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2021 MarsdenLR 510
HIGH COURT MALAYA SHAH ALAM
TAN HING HUI – Appellant
Versus
JHC TECHNOLOGY SDN BHD & ANOR (ENCL 19) – Respondent
[Companies (Winding Up) No: BA-28NCC-810-12/2019]
The court confirmed the distinct legal issues between a winding-up petition and civil suit, ruling that the winding-up petition could not be struck out as an abuse of process.
Headnote:(A) Companies Act 2016 – Section 469 – Order 18 Rule 19 of the Rules of 2012 – Application to strike out winding-up petition – The court examined whether the petition presented constituted an abuse of process, whether a winding-up order would render civil suit nugatory, and if the petitioner came with clean hands.
Issues of management deadlock and breach of fiduciary duties were significant. The court found the issues distinct, stating there is no duplicity in claims, and ruled that the application to strike out should be dismissed. (Paras 9, 13-24)
Findings of Court: The petition is dismissed with costs awarded to the Petitioner. (Para 25)
Issues: Abuse of process, potential conflict between civil suit and winding-up petition, and the conduct of the Petitioner discussed.
Ratio Decidendi: Distinct issues exist between the winding-up petition and the civil suit, with a ruling that staying the petition was beyond the court's powers as per the Companies Act.
Result: Petition dismissed.
JUDGMENT
Introduction
[1] Enclosure 19 dated 17 March 2020 is the Notice of Motion filed by the Respondents pursuant to O 18 r 19(b)/(c)/(d) of the Rules of 2012 and / s 469 of the Companies Act 2016 and / or the inherent jurisdiction of Court for an Order inter alia, as follows:
(a) that the Petition (encl 1) dated 20 December 2019 herein be struck out and dismissed;
(b) further or alternatively, all further proceedings in the Petition herein be stayed and / or adjourned pending the disposal of the Shah Alam High Court Suit No: BA-22NCVC-549-12/2019.
Facts Of The Case
[2] The facts of the case may be summarised as follows:
2.1 JHC Technology Sdn Bhd (Plaintiff / 1st Respondent) was established in 7 December 2012. The directors and the shareholder of the Company are the Petitioner / 1st Defendant (Tan Hing Hui) and Lau Chye Koon (2nd Respondent). The shareholding's of the Company are held by the Petitioner (40%) and Lau Chye Koon (60 %).
2.2 The Petitioner is also the father of Tan Tze Ching (2nd Defendant). The Petitioner was entrusted to manage and run the day-to-day business and operation of the Plaintiff. Both Lau Chye Koon and the Petitioner shall jointly manage the bank account belonging to the Plaintiff.
2.3 The 2nd Defendant (Tan Tze Ching) is employed by the Petitioner as a General Clerk since 1 June 2019 and she directly report to the Petitioner 2nd Defendant is the director and shareholder of Triple Supply Sdn Bhd since its incorporation. By virtue of her position as the General Clerk of the Plaintiff, 2nd Defendant has access to the Plaintiff proprietary information and trade secrets which are confidential in nature.
2.4 The 3rd Defendant (Triple Supply Sdn Bhd) was incorporated on 12 September 2019 by the 2nd Defendant and one Low Moi Hoong (4th Defendant) while the 2nd Defendants is still under the employment with the Petitioner. At all material times, the 3rd Defendant nature of business is similar to that of the Plaintiff's business.
2.5 The 4th Defendant is the shareholder and the director of the 3rd Defendant since the 3rd Defendant incorporation.
[3] On 4 December 2019, JHC Technology Sdn Bhd / Plaintiff had filed an action in the Shah Alam High Court Suit No: BA-22NCVC-549-12/2019 against, amongst others, the Petitioner / 1st Defendant (Tan Hing Hui), his daughter (Tan Tze Ching-2nd Defendant), and Triple Supply Sdn Bhd (3rd Defendant) for breach of fiduciary duties / to defraud the Plaintiffs by setting up a business to compete with the Plaintiff, diverting stocks belonging to the Plaintiff to Triple Supply Sdn Bhd, using Proprietary Information or confidential information belonging to the Plaintiff etc.
[4] The relationship between the Petitioner and Lau Chye Koon (2nd Respondent) had broken down when Lau Chye Koon unilaterally filed the above writs of summons alleging that the Petitioner has breached his fiduciary duties, filed an ex-parte application to freeze the Petitioner assets of RM 764,711.00 purportedly alleging that the Petitioner has caused the missing of JHC Technology Sdn Bhd stock of RM 764,711.00.
[5] On 13 February 2020, the learned High Court Judge has allowed the Company's inter-parte Mareve Injunction as well as the inter-parte Anton Piller. The Petitioner did not appeal against the said decision.
[6] The management of the Company is in deadlock when both the Petitioner and Lau Chye Koon totally lost mutual trust and confidence in each other. The Company's operation and business can no longer move as a result of the aforesaid breakdown in relationship when Lau Chye Koon refused to issue salary to the Company's employee since September 2019.
[7] On 17 March 2020, Respondents filed Notice of Motion to strike the Petition or alternatively stay the Petition until the disposal of the Civil Suit.
[8] So much for the factual background
Issues
[9] Issues for determination are:
(a) whether the presentation of the petition is an abuse of the process of the Court;
(b) whether the winding-up order if mad
