Concept Theatre Sdn. Bhd. v 1. ) Edutainment Dome Sdn. Bhd. (JA-28PW-34-03/2021)

Content

Page 1 of 15 MALAYSIA IN THE HIGH COURT IN MALAYA AT JOHOR BAHRU IN THE STATE OF JOHOR DARUL TAKZIM WINDING UP NO: JA-28PW-34-03/2021 5 Dalam perkara mengenai EDUTAINMENT DOME SDN. BHD. (No. Syarikat 989404-H) Dan 10 Dalam Perkara Seksyen 465(1)(e) dan Seksyen 477 Akta Syarikat 2016 dan peruntukan yang berkaitan dengan syarikat 15 Dan Dalam Perkara Mengenai Penggulungan Syarikat Akta 1972 20 BETWEEN PERFECT TRADING AGENCY SDN. BHD. 25 (Company No: 1023682-W) …PETITIONER 30

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(2) Penyelesai tersebut yang dilantik selaras dengan perenggan 1 Perintah ini diberikan kebebasan untuk melaksanakan segala kewajipan dan 5 kuasa selaras dengan peruntukan Akta Syarikat 2016;

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(3) Kos permohonan ini dibayar daripada aset-aset syarikat tersebut; dan

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(4) Lain-lain relif yang suai manfaat oleh Mahkamah yang mulia ini.” 10 [2] The reasons for the above application was stated as: “(a) Pada 5.8.2020, Pegawai Penerima telah dilantik sebagai pelikuidasi Responden melalui Perintah pada 5.8.2020 (Perintah tersebut);

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(4) Syarikat Responden telah digulungkan pada 30/11/2016 dan Responden berhutang Pemohon berjumlah RM48,843,926.00. WONG WENG FOO (No. K/P: 530609-10-6007) bagi Tetuan Wong Weng Foo & Co., telah dilantik sebagai pelikuidasi Responden. 15

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(5) Pada 26.2.2020, Pemohon memohon Pelikuidasi Responden, WONG WENG FOO (No. K/P: 530609-10-6007) digantikan oleh calon pelikuidasi baru yang bernama V. VENKATACHALAM A/L M.V. VENKATACHALAM CHETTIAR (No. K/P: 600825-02-5253). 20

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(6) Peguamcara Responden bercadang pelikuidasi tersebut digantikan oleh Pegawai Penerima disebabkan ingin menjimatkan masa Mahkamah. Selepas perbincangan antara peguamcara pemohon dan peguamcara responden, mereka bersetuju bahawa Pelikuidasi Responden, WONG WENG FOO (No. K/P: 530609-10-6007) meletakkan jawatannya 25 sebagai Pelikuidasi/Pelikuidasi EDUTAINMENT DOME SDN. BHD. (No. Syarikat: 989404-H) dan jawatain ini digantikan oleh Pegawai Penerima.

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(7) Pegawai Penerima Responden sampai hari ini masih belum menjalankan tugasnya. Oleh hal yang demikian, Pemohon memohon 30 kepada Mahkamah yang Mulia ini agar seorang pelikuidasi swasta dapat dilantik untuk menggantikan Pegawai Penerima melalui Lampiran 1 demi melancarkan proses likuidasi syarikat Responden. Dalam Page 5 of 15

