)(a) IA, Part 1 IA applies to the construction of CA, including its s 540. In this regard, I refer to ss 2(3)(a), (b), the definition of "person" in s 3 and 17A IA as follows-
a
the definition of "person" in s 3 IA (in Part 1 IA) {Definition [Person (Section 3 IA)]} does not apply in either one of the two circumstances as follows-
i
when there is an "express provision to the contrary" in s 540 CA as understood in s 2(3)(a) IA; or
II
(ii) there is "something in the subject or context" of s 540 CA which is "inconsistent with or repugnant" to the application of the definition of "person" in s 3 IA - please refer to s 2(3)(b) IA. Firstly, there is no express provision in s 540 CA or for that matter, any other provision in the CA, which would militate against the application of the Definition [Person (Section 3 IA)] to s 540(1) CA. Secondly, there is nothing in the subject or context of s 540 CA which is inconsistent with or repugnant to the application of the Definition [Person (Section 3 IA)]. On the contrary, due to reasons as explained in the above sub-paragraphs (1) to (4), a fortiori, the Definition [Person (Section 3 IA)] should apply to s 540(1) CA; and
b
s 17A IA (in Part 1 IA) mandates the court to adopt a purposive interpretation of s 540(1) CA. The object of s 540(1) CA is for the court to impose liability on "any person" "who was knowingly a party" to -
i
"any business of the company has been carried on with intent to defraud the creditors of the company or creditors of any other person"; or
II
(ii) "any business of the company has been carried on" "for any fraudulent purpose" {2 Alternative Limbs [Section 540(1) CA]}. It cannot be denied that in the commercial world, business is commonly transacted by groups of companies [Groups (Companies)]. In a Group (Companies), it is not uncommon for one company in the Group (Companies), usually a "holding company" (as understood in s 4 CA) (Holding Company), to control another company in the Group (Companies), usually a "subsidiary" of the Holding Company (as defined in s 4 CA) (Subsidiary). If a Holding Company is "knowingly a party" to either one of the 2 Alternative Limbs [Section 540(1) CA] with regard to the business of a Subsidiary, a purposive interpretation of s 540(1) CA in accordance with s 17A IA, requires, if not demands, that the Holding Company should be liable for the Subsidiary's debts under s 540(1) CA (as in this case). If I have followed Zamzam Arabic Food Holding, this is not only contrary to a purposive construction of s 540(1) CA as mandated by s 17A IA, this will also allow Holding Companies to evade their liability pursuant to s 540(1) CA for the debts of their Subsidiaries and render nugatory s 540(1) CA with regard to Groups (Companies); and
6
the Court of Appeal in Zamzam Arabic Food Holding, with respect, did not consider the following statutory provisions-
a
the phrase "any person" in s 540(1);
b
s 540(6); and
c
ss 2(3)(a), (b) and 17A IA. According to the doctrine of stare decisis, the Court of Appeal is bound by its own previous decisions unless, among others, the Court of Appeal's decision is made per incuriam of a statutory provision. I refer to the following judgment of the Federal Court delivered by Peh Swee Chin FCJ in Dalip Bhagwan Singh v Public Prosecutor [1998] 1 MLJ 1, at 12 to 13- "The doctrine of stare decisis or the rule of judicial precedent dictates that a court other than the highest court is obliged generally to follow the decisions of the courts at a higher or the same level in the court structure subject to certain exceptions affecting especially the Court of Appeal. The said exceptions are as decided in Young v Bristol Aeroplane Co Ltd [1944] KB 718. The part of the decision in Young v Bristol Aeroplane in regard to the said exceptions to the rule of judicial precedent ought to be accepted by us as part of the common law applicable by virtue of Civil Law Act 1956 vide its s 3. To recap, the relevant ratio decidenci in Young v Bristol Aeroplane is that there are three exceptions to the general rule that the Court of Appeal is bound by its own decisions or by decision of courts of co-ordinate jurisdiction such as the Court of Exchequer Chamber. The three exceptions are first, a decision of Court of Appeal given per incuriam need not be followed; secondly, when faced with a conflict of past decisions of Court of Appeal, or a court of co-ordinate jurisdiction, it may choose which to follow irrespective of whether either of the conflicting decisions is an earlier case or a later one; thirdly it ought not to follow its own previous decision when it is expressly or by necessary implication, overruled by the House of Lords, or it cannot stand with a decision of the House of Lords. There are of course further possible exceptions in addition to the three exceptions in Young v Bristol Aeroplane when there may be cases the circumstances of which cry out for such new exceptions so long as they are not inconsistent with the three exceptions in Young v Bristol Aeroplane. A few words need be said about a decision of Court of Appeal made per incuriam as mentioned above. The words 'per incuriam' are to be interpreted narrowly to mean as per Sir Raymond Evershed MR in Morelle v Wakeling [1955] 2 QB 379 at p 406 as a 'decision given in ignorance or forgetfulness of some inconsistent statutory provision or of some authority binding in the court concerned so that in such cases, some part of the decision or some step in the reasoning on which it is based, is found on that account to be demonstrably wrong'. It should be borne in mind that the year of Morelle's case is 1955 whereas our s 3 of the Civil Law Act was enacted in 1956. The ratio in Morelle's case is also part of the common law applicable to us." (emphasis added). Regrettably, the Court of Appeal in Zamzam Arabic Food Holding did not refer to the statutory provisions stated in the above sub-paragraphs (a) to (c). D. Epilogue
16
A draft of This Judgment had been previously forwarded by me to Dr. Alwi bin Haji Abdul Wahab and Ong Chee Kwan JJCA. Both my learned brothers had agreed with the draft.
17
I end with the message that every second chair should be prepared to conduct an appeal if the lead counsel is not able, for any reason, to do the appeal. This is also an opportune time for the second chair to rise to the occasion. DATE: 27 APRIL 2026 Judge Court of Appeal Appeal No.: W-02(NCC)(W)-1223-07/2022 Counsel for Ms. Magdalene Wong Sui Hua the Appellants: (Messrs Shafee & Co.) Counsel for Mr. P. Gananathan, Ms. Yeoh Kai Ying & the Respondent: Ms Koo Jia Ying (Messrs Gananathan Loh) Appeal No.: W-02(NCC)(W)-1226-07/2022 Counsel for Datuk Ben Chan Chong Choon the Appellant: Ms. Sangeetha Vasanth Kumar & Puan Nik Auni Syahirah Binti Nik Azizi (Messrs Ben Chan) Counsel for Mr. P. Gananathan, Ms. Yeoh Kai Ying & the Respondent: Ms Koo Jia Ying (Messrs Gananathan Loh)
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