Hong Xin Construction Sdn. Bhd. v Seng Hiap Glass Sdn. Bhd. (JA-24NCC-11-06/2022)

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SIOW FOOK LAI (berniaga sebagai peniaga tunggal atas nama perniagaan yang digelar FL OIL TRADING) …PENCELAH-PENCELAH YANG DICADANGKAN GROUNDS OF JUDGMENT [Enclosures 22, 35, 51, 101, 102 & 103] Introduction [1] These are 6 applications filed by 12 proposed interveners as follows:

in Enclosure 22, the application was filed by Seng Hiap Glass Sdn Bhd (“Proposed Intervener 1”) for leave to intervene in this action and to set aside the ex-parte order dated 15.6.2022 which allowed Hong Xin Construction Sdn. Bhd (“Hong Xin”)

in Enclosure 35, the application was filed by Menang Engineering Sdn Bhd (“Proposed Intervener 2”) and 8 other parties (Procurement & Contract Sdn Bhd (“Proposed Intervener 3”), Rebana Maju Sdn Bhd (“Proposed Intervener 4”), Magna Core Engineering Sdn Bhd (“Proposed Intervener 5”), Choon Lai Plumbing Works Sdn Bhd (“Proposed Intervener 6”), Perniagaan Anjung Kini Sdn Bhd (“Proposed Intervener 7”), Master Pools Sdn Bhd (“Proposed Intervener 8”), Yicon Bina Sdn Bhd (“Proposed Intervener 9”) and YK Aluminium Enterprise (“Proposed Intervener 10”) for the same reliefs sought by Seng Hiap Glass in Enclosure 22. For ease of reference, the Proposed Interveners 2 to 10 are referred to as “Proposed Interveners 2 to 10”;

in Enclosure 51, the application was filed by Kejuruteraan Asatera Sdn Bhd (“Proposed Intervener 11”), also for the same reliefs sought by Seng Hiap Glass in Enclosure 22; and

in Enclosures 101, 102 and 103, these 3 applications were filed by Siow Fook Lai (“Proposed Intervener 12”) seeking for the ex-parte order dated 15.6.2022 be set aside and for the stay of the execution of order dated 12.9.2022. [2] As a brief background of facts, on 2.6.2022 Hong Xin filed an ex-parte application in this court seeking for a few reliefs inter alia that Hong S/N D7h0XxGQ5kyy2a6Do8tdA Xin be allowed pursuant to s. 366 of the CA to summon a creditors' meeting for the purpose of considering a proposed scheme of compromise and arrangement between Hong Xin and its scheme creditors, the particulars of which were set out in the draft proposed scheme exhibited in the affidavit of Low Hui Ying filed together with the application. [3] Subsequently, on 15.6.2022, this Court granted the ex-parte application which, amongst others, allowing Hong Xin to commence a scheme meeting to consider and approve the proposed scheme of compromise and arrangement within 90 days from the date of the order. In addition, this Court had also granted a restraining order pursuant to s. 368 of the CA as sought in the application (“Restraining Order”). [4] On 12.8.2022, the Proposed Intervener 1 (Seng Hiap Glass) filed an application in Enclosure 22 to intervene in this suit under O. 15 r. 6(2) of the Rules of Court 2012 (“ROC”) and/ or s. 368 of the CA and/ or O. 92 r. 4 of the ROC and to set aside the ex-parte order dated 15.6.2022. On 26.2.2023, I allowed the Proposed Intervener 1 to intervene in this suit but I adjourned the decision on other reliefs in the Enclosure. [5] On 15.8.2022, a meeting to discuss a proposed scheme of compromise and arrangement was convened at Grand Paragon Hotel, Johor Bahru and attended by 82.8% of the total value of creditors. During the meeting, the proposed scheme of compromise and arrangement was approved by 75% out of 82% of the creditors attended present and voting. S/N D7h0XxGQ5kyy2a6Do8tdA [6] On the same day, the Proposed Interveners 2 to 10 filed an application in Enclosure 35 which the reliefs in the application are similar to what were sought by the Proposed Intervener 1 in Enclosure 22. [7] Not long after, on 22.8.2022, the Proposed Intervener 11 filed a similar application in Enclosure 51. [8] Back to the proposed scheme of compromise and arrangement which was approved during the scheme meeting, on 29.8.2022, Hong Xin filed an application under s. 366(3) of the CA in Enclosure 57 seeking for the court’s approval of the scheme of compromise and arrangement. [9] On 12.9.2022, this court, after having satisfied that the class of creditors was fairly represented during the scheme meeting and the proposed scheme of compromise and arrangement was approved by more than 75% of the total value of creditors, allowed the proposed scheme of compromise and arrangement (“execution order dated 12.9.2022”). [10] On 13.10.2022, the Proposed Intervener 12 filed 3 applications in Enclosures 101, 102 and 103 seeking inter alia that the ex-parte order dated 15.6.2022 be set aside and the execution order dated 12.9.2022 be stayed until the disposal of application to set aside the ex-parte order dated 15.6.2022. Enclosure 22 - Application by the Proposed Intervener 1 Application to intervene [11] To begin with, let me deal with the application filed by the Proposed Intervener 1 in Enclosure 22 seeking for leave to intervene in this action. S/N D7h0XxGQ5kyy2a6Do8tdA [12] It is trite that the law on adding a party to an action is governed by O. 15 r. 6(2) of the ROC. The provision reads –

