Back
2021 MarsdenLR 1089
HIGH COURT MALAYA SHAH ALAM
FL SYSTEM SDN BHD – Appellant
Versus
PLE ENGINEERING & CONSTRUCTION SDN BHD (ENCL 7) – Respondent
[Companies (Winding-Up) Petition No: 28NCC-176-04/2021]
The court confirmed that under s 470 of the Companies Act 2016, it lacks jurisdiction to stay winding-up petitions, reinforcing statutory interpretation principles regarding the intended scope of the provisions.
Headnote:(A) Companies Act 2016 – Sections 469 and 470 – Application for stay of winding-up proceedings – The Respondent sought a stay of the winding-up petition but was found ineligible for such under s 470. The Court reaffirmed that the stay must pertain to other actions not the winding-up petition itself. (Paras 8, 9, 10)
(B) The Respondent claimed compelling reasons for a stay, citing potential irreparable damage and a bona fide dispute to the debt; however, this was dismissed based on lack of jurisdiction under the applicable sections. (Paras 4, 7)
Facts of the case: The Petitioner secured a summary judgment against the Respondent for RM1,200,000 but the Respondent, claiming insolvency, sought a stay pending appeal. (Para 2)
Findings of Court: The court held it lacked power under s 470 to grant the stay as it was not applicable to the winding-up petition itself. (Para 7)
Issues: Whether winding-up proceedings could be stayed based on provisions in the Companies Act 2016. (Para 6)
Ratio Decidendi: The court clarified that the wording of s 470 does not allow stays for the winding-up petition itself, reiterating the necessity of distinguishing between pending actions. (Paras 8, 9)
Result: Enclosure 7 dismissed with costs to the Petitioner. (Para 12)
JUDGMENT
Introduction
[1] Summons (Encl 7) dated 1 June 2021 filed by the Respondent pursuant to s 470 and/or s 469 of the Companies Act 2016 , and/or s 44 and/or s 73 of the Courts of Judicature Act 1964, and/or r 6 and/or r 7 of the Companies (Winding-Up) Rules 1972, and/or O 92 r 4, Rules of 2012, prays for the following orders:
"(a) Petisyen Penggulungan Syarikat ini (Lampiran 1) digantungkan sehingga rayuan Responden terhadap keputusan penghakiman terns bertarikh 9 Februari 2019 yang diberikan dalam Mahkamah Tinggi Shah Alam guaman No BA-22NCVC-266-09/2019 didengardan dilupuskan ("Rayuan tersebut");
(b) Kos di dalam kausa; dan
(c) Relif yang lain dan/atau selanjutnya yang difikirkan suaimanfaat oleh Mahkamah Yang Mulia ini."
Background Facts
[2] To recap, it is important to state the facts of the case which may be summarised as follows:
2.1 On 9 February 2021, the Petitioner had obtained a summary judgment against the Respondent at the Shah Alam High Court vide suit No BA-22NCvC-266-09/2019 for the sum of RM1,200,000.00 with interest at the rate of 5% per annum on the said sum from the date of the judgment until the date of full and final settlement, and costs of RM2,500.00.
2.2 Unsatisfied with the Shah Alam High Court's decision, the Respondent on 9 March 2021 filed an appeal to the Court of Appeal. The hearing of the Respondent's Appeal is currently fixed on 14 January 2022.
2.3 On 25 March 2021, the Petitioner sent a statutory notice pursuant to s 465 and s 466 of the Companies Act 2016 . Twenty-one (21) days has lapsed from the service of the Notice and the Respondent failed to pay the sum as demanded.
2.4 On 16 April 2021, the Petitioner filed encl 1 against the Respondent under s 465(1)(e) of the Companies Act 2016 on the ground that the Respondent is unable to pay the debt pursuant to the Summary Judgment.
2.5 On 1 June 2021, the Respondent filed this application to stay the Winding Up Petition.
2.6 So much for the factual background.
The Relevant Provisions Of Law
[3] The provision of the law applicable are as follows:
(a) Section 470 of the Companies Act 2016 provides as follows:
" Power of Court to stay or restrain proceedings against company prior to order of winding up
(1) At any time after the presentation of a winding up petition and before a winding up order has been made, the company or any creditor or contributory may, where any action or proceeding against the company is pending, apply to the Court for an order to stay or restrain further proceedings in the action or proceeding, and the Court may stay or restrain the action or proceeding accordingly on such terms as it thinks fit.
(2) The applicant shall lodge with the Registrar the office copy of the order within fourteen days from the making of such order under subsection (1)."
(b) Section 469 of the Companies Act 2016 provides as follows: "Powers of Court on hearing petition for winding up
(1) On hearing the petition for winding up, the Court may, by order:
(a) dismiss the petition with or without costs;
(b) adjourn the hearing conditionally or unconditionally; or
(c) make any interim or any other order that the Court thinks fit.
(2) The Court shall not refuse to make a winding up order solely on the ground only:
(a) that the assets of the company have been mortgaged to an amount equal to or in excess of those assets;
(b) that the company has no assets; or
(c) in the case of a petition by a contributory, that there will be no assets available for distribution amongst the contributories.
(3) The Court may, at the hearing of the petition or at any time on the application of the petitioner, the company, or any person who has given notice that he intends to appear on the hearing of the petition:
(a) direct that any notice be given or any steps is taken before or after the hearing of the petition;
(b) dispense with any notices being given or steps being taken which are required by this Act, or by the rules, or by any prior order of the Court;
(c) direct that oral evidence
