Nad Segaram and Ow Jeong Jun for the Petitioner [Messrs Shearn Delamore & Co.] v Justin Voon and Lim Shu Ting for the Respondent [Messrs Justin Voon Chooi & Wing (Kuala Lumpur] (WA-28NCC-585-08/2021)

The Petitioner herein has in enclosure 1 hereto applied to this Court to wind up the Respondent Company (Company) via a Winding Up 2 Petition dated 24.8.2021 (Petition) filed pursuant to section 465(1)(e) and 466 (1)(a) and (2) of the Companies Act 2016.

The Petitioner had averred in its Petition that:

2.1 The indebtedness of the Company to your Petitioner is pursuant to a Settlement Agreement made on 22.10.2020 between your Petitioner and the Company (“SA”) wherein the sum of RM7,138,000.00 (“the Outstanding Amount”) is deemed to be owing to your Petitioner as a deduction of an one-off goodwill discount of RM250,000.00 (“the Goodwill Amount”) from the sum of RM7,388,000.00 (“the Total Amount”).

2.2 As of todate, the Company has failed, neglected and/or refused to pay the sum of RM700,000.00, being the payments for the months of February 2021 (in which RM200,000.00 out of the RM300,000.00 has been paid for by the Company) and March 2021.

2.3 The Company made a payment in the sum of RM50,000 to the Petitioner on 19.5/2021.

2.4 On the 30th day of April 2021, the Petitioner through its solicitors Messrs Shearn Delamore & Co., served upon the Company at its registered address at c/o 30-1, Jalan Kuchai Maju 8, Off Jalan Kuchai Lama, 58200 Kuala Lumpur a Statutory Demand issued pursuant to Sections 465(1)(e) and 466(1)(a) of the Companies Act 2016 demanding the Company to settle the Outstanding Amount, or to secure or compound the same to the reasonable satisfaction of the 3 Petitioner within twenty-one (21) days from the date of service of the Statutory Demand at its registered address.

2.5 Over twenty-one (21) days have now lapsed since the Petitioner served the Statutory Demand upon the Company, but to date the Company has failed and neglected to fully pay or satisfy the debt due to the Petitioner or to secure or compound the debt to the reasonable satisfaction of the Petitioner.

2.6 The company is therefore unable to pay its debts.

2.7 In the circumstances it is just and equitable that the company should be wound up.

There is also before this Court, an application by way of Form of Summons in enclosure 7 (Enclosure 7) by the Respondent to strike out the Petition under Order 18 rule 19 (1)(b) or (d) of the Rules of Court 2012 and/or the inherent jurisdiction of the Court.

The Respondent in support of Enclosure 7 and in opposing the Petition had in its Affidavit In Opposition at enclosure 12 as well in its submissions stated inter alia that:

the SA was not signed or executed by the Petitioner and was not stamped

thus the validity and enforceability of the SA is disputed

any part payments made to the Petitioner is still subject to the outstanding and ongoing issues between the parties which caused the SA to be unable to be finalized or completed

there are substantial issue to be tried and disputes in this case

there is no valid affidavit Verifying the Petition 4

At the hearing of the Petition which was fixed for hearing of Enclosure 7 as well, the Court had directed that the parties counsels submit on both matters and the Court will accordingly deliver a decision on Enclosure 7 and the Petition respectively.

There is now an appeal against my decision given on 20.4.2022 allowing the Petition and dismissing Enclosure 7.

I will firstly address the issue of there is no valid Affidavit Verifying the Petition as the words that it is ‘under oath’ is missing. It is my decision and I find no prejudice caused by the said Affidavit Verifying the Petition which cannot be cured by virtue of Rule 197 of the Companies (Winding Up) Rules 1972 (Formal Defect Not to Invalidate Proceedings) and which I therefore hold the said Affidavit Verifying the Petition which was affirmed by the deponent before the Commissioner for Oaths as being valid.

