D2D Bizhub Sdn Bhd v Lkw Petroleum Sdn Bhd (WA-28NCC-736-07/2023)

The Petitioner obtained a Summary Judgment dated 19.09.2022 against the Respondent (“the Judgment”).

(ii) It is not disputed that the Judgment sum has not been satisfied. S/N TnZesYcV0ml94oqelASKw

(iii) The Petitioner issued a Statutory Notice of Demand against the Respondent on 02.02.2023 (“Statutory Notice”).

(iv) For more than 21 days after the service the Statutory Notice, the Respondent had failed to pay the sum. [4] The Statutory Notice was served on the Respondent and the receipt of the notice was acknowledged. THE RESPONDENT’S CASE [5]

The Statutory Notice was not served on the Respondent in compliance with the provisions of the Companies (Winding-Up) Rules 1972 and the CA 2016.

(ii) The Judgment on which the Statutory Notice is based is invalid and tainted with illegality.

(iii) The Respondent is in fact solvent and thus able to pay its debt. The Respondent’s solvency is based on its balance sheet, which S/N TnZesYcV0ml94oqelASKw shows its current assets exceed its current liabilities by about RM4 million. THE COURT’S FINDINGS [6] I will deal with the issues raised in paragraphs 5(ii) and 5 (iii) first as the law on these is settled and trite. The issue of the alleged non-service of the Statutory Notice will be dealt with last, since it requires deeper analysis of the evidence. [7] The Respondent states the following in paragraphs 12, 13 and 14 of its written submission, which is reproduced verbatim here: “12. In this regard, respondent submits the amount petitioner seeking to recover in the Petition based on summary judgment is tainted by illegality and as such the Petition must be stayed/adjourned pending the disposal of the COA appeal no: 156-04.

The illegality concerning which the above appeal is filed is as follows.

Petitioner alleged to have given respondent friendly Loan of RM500,000.00 (“the Loan”) but respondent in the civil action denied applying for and receiving the Loan with petitioner. The respondent on the contrary have taken the position the Loan was provided by an illegal moneylender known to respondent as “Low Jack @ Ah Jack” (“the Lender”) using petitioner as his proxy in the illegal money lending scheme. Simply put, respondent’s position is that the Loan was negotiated with the Lender not petitioner who is not known to respondent.” S/N TnZesYcV0ml94oqelASKw [8] The law on this issue is trite. Once the Petition is based on a judgment debt, it is not for the Winding-Up Court to go behind the judgment and to make any decision on its validity. Until and unless the Order being challenged is set aside or reversed by a higher court, the order/judgment remains valid and enforceable. In the case of Marzida Mansor v Lembaga Kumpulan Wang Simpanan Pekerja (2023) 6 CLJ the Court of Appeal held as follows; [56] All of the aforementioned deliberations considered, this court finds no appealable error which would warrant this court’s appellate intervention to the extent of looking beyond the bankruptcy notice. Thus, the landmark principle in the COA’s decision in Affin Credit’s case shall apply (in that the court ought to be barred from delving beyond the judgment and examine the validity of the debt): Before us, learned counsel for the appellant submitted that the learned judicial commissioner (as he then was) had erred in law and fact when he failed to consider that the court cannot at this state go beyond the judgment and enquire into the validity of the debt as in doing so, would be tantamount to a collateral attack upon the final judgment of a court of competent jurisdiction and that until the judgment in the original suit is set-aside, the bankruptcy notice in this case which conforms to the terms of the judgment, remains valid… [9] It is also trite law that an appeal does not operate as an automatic stay of the judgment/order and is no bar to the presentation of a petition to wind up the judgment debtor. (see the decision of the Court of Appeal in Pontian United Theatre Sdn Bhd v Southern Finance Bhd (2006) 2 MLJ 602). S/N TnZesYcV0ml94oqelASKw WHETHER THE RESPONDENT IS SOLVENT [10] On this issue, the Petitioner submits as follows:

The Respondent contended that it has current assets more than its current liabilities, relying on the Company Search adduced in the Petition. The financial statements in the Company Search were for the financial year ending 31.10.2020 and tabled on 30.04.2021.