Subject to this rule, at any stage of the proceedings in any cause or matter, the Court may on such terms as it thinks just and either of its own motion or on application —

order any person who has been improperly or unnecessarily made a party or who has for any reason ceased to be a proper or necessary party, to cease to be a party;

order any of the following persons to be added as a party, namely —

any person who ought to have been joined as a party or whose presence before the Court is necessary to ensure that all matters in dispute in the cause or matter may be effectually and completely determined and adjudicated upon; or

(ii) any person between whom and any party to the cause or matter there may exist a question or issue arising out of or relating to or connected with any relief or remedy claimed in the cause or matter which, in the opinion of the Court, would be just and convenient to determine as between him and that party as well as between the parties to the cause or matter. [13] In Pegang Mining Company Ltd v. Choong Sam & Ors [1968] 1 LNS 96; [1969] 2 MLJ 52, the Privy Council held that a proposed intervener S/N D7h0XxGQ5kyy2a6Do8tdA must show to the court that he has some interest which is directly related to the subject matter of the action and that his interest (rights or liability) will be directly affected by any order of the court. [14] Back to the Proposed Intervener 1’s application to intervene, as a backdrop, by a letter of award dated 1.5.2015, Hong Xin had appointed the Proposed Intervener 1 as its subcontractor for aluminium works in a project known as “Cadangan Pembangunan Penggunaan Bercampur di PTD 216427 HSD 520197 Mukim Plentong, Johor Bahru comprising of 1 block of podium and 3 blocks of apartment for Adawan Development Sdn Bhd (“Adawan Project”)”. [15] On 14.10.2019, the Proposed Intervener 1 vide Suit No. JA-22NCC- 60-10/2019 filed a writ and statement of claim at the Johor Bahru High Court against Hong Xin for the non-payment of the works done by the former for the Adawan Project. [16] When the case came up for trial on 20.4.2021, both parties agreed to enter a consent judgment on the following terms, inter alia:

Hong Xin shall pay to the Proposed Intervener 1 a sum of RM2,000,000.00 on or before 31.10.2020 which the amount was already paid;

Hong Xin shall instruct Adawan Development Sdn Bhd (“Adawan Development”) to assign to the Proposed Intervener 1 the properties in the Adawan Project equivalent to RM2,000,000.00; and

Hong Xin shall identify the properties which are subject in the consent judgment and procure the consent of Adawan Development to assign the properties to the Proposed

[17] Following to the consent judgment, by a notice in writing to Adawan Development, Hong Xin assigned the said chose in action to the Proposed Intervener 1 and Adawan Development had confirmed the assignment., [18] Based on the above facts, I agree with the Proposed Intervener 1 that the company has some interest which is directly related to the proposed scheme of compromise and arrangement and that interest has been directly affected by any order of the court. As such, I allow the Proposed Intervener 1 to intervene in this action. Application to set aside the ex-parte order dated 15.6.2022

