Siti Zubaidah binti Jemadi for the Applicant [Messrs Gary Wong & Co.] v Samir Zainal for the Respondent [Messrs Radzlan, Low & Partners] (PENGGULUNGAN SYARIKAT NO. WA-28NCC-660-10/2017 SAMAN PEMULA NO.: WA-28PW-297-10/2021)

By way of a Notice of Motion dated 25.10.2021 in enclosure 1 (Motion) the Applicant had applied to this Court for, inter alia:

leave to commence this proceeding;

(ii) leave to commence legal proceedings against Began Construction Sdn Bhd (In Liquidation) (Company) 3

The main ground of the Applicant in support of the Motion was that he had entered into a Sale & Purchase Agreement dated 3.5.2016 with the Company and had made full payment of the purchase price of RM750,000 to the said Company.

It was submitted by counsel for the Company that the facts of the matter show amongst others that the Applicant has failed to show that he had paid the payment of the purchase price of RM750,000 to the Company and that there is no prima facie case against the Company.

After reading the parties’ respective written submissions and hearing learned counsels for the parties on 7.7.2022, I had dismissed the Motion with no order as to costs. The Applicant being dissatisfied with my decision had now filed an appeal against my said decision and herewith are my written grounds thereto.

The Respondent is a company incorporated in Malaysia under the prevailing companies’ law and was on 8.12.2017 wound up by the High Court in Kuala Lumpur.

The Applicant alleges that on 3.5.2016 the Applicant entered into a Sale and Purchase Agreement (“SPA”) for the sale and purchase of a property bearing postal address at No. 20, Jalan Ria 4, Kawasan Perindustrian Ria, 43000 Kajang, Selangor (“Property”) for the sum of RM750,000.00. This took place prior to the winding up of the Respondent. 4

The Applicant further alleges that the Applicant had paid for the Property in cash for the sum of RM1,000,000.00 through her father to the Respondent’s former directors allegedly as payment for the Property and the balance for another piece of property also belonging to the Respondent at the time. The other property has been successfully transferred to the Applicant.

I have given due consideration of the matter before me and in particular the following evidence which I find is material and before this Court:

the Sijil Carian Rasmi dated 27.3.2014 on the property known as HS (M) 6912 PT 10381 Mukim Semenyih Daerah Hulu Langat (Property) at exhibit A of enclosure 2 which shows inter alia that the Property is registered under the name of the Company and is charged to Public Bank Berhad (PBB);

(ii) the Sale & Purchase Agreement dated 3.5.2016 between the Applicant as purchaser and the Company as a vendor over the said Property at exhibit B of enclosure 2 for the sum of RM750,000 (Purchase Price);

(iii) the Memorandum of Transfer via Borang 14A on the said Property between which is executed between the Applicant as purchaser and the Company as a vendor and which is 5 undated as well as being unregistered at exhibit D of enclosure 2;

(iv) the OS purportedly to be filed at the Shah Alam High Court (Shah Alam OS) wherein contains a prayer for the extension of the caveat over the Property lodged by the Applicant and for the Pentadbir Daerah & Tanah Hulu Langat to immediately register the same upon the order being obtained as seen in exhibit F of enclosure 2;

exhibit H in enclosure 8 which is inter alia a letter dated 29.4.2016 purportedly from the Company to the Applicant wherein it is stated that the Applicant’s father had paid the sum of RM1,000,000 towards the purchase of 2 properties of which one included the Property referred to in the Motion as well as the alleged related bank transfer forms thereto from OCBC Bank to Company and the accompanying Combined Bank Statements of the Applicant and her husband thereto;

(vi) exhibit AJ-3 in enclosure 9 which is a Proof of Debt dated 1.10.2018 (POD) filed by the Applicant with the Liquidator of the Company claiming for the full refund of the Purchase Price;

(vii) the letter dated 18.11.2016 from Messrs Ewe Ching & Khoo solicitors for the Applicant to the Company demanding amongst others that the settlement of the redemption sum over the Property be made to PBB. 6

After examining the above evidence and the Motion before me, I find as follows:

the Applicant has filed a POD;

(ii) thus, there is prima facie evidence that the Applicant has terminated the SPA as the Applicant has filed a POD;

(iii) there is no proof before this Court that the Applicant has made payment to the Company and/or that the Company has received the same as alleged;

(iv) there is also no claim for vacant possession of the Property in the Motion or the affidavit in support thereto;

the Shah Alam OS is merely to reinstate the private caveat lodged and not a claim for the Specific Performance of the SPA or a declaration that the SPA is valid.

The relevant provision governing the Motion is Section 471 of the Companies Act 2016 which states “(1) When a winding up order has been made or an interim liquidator has been appointed, no action or proceeding shall be proceeded with or commenced against the company except by leave of the Court and in accordance with such terms as the Court imposes.”

The above section is similar to the previous section 226(3) of the Companies Act 2016 and of which the law on the same is now trite wherein the Court of Appeal had in Mesuntung Property Sdn Bhd 7 v Kimlin Housing Development Sdn Bhd [2014] 4 MLJ 886 laid down the test as follows:- “[24] 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. [27] 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 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 frivolous legal actions.”

In the circumstances based on my findings above, I held that no prima facie case has been shown against the Company and that the matter can be dealt with in the winding up proceedings itself as the Applicant has filed a POD as mentioned above.

The Motion is hereby dismissed against the Company with no order as to costs. Dated: 14th September 2022 8 Sgd. NADZARIN WOK NORDIN HIGH COURT JUDGE KUALA LUMPUR HIGH COURT Parties: Siti Zubaidah binti Jemadi for the Applicant [Messrs Gary Wong & Co.] Samir Zainal for the Respondent [Messrs Radzlan, Low & Partners]