The court's discretion to grant a stay of winding-up proceedings requires clear evidence that it is warranted, considering the interests of all parties involved.

[1] Enclosure 38 is the application by the Contributory, Puan Hamidah Abdul Razak, for a permanent stay of the Winding Up Order dated 24 February 2011 pursuant s 243(1) of the Companies Act 1965 ( CA ).

[2] The cause papers for this application comprise:

(i) Notice of motion dated;

(ii) Affidavit in support of affirmed on;

(iii) Affidavit in reply of affirmed on 10 December 2013;

(iv) Affidavit in reply of affirmed on; and

(vi) Official Receiver's report dated.

Brief Background

[3] The Respondent was wound up on 24 February 2011. The Winding up Petition was based on the failure of the Respondent in paying a Judgment debt in the sum of RM371,642.50 together with interest thereon at the rate of 8% per annum.

[4] The Applicant is a contributory and shareholder of the Respondent and owns 80% of the total issued ordinary shares in the Respondent (1,200,00 shares out of 1,500,000 issued shares).

[5] The creditors who has filed Proof of Debt with Official Liquidator Malaysia are as follows:-

No.

Creditors

Amount (RM)

1.

Kumpulan YL Enterprise Sdn. Bhd.

384,532.89

2.

Maybank Berhad

87,904.28

3.

Konica Minolta Business Solution Sdn. Bhd.

44,146.70

Total

516,583.87

Liquidators Fee

38,000.00

554,583.87

[6] By letter dated 25 August 2014, the solicitors for Beryl's Marketing Sdn. Bhd. paid the Official Liquidator Malaysia a sum of RM554,583.87 as full and final settlement on behalf of Respondent. It is submitted by the Applicant that the said payment settled all the claims of the creditors of the Respondent. In her Affidavit in support she stated that she is the owner of the property No. 20, Jalan Medan Pasar, 50050 Kuala Lumpur ("the Property"). By a Sale and purchase Agreement dated 24 February 2014 she had sold the said Property to Beryl's Marketing Sdn. Bhd. for the sum of RM4,300,000.00.

[7] The Petitioner had filed a suit in a Kuala Lumpur High Court (Suit No: 22NCVC-1095-09/2012) against the said Applicant for a declaration that she was holding a property known on trust for the Respondent. The High Court dismissed the suit but on appeal, the Court of Appeal on 9 April 2014 unanimously ordered that the Applicant holds on trust the Property for the Respondent. The Petitioner had informed the Official Receiver on 26 November 2013 that the Property that the Property was held on trust by the Applicant for the Respondent.

[8] A Creditor's meeting was held on 4 July 2014 to vote on the appointment of the private liquidator. The representatives from two other creditors who attended the meeting beside the Petitioner were Maybank Berhad ("Maybank") and Konica Minolta Business Solution Sdn. Bhd. ("Konica"). The Petitioner and Konica voted for the appointment, whilst Maybank abstained. Another contributory, one Mr Sivakurunathan A/L M Appadurai ("Sivakurunathan") attended the said meeting whilst representatives from the potential purchaser of the Property, Beryl's Marketing Sdn. Bhd. ("were also present at that meeting. The Applicant was absent but was notified by the Official Receiver that another meeting consisting of the contributories was to be held a week later to vote on the issue of the private liquidator's appointment.

Decision and Reasons

[9] Section 243 (1) CA provides as follows:

"(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 ought to be stayed, make an order staying the proceedings either altogether or for a limited time on such terms and conditions as the Court thinks fit.".

[10] In Vijayalaksmi Devi a/p Nadchatiram v. Dr Mahadevan a/l Nadchatiram & Ors, [1995] 2 MLJ 709, at 716-718; [1995] 3 CLJ 493; [1995] 2 AMR 2076, Mohd. Dzaiddin FCJ (as h