Whether the application is no longer relevant [19] Learned counsel for Hong Xin in objecting the Proposed Intervener 1’s application argued that the ex-parte order dated 15.6.2022 had lapsed at the time of the hearing of this application. As such, he submitted that the issue is a matter of academic and no longer relevant. [20] With respect, I find that such argument is untenable. The fact that the ex-parte order dated 15.6.2022 had lapsed per se does not prevent this court from dealing with the order. In this respect, I can do no better than to quote the view of Abdul Hamid Mohamad JCA (as he then was) in RIH Services (M) Sdn Bhd v. Tanjung Tuan Hotel Sdn Bhd [2002] 3 CLJ 83, where it was stated in the following passage: S/N D7h0XxGQ5kyy2a6Do8tdA However, if the defendant wants to set aside the ex parte order, the defendant is at liberty to file an application for that purpose. It is at the hearing of that application that the court should decide whether to set it aside or not, if it has not lapsed. If in the meantime the ex parte order has lapsed, the court should nevertheless hear the application, not for the purpose of setting it aside or not, because it has lapsed, but for the purpose of determining whether that ex parte order should or should not have been made in the first place. This is necessary in order to determine whether damages should be awarded or not. [21] In view of the foregoing, although the ex-parte order dated 15.6.2022 had lapsed, I find that the application to set aside the ex-parte order is still relevant as it would allow the court to determine whether the ex-parte order dated 15.6.2022 should have been granted or otherwise at the first place.

(ii) Whether the ex-parte order dated 15.6.2022 violates s. 368(6)(b) of the CA as it restrains the guarantor of Hong Xin [22] Back to the application, learned counsel for the Proposed Intervener 1 submitted that the ex-parte order dated 15.6.2022 must be set aside as it violates s. 368(6)(b) of the CA due to the reason it restrains among others the guarantor of Hong Xin. [23] According to the Proposed Intervener 1, the ex-parte order dated 15.6.2022 not only allowed Hong Xin to summon a creditors' meeting for the purpose of considering the proposed scheme of compromise and arrangement but at the same time, it restrained any person including a guarantor from taking any action or proceedings against Hong Xin. This, as submitted by the Proposed Intervener 1, contravenes s. 368(6)(b) of the CA. S/N D7h0XxGQ5kyy2a6Do8tdA [24] On this point, it is a general principle that once the court has allowed a company to undergo a restructuring exercise through a scheme of arrangement pursuant to s. 366(1) of the CA, all creditors and third parties are restrained from further proceedings in any action or proceedings against the company except by leave of the court. However, the legal immunity given to the company does not affect any guarantor of the company. S. 368(6) of the CA reads –

An order made by the Court under subsection (1) shall not have the effect of restraining —

further proceedings in any action or proceeding that should be taken against the company by the Registrar or the

further proceedings in any action or proceeding against any person including the guarantor of the company but does not include the company that had applied for the restraining order. [25] It is no doubt that the provisions regarding the restraining order provided by the CA are mandatory and any non-compliance of them may render the order irregular and liable to be set aside. This is fortified by the Federal Court case of Mansion Properties Sdn Bhd v. Sham Chin Yen & Ors [2021] 1 CLJ 609; [2021] 1 MLJ 527, where it was held that – Specific Statutory Requirements In Section 368(2) To (7) Of The Companies Act [50] This view is further fortified when the matter is considered in the light of other sub-sections in s. 368 of the CA. Section 368(2) to (7) of the CA imposes S/N D7h0XxGQ5kyy2a6Do8tdA a number of specific statutory safeguards in respect of restraining orders under s. 368(1). Among others, these include:

the pre-conditions for the court to grant a restraining order to a company under s. 368(1) of the CA. The court must be satisfied that there is a proposal for a scheme of arrangement, that the restraining order is necessary to enable the company and its creditors to formalise the scheme for approval, that a statement of particulars as to the affairs of the company is lodged together with the application, and that the court approves or appoints a person nominated by the majority of creditors to act as director (s. 368(2) );

(ii) the person approved or appointed by the court has the right of access to all of the company's records, and is entitled to require any information from the company as required (s. 368(3) );

(iii) unless the court otherwise orders, any disposition or acquisition of company property, other than in the ordinary course of business, made after the grant of the restraining order is void. Such an act constitutes an offence (ss. 386(4) - (7)); and

(iv) where a restraining order is granted, the company shall lodge a copy thereof with the Registrar and publish a notice of the order in a widely circulated newspaper (s. 386(5)). [51] These statutory requirements are mandatory and any non-compliance may render the restraining order liable to be set aside for irregularity (see: Pelangi Airways Sdn Bhd v. Mayban Trustees Bhd (supra)). [26] In light of the above, it is axiomatic that the ex-parte order dated 15.6.2022 contravenes the statutory provision in s. 368(6)(b) of the CA and must be set aside. S/N D7h0XxGQ5kyy2a6Do8tdA

