Yhl Property Sdn Bhd v Silveron Builders Sdn Bhd (JA-28NCC-15-01/2025)

This is a petition by YHL Property Sdn Bhd (“the Petitioner”) to wind up Silveron Builders Sdn Bhd (“the Respondent”) under Sections S/N DF5dIjyNB0emj94ggbxPTw 465(1)(e) and 466(1)(a) of the Companies Act 2016 [Act 777] on the ground that the Respondent is unable to pay its debts.

The petition is founded on a judgment of this Court dated 9 January 2024 in OS No. JA-24NCvC-156-03/2020, subsequently affirmed by the Court of Appeal on 8 August 2025. The Respondent has not paid the judgment sum.

The Petitioner filed two written submissions (Enclosure 25 and Enclosure 53) and the Respondent filed an outline submission and a written submission in reply (Enclosures 22 and 50), together with its bundles of authorities (Enclosures 51 and 52). Counsel for both parties and counsel for Chee Kam Fatt, who filed a Notice of Intention to Appear on Petition (Enclosure 47), also made oral submissions before this Court. The Court had the benefit of perusing the cause papers and preparing a judgment in advance. The oral submissions were consistent with the written submissions and in the case of Chee Kam Fatt, with his affidavit in Enclosure 48. The Court now delivers its judgment.

By the order of 9 January 2024, the Respondent was ordered to pay the Petitioner RM748,931.37 as damages for wrongful entry of a private caveat, together with interest at 5% per annum and costs.

The total indebtedness relied on in this petition is RM917,368.31, comprising the judgment sum, interest up to 22 November 2024, costs and allocator fees.

A statutory notice under section 466(1)(a) of Act 777 was served on the Respondent on 26 November 2024 demanding payment within 21 days. The Respondent did not pay or secure the amount.

The Respondent’s appeal against the assessment of damages was dismissed by the Court of Appeal on 8 August 2025 with costs and no stay of the High Court or Court of Appeal orders has been obtained.

The Respondent opposes the petition on the basis that –

it is not commercially insolvent;

there is a bona fide dispute and/ or substantial cross-claim arising from Writ No. JA-22NCvC-71-06/2020 (“Writ 71”) and a pending motion for leave to appeal to the Federal Court;

the petition is premature and an abuse of process; and

this Court is forum non conveniens.

The Respondent relies, among others, on Sri Hartamas Development Sdn Bhd v MBF Finance Bhd [1992] 1 MLJ 313, Christopher Michael Cheow v ANS Builders Sdn Bhd [2012] 10 MLJ 359 and Pontian United Theatre Sdn Bhd v Southern S/N DF5dIjyNB0emj94ggbxPTw Finance Bhd (formerly known as United Merchant Finance Bhd) [2006] 2 MLJ 602 to contend that the presumption of insolvency is rebuttable where there is solvency, a bona fide dispute or a genuine cross-claim.

The issues for determination are –

whether the Respondent has rebutted the presumption of inability to pay its debts under section 466(1)(a) of Act 777;

whether there is a bona fide dispute or substantial cross-claim which justifies refusing a winding-up order; and

whether the petition is an abuse of process or otherwise premature. Presumption and commercial insolvency

Service of the statutory notice and non-payment within the prescribed period are not seriously disputed. The presumption of inability to pay under section 466(1)(a) of Act 777 therefore arises.

On solvency, the Respondent has not produced any cogent financial documents in these proceedings to demonstrate that it is able to meet its liabilities as they fall due. Instead, in May 2025 the Respondent itself filed a Judicial Management application in the High Court at Kuala Lumpur, supported by an affidavit of its director, Chee Kam Fatt, stating that the company is in “severe financial distress”. Although that Judicial Management application was later withdrawn, the financial statements exhibited and the admission of ‘severe financial distress’ remain part of the evidential record before this Court.

The audited financial statements exhibited therein show current liabilities of RM1,129,082.00 against current assets of only RM310.00, with debts exceeding assets by more than RM1.12 million.

In the Court’s view, those figures are strong evidence of commercial insolvency, and are wholly inconsistent with the bare assertion that the Respondent “has the capability to meet the liabilities out of its monies”.

The presumption of inability to pay has not been rebutted; if anything, it is reinforced. S/N DF5dIjyNB0emj94ggbxPTw Bona fide dispute and cross-claim

The debt in question is founded on a regular High Court judgment which has been affirmed by the Court of Appeal and remains valid. A judgment debt of this nature is ordinarily not capable of being treated as “disputed” for the purposes of winding-up proceedings unless the judgment is stayed or set aside. (See Sri Jeluda Sdn Bhd v Pentalink Sdn Bhd [2008] 3 MLJ 692; Pengkalen Holiday Resort Sdn Bhd v. Perbadanan Pengurusan Paradise Lagoon Apartment (North) & Anor [2016] CLJU 1114).

The Respondent’s pending motion for leave to appeal to the Federal Court does not, in law, operate as a stay of execution. On the present record, there is therefore no bona fide dispute as to the existence or quantum of the judgment debt.

As for Writ 71, the Court accepts that it raises a substantial claim by the Respondent against several parties, including the Petitioner, in respect of alleged conspiracy and declarations on beneficial ownership, and that it has been fixed for trial.

However, Writ 71 is in substance a cross-claim. It does not negate the judgment debt which has already been finally determined in OS 156 and affirmed on appeal.

