A creditor may file a winding-up petition based on a demonstrated inability of a company to pay its debts, without needing prior judgment; petition is valid under the relevant statutory provisions.

JUDGMENT

(Enclosure 1 & 5)

Nadzarin Wok Nordin J:

Introduction

[1] There are 2 enclosures before this Court being the Winding Up Petition in enclosure 1 (Petition) and the Respondent's application under s 9 of the Reciprocal Enforcement of Judgement Act 1958, O 18 r 19 and O 92 r 4 of the Rules of 2012 vide enclosure 5 (Enclosure 5) to strike out the Petition on inter alia the Petition has no reasonable cause of action or locus and/or that it is scandalous, frivolous, vexatious and/or an abuse of Court process.

[2] The Petition states that:-

(a) the Respondent is indebted to the Petitioner for a total sum of USD 2,791,167.11 as at 31 March 2021 which includes the judgment sum, interest calculated up to 31 March 2021 and costs as ordered in the judgment obtained by the petitioner against the Respondent from the District Court of Virginia, United States of America in the Civil Action No. 1:20-cv-00235 on 21 October 2020 (Judgment);

(b) by a letter dated 22 April 2021 (Statutory Notice) the Petitioner's solicitors Messrs Christopher Lee & Ong (MCLO) had issued a letter to the Respondent demanding for payment of the Judgment sum to be made by the Respondent; and

(c) the Respondent had failed and/or refused to make any payment towards settlement of the Judgment sum.

[3] Enclosure 5 is premised on the grounds that:-

(a) the Judgment is not a judgment obtained in reciprocating countries within the Reciprocal Enforcement of Judgement Act 1958; and

(b) there is no fresh action commenced and judgment obtained in the Malaysian Court to enforce the Judgment.

Background Facts

[4] The relationship between the Petitioner and the Respondent can be summarized as follows:

(a) Sometime in 2013, the Respondent entered into several contracts with the Petitioner (known at the time as Greenline Systems);

(b) Effective 1 January 2015, GreenLine merged with and into A-T Solutions, Inc. and the surviving entity of the merger was called "A-T Solutions, Inc.". By operation of law and pursuant to the Plan of Merger between the aforesaid two companies, all properties, assets, contractual rights and liabilities possessed by GreenLine prior to the merger vested in A-T Solutions, Inc. Since all of GreenLine's properties, assets and contractual rights automatically vested in A-T Solutions, Inc, no assignment of GreenLine contracts occurred or was required;

(c) On 31 December 2016, A-T Solutions, Inc. subsequently converted from a corporation to a limited liability company and changed its name to "PAE national Security Solutions LLC" - who is the Petitioner named herein;

(d) Accordingly, the right and obligations under the contracts that were entered between GreenLine and the Respondent were assumed by and vested in the Petitioner;

(e) There were substantially no changes in the services provided under the contracts to the Respondent and furthermore, the services delivered to the Respondent were handled by the same team since the commencement of the contracts;

(f) At all material times, the Respondent was and is aware that GreenLine's rights and obligations under the relevant contracts were assumed by and or vested in the Petitioner as the Respondent had over the years acceptedservices under the contracts from the Petitioner, made payments to thePetitioner and corresponded with the Petitioner for matters pertaining tothe contracts.

Court's Findings

Striking Out

[5] I will firstly deal with Enclosure 5 and whether the Petitioner has a reasonable cause of action or locus to commence the Petition against the Respondent.

[6] On this issue the Respondent had argued that the Master Subcontractor Agreement (MSA) was entered into between GreenLine Systems Inc (GreenLine) and the Respondent and that the Petitioner is not a party or privy to the MSA, whilst the Petitioner submits that the Petitioner is a successor in title to GreenLine and that GreenLine had originally merged with A-T Solutions Inc (ATS) which by way of a plane of merger ATS was converted from a corporation to a limited liabili