Lampiran

Lampiran 1, Pemohon mencalonkan Encik V. VENKATACHALAM A/L M.V. VENKATACHALAM CHETTIAR (No. K/P: 600825-02-5253) dari Tetuan Ahmad Abdullah & Co sebagai penyelesai dan menggantikan Pegawai Penerima. 5 (8) Selepas Lampiran 1 diterima oleh Pegawai Penerima, Pegawai Penerima mengadakan Mesyuarat bagi Pemiutang dan Penyumbang. Minit Mesyuarat Am Pemiutang dan Mesyuarat Am Penyumbang bagi Pelantikan Encik V. VENKATACHALAM A/L M.V. VENKATACHALAM CHETTIAR (No. K/P: 600825-02-5253) dari Tetuan Ahmad Abdullah & 10 Co. sebagai penyelesai dan menggantikan Pegawai Penerima telah dijalankan pada 28.4.2021. (9) Pemiutang-Pemiutang lain (Pencelah-pencelah tersebut) tidak berpuas hati dengan permohonan tersebut dan sesungguhnya memfailkan Notis 15 Usul bertarikh 5.5.2021 (“Lampiran 6”) untuk mencelah dalam Lampiran 1 dan menentang Lampiran 1.” [5] The intervenors who were also the creditors of the wound up company opposed the appointment of the private liquidator on three main 20 grounds. First - no cause was shown to remove the Official Receiver (OR) [6] In the case of ES ENG SOON HOLDINGS SDN BHD v GOLDEN 25 AFFINITY DEVELOPMENT SDN BHD (in liquidation) [2021] MLJU 538, my learned brother Justice Nadzarin Wok Nordin held: “Law on removal of Liquidators 30 Page 6 of 15 [31] As a starting point, this Court will remind itself of the law in respect of such an application as in the one before me. Under Section 482(b) of the Companies Act 2016 it is stated: "A liquidator or interim liquidator appointed by the Court may: 5 (a) resign from office in accordance with the rules; or (b) on cause shown, be removed from office by the Court." [32] The relevant principles of law applicable to an application to remove a liquidator are well set out by Ramly Ali J (now FCJ) in Ng Yok Gee v. 10 CTI Leather Sdn Bhd (Metro Brilliant Sdn Bhd & Ors, Intervener) [2006] 3 CLJ 360; [2006] 7 MLJ 28, 37-38 which was affirmed by the Federal Court in Wong Sin Fan & Ors v. Ng Peak Yam & Anor [2013] 3 CLJ 17; [2013] 2 MLJ 629, 638) where the Federal Court in the latter case had stated " The principles of law governing an application to remove a 15 provisional liquidator (or liquidator) are well set out as in the case of Ng Yok Gee & Anor v. CTI Leather Sdn Bhd; Metro Brilliant Sdn Bhd & Ors (Interveners) [2006] 3 CLJ 360 and include the following: (a) The court does not have an unfettered discretion, as 20 cause must be shown before a liquidator can be removed. The position is not the same as it is when a liquidator is first appointed and the court may choose between two or more competing candidates. 25 (b) The normal grounds for removal are that the liquidator has a personal unfitness, has failed to act impartially or is in a position where his duty and interest are in conflict. (c) The removal of the liquidator must be in the interest of all 30 those who are interested in the company being liquidated. Thus, all the contributories and creditors of the company being liquidated must support such application to remove the liquidator. Page 7 of 15 [24] Based on the above principles of law, we are of the view that the court should be slow to interfere with any act or decision of the liquidators in discharging their roles in company liquidation and will do so only if it is so unreasonable and absurd that no reasonable person 5 would have acted in that way. The court will not interfere with the decision simply because its opinion might differ from that of the liquidator. (see the case of Andrew Christopher Chuah Choong Eng Chuan v. Ooi Woon Chee & Anor [2007] 2 CLJ 405)." 10 [33] The Court of Appeal in the case of Andrew Christopher Chuah Choong Eng Chuan v. Ooi Woon Chee & Anor [2007] 2 MLJ 12; [2007] 2 CLJ 405 had held that "The court will not interfere with the decision simply because its opinion might differ from that of the liquidator. Generally, the 15 court will recognize that the discretion has been vested by statute in the liquidator and will not interfere unless it is shown that he did not address himself to the correct questions or has made errors of law, or has not exercised his discretion bona fide or has acted in a way which no reasonable liquidator would have acted, or has taken into account 20 entirely irrelevant considerations or when there is fraud." [7] The applicant has failed to show any personal unfitness, failure to act impartially, or is in any way conflicted on the part of the OR apart from the fact that the OR is overburdened with work. This in the court’s view is 25 not a ground for the OR’s removal. Secondly, the issue of estoppel [8] The intervenors in their submissions stated: 30 Page 8 of 15 “6.1. It is an undisputed fact that the Official Receiver had become the liquidator by CONSENT as per the Order dated 05.08.2020 (“the 2020 Order”) under the Applicant’s application on 26.02.2022 (“the 2020 Application”). 5 6.2. The Applicant sought an order to appoint the Nominated Liquidator as liquidator of the Respondent Company in both the 2020 Application and again in this current Applicant’s SIC. 6.3 We submit that vide the Applicant’s SIC, the Applicant is attempting ‘a 10 second bite of the cherry’ and such attempt ought to be refused by this Court. 