(iii) Whether the proposed scheme of compromise and arrangement lacks bona fide and lacks of full and frank disclosure by Hong Xin [27] Another point raised by the Proposed Intervener 1 is the proposed scheme of compromise and arrangement lacks bona fide and lacks of full and frank disclosure by Hong Xin. This is due to the reason that Hong Xin did not disclose the true facts in Hong Xin’s application for the scheme meeting regarding the nomination of Lee Kok Chew as the director. The Proposed Intervener 1 submitted that Hong Xin’ nomination of Lee Kok Chew as the director of Hong Xin had not been consented by the majority of the scheme creditors despite Hong Xin averred that the scheme creditors representing 59.17% of the total scheme liabilities had given the consent. [28] Upon perusal the cause papers, I find that the Proposed Intervener 1 has established that Hong Xin’s averment on the nomination of Lee Kok Chew is proven untrue. In fact, there were no consent letters from contingent creditors as averred by Hong Xin. Further, if all liabilities are calculated, the scheme creditors who gave consent are only 46.64%. Hence, I agree the Proposed Intervener 1 that the proposed scheme of compromise and arrangement lacks bona fide and lacks of full and frank disclosure by Hong Xin. [29] On this note, it is trite that any party applying for an ex-parte application must disclose all material facts by way of affidavit which could or would be taken into account by the judge in deciding whether to grant or not to grant the application. In Castle Inn Sdn Bhd v. Bumiputra-Commerce Bhd Bank [2009] 2 CLJ 445, Low Hop Bing JCA when delivering decision of the court held that – S/N D7h0XxGQ5kyy2a6Do8tdA It is an established general rule of law that when a party makes an ex parte application to the court of any kind, he must make a full and frank disclosure of all relevant matters. This general rule applies in particular to an ex parte application for extension of the validity of a writ; and an extension can be refused on this ground alone." [30] The principles with regard to the duty of disclosure in an ex parte application have been expounded in a plethora of cases including Creative Furnishing Sdn Bhd v. Wong Koi [1989] 1 CLJ Rep 22; [1989] 2 MLJ 153, Kosma Palm Oil Mill Sdn Bhd & Ors v. Koperasi Serbausaha Makmur Bhd [2004] 1 CLJ 239; [2004] 1 MLJ 316, Motor Sports International Ltd & Ors v. Delcont (M) Sdn Bhd [1996] 3 CLJ 483, Arthur Anderson & Co v. Interfood Sdn Bhd [2005] 2 CLJ 889; [2005] 6 MLJ 239 and, PECD Bhd & Anor v. Amtrustee Bhd & Other Appeals [2010] 1 CLJ 940, where it has been established that it is incumbent on the applicant to make frank and full disclosures of all material facts, and that failure to do so at the crucial time of making the ex parte application would invariably be fatal. [31] In the upshot, I find that the failure of Hong Xin to disclose the full and frank of the material facts would render the ex-parte order dated 15.6.2022 invalid and thus I allow the ex-parte order dated 15.6.2022 be set aside with costs. Enclosure 35 - Application by the Proposed Interveners 2 to 10 Application to intervene [32] In this application, the Proposed Interveners 2 to 10 sought for leave to intervene in this action based on the reason that they are creditors to Hong Xin and as such they are entitled to intervene to ensure that all S/N D7h0XxGQ5kyy2a6Do8tdA matters in dispute in this suit would be effectually and completely determined and adjudicated upon. [33] As a brief backdrop, 7 of the Proposed Interveners 2 to 10 namely Menang Engineering, Magna Core Engineering, Choon Lai Plumbing Works, Perniagaan Anjung Kini, Master Pools, Yicon Bina and YK Aluminium are the nominated subcontractors appointed by Hong Xin in a project known as “Cadangan Pendirian Bangunan Komersial 20 Tingkat dan 1 Tingkat Separa Bawah Yang Mengandungi (A) 25 Unit Kedai Di Tingkat Bawah (B) 50 Unit Pejabat Di Tingkat 1 Dan 2 (C) Ruang Konvensyen Di Tingkat 6 (D) 111 Bilik Hotel Bajet (Jenis A, A1, B Dan C) Di Tingkat 6, 7 Dan 8 (E) 8 Tingkat Tempat Letak Kereta Di Tingkat Podium (F) 13 Tingkat 305 Unit Pangsapuri Perkhidmatan Di Podium Hingga Tingkat 19 Di Atas Lot 1259, Mukim Rawang Daerah Gombak, Selangor” (“Rawang Project”). [34] Due to the non-payment of the works done and services rendered by the above parties, their claims against Hong Xin are as follows: Name of parties Amount claimed against Hong Xin 1. Menang Engineering RM1,100,191.65

