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2021 MarsdenLR 1920
HIGH COURT MALAYA PULAU PINANG
EXPORT-IMPORT BANK OF MALAYSIA BERHAD – Appellant
Versus
TFT DISPLAY (M) SDN BHD – Respondent
[Winding Company No: PA-28NCC-34-05/2020]
Non-payment of a statutory demand suffices to declare a company insolvent under Companies Act 2016, regardless of the company's commercial solvency.
Headnote:(A) Companies Act 2016 – Paragraphs 465(1)(e) and 466(1)(a) – Insolvency – The Petitioner issued a statutory demand based on a judgment debt which was not paid, leading to a petition for winding-up. Respondent’s technical objections were dismissed as without merit. (Paras 2, 20, 21)
(B) Service of documents – The court ruled that the service of statutory demand and petition was properly executed in accordance with the Companies (Winding-up) Rules 1972. (Paras 11, 15)
(C) Legal Requirement – The non-payment of a statutory demand per se deems the Respondent insolvent. (Paras 20, 21)
Facts of the case: The Petitioner sought to wind up the Respondent company due to insolvency, which was established by a statutory demand that remained unpaid following a court judgment.
Findings of Court: The Respondent's objections lacked merit; thus, the court ordered the winding-up of the company.
Issues: The main issues included the validity of the statutory demand service and whether the non-payment was sufficient to declare insolvency.
Ratio Decidendi: The court upheld that non-payment of the statutory demand alone suffices to deem a company insolvent.
Result: Petition granted.
JUDGMENT
Introduction
[1] This is the Petitioner's petition to wind up the Respondent company on the ground that they were insolvent. I allowed the Petition and ordered that the Respondent be wound up on 29 March 2021. These are the grounds for my decision.
Background
[2] The Petitioner issued a statutory demand against the Respondent company on 29 January 2020. The statutory demand was premised on a judgment ("Judgment") dated 8 June 2018 for the judgment debt of RM1,200,000 with interest and cost totalling RM1,698,257.54 as at 24 January 2020.
[3] The Respondent had not made good on the statutory demand and were deemed insolvent pursuant to para 466(1)(a) Companies Act 2016 (" CA "). The Petitioner proceeded to file the Petition to wind-up the Respondent company pursuant to para 465(1)(e) on 28 May 2020.
Technical Objections
[4] The Respondent opposed the Petition on several grounds. They were all technical objections that were without merit.
Must Be In BM
[5] First, the Respondent submitted that the Winding-up Petition and causepapers must be in Bahasa Malaysia.
[6] The respondent is misconceived. There is no such imposition. This was explained by the High Court in Scientequip (M) Sdn Bhd v. Properties Review Sdn Bhd, as follows:
"[7] The Companies (Winding-up) Rules 1972 had been made by the Rules Committee in exercise of the powers conferred under s 372 of the Companies Act and s 16 of the Courts of Judicature Act 1964.
[8] It must be noted to date there is no authoritative Bahasa Malaysia text of this Winding-up Rules including the forms in relation thereto, ft must also be noted that a Registrar's Circular No 5/1990 dated 28 July 1990 permitted the use of English in winding up proceedings. The circular reads as follows:...
[9] It is thus clearly permissible for the petition to be filed in English until such time the authoritative Bahasa Malaysia version is gazetted."
[7] The Respondent made a bald allegation that "The Companies (Winding-up) Rules 1972 ("WUR")" has been gazaetted in Bahasa Malaysia, without providing any details of such gazette. I am not aware of any such change that has altered the circumstance that allows the winding up causepapers to be filed in English.
No Warrant To Act And No Board Resolution
[8] Second, the Respondent submitted that the Petitioner failed to furnish a warrant to act and a board resolution to authorize the deponent of the Affidavit Verifying Petition to act on behalf of the Petitioner. The respondent is misconceived. There is no such requirement.
[9] The only requirement on this matter is provided in r 26 WUR which reads as follows:
"Rule 26 Verification of Petition
Every petition for the winding-up of a company by the Court shall be verified by an affidavit referring thereto. The affidavit in Form 7 shall be made by the petitioner or by one of the petitioners, if more than one, or, in case the petition is presented by a corporation, by some director, secretary or other principal officer thereof, and shall be sworn after and filed within four days after the petition is presented, and the affidavit shall be prima facie evidence of the statements in the petition."
[10] This has been complied with. Wan Noorazali Maula Wan Suleiman, the acting head of the legal division of the Petitioner, had deposed the affidavit on behalf of the Petitioner.
No Proof Of Service Of Statutory Notice
[11] Third, the Respondent submitted that the Statutory Demand was not properly served on the Respondent. This is a bald allegation.
[12] The Petitioner personally served the Statutory Demand dated 29 January 2020 on the registered address of No 44A, Tingkat Satu (Right Wing), Jalan Todak 2, Bandar Seberang Jaya, Perai, Pulau Pinang on 2 February 2020. The registered address is that stated in the SSM search results, in addition, the Petitioner personally served the Statutory Demand dated 29 January 2020 on 3 other business addresses known to them all on 2 February 2020.
[13] The process server, Muhammad Alif Bin Ch