From the facts before this Court, I have found that the Company has made a payment on 19.5.2021 to the Petitioner after the Statutory Demand dated 30.4.2021 was issued amounting to a sum of RM50,000 evidenced in exhibit NSC 5 of enclosure 15 and as averred to in the Petition and which has not been denied by the Company. 5

This Court has further noted that the Petition had also averred that prior to the Statutory Demand, the Company had also made various payments to the Petitioner after the SA was signed for the months of November 2020 to February 2021 which was also not denied by the Company in its Affidavit in Opposition and which is evidenced by the Company’s previous solicitors, Messrs K Nadarajah & Partners letter of 24.8.2021 in exhibit NSC 5 of enclosure 15.

Much ado has been raised by the Company on the issue of the SA as exhibited in the Petition was not dated or signed by the Petitioner. I have since examined the SA dated 22.10.2020 and found as follows:-

10.1 the SA defines “Agreements’ to mean

a Letter of Award dated 21/4/2-14 in respect of Projek:Pakej D-49- Pembinaan Rangkaian Paip Pembentungan Di Kajang 1 dan Kajang 3 (Rkea dan

(ii) Letter of Agreement dated 18.1.2019 pertaining to the payment plan of the full contract sun under the the Letter of Award (Letter of Agreement)

10.2 the recital therein which expressly inter alia states that the Company has defaulted in payments due to the Petitioner under the Agreements and that “The Parties are desirous of entering into this Agreement in order to regulate the payment of the Total Amount” 6

10.3 the SA contains a clause which expressly states that the Company shall pay the amount of RM7,138,000 to the Petitioner “in full and final settlement of all claims and disputes arising from and in connection with the Agreements which the Parties have or may have against each other”

10.4 the term “Total Amount” is stated as RM7,388,000 which is then set off against a one off goodwill discount known as the “Goodwill Amount” of RM250,000 wherein the “Outstanding Amount” then became the sum of RM7,138,000

10.5 the method of payment for the Outstanding Amount was as stated in Annexure A of the SA

From a perusal of the SA exhibited in the Petition, the said SA as it appears therein was not signed by the Petitioner and does not appear to be stamped. However, I note that the Petitioner in its Affidavit In Reply in enclosure 15 that it had averred that it had sent a duly signed and executed SA to the Respondent vide an email dated 9.11.2020 as shown in exhibit NSC-6 of enclosure 15 but in paragraph 6 (i) of enclosure 15, the Petitioner had averred that the SA was not signed but contends that the Company had admitted to the validity of the same and there is no specific denial by the Company as to this.

As to the issue of the stamping of the SA, I hold that I am bound by the Federal Court case of Malayan Banking Bhd V Agencies Service Bureau Sdn Bhd & Ors [1982] 1 MLJ 198 where the Federal Court held: 7 “The purpose of the Stamp Ordinance 1949 is to impose and to collect taxes on legal and commercial documents by compelling these documents to be stamped on pain of being inadmissible. The Ordinance provides that payment of duty can be made before or at the time when documents are executed, and even later except for certain type of documents. The duty must be paid within 30 days of execution or even on a later date when the documents are used provided that an appropriate penalty is paid. Failure to pay the duty or the penalty prevents the use of the instrument. If the use is intended for a judicial proceeding the document is not admissible until the duty or the penalty is paid, unless the document belongs to special categories stated earlier. To ensure that the duty is paid section 51 imposes an obligation on those whose function is to receive evidence including the courts to be specially vigilant to see whether a document produced before them is duly stamped or not. If it appears to be unstamped the authority concerned has no choice but to impound the document and admit the same on payment of the necessary duty or penalty under proviso (a) to section 52(1) and thereafter send the impounded documents to the Collector of Stamp Duty together with the duty or penalty for stamping under section 53. Because a stamp objection really relates to the need of safeguarding Government revenue, the practice in England regarding an unstamped document is that the court will admit such document upon payment of the necessary duty or penalty, if any, unless of course the lack of stamping goes to the root or the validity of the document itself or the case is a revenue dispute (emphasis mine)” 8

From the facts before me, I hold that the non stamping of the SA does not go to the root of or the validity of the SA itself and is only an issue of government revenue as per a similar decision made by Mah Weng Kwai JC (as he then was) in Omega Securties Sdn Bhd V Dato Hamzah bin Abdul Majid (2011) 8 MLJ 12.