Magna Core Engineering

Choon Lai Plumbing Works

Perniagaan Anjung Kini

Master Pools

Yicon Bina

YK Aluminium RM328,925.67 S/N D7h0XxGQ5kyy2a6Do8tdA [35] Another proposed intervener i.e Procurement & Contracts (the Proposed Intervener 3) is a contractor appointed by Hong Xin for the Rawang Project. On 31.5.2022, the Proposed Intervener 3 via its solicitors sent a notice of demand to Hong Xin claiming for the payment of outstanding debt of RM624,963.90 being the tiles and sanitary wares supplied by the former. [36] For Rebana Maju (the Proposed Intervener 4), this company is the owner of the Rawang Project and had appointed Hong Xin as the main contractor for the Project. Hong Xin had sent two letters of termination of contract to the Proposed Intervener 4 on 20.4.2022 and 10.5.2022. However, the Proposed Intervener 4 averred that the termination was pre-mature and wrongful and subsequently on 1.6.2022, the Proposed Intervener 4 sent to Hong Xin a notice to refer the matter to arbitration and thus claimed for a sum of RM6,218,958.88 from Hong Xin. [37] Based on the above facts, it is no doubt that the Proposed Interveners 2 to 10 are unsecured creditors of Hong Xin and this fact was even admitted by Hong Xin. Thus, I find that the admission by Hong Xin has strengthen the fact that the Proposed Interveners 2 to 10 have some interest which is directly related to the proposed scheme of compromise and arrangement. In Zulpadli Mohammad & Ors v. Bank Pertanian Malaysia Bhd [2011] 1 LNS 1853 the Court of Appeal held that – [20] The foregoing in law amounts to judicial admissions which had been made by the respondent. In this regard, we are in agreement with the decision in the case of Hu Chang Pee v Tan Sri Datuk Paduka (Dr) Ting Pek Khiing [1999] 3 MLJ 402 (subsequently affirmed by the Court of Appeal in Tan Sri Datuk Paduka (Dr) Ting Pek Khiing v Hu Chang Pee (also known as Hii Chang Pee) [2011] 6 MLJ 193; [2010] 1 LNS 1269) as follows:

The plaintiff in entitled to rely on the defendant's affidavit filed in Suit No 22–18–96 as the basis in the present suit. What was stated by the defendant in his affidavit dated 3 December 1996 was actually an admission by him. Admission in pleadings is judicial admission and can be made the foundation of rights. Admission are admissible against the party making them. [38] Hence undeniably being the creditors to Hong Xin, the Proposed Interveners 2 to 10 have some interest which is directly related to the subject matter of this action and that interest is directly affected by any order of the court. In the Federal Court case of Mansion Properties Sdn Bhd (supra) it was held that – [48] Further, where an ex parte order is granted under s. 368 of the CA, the affected creditors have the right to intervene in the proceedings and apply to set aside the order. This has been the general practice (see: PECD Bhd & Anor v. AmTrustee Bhd (supra); Sri Hartamas Development Sdn Bhd v. MBF Finance Bhd (supra)) and was indeed the practice adopted in the present appeal. It is undisputed that, having obtained the first order by way of an ex parte application, the appellant subsequently served the first order on the respondents. The respondents successfully applied to intervene in the first OS proceedings, and were given an opportunity to make representations in respect of their application to set aside the first order. In these circumstances, no prejudice or breach of natural justice could be said to have been occasioned to the respondents, by reason of the ex parte nature of the application or the omission to serve the application on the respondents before the hearing. [39] In light of the above, I have no doubt that the Proposed Interveners 2 to 10 have right to intervene in this action. S/N D7h0XxGQ5kyy2a6Do8tdA Application to set aside the ex-parte order dated 15.6.2022 [40] In this application, the Proposed Interveners 2 to 10 mounted the similar grounds which raised by the Proposed Intervener 1 namely:

