The court emphasized that a stay of winding up must protect the rights of all creditors and cannot create undue preference for one creditor, requiring evidence of commercial solvency post-stay.

Prelusion

[1] The Respondent company was wound up under a Petition filed by the Petitioner.

[2] The Applicant (who is a contributory of the Respondent company) applies to stay the winding up Order.

[3] The grounds proffered for the stay are that:

(1) there is an agreement between the Applicant (on behalf of the Respondent company) and the Petitioner, to settle the judgment debt owed to the Petitioner;

(2) a stay of the liquidation process is very important (amat penting) for the Applicant and the Petitioner to finalise their settlement agreement; and

(3) the stay will not prejudice any party involved.

[4] Should the stay Order be granted?

The Pertinent Facts And Proceedings

[5] The Petitioner (NAFAS) presented a Petition to wind up the Respondent company (TRA). The Petition was grounded on TRA's failure to pay the sum demanded in NAFAS's s 466 statutory notice for approximately RM3.3 million. This sum was based on a High Court Judgment dated 19 October 2020 obtained by NAFAS against TRA.

[6] Against the High Court Judgment, TRA appealed to the Court Of Appeal. The Court Of Appeal dismissed TRA's Appeal. TRA applied for leave to appeal to the Federal Court. The Federal Court did not grant leave.

[7] In January 2022, NAFAS presented a winding up Petition against TRA. On 25 April 2022, by an Order of this Winding Up Court, TRA was ordered to be wound up and a liquidator was appointed to liquidate TRA (WUp Order).

[8] The Applicant is a contributory of TRA. She now files this post-winding up Application for an Order to stay the WUp Order. She applies for a stay under s 492 of the Companies Act 2016 (CoAct).

[9] Section 492 is set out below for an easy reference to its terms:

Section 492. Power of Court to stay 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 stayed, make 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.

A Few Preliminary Notes

[10] Preliminarily, I would like to set out a few notes.

[11] First, s 492(1) requires that a stay Order made under s 492 must be for a "specified time". The Applicant has not prayed for a stay Order for a specified time ie up until a specified date, or for a specified period of time.

[12] Second, the settlement agreement that the Applicant refers to requires the Applicant to pay off TRA's debt to NAFAS totalling approximately RM3.45 million by monthly instalments from December 2022 until November 2027. This, to me, means that the Applicant asks for the liquidation process to be stayed until November 2027 to allow for the carrying out and completion of this settlement exercise.

Issues Raised By The Applicant

[13] The Applicant raises these three issues in her Written Submissions and during the hearing:

(1) Whether the Applicant herself is eligible to make this Application (layak membuat permohonan ini)?

(2) Whether the Court-appointed Liquidator (who has a fiduciary duty) is bo