The court upheld the validity of a winding-up petition based on non-payment and statutory notice compliance, reaffirming the need for clear creditor-debtor relationships.

Khadijah Idris JC:

[1] The petitioner, Kumpulan Protection Sdn Bhd (No Syarikat 106999-X) and respondent, Global Globe (M) Sdn Bhd (No Syarikat 556853-V) are both private company incorporated under the Companies Act 1965 [Act 125].

[2] On 11 May 2015, the petitioner presented a petition vide 28NCC-353-05- 2015 ("Petition") for the respondent to be wound up in accordance with Act 125 and for the Official Receiver to be appointed as Provisional Liquidator.

[3] On 5 February 2016, after hearing submission from both parties, this court made an order in terms of the prayer in the petition. The respondent appealed against the order.

Factual Background

[4] On 21 August 2014, the petitioner and the respondent agreed to settle a monetary claim made by the petitioner against the respondent in Suit No: A52C-9-02-2014 at the Kuala Lumpur Sessions court ("KLSC Suit") for the amount RM128,911.26 ("Judgment Sum"). Both parties had mutually agreed for the respondent to pay the Judgment Sum in 10 equal monthly instalments in the sum of RM12,891.12 each beginning 30 September 2014 and ending on 30 June 2015 as full and final settlement of the amount claimed by the petitioner. Pursuant thereto a consent judgment was recorded on 21 August 2014. ("Consent Judgment" - see encl 10 exh "CYC 1").

[5] Due to the respondent's failure to comply with the Consent Judgment, the petitioner served a notice under s 218 Act 125 demanding the respondent to pay the Judgment Sum together with interest of 5% per annum on the said sum from 30 November 2014 to date of full realisation and costs within 21 days from the date of receipt of the said notice.

[6] The respondent neglected to pay or satisfy the Judgment Sum demanded or any part thereof or to make any offer to secure or compound the said sum within the stipulated period.

[7] By reason of the respondent's failure, the respondent is deemed insolvent and unable to pay its debt and as such the petition was presented, seeking for an order that the respondent be wound up.

[8] The respondent opposed the Petition. In essence, the respondent's case (encl 9) is that the Consent Judgment was erroneously entered because there was no privity of contract between both parties. As such, the respondent is not indebted to the Petitioner. The respondent further argued even if it is liable to the petitioner, the Judgment Sum is not due. Under the circumstances the winding-up proceedings which is based on the Consent Judgment is untenable.

[9] The facts related by the respondent in encl 16 in support of their contention that the Consent Judgment was a mistake is as follows:

(a) vide a Letter of Award dated 10 February 2010, the respondent appointed one Dinamik Jana as a sub-contractor to execute services works ACMW, Fire Protection Services, Kitchen Equipment and LPG System for a project known as "Cadangan Pembangunan yang Mengandungi Ibu Pejabat dan Dewan Besar LKIM di atas PT 1118 dan PT 1119 Mukim Dengkil, Daerah Sepang, Selangor Darul Ehsan" ("Contractual Works Contract") worth RM9,807,162.00. Subsequently, both parties executed an agreement in respect of the Contractual Works on 15 March 2010;

(b) thereafter vide a Letter of Award of the same date, Dinamik Jana appointed the petitioner as a subcontractor to execute works in respect of Fire Protection System under the Contractual Works Contract. The value of the said contract is RM1,165,000.00;

(c) according to the petitioner, though they are appointed by Dinamik Jana to execute works of the Fire Protection System, Dinamik Jana had by letter dated 23 December 2009 (encl 9