6.4 We re-iterate that the appointment of Official Receiver was with the CONSENT of the Applicant under the 2020 Order and the Applicant’s 15 SIC filed within eight (8) months from the said 2020 Order is clearly mala fide and the Applicant is estopped to seeks the relief prayed for vide the Applicant’s SIC.” [9] For the earlier consent order dated 5 August 2020 in case no JA- 20 28PW-30-02/2020. [10] In the case of M RM SP v. SUBRAHMANYAN CHETTIAR @ V SUBRAMANIAN M RM SP v. VENKATACHALAM CHETTIAR & Anor v. SWAMINATHAN SWETHARANYAM @ SM SWETHARANYAM 25 SWAMINATHAN CHETTIAR @ M RM SP SM SWETHARANYAM & Anor [2021] 1 LNS 2246, my learned brother Justice Amarjeet Singh held: “[28] The defendants claimed that the present suit or at least part of the suit 30 thereof must be struck out based on the plea of res judicata. It is contended that the causes of action and issues in the present suit are Page 9 of 15 MTJB-JA-28PW-34-03/2021/CT/bpts/az/r the same as or ought to have been brought in the earlier civil suit and which causes of action and issues have merged with the 2014 Consent Judgment. The defendants relied on Asia Commercial Finance (M) Berhad v. Kawal Teliti Sdn Bhd [1995] 3 CLJ 783; [1995] 3 MLJ 189 ("Asia Commercial Finance") and submitted that a cause of action which 5 has been adjudicated cannot be litigated once more and this includes every issue which parties exercising reasonable diligence might have brought in the earlier civil suit. [29] The question to be decided now is whether the plea of res judicata has 10 been established. The law on res judicata is trite and instructively stated in Asia Commercial Finance and reaffirmed in Kerajaan Malaysia v. Mat Shuhaimi Shafie [2018] 3 CLJ 1 where the Federal Court reminded that the underlying rationales of the doctrine of res judicata and abuse of process are "founded on the consideration of public policy that it is in the 15 public interest that there should be finality in litigation and decisions made by courts of competent jurisdiction, and that no one should be vexed twice for the same kind of litigation". [30] In Asia Commercial Finance it is stated that res judicata creates 20 an estoppel per rem judicatum and there are two types of such estoppel: 'cause of action estoppel ' and 'issue estoppel '. The position can be summarised as follows: (i) The cause of action estoppel arises where the rights or liabilities 25 involving a particular right to take a particular action in court for a particular remedy are determined in a final judgment. The cause of action cannot be relitigated between the same parties in a subsequent action. 30 (ii) The cause of action estoppel extends to all other causes of action, based on the same facts or issues, which should have been litigated or asserted in the earlier action resulting in the final judgment. Page 10 of 15 (iii) The issue estoppel means that neither the same parties nor their privies in a subsequent action will be allowed to challenge the correctness of the decision of a previous final judgment in which they, or their privies, were parties and neither will such parties be allowed to adduce evidence or advance any argument to 5 contradict such decision. (iv) The issue estoppel also extends to an issue that is raised in a subsequent proceeding which involves a different cause of action to which the same issue is relevant and to a situation where an 10 issue raised in a subsequent proceeding is an issue which might have been and which was not brought forward in the earlier action. [31] In the context of this case in view of the fact that we have a consent 15 judgment and not a judgment adjudicated on merits the nature of such judgment must be appreciated. A consent judgment is only recorded by the court when the respective litigants have by way of an agreement resolved their legal suit and sometimes including other disputes that they may have in the form of a global settlement. A consent judgment has 20 been explained by the Federal Court in Tan Geok Lan v. La Kuan [2004] 2 CLJ 301 as follows: ‘A consent judgment or order is not the less a contract, and subject to the incidents of a contract, because there is 25 superadded the command of the court, and its force and effect derives from the contract between the parties leading to, or evidenced by, or incorporated in, the consent judgment or order.’ and later further clarified in Kamil Azman bin Abdul Razak & Ors v. 30 Amanah Raya Bhd & Ors [2019] 6 CLJ 419; [2019] 4 MLJ 726 in the following as follows: Page 11 of 15 ‘Such an order remains valid, effective and binding on all the parties involved... until and unless the consent order is set aside, the consent order operates as an estoppel....’ [32] In Mayban Allied Bhd (formally known as Phileo Allied Bank (M) Bhd) v. 5 Kenneth Godfrey Gomez & Anor [2010] 9 CLJ 702; [2011] 5 MLJ 219, Ramly Ali JCA observed that: [23] It is trite that a consent order could give rise to a plea of res judicata. There are a number of authorities on this point. 10 Among them are: Palmer & Anor v. Durnford Ford (a firm) & Anor [1992] 2 All ER 122; Cohen v. Fonesco [1926] 1 KB 119, Re South American & Mexican Co. ex p. Bank of England [1895] 1 Ch 37; and Malaysian National Insurance Sdn Bhd v. Lim Tiok [1997] 2 CLJ 351.” 15 [11] Therefore the applicant was estopped from now asking for the OR to be removed as the liquidator after having earlier consented to their appointment on 5 August 2020. 