Gui Chai Chern v Mexland Sdn. Bhd. (JA-28NCC-106-07/2025)

This petition was presented by Gui Chai Chern (“the Petitioner”) seeking to wind up Mexland Sdn Bhd (“the Respondent”) pursuant to the Companies Act 2016 [Act 777].

On 26 August, 9 September, and 23 September 2025, parties informed the Court that the settlement discussions were ongoing. On 1 October 2025, they confirmed that the attempt had failed and invited the Court to determine the petition on its merits. The Respondent did not file any affidavit in opposition.

Upon hearing both parties, the Court allowed the Petitioner's petition. On 14 October 2025, the Respondent filed a Notice to Appeal against the entirety of this Court's decision in allowing Enc. 1.

The Petitioner alleged that the Respondent is indebted to him in the sum of RM 2,000,000.00, which remains due and owing. DA Land Sdn Bhd (in Liquidation), through its liquidator Augustine a/l T.K. S/N /vD9uPf/OEa8yw1Zcc5Nvg James, filed a Notice of Intention to Appear at the Hearing of this Petition (Enc. 8), asserting its position as a creditor of the Respondent in the sum of RM 8,000,000.00 as at 31 July 2023.

The petition complied with all procedural requirements under the Companies (Winding-Up) Rules 1972, namely --

service on the Respondent, Assistant Official Receiver (Director-General of Insolvency) and Companies Commission of Malaysia (SSM) on 4 July 2025 (affidavit of service in Enc. 4 and affidavit by the solicitor in Enc. 6);

publication of advertisements in the New Straits Times (23 & 25 July 2025), Nanyang Siang Pau (21 & 23 July 2025), and the Government Gazette (25 July 2025) (Memorandum of Advertisement and Gazette in Enc. 4 and Affidavit by the solicitor in Enc. 6);

payment of the statutory deposit of RM 3,000 to the Department of Insolvency on 6 August 2025 (affidavit by the solicitor in Enc. 6);

list of parties attending the hearing of the Petition (none) in Enc. 7; and

issuance of the Registrar’s Certificate on 11 August 2025 (Enc. 9). S/N /vD9uPf/OEa8yw1Zcc5Nvg

The issue before this Court was whether the Petitioner had established that the Respondent was unable to pay its debts within the meaning of subparagraph 465(1)(e) read with subparagraph 466(1)(a) of Act 777, such an inability is deemed when a company neglects to satisfy a statutory demand for a liquidated sum.

Based on the Petitioner's affidavit and cause papers, the Court found that:

the debt of RM 2,000,000.00 was liquidated and undisputed;

the Respondent failed to file any affidavit, appear through counsel to contest the debt, or raise any bona fide dispute; and

the Petitioner had fulfilled all procedural requirements under the Companies (Winding-Up) Rules 1972. In the absence of any evidence to the contrary, the Court accepted the Petitioner’s assertions as unchallenged.

The Court also notes that although DA Land Sdn Bhd (in Liquidation) had filed a Notice of Intention to Appear at the hearing of the petition, no representative attended any of the hearing dates. Notwithstanding their absence, the Notice indicated DA Land’s position as a creditor for RM 8,000,000.00 as at 31 July 2023. Accordingly recognises DA Land is a substantial supporting creditor, thereby reinforcing the inference that the Respondent was commercially insolvent. S/N /vD9uPf/OEa8yw1Zcc5Nvg

In light of the undisputed indebtedness, absence of opposition, and presence of a supporting creditor, the statutory test under subparagraph 465(1)(e) read with section 466 of Act 777 was satisfied. There were no equitable or discretionary grounds to defer or refuse relief.

The Court’s approach accords with the settled authorities in Sri Hartamas DVPT. Sdn. Bhd. V. MBF Finance Bhd. [1992] 1 CLJ 637, Gulf Business Construction (M) Sdn Bhd v. Israq Holding Sdn Bhd [2010] 8 CLJ 775, and SSM Management Sdn Bhd v. Aeon Big (M) Sdn Bhd [2019] 5 CLJ 695 which affirm that once a company neglects to pay a liquidated debt after statutory demand, the presumption of insolvency arises. The onus lies on the company to rebut it with credible evidence. In this case, the Respondent filed no affidavit and produced no proof of solvency. The presumption, therefore, stands unrebutted.

Further, the Court’s exercise of discretion is consistent with the principle affirmed by the Federal Court in Kilo Asset Sdn Bhd v Hew Thai Hong [2016] 1 MLJ 785, that the winding-up jurisdiction should not be applied mechanically or with undue technical rigidity. The Federal Court emphasised that procedural rules must serve the ends of justice and that the Court retains a broad discretion to ensure fairness and prevent substantial injustice.

In this case, there was full procedural compliance, no irregularity or prejudice to any party, and no bona fide dispute of debt. The Respondent’s failure to file any affidavit in opposition, coupled with S/N /vD9uPf/OEa8yw1Zcc5Nvg its invitation to the Court to determine the Petition following the breakdown of settlement discussions, constitutes an admission of the debt and an inability to pay within the meaning of subparagraph 466(1)(a) of Act 777. No exceptional circumstance has been shown to warrant the exercise of discretion against the making of the winding-up order.

The Court therefore properly exercised its discretion in granting the winding-up order.

For the foregoing reasons, Petitioner's Petition in Enc. 1 is allowed. Dated : 1 Oktober 2025 Dr. Noradura binti Hamzah Judicial Commissioner High Court Civil 2 Johor Bahru S/N /vD9uPf/OEa8yw1Zcc5Nvg Peguamcara : Gui Chai Chern Tetuan Ong Ban Chai & Co. Peguamcara : Mexland Sdn. Bhd. Tetuan Lu Hon San & Associate Johor Bahru S/N /vD9uPf/OEa8yw1Zcc5Nvg