Tetuan Joshua & Associates, Selangor v 1. ) Tetuan Leong Kwong Wah, Kuala Lumpur (28NCC-152-04/2018)

A company shall be deemed to be unable to pay its debts if-

the company is indebted in a sum exceeding the amount as may be prescribed by the Minister and a creditor by assignment or otherwise has served a notice of demand, by himself or his agent, requiring the company to pay the sum due by leaving the notice at the registered office of the company, and the company has for twenty-one days after the service of the demand neglected to pay the sum or to secure or compound for it to the satisfaction of the creditor; [11] The Petitioner then proceeded to file this Petition on 2.4.2018

The Court may order the winding up if-

the company is unable to pay its debts; [12] The Petitioner had served the Petition and all related cause papers on the Respondent on 4.5.2018 and the Affidavit of Service has been filed. The Petitioner had complied with all procedural requirements and the Registrar’s Certificate was issued on 28.6.2018 as provided in Rule 32 of the Companies (Winding Up) Rules 1972. [13] The Petition was fixed for hearing on 10.7.2018. The Respondent did not file any Notice of Intention to oppose the Petition. However, on the eve of the hearing, the Respondent appeared on the Petition through its solicitors, Messrs Joshua & Associates, and filed an affidavit in opposition dated 9.7.2018. 5 [14] This affidavit in opposition was objected to by learned counsel for the Petitioner on grounds that it contravened the provisions of Rule 30 of the Companies (Winding Up) Rules 1972, that reads:

Affidavits in opposition to a petition that a company may be wound up shall be filed and a copy thereof served on the petitioner or his solicitor at least seven days before the time appointed for the hearing of the petition. In Crocuses & Daffodils (M) Sdn Bhd v. Development and Commercial Bank Bhd [1997] 3 CLJ 485 Siti Norma Yaakob JCA (as she then was) said: By their words and expression, r. 30(1) is mandatory in nature and as such the learned Judge was correct when he refused to admit all four affidavits in opposition for non-compliance of that particular rule. The fact that the four affidavits were only relied upon on 24 November 1995 does not alter the position as such affidavits were intended for use in the earlier hearings which never took place as all the earlier hearings were adjourned for some reason or other. As such I agree with the contention of learned counsel for the Petitioner that the Respondent’s affidavit filed on 9.7.2017, i.e. a day before the hearing of the Petition, cannot be admitted as it contravenes the mandatory requirement in r. 30(1) of the Companies (Winding-Up) Rule 1972 that any affidavit in opposition must be filed at least seven days before the hearing date. Hence, it is quite evident that the Respondent had not validly filed affidavit opposing the Petition, and the Petition should be considered only on the cause papers filed by the Petitioner. 6 See also Ayer Molek Rubber Co Bhd v. Mirra Sdn Bhd [2008] 2 CLJ 459 CA; Dataprep (Malaysia) Sdn Bhd v. Utas Lambang Sdn Bhd [2009] 7 CLJ 163 HC; Anvest Corporation Sdn Bhd v. Wong Siew Choong Sdn Bhd [2008] 3 CLJ 317 CA. [15] At the hearing of the Petition, Palm Discovery Sdn Bhd, i.e. the Purchaser under SPA, sought to be heard via counsel. Counsel appearing for Palm Discovery Sdn Bhd informed the court that they had filed a Notice of Intention to oppose the Petition and had faxed the same to the Petitioner’s solicitors the previous day. Counsel for the Petitioner pointed out that, firstly Palm Discovery Sdn Bhd is not a creditor of the Respondent, and secondly, that Notice of Intention to Appear on the Petition was also invalid as it did not comply with the requirements of Rule 28 of the Companies (Winding Up) Rules 1972 that reads:

Every person who intends to appear on the hearing of a petition shall serve on the petitioner or his solicitor notice of his intention. The notice shall be signed by the person or by his solicitor and shall give the address of the person signing it and shall be served or if sent by post shall be posted in such time as in ordinary course of post to reach the address not later than 12.00 o'clock noon of the day previous to the day appointed for the hearing of the petition.

The notice may be in Form 8 with such variations as circumstances may require.

A person who has failed to comply with this rule shall not, without special leave of the Court, be allowed to appear on the hearing of the petition. 7 The court’s record show that the Notice of Intention To Appear On Petition by Palm Discovery Sdn Bhd was filed on 9.7.2018 at 4.47pm and subsequently served on the Petitioner. Hence, I agree with the submissions of counsel for the Petitioner that the service of Notice of Intention on the Petitioner’s solicitors was invalid as it did not comply with the mandatory requirement of Rule 28 of the Companies (Winding Up) Rules 1972 that it be served by 12.00 noon on the day prior to the hearing. Nevertheless, in the interest of justice I heard counsel for Palm Discovery Sdn Bhd on the nature of their opposition to the Petition. It was evident that other then the fact that Palm Discovery Sdn Bhd is the purchaser in the SPA, it does not have any other interest in the Respondent. Having heard counsel, I concluded that Palm Discovery Sdn Bhd was not a creditor nor a contributory with an interest in law to oppose the Petition. If Palm Discovery Sdn Bhd was still desirous of purchasing those properties, it may negotiate with the liquidator. [16] In the premise, since the SOA had lapsed, and all the cause papers were in order, and the averment in the Petition and the Affidavit Verifying Petition stands unrebutted, I find that the court ought to grant order in terms of the Petition. The intention of the Petitioner to wind up the Respondent was also supported by counsel for a supporting creditor, Highland Palm Sdn Bhd, who was present in court. 8 [17] Having considered the totality of the evidence and the fact that the Respondent had not filed any affidavit opposing the Petition, I find that the Petitioner has made out a strong case for winding-up under section 456(1)(e) of the Companies Act, as the Respondent is clearly unable to pay its debts and that it is just and equitable that the Respondent be wound up. Wherefore, order in terms of prayers in paragraphs 22((1),

(2), (3) and (4) of the Petition was granted. The liquidator proposed by the Petitioner, Mr Tan Chil Khin under prayer 22(2) was appointed as provisional liquidator. The cost of the Petition was fixed at RM5,000.00 to be borne by the Respondent. Orders accordingly. Dated this 7th day of November 2018. Vazeer Alam Mydin Meera Judge High Court in Malaya Shah Alam. 9 Peguamcara Perayu Tetuan Joshua & Associates No. 16-03, Jalan Kenari 18A Bancar Puchong Jaya, Selangor No. Tel: 010-8961610/010-2614099 Fax: 03-20349511 Ruj: JA/JTCF/1744/2018/COA Peguamcara Responden/Pempetisyen Tetuan Leong Kwong Wah Lot 10.08, Tingkat 10 Grand Seasons Avenue 72 Jalan Pahang 53000 Kuala Lumpur Peguamcara Palm Discovery Sdn Bhd Tetuan Go Tiong Siew & Associates No. 1-1& 3-1, Jalan KL 3/11 Taman Kota Laksamana Seksyen 3 Melaka Peguamcara Highland Palm Produce Sdn Bhd Tetuan Law Office of Hann No. 8-3, Jalan 2/114 Kuchai Business Centre 58200 Kuala Lumpur 10