Back
2021 MarsdenLR 831
HIGH COURT MALAYA PULAU PINANG
GTM LAND & PROPERTY SDN BHD & ORS – Appellant
Versus
PRESGRAVE & MATTHEWS & ORS (ENCL 14 & 17) – Respondent
[Civil Suit No: PA-22NCvC-170-09/2020]
The court affirmed that early publication of winding-up petition advertisements is protected by absolute privilege, regardless of procedural irregularities.
Headnote:(A) Companies (Winding-Up) Rules 1972 – Rule 24 – Absolute privilege in publication of winding-up petitions – The court upheld that early publication of advertisements for winding-up proceedings is protected by absolute privilege, as it fulfills statutory requirements despite procedural irregularities (Paras 30, 37, 44, 62).
(B) Defamation – The plaintiffs alleged defamation due to early publication without court order, contending it was done maliciously; however, the court determined that absolute privilege absolves this claim (Paras 22, 51).
Facts of the case: The case involved winding-up proceedings against a company, where defendants published an advertisement of the petition prematurely, leading plaintiffs to claim defamation and abuse of process without cause (Paras 4, 17).
Findings of Court: The publication, while irregular, did not violate the core notice purpose of the winding-up rule and thus upheld the defense of absolute privilege (Paras 30, 37, 61).
Issues: The court addressed the validity of defamation claims linked to the early advertisement of winding-up petitions and the application of absolute privilege (Paras 18, 22).
Ratio Decidendi: The court ruled that the advertisement's early publication fell under legal privilege, protecting defendants against defamation claims, asserting that such statutory mandates must be adhered to for effective notice (Paras 36, 44).
Result: Claims dismissed with costs.
JUDGMENT
Introduction
[1] Two encl ie, encl 14 and 17, were heard together.
[2] Enclosure 14 is the 1st defendant's Notice of Application dated 17 November 2020 made pursuant to O 14A, Rules of 2012 ("ROC 2012') which sought the determination of the following question of law:
(i) whether the publication of the Advertisement of Petition on 9 August 2020 and 11 August 2020 in The Star and Kwong Wah Yit Poh newspapers, made pursuant to r 24, Companies (Winding-Up) Rules 1972 ("WUR 1972'), in the course of proceedings in Court for the Winding-Up of the 1st plaintiff company, via, Penang High Court Companies (Winding-Up) No PA-28NCC-57-07/2020 ("Winding-Up Proceedings"), were protected by absolute privilege.
[3] Enclosure 17 is the 2nd and 3rd defendants' Notice of Application dated 30 November 2020 made under O 14 ROC 2012 seeking the determination of the following questions of law:
(i) whether the publication of the Advertisement of Petition dated 4 August 2020 in The Star and the Kwong Wah Yit Poh newspapers on 9 August 2020 and 11 August 2020 pursuant to the WUR 1972 in the Winding-Up Proceedings is protected by absolute privilege; and
(ii) whether the fact that the Advertisement of Petition was advertised more than 7 clear days before the date of the hearing of the Petition has any bearing on the 2nd and 3rd defendants' defence of absolute privilege.
Brief Background Facts
[4] These contextual facts are gleaned from the cause papers and the submissions of the parties filed herein.
[5] The 1st defendants are a firm of solicitors, retained by the 2nd defendant company and instructed by the 3rd defendant (director of the 2nd defendant) to wind-up the 1st plaintiff company.
[6] The 2nd defendant is a shareholder of the 1st plaintiff, having purchased 1,200,000 shares from Goh Kim Heong, a former shareholder and director of the 1st plaintiff under a Share Sale Agreement dated 24 April 2019 ("SSA").
[7] The SSA was entered with the consent of the 2nd and 3rd plaintiffs, who were the other 2 directors of the 1st plaintiff.
[8] Having received the full purchase price, Goh Kim Heong resigned as a director of the 1st plaintiff and in accordance with the preconditions in the SSA, the 2nd defendant's nominee, Tan Kok Siang was appointed as a director of the 1st plaintiff.
[9] Subsequently, the plaintiffs and the 2nd defendant entered into the Shareholders Agreement dated 7 August 2019 ("SA").
[10] The SA confirmed that 1,200,000 shares had been duly issued and subscribed by the 2nd defendant and that 2nd and 3rd plaintiff are the other 2 shareholders in the 1st plaintiff.
[11] The 2nd defendant faced difficulties in the joint management of the 1st plaintiff and instructed the 1st defendant firm to present a Winding-Up Petition, ie, the Winding-Up Proceedings, against the 1st plaintiff on just and equitable grounds, due to breach of trust and confidence.
[12] The Petition and the Affidavit Verifying the Petition were served on the 1st plaintiff on 27 July 2020, the Insolvency Department on 4 August 2020 and the Companies Commission Malaysia on 5 August 2020.
[13] After failed attempts of service on the 2nd and 3rd plaintiffs, the Petition and the Affidavit Verifying the Petition were eventually served on the 2nd and 3rd plaintiffs on 10 August 2020, when they agreed to accept service of the same.
[14] The Advertisement of Petition was published on 9 August 2020 and 11 August 2020 in The Star and Kwong Wah Yit Poh newspapers.
[15] The Petition was fixed for case management on 25 August 2020 and the learned Senior Assistant Registrar directed the 1st defendant to comply with r 32 WUR 1972 and file the requisite certificate by the next case management on 16 September 2020, which was about 1 month before the hearing of the Petition fixed on 17 October 2020. And upon compliance, the Registrar's Certificate was issued on 17 September 2020.
[16] As required by r 24 WUR 1972, the Advertisement of Petition was published in The Star newspaper and the