I further agree with the Petitioner’s counsel that the SA is an admission of the sums due and owing by the Company when it had signed the SA. The Company’s conduct in acting albeit in part in accordance with the SA but on the other hand vehemently challenging the validity of the SA is in this Court’s view a further admission as to the terms of and the validity of the SA. I therefore hold that act of the Company is therefore not only inconsistent and contradictory but that the Company cannot willy nilly approbate and reprobate its stand on the SA as it pleases. Reference is made to the case of Kelana Megah Development Sdn Bhd v Kerajaan Negeri Johor and Another Appeal [2016] 8 CLJ 804 where the Court of Appeal had held: “21] Reference in this connection may be made to the case of Bato Bagi & Ors v. Kerajaan Negeri Sarawak & Another Appeal [2011] 8 CLJ 766; [2011] 6 MLJ 297. In that case, the Federal Court cited with approval, the English Court of Appeal's decision in Verschures Creameries, Limited v. Hull And Netherlands Steamship Company, Limited [1921] 2 KB 608 wherein Scrutton LJ held: A plaintiff is not permitted to "approbate and reprobate." The phrase is apparently borrowed from the Scotch law, where it is 9 used to express the principle embodied in our doctrine of election - namely, that no party can accept and reject the same instrument: Ker v. Wauchope (1); Douglas-Menzies v. Umphelby (2). The doctrine of election is not however confined to instruments. A person cannot say at one time that a transaction is valid and thereby obtain some advantage, to which he could only be entitled on the footing that it is valid, and then turn round and say it is void for the purpose of securing some other advantage. That is to approbate and reprobate the transaction. (emphasis added) [22] Further, in Cheah Theam Kheng v. City Centre Sdn Bhd (In Liquidation) & Other Appeals [2012] 2 CLJ 16; [2012] 1 MLJ 761, this court cited with approval the English case of Express Newspapers plc v. News (UK) Ltd And Others [1990] 3 AII ER 376 wherein it was stated: In the words of Sir Nicolas Browne-Wilkinson VC in Express Newspapers plc v. News (UK) Ltd and others [1990] 3 AII ER 376, at pp 383-384: There is a principle of law of general application that it is not possible to approbate and reprobate. That means you are not allowed to blow hot and cold in the attitude that you adopt. A man cannot adopt two inconsistent attitudes towards another: he must elect between them and, having elected to adopt one stance, cannot thereafter be permitted to go back and adopt an inconsistent stance. (emphasis added) [23] The decision of this court in Tenaga Nasional Bhd v. Irham Niaga Sdn Bhd & Anor [2011] 1 CLJ 491; [2011] 1 MLJ 752 is also instructive. We reproduce the relevant excerpts below: 10 Estoppel by election is related to the principle that a person may not approbate and reprobate (Lissenden v. CAV Bosch, Limited [1940] AC 412 p 478; [1940] 1 All ER 425 at p 418 at p 429 (HL)). Thus, a person having a choice between two courses of conduct is to be treated as having made an election from which he cannot resile. But the person will not be regarded as having so elected unless he has taken a benefit under or arising out of the course of conduct which he has first pursued and with which his subsequent conduct is inconsistent with his election (Banque des Marchands de Moscou (Koupetschesky) v. Kindersley and another [1951] Ch 112 at pp 119-120; [1950] 2 All ER 549 at p 552 (CA); Ex parte Robertson, In re Morton (1875) LR 20 Eq 733; and Evans v. Bartlam )... If a person is entitled to one of two inconsistent rights, as opposed to having a choice between two alternative remedies (United Australia, Limited v. Barclays Bank, Limited[1941] AC 1 at p 29; [1940] 4 All ER 20 at p 37 (HL)) and, with an open mind and with full knowledge he does an unequivocal act showing that he has chosen one, he cannot afterwards pursue the other (Slough Estates Ltd v. Slough Borough Council and another (No 2)[1969] 2

In coming to my decision herein I have considered the Company’s contention that there were disputes including serious defects and/or delay in relation to the Works done by the Petitioner from the following:

the Company’s letters dated 11.7.2019, 1.8.2019, 20.9.2019 and 22.10.2019 11

(ii) the Petitioners response vide their solicitors dated 7.10.2019

(iii) a Notice of Arbitration dated 13.8.2019 was issued by the Petitioner to the Company

(iv) A payment claim pursuant to the Construction Industry Payment and Adjudication Act 2012 (CIPAA) dated 18.5.2020 was issued by the Petitioner’s solicitors to the Company

It is evident from the above mentioned documents and the chronological events that they were all issues pre the SA, which appears to have led to the culmination and existence of the SA.

