SHH Construction Sdn Bhd v Nusajaza Development Sdn Bhd(dalam likuidasi) (DA-28PW-2-01/2025)

4 MLJ 886 stated that the appellant has the burden of satisfying the Court of two criteria, namely (1) whether the claim can be adequately dealt with by the winding up court; and (2) whether the applicant has a prima facie case against the respondent. These two criteria are in line with the test for leave application as enunciated by the Federal Court in Dubon. Whether the claim can be adequately dealt with by the winding up court 18. The crux of Nusajaza’s submission is that the AD cannot rank higher in priority over other creditors and that any payment of the sums claimed by SHH would amount to undue preference in favour of SHH. Nusajaza submits that SHH should lodge a proof of debt and the payment should be made from the general assets of the company in accordance with pari pasu principle. 19. However, SHH argued that the sum awarded in the AD is the debt incurred after the winding up and that the Contract was entered into between the parties after Nusajaza was wound up. It was agreed in the contract and recorded in the Order of this Court that the payments to SHH were to be paid from the payments received from purchasers, and monies received from LPPSA and financiers. 20. It is not in dispute that the sum claimed by SHH was incurred after Nusajaza was wound up. The law on this has been stated by the the Federal Court in Majlis Amanah Ra’ayat v The Official Receiver Malaysia [1984] 1 MLJ 173 where it was held as follows: “The effective date for the purposes of proof of debt against an insolvent Company which is being wound up is the date of the order of winding up, that is, in this case, July 22, 1976 and therefore the appellant's proof of debt was wrongly rejected by the respondent. An order should be made that the appellant's proof of debt be admitted.” 21. Applying the principle set out in Majlis Amanah Ra’ayat (Supra), | find that there is no merit in Nusajaza’s argument that SHH should lodge a proof of debt with regard to the sum awarded in the AD as the debt was accrued after the cutoff date (i.e. the winding up date). In any event the Contract itself was entered into after Nusajaza was wound up and is subject to the terms set out in the Order of the High Court dated 22.10.2018, which include the method and source of payment. 22. As the amount claimed by SHH was incurred after the winding up Order, it did not exist when Nusajaza was wound up. It follows that SHH cannot lodge a proof of debt as it is not a creditor at the date of the winding up. S.524 (3) of the companies Act provides that (3) Save as provided in subsections (1) and (2), all debts and liabilities present or future, certain or contingent, to which the company is subject at the date of the winding up order or the resolution, or to which the company may become subject before dissolution by reason of any obligation incurred before the date of the winding up order shall be deemed to be debts provable in winding up. 23. The onus is on SHH to demonstrate why it is more appropriate for it to proceed by way of enforcement proceedings for the AD instead of by lodgment of a proof of debt. See Ganda Setia Cemerlang Sdn Bhd v Maika Holdings Bhd [2018] 2 CLJ 401. As stated above, SHH could not lodge a proof of debt as the debt was incurred after the date of winding up order and not deemed to be debts provable in winding up. As such it is more appropriate for it to proceed by way of another proceeding. Whether the applicant has a prima facie case against the respondent 24. The definition of prima facie in the context of leave of this nature was explained by the Court of Appeal in Mesuntung Property (Supra) as follows: “As to what amounts to prima facie in the context of s 226(3) of the Companies Act, in our view is simply whether there is a serious dispute between the litigants which warrant a trial to determine the truth of the combating allegations. It is not unlike the court’s approach when dealing with an application to strike out under O 18 r 19 of the Rules of Court 2012 despite the consideration that the liquidator ought not to be burden with 8 wasteful financial resources in defending frivolous legal actions. That consideration in our view is also a consideration for other suits not involving wound up companies as all the defendants should also not be burdened with financial resources to defend Jrivolous legal actions.” 25. In any event, the issue before this court is not the merits of the enforcement proceedings which is more suitable to be determined by the Court hearing the enforcement proceedings. Nusajaza’s arguments revolve around the merit of the case which should not be a consideration at this leave stage. 26. In dealing with applications for leave pursuant to s.471 of Companies Act, the court should not delve into the merits of the case, but merely examine the case to see if they are baseless and devoid of any substance (see Ganda Setia Cemerlang (supra)). 27. In fact, looking at the arguments raised by Nusajaza, | am of the view that leave should be granted as there are serious issues that need to be determined in the enforcement proceedings. | am satisfied that this application is a genuine application and is not baseless or devoid of substance. Conclusion 28. Based on the above, the application for leave pursuant to s. of the Companies Act 2016 is allowed with costs of RM10,000.00. This Grounds of Judgment is dated 12.10.2025. SHAMSUL BAHRIN BIN ABDUL MANAF Pesuruhjaya Kehakiman Mahkamah Tinggi (3) Kota Bharu Kelantan 10 PIHAK-PIHAK: Peguam bagi pihak Pemohon: Peguam bagi pihak Responden: Tetuan Tan Swee Im, Siva & Partners Suite D-3A-03-06, Block D, Plaza Mont Kiara, No. 2, Jalan Kiara, Mont Kiara, 50480 Kuala Lumpur. Tetuan G. Naidu & Partners Lot 287, Kg. Bekok, 18000 Kuala Krai, Kelantan. 11