TC Success Jewellery Sdn.Bhd. v Primepoint Engineering Sdn.Bhd. (PA-28PW-46-10/2023)

At any time after an order for winding up has been made, the Court may, on the application of the liquidator or of any creditor or contributory and on proof to the satisfaction of the Court that all proceedings in relation to the winding up of the company ought to be terminated, make an order terminating the winding up of the company as the Court thinks fit.

In making an order under subsection (1), the Court may take into consideration, but not limited to, the following facts:

the satisfaction of the debts;

any agreement by the liquidators, creditors, contributories and other interested parties; or

other facts that the Court considers appropriate.

Where the Court makes an order under subsection (1), the company ceases to be in liquidation and the liquidator ceases to hold office and be released from all liability in respect of any act done or default made by the liquidator in the administration of the affairs of the company or otherwise in relation to his conduct as liquidator, with effect from the making of the order or such other date as may be specified in the order. [emphasis mine] [6] Section 492 provides that when an application is made by the liquidator or creditor or contributory of a wound up company for a stay of the Winding Up Order, the winding up Court may grant the Order to stay the winding up, for a specified time (for a specific period of time), on such terms and conditions that the Court thinks fit. [7] Section 492 is set out here for reference— Section 492. Power of Court to stay winding up

At any time after an order for winding up has been made, the Court may, on the application of the liquidator or of any creditor or contributory and on proof to the satisfaction of the Court that all proceedings in relation to the winding up of the company ought to be stayed, make an order staying the winding up of the company for a specified time on such terms and conditions as the Court thinks fit.

Where the Court makes an order under subsection (1), the liquidator shall cease to conduct any further action on behalf of the company from the date of such order. [emphasis mine] THE GROUNDS FOR THIS APPLICATION [8] The grounds for this Application to terminate the Winding Up Order, or alternatively to perpetually stay the winding up of RCo include—

RCo’s debt to the Petitioner (TC Success Jewellery Sdn Bhd) is fully settled. The Petitioner is the sole creditor of RCo.

The Petitioner wrote an undated letter to the Jabatan Insolvensi Malaysia (JIM) to inform the JIM that RCo’s debt to the Petitioner was fully settled. As such, they have no objections to the setting aside of the Winding Up Order, or to stay the Winding Up Order. According to RCo’s affidavit evidence, which was affirmed by a director, shareholder and contributory of RCo, that letter was dated 14.9.2023.

RCo filed a Supplementary Affidavit, which was affirmed by the same director, shareholder and contributory, averring that on 16.11.2023, RCo paid the JIM RM109K, “as agreed between the parties” (which I take to mean between RCo and the Petitioner). To support this fact, RCo exhibited the letter dated 20.11.2023 from the Petitioner to the JIM.

Inconsistently though, this letter dated 20.11.2023 from the Petitioner to the JIM states that—

the Petitioner received RM100K (not RM109K) as settlement;

(ii) the balance owing (baki hutang) will be settled after RCo obtains the Court Order to terminate the Winding Up Order under section 493. In other words, the debt to the Petitioner is not fully settled, contrary to RCo’s earlier averment that the debt to the Petitioner was fully settled. SHOULD EITHER OF THE ALTERNATIVE ORDERS BE MADE? [9] Firstly, the main ground for this Application is that the debt, upon which this winding up is premised, is fully settled. RCo avers that it has fully settled the debt with the Petitioner. But the Petitioner states in their letter that RCo has part-paid the debt and that they are expecting the balance due to be settled after RCo obtains the Order that RCo seeks in this Application. There appears to be a condition to this agreement or understanding between the Petitioner and RCo. [10] I am not reasonably satisfied that it is fit to grant the Orders sought (to terminate the winding up or to stay the winding up perpetually). I do not want any party to this proceeding (or any person affected by this proceeding) to come back to Court by filing a subsequent application for subsequent Orders. [11] For instance, if RCo does not settle up the balance due to the Petitioner, and the Winding Up Order is terminated, the Petitioner may file subsequent court proceedings to get consequential reliefs or remedies. Further Court proceedings must be avoided. [12] Secondly, there are three categories of persons who are entitled to make the applications under sections 493 and 492 of the Companies Act 2016—the liquidator of the wound up company, a creditor of the company, or a contributory of the company. RCo, as a legal entity, is not in any of these categories of persons. RCo cannot make this Application to get either an Order to terminate the winding up, or an Order to stay the winding up (stay the liquidation process). [13] Thirdly, as for the alternative prayer for a perpetual stay of the winding up process, section 492 provides that the winding up Court may grant a stay “for a specified time”, which to me means for a finite and specified period. Asking for the Winding Up Order to be “perpetually stayed” is not the equivalent of asking for a stay Order for a finite and specified period. CONCLUSION [14] In summary, for the above reasons, I will neither grant the Order terminating the winding up of RCo, nor the Order to perpetually stay the winding up of RCo. I am not satisfied that all the proceedings in relation to the winding up of RCo either ought to be terminated or ought to be perpetually stayed. I find that it is not fit to grant either of these prayed-for Orders to the applicant: RCo. [15] I make no Order for costs. Dated 6 December 2023 signed KENNETH ST JAMES Judicial Commissioner Penang High Court Counsel/Solicitors For the Petitioner/Applicant: Ranjit Singh Dhillon [Messrs. Ranjit Singh Dhillon & Co., Pulau Pinang] For the Third Party: Emy Juliana binti Jaafar [Malaysian Department of Insolvency, Pulau Pinang] Legislation referred to:

Section 493 and Section 492 of the Companies Act 2016. Cases referred to: -