Based on the documents before me, the Respondent had issued a letter dated 12.10.2021 to the Petitioner (12.10.2021 Letter), as seen in exhibit NSC -7 of enclosure 15, which was issued only when the Company had a change of solicitors and after the Petition was filed and served, which amongst others challenged the validity of the SA and alleging the Petitioner’s delays in completing the Works as well as claiming that items relating to the Surge Suppression System (NPS 1 to 6) , Flygt Pumpset (NPS 1 to 4) and Mechanical Screen art NPS 1 & 2 were not carried out by the Petitioner under the SA.

It is my finding that these issues were:

never raised in any correspondence between the parties prior to this said 12.10.2021 Letter

(ii) despite these allegations and based on the documents before me, the Company had still made payments to the Petitioner 12 for the months of November 2020 to February 2021 as mentioned above

(iii) there is no evidence of any contemporaneous documents whatsoever before this Court to substantiate the allegations therein more so when these allegations were only raised 12 months after the SSA dated 22.10.2020

I hold that as the Company had alleged these are serious issues / disputes then it would have logically raised these matters much earlier on. In any event, the Petitioner has stated as seen in the respective email correspondences found at exhibit 5 of enclosure 12 where inter alia a) the Petitioner had responded to the issues regarding NPS 1 – NPS 6 which were responded to on the same day at 2.45 p.m b) the VFD for Pump No.3 NPS 1 had been rectified by the Petitioner a week before the Company raised the issue vide an email dated 17.6.2021 to the Petitioner

In coming to this Court’s decision, I have not taken into account the respective letters dated 19.5.2021 and 24.9.2021 which are marked ‘without prejudice’ which can be found in exhibit NSC 5 of enclosure 15 and authority for this can be found in the Federal Court case of Malayan Banking Bhd v Foo See Moi [1981] 2 MLJ 17 which was also adopted by this Court in Ji Long Hardware Machinery Sdn Bhd v Jake Engineering Sdn Bhd [2021] 1 LNS 762 where this Court held: “[24] As to the law on 'without prejudice' communications. This is encapsulated by the Federal Court in Malayan Banking v. Foo 13 See Moi [1981] 1 LNS 95; [1981] 2 MLJ 17 where the Court held as follows: "It is settled law that letters written without prejudice are inadmissible in evidence of the negotiations attempted. This is in order not to fetter but to enlarge the scope of the negotiations, so that a solution acceptable to both sides can be more easily reached. But it is also settled law that where the negotiations conducted without prejudice lead to a settlement, then the letters become admissible in evidence of the terms of the agreement, unless of course the agreement has become incorporated in another document which would then be the evidence of the agreement." [25] This Court will therefore not place any weight on the said letter dated 30.4.2019 with respect to this Petition on the grounds that it is outside the scope of the Petition and that it was made on a 'without prejudice' basis”

After a careful consideration of all the aforementioned facts and issues, I hold that there is no bona fide credible or substantial dispute in the matter before me and I therefore find there is no prima facie case to justify the Company’s Striking Out Application in Enclosure 7 of which I hold is without merit and baseless.

I further hold that the Company has been found to be unable to pay its debts after the Statutory Demand was issue against it and that it has failed to prove to this Court that it is solvent.

In the circumstances I had dismissed Enclosure 7 with costs and granted Order in Terms of the Petition in Enclosure 1. 14 Dated: 4th day of July 2022 sgd. NADZARIN WOK NORDIN HIGH COURT JUDGE KUALA LUMPUR HIGH COURT Parties: Nad Segaram and Ow Jeong Jun for the Petitioner [Messrs Shearn Delamore & Co.] Justin Voon and Lim Shu Ting for the Respondent [Messrs Justin Voon Chooi & Wing (Kuala Lumpur]