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2021 MarsdenLR 4230
HIGH COURT MALAYA SHAH ALAM
SIME DARBY ENERGY SOLUTIONS SDN BHD – Appellant
Versus
RZH SETIA JAYA SDN BHD (ENCLS 1 & 10) – Respondent
[Companies Petition Winding Up No: BA-28NCC-241-05/2021]
The court maintained that inherent jurisdiction cannot override specific statutory provisions in winding-up proceedings, affirming the limited grounds for striking out such petitions.
Headnote:(A) Companies Act 2016 – Sections 465(1)(e), 466(1)(a), and 470(1) – Application for winding-up petition – Respondent sought to strike out petition and stay proceedings – Court ruled that inherent jurisdiction cannot override specific rules and dismissed application, noting no basis for striking out under existing law. (Paras 1.1 - 1.2, 9 - 10, 13 - 14, 16 - 17)
(B) Principle of Law – The court may only strike out a petition in plain and obvious cases; where there is reasonable cause of action and legal grounds – The Respondent's application was deemed not to meet this requirement. (Paras 6 - 9)
Facts of the case: The Petitioner, a subcontractor for a project, claimed payment through adjudication, leading to disputes and a winding-up petition after the Respondent failed to pay the adjudicated sum.
Findings of Court: Respondent's application to strike out and stay the petition was unjustified, with costs awarded to the Petitioner.
Issues: Whether a striking out order is warranted and if the court has the power to stay the winding-up petition.
Ratio Decidendi: The court confirmed that the application must be made under the prescribed rules, not inherent jurisdiction, and noted that instances for striking out are limited and based on specific legal grounds.
Result: Enclosure 10 dismissed, costs awarded to the Petitioner.
JUDGMENT
Introduction
[1] There are two (2) Enclosure before this Honourable Court for me to decide.
1.1 Enclosure 10 dated 28 July 2021 is the Respondent application via Forms of Summons pursuant to s 470 of the Companies Act 2017 and the inherent jurisdiction of the Court) under O 92 r 4 of the Rules of 2012 for the following orders:
"(a) That the Companies (Winding-Up) Petition No,: BA-28NCC-241-05/2021 filed in this Honourable to be struck out;
(b) In the alternative, that these proceedings be stayed pending disposal of the Respondents' application for leave to appeal to the Federal Court via Application No.:08(f)-57-03/2021 and (in the event the leave application is allowed), pending the disposal of the appeal to the Federal Court, and pending disposal of the arbitration proceedings via Arbitration No.: ADM-842-2020 commenced by the Respondent against the Petitioner;
(c) These proceedings be stayed pending the disposal of the application;
(d) Costs to be borne by the Petitioner; and
(e) Any other relief that this Honourable Court thinks fit and fair to grant."
1.2 Enclosure 1 dated 5 May 2021 is a petition for a winding-up order against the Respondent under s 465 (1) (e) and s 466 (1) (a) of the Companies Act 2016 .
[2] As a start, let me deal with encl 10.
Brief Facts
[3] To recap, it is important to state the facts of the case which may be summarised as follows:
(a) The Respondent has been appointed by Jabatan Pengairan dan Saliran as the main contractor in a project known as the "KERJA PROJEK PEMBERSIHAN DAN PENGINDAHAN SG MELAKA, MELAKA."
(b) Initially, the Project was awarded to a Former Main Contractor. The Former Main Contractor was terminated. The balance of the Project was the awarded to the Respondent.
(c) The Respondent then appointed the Petitioner as the subcontractor for the remaining Storm Water Treatment Plant works to the Petitioner.
(d) Dispute arose between both parties with regards to the payment for the work done by the Petitioner.
(e) On 9 May 2019, the Petitioner commenced an adjudication under the Construction Industry Payment and Adjudication Act 2012 ("CIPAA") claiming for the amount of RM3,483,025.06.
(f) The Respondent disputed the Petitioner's claim and raise a cross claim in the sum of RM3,715,369.61 being the LAD against the Petitioner.
(g) On 31 October 2019 an Adjudication Award was made against the Respondent whereby the Adjudicator allowed part of the Petitioner's claim in sum of RM1,782,156.14 and dismissed the Respondent's cross claim.
(h) The Petitioner filed an Originating Summons dated 13 November 2019 to register the Adjudication Award at the Shah Alam High Court.
(i) The Respondent subsequently filed an Originating Summons to set aside the Adjudication Award and to Stay the Adjudication Award under s 16 of the CIPA Act 2012, both dated 12 December 2019 and another Application for Stay the Adjudication Award pending Arbitration dated 6 April 2020.
(j) All four (4) of these Originating Summons were heard by the Shah Alam High Court Judge, who decided in favour of the Petitioner and dismissed the Respondent's three (3) OS for Set Aside and the Stays on 13 October 2020.
(k) On 3 January 2020, the Petitioner served a statutory notice dated 18 February 2021 pursuant to s 466 (1) (a) of the Companies Act 2016 demanding for payment of the Adjudicated Sum to be paid within 21 days from the date of the receipt of the notice.
(l) Twenty-one (21) has lapsed from the service of the Notice and the Respondent failed to pay the sum as demanded.
(m) Thereafter, on 5 May 2021, the Petitioner filed this winding-up petition against the Respondent.
(n) So much for the brief factual background.
[4] Now, let me first deal with encl 10.
The Relevant Provision Of Law
[5] The law applicable are as follows:
(a) Section 470 (1) of the Companies Act 2016 provides as follows:
"(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 contributor