Consistent with the principles in Josu Engineering Construction Sdn Bhd v TSR Bina Sdn Bhd [2014] 11 MLJ 916 and Kumpulan Liziz Sdn Bhd (in liquidation) v Pembinaan Azam Jaya Sdn Bhd S/N DF5dIjyNB0emj94ggbxPTw [2022] 1 MLJ 570, a genuine cross-claim may in some cases justify refusing or staying a petition. But where, as here, there is a final, unstayed judgment and clear evidence of commercial insolvency, it is entirely appropriate for any such cross-claim to be pursued by a liquidator for the benefit of the general body of creditors rather than by an insolvent company under the control of its directors. Abuse and prematurity

The Court has considered the Respondent’s complaint that the timing of the statutory notice and the petition shows an ulterior motive to stifle Writ 71. The chronology does show that the notice was issued some months after the damages order and that the petition was presented while other proceedings were pending.

However, the Petitioner is a judgment creditor who has not been paid for a substantial period and is entitled to choose the mode of enforcement. This Court is not persuaded that the petition is brought for a collateral or oppressive purpose.

This Court also notes that the Respondent has itself engaged in multiple interlocutory applications, including a Fortuna injunction, a stay application and the Judicial Management application, several of which were ultimately withdrawn.

This pattern is more consistent with an attempt to delay or avoid payment than with oppression by the Petitioner.

The Respondent contends that this Court is forum non conveniens and that the winding-up proceedings ought properly to have been commenced in the High Court at Kuala Lumpur, on the basis that the Respondent’s registered office and principal place of business are in Kuala Lumpur.

By Notice of Intention to Appear (Enclosure 47), one Chee Kam Fatt, a creditor of the Respondent in the sum of RM350,064.00, appears and opposes the petition on substantially the same basis, namely that the proceedings should have been brought in Kuala Lumpur and that this Court is forum non conveniens.

The Court accepts that the Respondent’s registered office and principal place of business are in Kuala Lumpur. However, the judgment which forms the basis of the present debt was obtained in Johor Bahru in OS No. JA-24NCvC-156-03/2020, in respect of land situated in Johor; the related Writ 71 is also pending in the Johor Bahru High Court; and the Petitioner is represented by Johor Bahru– based solicitors.

In the Court’s view, these matters provide a sufficient and natural nexus to this Court for the purposes of a winding-up petition. Section 23 of the Courts of Judicature Act 1964 is disjunctive and nothing in it confines jurisdiction exclusively to Kuala Lumpur in the circumstances of this case, as explained by the Court of Appeal in S/N DF5dIjyNB0emj94ggbxPTw Bank Industri & Teknologi Malaysia Bhd v Alom Building Systems Sdn Bhd [2006] 4 MLJ 405.

Further, the opposing creditor in Enclosure 47 is also the director who has deposed that the Respondent is in “severe financial distress” and has exhibited financial statements showing that its current liabilities far exceed its current assets.

His objection on convenience does not override the clear statutory jurisdiction of this Court, nor does it alter the substantive findings on the Respondent’s inability to pay its debts. A creditor has a right to be heard but no veto over the choice of forum where jurisdiction exists in law.

As for the complaint that the petition is premature or an abuse because other proceedings are pending, this Court has considered the chronology. The Petitioner is a judgment creditor armed with a final, unstayed judgment that has been affirmed by the Court of Appeal and remains unpaid. The mere filing of a motion for leave to appeal to the Federal Court and the existence of Writ 71 do not, in the Court’s view, render this petition premature or abusive. Any legitimate cross-claim in Writ 71 may be pursued by a liquidator in the ordinary course of the winding-up. S/N DF5dIjyNB0emj94ggbxPTw

In summary, this Court finds that –

the Petitioner is a judgment creditor in the sum of RM917,368.31

the Respondent has failed to rebut the statutory presumption of inability to pay and is commercially insolvent on its own financial evidence;

there is no bona fide dispute as to the judgment debt and the existence of Writ 71 and the pending leave application to the Federal Court do not justify refusing a winding-up order; and

the petition is neither an abuse of process nor premature.

Accordingly, this Court allows the petition. The Court orders that Silveron Builders Sdn Bhd [Company No. 197301000945 (14469-K)] be wound up by the Court under the Companies Act 2016.

The Court notes that there is a pending application in Enclosure 49 by an opposing creditor and director of the Respondent seeking the appointment of named private liquidators in place of the Director-General of Insolvency. That application has been fixed for hearing on a later date. The Court therefore confines itself in this decision to the question whether a winding-up order ought to be made. S/N DF5dIjyNB0emj94ggbxPTw

For present purposes, and in line with the usual practice, this Court appoints the Director-General of Insolvency as liquidator of the Respondent, without prejudice to any further order the Court may make upon hearing Enclosure 49.

The costs of and incidental to this petition are to be taxed and paid out of the assets of the Respondent as costs in the winding-up. Dated : 2 December 2025 -sgd-Dr. Noradura binti Hamzah Judicial Commissioner High Court Civil 2 Johor Bahru S/N DF5dIjyNB0emj94ggbxPTw Solicitors for the Petitioner : Wong Wan Ting : Messrs. Gan & Lim Solicitors for the Respondent : Mohammad Danial Bin Hazizan : Messrs. S Ravenesan Solicitors for the Opposing Creditor, Chee Kam Fatt : Lim Seng Liang : Messrs. SL Lim & Lui S/N DF5dIjyNB0emj94ggbxPTw