Tan Poh Yee v Cairnhill Hotel (M) Sdn Bhd (WA-28NCC-421-05/2022)

The Petitioner filed this petition against the Respondent under sections 465 (1) (e) and 466 (1) (a) of the Companies Act 2016 (“CA 2016”) on the grounds of the Respondent’s inability to pay its debt.

The Petitioner obtained an award against the Respondent from the Industrial Court on 12.02.2020 for the sum of RM118,000.00. The award was duly registered with the Kuala Lumpur Sessions Court under registration number T05(A) 2020 on 16.03.2020 pursuant to section 56(4) of the Industrial Relations Act 1967.

Upon the Respondent’s failure to pay the Petitioner the sum awarded by the Industrial Court and an additional sum of RM5,000.00 in costs awarded by the High Court on the dismissal of the Respondent’s judicial review application against the Industrial Court award, the Petitioner issued and served on the Respondent a statutory notice under section 466 (1)(a) of the CA 2016 on 05.04.2022.

After expiry of twenty-one (21) days from the date of the statutory notice referred to above, the Petitioner filed this petition to wind-up the Respondent on the grounds that the Respondent is unable to pay its debt and is thus, deemed commercially insolvent.

After service of this petition, the Respondent filed an application in Enclosure 31 for a stay of all proceedings in this petition pending the disposal of the Respondent’s appeal to the Court of Appeal (“COA”) against the dismissal of its judicial review application to quash the award of the Industrial Court in favour of the Petitioner.

The Respondent’s application for a stay of proceedings was dismissed by this Court on 07.06.2023.

After the dismissal of the Respondent’s stay application in Enclosure 31, the petition in Enclosure 1 was heard by this Court on 04.07.2023.

The issues raised by the Respondent in resisting this petition are similar to the issues raised in the stay proceedings which have been dismissed.

The main issue raised by the Respondent is that the Respondent has filed an appeal to the COA challenging the Industrial Court award and the dismissal of the judicial review application against the said Industrial Court award by the High Court.

The other issues raised relate to proceedings in another court, which is Kuala Lumpur High Court Suit WA-22NCVC-559-09/2018 (“Suit 559”).

This Court finds that the appeal pending at the COA against the award by the Industrial Court and dismissal of the judicial review application by the Respondent does not amount to a bona fide dispute to the Petitioner’s claim against the Respondent until and unless the award has been set-aside. This principle of law is well-settled and trite.

The above principle of law was enunciated by the Federal Court in the case of Ann Joo Steel Bhd v Pengarah Tanah dan Galian Negeri Pulau Pinang & Anor and another appeal [2020] 1 MLJ 689 (Tab C of PBOA on page 30), wherein the Federal Court referred to numerous cases where the courts upheld the principle that an order is deemed good and enforceable against the parties unless and until it is set aside: “[49] In T.O. Thomas v Asia Fishing Industry Pte Ltd [1977] 1 MLJ 15, it was held by this court that ‘An order even irregularly obtained cannot be treated as a nullity, but must be implicitly obeyed, until by proper application it is discharged’. The Court of Appeal in Thiruchelvasegaram a/l Manickavasegar v Mahadevi a/p Nadchatiram [1998] 4 MLJ 297, observed that a party could not ignore or refuse to comply with a court order on the ground of nullity. In another case of Hup Soon Omnibus Co Sdn Bhd & Anor v Lim Chee @ Lam Kum Chee [2017] MLJU 1937, the Court of Appeal had once again emphasised that a court order is a court order, it must be obeyed as ordered unless set aside or varied. And it is not a mere technicality that can be ignored.”

This Court has also taken note that the Respondent did not file any application to stay the execution of the Industrial Court award pending appeal to the COA.

With respect to the other grounds raised by the Respondent, this Court finds that Suit 559 has no bearing on this petition for the following reasons:

The Respondent is the plaintiff in Suit 559 but the Petitioner is not a party. All other matters raised in Suit 559 do not involve the Petitioner as a party;

(ii) Suit 559 concerns a dispute which is being heard before another court and has no relevance to this winding-up petition as it does not have any bearing on nor does it affect the Industrial Court award. [15] The Petitioner further submits that the Industrial Court award has been duly registered with the Kuala Lumpur Sessions Court under Registration No.: T05(A)/2020 on 16.03.2020 pursuant to section 56(4) of the Industrial Relations Act 1967, thus rendering the award as an enforceable debt and an order of court. [16] In the case of Cheah Aei Ling v HKS Infra & Earthwork Sdn Bhd [2021] MLJU 424, the court held: “[23] Unlike a judgment or order of the court, which is final and binding until it is either set aside or stayed, an award of the Industrial Court is thus non-enforceable until the procedure prescribed in section 56 of the Industrial Relations Act 1967 is complied with. Thus, only upon the provisions of section 56 thereto being complied with, can the successful party enforce the award as a court order.” [17] For the reasons aforesaid, I find the Respondent has failed to raise any bona fide dispute to this petition and thus, I grant an order in terms of the prayers in this petition with costs of RM10,000.00 to be paid to the Petitioner out of the assets of the Respondent. Dated 24 June 2024 ……………..t.t….………… Ahmad Murad Bin Abdul Aziz Judge High Court of Malaya Kuala Lumpur COUNSEL FOR THE PETITIONER: MR NG THIANG TUAN WITH SARAH ARINA, KEITH KWAN SOLICITORS FOR THE PETITIONER: TETUAN TUAN, MOHD ZAIN & CO COUNSEL FOR THE RESPONDENT: MR KHOR SHER REN WITH CALISTA CHIN SOLICITORS FOR RESPONDENT: TETUAN AZRI, LEE SWEE SENG & CO Cases Referred to: ➢ Ann Joo Steel Bhd v Pengarah Tanah dan Galian Negeri Pulau Pinang & Anor and another appeal [2020] 1 MLJ 689 ➢ Cheah Aei Ling v HKS Infra & Earthwork Sdn Bhd [2021] MLJU 424 Legislation Referred to: ➢ Companies Act 2016 ➢ Industrial Relations Act 1967 Decision date: 04.07.2023