A petitioner cannot initiate a winding up if there is no established debt owed by the company. A judgment that has been overturned negates creditor status.

JUDGMENT

Enclosure 1

Nadzarin Wok Nordin JC

Petition

[1] In the Winding Up Petition (Petition) filed by Chia Soo Nee (Petitioner) against Karak Land Sdn Bhd (Respondent) herein, the Petitioner had sought to wind up the Respondent pursuant to ss 465(1(e) and (h), 466 and 476 of the Companies Act 2016 .

[2] The Petition states that pursuant to a judgment dated 27 July 2020 obtained at the Kuala Lumpur Sessions Court vide Suit No WA-B53- 10-08/2019 (Judgment) the Petitioner had obtained a judgment against the Respondent and that the Respondent had failed, refused and/or neglected to make any payment towards the outstanding Judgment.

[3] A statutory notice dated 11 March 2021 (Notice) was then issued to the Respondent and that a period of 21 days have since lapsed since the date of the Notice but the Respondent has still failed, refused and/or neglected to pay the same after which the Petition herein was filed.

Factual Background

[4] The Petitioner is one of several hundreds of purchasers who had bought a plot of land (Plot) from the Respondent in a project known as 'The Valley'(Project) via a sale and purchase agreement dated 31 October 2017 between the Petitioner and the Respondent (SPA).

[5] Vacant possession of the Plot was delivered on 23 January 2019

Petitioner's Submissions

[6] The Petitioner submits that the Respondent had inter alia:

a) failed to deliver the Plot free of encumbrances as per the SPA and that no disclaimers were given to any purchasers in the Project to disclaim the said properties purchased in the event of any foreclosure by the Chargee bank, Bank Pertanian who holds a charge over the Master Title lands in the Project

b) failed to pay off its term loan to Bank Pertanian who holds the charge over the Master titles on the lands in the Project and has an outstanding term loan of RM28,301,541

c) the Plot is being held as constructive trustee for the Petitioner and liable for lis pendens for failure to issue the Strata Title after receiving full payment for the same under the SPA

d) the Respondent is bound to perform subdivision of the said lands within 6 months from date of vacant possession but has refused, neglected and/or failed to do so

e) the Respondent continues to list the said lands as their assets

f) the purchasers in the Project have lost confidence in the Respondent

g) the Respondent was set up to sell lands for a homestay under the Project and that this was now no longer viable due to quit rent arrears amounting to RM15,162,659

h) the Respondent was doing business at a loss as its assets were not sufficient to pay its debt

i) there was no hope for profit for the Respondent

a) taking into account the removal of these lands from its assets and based on the current liabilities including the outstanding quit rents on the said lands in the Project which are still due and payable, the Respondent's true financial position will stand at a negative position

[7] Based on all of the above, the petitioner submits that it is just and equitable for the Respondent to be wound up.

[8] The Petitioner has also raised several preliminary issues being:

(i) a number of affidavits in opposition filed by the Respondent was not filed within the time prescribed under r 30 of the Companies (Winding Up) Rules 1972 and therefore objects to the admissibility of the same

(ii) the affidavits filed by the Respondent were undated as no leave was obtained from this Court to file the same

(iii) the deponent of the Respondent's affidavits was the project manager of the Respondent who had not sworn the same as 'within his personal knowledge' but instead had done so 'from my personal knowledge' and therefore it was based on information that was informed to him and he does not have current information of the same and that his affidavit contained contradictory statements.

Respondent's Opposition

[9] The Respondent submits inter alia that:

(i) the Judgment has been overturned by the High Court on appeal on 18 June 2021 (High Court Appeal) and thus the Petitioner is n