the ex-parte order dated 15.6.2022 contravenes s. 368(6)(b) of the CA as it restrains the guarantor of Hong Xin; and

the ex-parte order dated 15.6.2022 contravenes s. 368(2)(d) of the CA as Hong Xin’s nomination of Lee Kok Chiew as its director was not consented by the majority of Hong Xin’s creditors. [41] As I mentioned it earlier, the above reasons were raised by the Proposed Intervener 1 and I have already discussed in my judgment. I do not intend to be repetitive in my judgment. Suffice to say that I agree that the ex-parte order dated 15.6.2022 violates s. 368(6)(b) of the CA as it restrains the guarantor of Hong Xin and s. 368(2)(d) of the CA as Hong Xin’s nomination of Lee Kok Chiew as its director was not consented by the majority of Hong Xin creditors. Enclosure 51 – Application by the Proposed Intervener 11 Application to intervene [42] In this application, Kejuruteraan Asastera (the Proposed Intervener 11) sought for leave to intervene in this action based on the reason that the company is one of Hong Xin’s creditors and as such it is entitled to intervene in this action. S/N D7h0XxGQ5kyy2a6Do8tdA [43] As a brief background, by a letter of award dated 31.12.2018, Hong Xin had appointed the Proposed Intervener 11 as its nominated subcontractor for electrical works in the Rawang Project. [44] Since November 2021 until January 2022, the Proposed Intervener 11 had sent various letters to Hong Xin demanding the outstanding payments of the works done by the former for the Rawang Project. On 17.6.2022, the Proposed Intervener 11 submitted its final claim of RM1,313,372.58 to Hong Xin. In reply to that, Hong Xin via its letter dated 28.6.2022, informed the Proposed Intervener No. 11 that the former would include all nominated subcontractors’ final claims (including the latter’s claims) in its claims to the Proposed Intervener 4 who is the owner of the Rawang Project. [45] Based on the above facts, it is no doubt that the Proposed Intervener 11 is a creditor of Hong Xin. Being a creditor of Hong Xin, it is clear that the Proposed Intervener 11’s interest is directly affected by any order of the court. Therefore, I allow the Proposed Intervener 11’s application to intervene in this action. Application to set aside the ex-parte order dated 15.6.2022 [46] The Proposed Intervener 11’s grounds to set aside the ex-parte order dated 15.6.2022 are similar to what were averred by the Proposed Intervener 1 and the Proposed Interveners 2 to 10. As I have decided this issue before, I accept the grounds and agree that the ex-parte order dated 15.6.2022 must be set aside. Enclosures 101, 102 and 103 - Applications by Siow Fook Lai Application to set aside the ex-parte order dated 15.6.2022 S/N D7h0XxGQ5kyy2a6Do8tdA [47] In Enclosures 101, 102 and 103, these 3 applications were filed by Siow Fook Lai (the Proposed Intervener 12) for the ex-parte order dated 15.6.2022 be set aside. The reasons for the application are similar to what have been submitted by the Proposed Intervener 1, the Proposed Interveners Nos. 2 to 10 as well as the Proposed Intervener 11. Again, I agree that the ex-parte order dated 15.6.2022 must be set aside. Application for the stay of the execution of order dated 12.9.2022 [48] As a brief backdrop, the Proposed Intervener 12 had filed a writ and statement of claim against Hong Xin at the Johor Bahru Magistrate Court on 26.4.2022 via Suit No. JA-A72NCVC-431-06/2022 seeking for the payment of an outstanding sum of RM79,146.00. The memorandum of appearance was filed by Hong Xin on 20.5.2022. On 7.6.2022, counsel for the Proposed Intervener 12 received a call from counsel for Hong Xin requesting the latter be given an extension of time to file the statement of defence until 22.6.2022. [49] The Proposed Intervener 12 averred that at that particular time, the company was not informed by Hong Xin that the latter had filed an ex-parte application