Winding up orders made during a statutory moratorium are null and void; shareholders have standing to seek termination.

JUDGMENT

(Termination Of Winding Up)

Kenneth St James J:

Prelusion

[1] The subject company is Jimat Jimat Fresh & Frozen Mart Sdn Bhd (Company). The Company first filed an application to be placed under judicial management — for the Court to appoint a judicial manager to rescue it from its financial problems (JM Application). The Petitioner (B2B Finpal Sdn Bhd) then filed a winding up petition against the Company, in Companies (Winding Up) Petition No PA-28NCC-51-05/2023 (winding up Petition). The Company did not appear at the winding up Petition hearing. The winding up order was granted. The Company was put into liquidation.

[2] The shareholders of the Company (Applicants) now file an Amended Notice Of Motion to apply to terminate the winding up (Application). Should the Application be allowed?

Preliminaries

[3] The Applicants initially prayed for two alternative orders. They prayed for the winding up order dated 17 July 2023 — which was made in the winding up Petition — to be "terminated". They alternatively prayed for the winding up order to be stayed.

[4] During the proceedings, however, the Applicants dropped (withdrew) the alternative prayer for a stay of the winding up. They now seek only to terminate the winding up.

The Pertinent Statutory Provisions For This Application

[5] I would like first to set out the pertinent statutory provisions that I have to consider and apply to this Application.

Section 410 Of The Companies Act 2016

[6] First, we have s 410 of the Companies Act 2016 ( CA 2016). Section 410 provides that when an application for a judicial management order is made, a moratorium is triggered. The moratorium is against all legal proceedings against the Company. The moratorium prohibits the commencement and continuation of any legal proceeding against the Company. The moratorium also forbids the making of any order to wind up the Company.

[7] The relevant portions of s 410 are now set out here for reference, with my emphases added:

Section 410 . Effect of application for a judicial management order

During the period beginning with the making of an application for a judicial management order and ending with the making of such an order or the dismissal of the application:

(a) no resolution shall be passed or order made for the winding up of the company;

(b) ...

(c) no other proceedings and no execution or other legal process shall be commenced or continued and no distress may be levied against the company or its property except with leave of the Court and subject to such terms as the Court may impose.

Section 493 Of The CA 2016

[8] Then we have s 493 of the CA 2016. Section 493 provides that after the Court makes a winding up order against the Company, the Court can later terminate the winding up order, if the Court thinks it is "fit" that the winding up should be terminated. And in considering whether to terminate the winding up, the Court can consider facts such as:

(1) the Company has satisfied its debts;

(2) there is an agreement between the liquidators, creditors, or contributories, with other parties interested in the winding up of the Company; or

(3) "other facts that the Court considers appropriate".

[9] The relevant portions of s 493 are now set out here for reference, with my emphases added:

Section 493 . Power of to terminate winding up

(1) 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.

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

(a) the satisfaction of the debts;

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

(c) other facts that the Court considers appropr