20 Third issue - the wishes of the creditors and contributories [12] Rule 119 of the Companies (Winding Up) Rules 1972 reads: “At a meeting of creditors or contributories a resolution shall be deemed 25 to be passed when a majority in number and value of the creditors or, as the case may be, contributories present, personally or by proxy, and voting on the resolution, have voted in favour of the resolution, the value of the contributories being determined according to the number of votes conferred on each contributory by the regulations of the company.” 30 Page 12 of 15 [13] The majority of the creditors in numbers objected to the removal of the OR as the liquidator of the company. See the report of the OR in enclosure 4. Therefore based on the provision of R 119 of the Companies (Winding Up) Rules 1972 the court should acquiesce to their wishes. 5 [14] In the case of LIM CHIP KEONG v. OON BROTHERS ELECTRICAL TRADING SDN BHD & ANOR [2022] 1 LNS 222, my learned brother Justice Nadzarin Wok Nordin held: “Removal of Liquidator 10 [10] This Court will now address the law on the removal of a liquidator or interim liquidator as the case maybe herein. Pursuant to Section 482(b) of the Companies Act 2016 it is stated that: 15 "A liquidator or interim liquidator appointed by the Court may: (a) resign from office in accordance with the rules; or (b) on cause shown, be removed from office by the Court." [11] The Federal Court in Wong Sin Fan & Ors v. Ng Peak Yam & Anor [2013] 20 3 CLJ 17; [2013] 2 MLJ 629, 638) had held in relation to a removal of a liquidator that: "The principles of law governing an application to remove a provisional liquidator (or liquidator) are well set out as in the case 25 of Ng Yok Gee & Anor v. CTI Leather Sdn Bhd; Metro Brilliant Sdn Bhd & Ors (Interveners) [2006] 3 CLJ 360 and include the following: (a) The court does not have an unfettered discretion, 30 as cause must be shown before a liquidator can be removed. The position is not the same as it is when Page 13 of 15 MTJB-JA-28PW-34-03/2021/CT/bpts/az/r a liquidator is first appointed and the court may choose between two or more competing candidates. (b) The normal grounds for removal are that the 5 liquidator has a personal unfitness, has failed to act impartially or is in a position where his duty and interest are in conflict. (c) The removal of the liquidator must be in the interest 10 of all those who are interested in the company being liquidated. Thus, all the contributories and creditors of the company being liquidated must support such application to remove the liquidator. 15 [24] Based on the above principles of law, we are of the view that the court should be slow to interfere with any act or decision of the liquidators in discharging their roles in company liquidation and will do so only if it is so unreasonable and absurd that no reasonable person would have acted in that way. The court will 20 not interfere with the decision simply because its opinion might differ from that of the liquidator. (see the case of Andrew Christopher Chuah Choong Eng Chuan v. Ooi Woon Chee & Anor [2007] 2 CLJ 405)." 25 [12] In Andrew Christopher Chuah Choong Eng Chuan v. Ooi Woon Chee & Anor [2007] 2 CLJ 405; [2007] 2 MLJ 12; the Court of Appeal had held that: "The court will not interfere with the decision simply because its 30 opinion might differ from that of the liquidator. Generally, the court will recognize that the discretion has been vested by statute in the liquidator and will not interfere unless it is shown that he did not address himself to the correct questions or has made errors of Page 14 of 15 MTJB-JA-28PW-34-03/2021/CT/bpts/az/r law, or has not exercised his discretion bona fide or has acted in a way which no reasonable liquidator would have acted, or has taken into account entirely irrelevant considerations or when there is fraud." 5 [13] From the above, as well as various other authorities such as Shencourt Sdn Bhd (in receivership) v. Shencourt Properties Sdn Bhd (in liquidation) [2019] 3 CLJ 791; [2019] 12 MLJ 184 and Abric Project Management Sdn Bhd v. Palmshine Plaza Sdn Bhd & Anor [2007] 7 CLJ 516; [2006] 4 MLRH 110 [2007] 3 MLJ 571 [2007] 4 AMR 445 it is clear 10 that unless the Liquidator, or in this case the Interim Liquidator, resigns from office in accordance with the Companies (Winding Up) Rules 1972, there must be some unfitness shown in order to remove R2 as the Interim Liquidator herein.” 15 [15] Based on the matters adumbrated above, I dismissed the application in enclosure 1 with costs. [16] Ergo cadit quaestio. 20 Dated 22nd February 2023 -Signed- …………………………….. (ASLAM B ZAINUDDIN) 25 Judge High Court in Malaya Johor Bahru 30 Note: Grounds of judgment is subject to correction of typographical errors, grammatical mistakes and editorial formatting, if any. 35 Page 15 of 15 COUNSELS For Applicant: Ms. Heng Wang Qianwei 5 Messrs. Allen Loh & Co. Advocates & Solicitors No. 29-01, Jln Setia Tropika 1/25 Taman Setia Tropika 81200 Johor Bahru 10 For Respondents: Puan Juanita binti Said 15 Jabatan Insolvensi Malaysia Bangunan Tabung Haji Johor Bahru 20 For Intervenors: Mr. LM Looi Messrs. Dennis Nik & Wong Advocates & Solicitors 25 Suite 601-602, Level 6, Bangunan Ang No. 1 Jln Jeram, Taman Tasek 80200 Johor Bahru