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2021 MarsdenLR 3876
HIGH COURT MALAYA SHAH ALAM
PREMIUM ALUMINIUM (M) SDN BHD – Appellant
Versus
TAN HOCK CHUAN; CRYSTAL GROUP ALUMINIUM EXTRUSION (M) SDN BHD (PETI.... – Respondent
[Companies (Winding Up) Petition: BA-28NCC-221-05/2020]
The court requires an applicant seeking a stay of winding-up proceedings to establish special circumstances, including compelling evidence that mandates such relief.
Headnote:(A) Companies Act 2016 – Sections 492 and 493 – Winding-Up Order – Application for stay – Applicant sought stay of Winding-Up Order pending settlement of debts; failed to demonstrate special circumstances as required under relevant law – High Court disallowed stay based on the absence of compelling grounds. (Paras 1, 3, 5, 8)
(B) Court’s discretion – Onus on Applicant to prove special circumstances – Mere assertion of appeal being rendered nugatory is insufficient without evidence. (Paras 5, 6)
(C) Duties of Directors – Noncompliance with statutory duties and failure to furnish required information to Liquidator considered. (Paras 7, 8)
Facts of the case: The Petitioner served a Statutory Notice of Demand for RM8,639,331.02 on the Respondent, which failed to pay; subsequent winding-up petition filed and order granted.
Findings of Court: Insufficient proof of genuine contract; no compelling grounds for granting a stay of proceedings.
Issues: Whether the Applicant demonstrated special circumstances for stay of the Winding-Up Order.
Ratio Decidendi: Court affirmed the necessity for the Applicant to provide substantial proof of special circumstances to justify a stay.
Result: Enclosure 1 dismissed with costs.
JUDGMENT
Introduction
[1] Enclosure 1 is the Applicant / Contributory application vide Notice of Motion dated 29 December 2020 seeking for inter alia an interim stay of the Winding-Up Order dated 21 December 2020 to up 7 August 2021 for the purposes of settling the debts to the Petitioner pursuant to s 492 of the Companies Act 2016 and subsequently a termination of the said Winding-Up Order under s 493 of the after payment has been made to the Petitioner.
Brief Facts
[2] The facts of the case may be summarised as follows:
2.1 On 10 March 2020, the Petitioner's (Crystal Group Aluminium Extrusion (M) Sdn Bhd) served on the Respondent Company a copy of the Statutory Notice of Demand dated 10 March 2020 pursuant to s 465 and s 466 of the Companies Act 2016 by way of personal service to the registered office of the Company demanding for the sum of RM8,639,331.02 (as at 10 March 2020) to be paid within 21 days from the date of the receipt of the notice.
2.2 Twenty-one (21) has lapsed from the service of the Notice and the Respondent failed to pay the sum as demanded.
2.3 Thereafter, on 18 May 2020 the Petitioner filed this winding-up petition against the Respondent.
2.4 On 28 August 2020, Petitioner filed Amended Petition (encl 30) pursuant to the Court Order dated 19 August 2020.
2.5 On 28 September 2020, Respondent Application for Leave to Appeal against the Order granted by the Court of Appeal on 19 February 2020 was dismissed by the Federal Court.
2.6 On 21 December 2020, this Honourable Court had allowed the amended winding-up petition (encl 30) and grant the winding-up order against the Respondent.
2.7 Mr Onn Kien Hoe of Messrs Crowe Advisory Sdn Bhd was appointed as the Liquidator of the Respondent and cost of RM8,000.00 to be paid to the Petitioner out of the assets of the Respondent.
2.8 On 29 December 2020, the Applicant filed the present Notice of Motion (encl 1)
2.9 So much for the factual background.
Issue For Determination
[3] The only main issue is whether the Applicant has shown special circumstances for stay to be granted.
The Law Applicable For Stay Of Winding-Up
[4] The Applicant stay application is premised on the following provisions of the law:
(a) Section 492 of the Companies Act 2016 (successor of s 243 of the Companies Act 1965), provides as follows:
"Power of Court to stay winding up
492. (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 stayed, nuke an order staying the winding up of the company for a specified time on such terms and conditions as the Court thinks fit.
(2) 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.
Power of Court to terminate winding up
493. (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 considers appropriate
(3) Where the Court makes an order under subsection (1), the company cease 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 o