for the scheme of arrangement meeting at the high court. the Proposed Intervener 12 was only aware about this matter when the company was served with the ex-parte order dated 15.6.2022. [50] The Proposed Intervener 12 contended that Hong Xin failed to alert or draw the High Court’s attention during the hearing of Hong Xin’s ex-parte application regarding the status of on-going suit at the Magistrate Court. The Proposed Intervener 12 also submitted that the filing of the ex-S/N D7h0XxGQ5kyy2a6Do8tdA parte application by Hong Xin was a mala fide as to evade the payment of its debt to the former. [51] On this issue, it is an established principle that an applicant for any ex-parte application is duty bound to draw the court's attention to the material evidence or issues that may affect the court's consideration of the ex-parte application (see Bakmawar Sdn Bhd v. Malayan Banking Berhad [1991] 2 CLJ Rep 323;[1992] 1 MLJ 67). In the Court of Appeal case of Kosma Palm Oil Mill Sdn Bhd & Ors (supra), the Court held that (para 33 at page 328): - "It is trite law that in any ex parte application it is essential that there must be frank and fair disclosure of all relevant materials including points that may be unfavourable to an applicant” [52] I agree with learned counsel for the Proposed Intervener 12 that Hong Xin should have alerted this court of the on-going action in the magistrate court during the hearing of the ex-parte application. As adumbrated earlier the ex-parte application not only sought for an application to summon a creditors' meeting for the purpose of considering a proposed scheme of compromise and arrangement but also a restraining order against all legal suits involving Hong Xin. [53] Another issue raised by the Proposed Intervener 12 is on the classification of Low Hui Ying, Low Kok Yew and Gwee Hong Kiow who are guarantors of Hong Xin as contingent creditors. I have dealt with this issue before and it is unnecessary for me to repeat my reasons for agreeing with the averment that those individuals were wrongly classified by Hong Xin. S/N D7h0XxGQ5kyy2a6Do8tdA Conclusion [54] In the upshot, based on the aforesaid reasons, I allow all the Proposed Interveners’ applications with costs. [55] Flowing from this decision, the order dated 12.9.2022 which allowed the proposed scheme of compromise and arrangement is also set aside. Dated: 13.1.2024 -SIGNED- (SHAMSULBAHRI BIN HAJI IBRAHIM) Judge, High Court of Malaya, Johor Bahru Counsels: For the Applicant - Gan Khong Aik (together with Gwee Xi Wen); Messrs. Gan Partnership For the Proposed Intervener 1 – Theng Kai Chi; Messrs. Sodhi Chambers For the Proposed Interveners 2 to 10 - Eng Yi Wang; Messrs Armiy Rais For the Proposed Intervener 11 – Vitwat Sae Ng (together with Ng Chia How); Messrs. Vitwat Wong & Lim For the Proposed Intervener 12 – Rhubinii a/p Nantaraja; Messrs. Rhubinii Nantaraja & Co. Cases referred to:  Arthur Anderson & Co v. Interfood Sdn Bhd [2005] 2 CLJ 889; [2005] 6 MLJ 239  Bakmawar Sdn Bhd v. Malayan Banking Berhad [1991] 2 CLJ Rep 323;[1992] 1 MLJ 67 S/N D7h0XxGQ5kyy2a6Do8tdA  Castle Inn Sdn Bhd v. Bumiputra-Commerce Bhd Bank [2009] 2 CLJ 445,  Creative Furnishing Sdn Bhd v. Wong Koi [1989] 1 CLJ Rep 22; [1989] 2 MLJ 153,  Kosma Palm Oil Mill Sdn Bhd & Ors v. Koperasi Serbausaha Makmur Bhd [2004] 1 CLJ 239; [2004] 1 MLJ 316  Mansion Properties Sdn Bhd v. Sham Chin Yen & Ors [2021] 1 CLJ 609; [2021] 1 MLJ 527  Motor Sports International Ltd & Ors v. Delcont (M) Sdn Bhd [1996] 3 CLJ 483,  PECD Bhd & Anor v. Amtrustee Bhd & Other Appeals [2010] 1 CLJ 940  Pegang Mining Company Ltd v. Choong Sam & Ors [1968] 1 LNS 96; [1969] 2 MLJ 52  RIH Services (M) Sdn Bhd v. Tanjung Tuan Hotel Sdn Bhd [2002] 3 CLJ 83  Zulpadli Mohammad & Ors v. Bank Pertanian Malaysia Bhd [2011] 1 LNS 1853 Legislations referred to:  Companies Act 2016 – s. 368(6)  Rules of Court 2012 - O. 15 r. 6(2)