Petronas Lubricants Marketing (Malaysia) Sdn Bhd v Rigaz Sdn Bhd (WA-28NCC-1104-10/2023)

Enclosure 1 is a Petition to wind up the Respondent pursuant to section 465(1)(e) read with section 466(1)(a) of the Companies Act 2016 (CA 2016). This petition is premised on the failure by the Respondent to settle a judgment sum after the expiry of 21 days from service of a statutory notice under section 466(1)(a) of the Companies Act 2016 on the Respondent.

The Petitioner obtained a judgment against the Respondent in Suit No. WA-22NCC-549-10/2022 on 13.04.2023 (“the Judgment”). S/N 98ZFqi3ckiJLvFWyy0t0w **Note : Serial number will be used to verify the originality of this document via eFILING portal The Judgment is for the sum of RM 4,400,298.75 together with interest and costs.

Till the date of hearing of this Petition, the Respondent has not filed any appeal against the Judgment.

The Petitioner issued and served a notice pursuant to section 466(1)(a) of the CA 2016 (“Statutory Notice”) on the Respondent on 8.6.2023 demanding payment of the Judgment sum within 21 days of service of the Statutory Notice.

Upon expiry of the 21 days and the failure by the Respondent to pay the Judgment sum, the Petitioner filed this Petition.

It is trite law that a failure by the Respondent to pay the sums demanded under the statutory notice will trigger a rebuttable presumption of indebtedness.

In SSM Management Sdn Bhd v Aeon Big (M) Sdn Bhd [2019] 5 CLJ 695, Harminder Singh (JCA) as he then was, held: “[20] In this regard, it is settled law that once a company has failed to comply with the statutory demand, there is a presumption of insolvency against it. The onus then shifts to the company to show that it is able to pay all its debts at the material time. The test of insolvency, is the test of commercial insolvency or cash flow insolvency in that the company must be able to pay its debts when they fall due and not at some future date.” S/N 98ZFqi3ckiJLvFWyy0t0w **Note : Serial number will be used to verify the originality of this document via eFILING portal

The Respondent oppose the Petition on the following grounds: -

The Respondent has been communicating with the Petitioner and the Respondent possesses full capacity to settle its debt.

The sum of RM 4,541,124.40 set out in the Statutory Demand is not a definite and conclusive sum.

The Respondent purportedly possesses ongoing and potential projects exhibiting the Respondent’s solvency. THE COURT’S FINDINGS [9] (a) With respect to the first ground concerning “ongoing negotiations” I find that is not a valid ground to oppose the Petitioner. Unless the Respondent can prove that a settlement has been achieved, just saying negotiations are ongoing is not a ground to oppose a petition.

On the other issue raised by the Respondent that it has capacity to settle the outstanding debts, again I find this submission is misconceived. The test for making a winding up order under section 465(1)(e) of the Companies Act 2016, is “commercial insolvency”. Since the Petitioner has proven and it is not disputed that the Respondent has failed to pay judgment sum after the expiry of the Statutory Notice, the burden is on the Respondent S/N 98ZFqi3ckiJLvFWyy0t0w to rebut the presumption of commercial insolvency. I find the Respondent has failed to rebut the presumption.

The allegation that the amount claimed in the Statutory Invoice is not a definite and conclusive sum is also not a valid ground to oppose the Petition. I find this averment is also incorrect since the amount due based on the pre and post judgment interest on the principle sum of RM 4,400,298.75 is correctly calculated.

In any event it is settled law that even if the amount claimed in the Statutory Notice is incorrect, it will neither nullify the Statutory Notice nor will it defeat a winding-up petition.

In Malaysia Air Charter Company Sdn Bhd v Petronas Dagangan Sdn Bhd [2000] 4 CLJ 437 the Federal Court held that;

A notice of demand need not specify the exact amount due as at the date of demand.

So long as the sum due exceeds RM 500 (the statutory threshold then) and remained unpaid… there is neglect to pay such sum within the meaning of the section.

With respect to the Respondent’s submissions that there are ongoing projects, this submission does not help the Respondent to rebut the presumption of commercial insolvency of the Respondent.

The Respondent in its submissions made some after averments, such as the Respondent has a purported cross-claim of the RM 3,600,000.00 against the Petitioner. This allegation is not confirmed in any affidavits filed by the Respondent. Thus, I agree with the Petitioner’s submission on this issue. (See the case of Venu Nair & Anor v Public Bank Bhd [2017] 5 MLJ 529 where the Court of Appeal held: “Therefore, although the appellants had now raised the issue in their memorandum of appeal…we could and should not allow it an it had gone beyond the four corners of their affidavits which like pleadings, they were bound to…” [10] Having read and considered the affidavits and submissions filed herein, I find that the Respondent had failed to rebut the presumption of commercial insolvency and failed to raise any bona fide dispute to the Petitioner’s claim on substantial grounds. [11] For the reasons aforesaid, I allow the Petition and make the orders prayed for in the Petition with costs. Dated 2nd April 2025 ………………….t.t………………….. Ahmad Murad Bin Abdul Aziz Judge High Court of Malaya Kuala Lumpur S/N 98ZFqi3ckiJLvFWyy0t0w SOLICITORS FOR THE PETITIONER: MESSRS SHEARN DELAMORE & CO. SOLICITORS FOR THE RESPONDENT: Cases referred to: ➢ SSM Management Sdn Bhd v Aeon Big (M) Sdn Bhd [2019] 5 CLJ 695 ➢ Malaysia Air Charter Company Sdn Bhd v Petronas Dagangan Sdn Bhd [2000] 4 CLJ 437 ➢ Venu Nair & Anor v Public Bank Bhd [2017] 5 MLJ 529 Legislation Referred to: ➢ Companies Act 2016 ➢ Winding Up Rules 1972 Decision Date: 4th July 2024