(ii) The Respondent is relying on outdated financial statements instead of adducing its own current financial statement. Further, even if the Respondent indeed has a lot of assets, it is no bar to winding up. THE COURT’S FINDINGS ON THIS ISSUE [11] The test on whether a company is able to pay its debt as envisaged by section 465(b) and (e) is whether the company is commercially insolvent. S/N TnZesYcV0ml94oqelASKw [12] Meanwhile, the Court of Appeal in Gulf Business Construction (M) Sdn Bhd v Israq Holding Sdn Bhd [2010] 5 MLJ 34 held that: “… [7] The test to ascertain commercial insolvency is rather simple. It is this. That the company is unable to meet the current debts as they fall due. And such a company may still be categorised as ‘unable to pay its debts’ even though the company has substantial wealth which cannot be realised immediately and even though on liquidation the company will be able to meet all its liabilities…” In the present Petition, the Respondent merely averred that it has more assets than liabilities but the fact remains that it did not pay the Judgment sum. Thus, it is insolvent for all intents and purposes. ALLEGED NON-SERVICE OF THE STATUTORY NOTICE [13] The Respondent submits that while the Petitioner claimed to have served the Statutory Notice dated 02.02.2023 on the Respondent, in fact, no such notice was received and/or acknowledged to be received by any officer(s) or employee(s) of the Respondent. On the contrary, it is self-evident in paragraph 3 of the Statutory Declaration (“SD”) in Annexure E to the Petition that the Statutory Notice was, in fact, served on OGY MARKETING SDN BHD not the Respondent. S/N TnZesYcV0ml94oqelASKw [14] The Respondent further submits that the SD in paragraphs 2 and 3 merely states notice was left at the addresses stated without condescending into particulars as to who in the Respondent’s office received the notice if at all it was served. For all intents and purposes, the Respondent reiterates no such notice was served on the Respondent. [15] The Respondent submits that, given no such Statutory Notice was served and/or received by the Respondent there is no presumption of inability to pay as stated by the Petitioner in paragraph 7 of the Petition. THE COURT’S FINDINGS ON THIS ISSUE [16] Section 466(1)(a) of the CA 2016 provides that a Statutory Notice may be served by leaving the same at the registered address to invoke the deeming provision. [17] The purpose of a Statutory Notice is only meant to warn the Respondent of a winding-up petition. Where there is no prejudice caused, and the Respondent knows of the winding-up petition, the service is sufficient. (see the case of Cymun Development Sdn Bhd V Suparmax Sdn Bhd (1995) 2 MLJ 233 at page 237). S/N TnZesYcV0ml94oqelASKw [18] Numerous cases have held that service of court documents may be carried out by way of:

18.1 Service at the business address; and

18.2 Service by way of AR Registered post at the registered office. In the present Petition, the Statutory Notice was served on the Respondent at two (2) distinct places i.e., by leaving it at the registered office and at the business address of the Respondent. In this regard, there is an acknowledgement of receipt by a person at the registered office of the Respondent dated 02.02.2023 at 11.18 a.m. (see Enclosure 3 Annexure D, page 36). [19] There is also an acknowledgement of receipt by the Respondent itself using its own stamp at the business address of the Respondent. [20] Even taking the Respondent’s case that the Statutory Notice was not properly served on its business address, there could be no dispute that the Statutory Notice was served on its registered address (see Enclosure 3, Annexure E, pg 41, paragraphs 2 and 3) [21] Thus, I find that the Statutory Notice was duly served on the Respondent’s registered address. Therefore, the allegation of non-service of the Statutory Notice is misconceived. S/N TnZesYcV0ml94oqelASKw [22] For the reasons aforesaid, I allow the Petition to wind up Respondent with costs of RM10,000.00 to be paid to the Petitioner out of the assets of the Respondent. Dated 28 November 2024 ……………t.t………………. Ahmad Murad Bin Abdul Aziz Judge High Court of Malaya Kuala Lumpur S/N TnZesYcV0ml94oqelASKw COUNSEL FOR THE PETITIONER: YH LOKE WITH BL CHONG SOLICITORS FOR THE PETITIONER: TETUAN HL FOO & CO COUNSEL FOR THE RESPONDENT: SITI NORAZWANI WITH SHAHABUDIN SOLICITORS FOR THE RESPONDENT: TETUAN SHAHABUDIN & ROZIMA Cases Referred to: ➢ Marzida Mansor v Lembaga Kumpulan Wang Simpanan Pekerja

6 CLJ ➢ Pontian United Theatre Sdn Bhd v Southern Finance Bhd (2006) 2 MLJ 602 ➢ Gulf Business Construction (M) Sdn Bhd v Israq Holding Sdn Bhd [2010] 5 MLJ 34 ➢ Cymun Development Sdn Bhd v Suparmax Sdn Bhd (1995) 2 MLJ 233 Legislation Referred to: ➢ Companies Act 2016 ➢ Insolvency Act 1967 ➢ Insolvency Rules 1967 ➢ Companies (Winding-Up) Rules 1972 Decision date: 9 May 2024 S/N TnZesYcV0ml94oqelASKw