Stay of winding-up orders allows beneficial transactions post-winding-up, provided they are approved and within jurisdiction; companies can sustain necessary operations until liquidator assumes control.

[1] This is my JUDGMENT in respect of the plaintiff's application in essence to set aside an order of the High Court in a different suit where the Court ordered a stay of the winding up proceedings pursuant to section 243 of Companies Act 1965 (CA 1965) . The prayers inter alia reads as follows:

1. A declaration that the Order dated 27.4.2009 obtained at Kuala Lumpur High Court Companies Winding-Up No: D1-28-86-2001 was obtained in breach of and/or ultra vires section 243(1) of the Companies Act 1965 and is therefore void and of no effect.

2. A declaration that the Order dated 27.4.2009 obtained at Kuala Lumpur High Court Companies Winding-Up No: D1-28-86-2001 was obtained in excess of and/or without the jurisdiction of the winding-up Court and is therefore void and of no effect.

3. A declaration that the Order dated 27.4.2009 obtained at Kuala Lumpur High Court Companies Winding-Up No: D1-28-86-2001 was obtained in breach of the rules of natural justice and is therefore void and of no effect.

4. Consequent to any or all of the declarations above, the Order dated 27.4.2001 obtained at Kuala Lumpur High Court Companies Winding-Up No: D1-28-86-2001 be set aside.

Brief facts

[2] The defendant was wound up by an order of Court on 23.10.2001. However the Court had on 27.4.2009 granted a stay of the winding up order. And that order reads as follows:

"ADALAH DIPERINTAHKAN bahawa Perintah penggulungan terhadap syarikat Responden bertarikh 23hb Oktober 2001 di gantung samasekali dan bahawa segala urusniaga dan perjanjian-perjanjian yang telah dimasuki oleh syarikat Responden dari tarikh permulaan penggulungan, iaitu 05 hb Februari 2001, sehingga tarikh Perintah ini disahkan."

[3] The plaintiff is an insurance company and complains that (i) after the winding up order had been granted the defendant had obtained from the plaintiff a fire insurance policy from 10.5.2002 to 9.5.2003 and thereafter the policy was renewed from 10.5.2003 to 9.5.2004 (ii) the defendant made a claim under the policy on 4.4.2004 (iii) thereafter the plaintiff through their loss adjuster found out that the company has been wound up at the material time the insurance policy was procured. In consequence, the plaintiff had repudiated liability and refunded the premium but the defendant had refused to accept the premium and threatens to institute legal proceedings.

Preliminaries

[4] It is clear that the plaintiff is making this application to evade liability in respect of the policy, on the ground that the policy was procured after the order of winding up. Both counsels did not address me on the issue whether a company is debarred from taking insurance policy or any other steps to protect the assets of the company or acts beneficial to the company. Just because the company has been wound up does not mean any of the transaction during the material time or transaction after the winding up cannot be sustained. It all depends on whether the act is for the benefit of the company which is essential in the process of winding up. Just because the winding up order has been granted does not mean all activities in the company must freeze immediately. And that does not also mean that all activities of the company must be done only by the liquidator. For example, paying water bill, electricity bill, payment of petrol expense and so many other things which need to be done to sustain the company as a going concern or at least until the liquidator comes into direct control of the activities of the company. At times it may take days or months for the liquidator to take control and even if he has taken control it does not mean that he cannot direct or seek assistance from the directors, employees etc. of the company to continue with the