Samsung C&T (Kl) Sdn. Bhd. v M & M Construction Sdn. Bhd. (WA-28PW-758-12/2025)

These Grounds concern a Notice of Appeal to the Court of Appeal in Encl 6 dated 6.2.2025 against my decision on 27.1.2026 dismissing Encl 1 with no order as to costs.

Encl 1 was an application for leave pursuant to s. 471(1) of the Companies Act 2016 (“CA 2016”) to proceed with Kuala Lumpur Sessions Court Civil Suit No.: WA-A52NCVC-758- 09/2025 ("Suit 758") filed by the Applicant against M & M Construction Sdn. Bhd ("Company") and/or any other action relating or arising from the Suit 758 or any appeal thereof against the Company.

All references to sections in these Grounds are with reference to sections in CA 2016.

In September 2025, the Applicant vide Suit 758 commenced proceedings against the Company for sums allegedly outstanding to the Applicant under the Settlement Agreement entered into pursuant to the termination of a construction contract. The Applicant sought, amongst others: a. an order that the Company pay the Applicant RM268,000.00; b. an order that the Company pay the Applicant the sum of RM12,764.45; and c. an order that the Company pay the Applicant interest at the rate of 7.4% per annum on RM268,000.00 from 8 September 2025 until the date of realisation.

From the Written Submissions of the Applicant, it appears that the Applicant’s claim under Suit 758 is that the Settlement Agreement was entered into between the Applicant and the Company, and that the parties agreed to a full and final settlement of all claims arising out of a construction contract and/or its termination.

6.

The Applicant complains that the Company had never disputed or denied its obligation to pay the settlement sum under the Settlement Agreement until the filing of its Defence in Suit 758. And hence, the Applicant filed Encl 1 to proceed with Suit 758.

I had the opportunity to consider s. 471(1) in Tan Aik Ling v CT World Construction Sdn Bhd and another suit [2024] MLJU

I summarised the pertinent principles behind s. 471(1) thus: “[44] The underlying and undeniable rationale of section 471(1) (previously, section 223 of the Companies Act, 1965) is as stated in Mosbert Berhad (in liq.) v. Stella D’Çruz [1985] 2 MLJ 446, where the Supreme Court held: “… it cannot be disputed that the primary object of winding up is the collection and distribution of the assets of the company pari passu amongst unsecured creditors after payment of preferential debts. And the purpose of the statutory provision is to ensure that all claims against the company in liquidation which can be determined by cheap and summary procedure available in a winding up are not made the subject of expensive litigation. The provision is designed to prevent unnecessary multiplicity of suits which may result in dissipating the assets of the company.” [45] ... [46] The principles as to when leave will actually be granted were considered in detail in Mesuntung Property Sdn Bhd v Kimlin Housing Development Sdn Bhd [2014] 4 MLJ 886. The Court of Appeal, after reviewing a host of authorities, held: “From the above authorities, the appellant has the burden of satisfying the court of two criteria:

the appellant’s claim cannot be adequately dealt with by the winding up court; and

the appellant has a prima facie case against the respondent.”

It is worth emphasising that the entire purpose of the stay and leave provisions is to first allow the liquidator to assess monetary claims against the company in liquidation quickly and cheaply rather than engage in curial proceedings which may be long drawn out and expensive and thus depleting assets of the company otherwise available to the creditors.

In this case, the claims appear to be straightforward claims under Settlement Agreement. Ex facie, in my judgment, the Official Receiver as the Liquidator of the Company would be able to assess these claims within the Proof of Debt process. The issue of whether the Company knew of the Settlement Agreement could be decided on the conduct of the parties, such as the part payment by the Company of sums pursuant to the Settlement Agreement. That is for the Liquidator and nothing stated here is to be taken as pre-empting the liquidator’s decision or assessment.

With respect, I see little justification in granting leave to the Applicant to continue with Suit 758 and thus racking up legal costs that will deplete the assets of the Company to the detriment of the creditors.

I note that at the hearing of Encl 1 on 27.1.2026 and on my enquiry, the OR as Liquidator of the Company, agreed that the Applicant’s claim should be dealt with within the Proof of Debt process. As such, I dismissed Encl 1 with no order as to costs. Dated the 27th day of March 2026 ........................tt............................ YA TUAN SAHERAN SUHENDRAN JUDICIAL COMMISSIONER OF THE HIGH COURT (COMMERCIAL 11) (INSOLVENCY 2) OF KUALA LUMPUR IN THE TERRITORY, MALAYSIA Case References: • Tan Aik Ling v CT World Construction Sdn Bhd and another suit [2024] MLJU 2479 Legislation References: • Companies Act 2016 (“CA 2016”) Decision Date: 27th January 2026 Counsel for the Applicant: Solicitors: Bryan Tan Messrs. YY Chin & Co. (Kuala Lumpur) Official Receiver (OR): Engku NorSuhaila binti Engku Zain Jabatan Insolvensi Malaysia Wilayah Persekutuan Kuala Lumpur (Kuala