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2009 MarsdenLR 2589
K ANANTHAM
PIONEER INTERNATIONAL HOLDINGS SDN BHD – Appellant
Versus
GRANDBASE SDN BHD – Respondent
Court denied a stay of a Winding-Up order based on technical grounds, prioritizing prior judgments and evidence of motives to evade service.
Headnote:(A) Companies Act - Section 218(2)(a) - Winding-up order - Respondent's grounds to set aside Winding-Up Order based on technical disputes and non-representation rejected - Respondent's failure to appeal previous judgment precludes reconsideration - Evidence suggests motive to evade service - Court will not grant stay of Winding-Up order in light of circumstances - Minimum outstanding amount for petition established as RM500. (Paras a, b, c, d)
(B) Discretion of Court - In exercising discretion, Court considers the motives and circumstances surrounding the application.
Findings of Court:
The application to stay the Winding-Up order is dismissed; costs of RM15,000 awarded to the petitioner.
Issues: The primary issues involved technical grounds against a Winding-Up order, including service and whether a prior judgment could justify reconsideration.
Ratio Decidendi: The Court emphasized that prior judgments should not be disregarded and that motives to evade legal processes can warrant refusal to exercise discretion favorably.
Result: Application dismissed with costs.
I dismiss Enc. 15 with cost on the following grounds:
a) The grounds for the Respondent moving this Court to set aside the Winding-Up Order in Enc. 12 and the contributory seeking a stay of the Winding-Up order in Enc. 15 are identical. The grounds are largely technical and relate to the debt being disputed; the 218 notice and the petition being defective for not having been served on the registered address of the company and finally, because the Respondent was not represented at the hearing of the petition. Enc. 12 was dismissed by another High Court judge. The Respondent who is more directly adversely affected by the Winding-Up order did not appeal against this decision. By reason thereof, I do not see any reason why I should go behind the judgment of another High Court Judge and order a stay of the Winding-Up order when the contributory is relying on the very same 'discredited' technical grounds;
b) In any event, I refuse to exercise my discretion in favour of granting a stay since paragraphs 4 to 23 of Enc. 18 afford prima facie evidence that the motive of the Respondent in changing its registered address was primarily to evade service of the Winding-Up petition on it. The motive of the contributory in moving this Court for stay is also suspect since there is prima facie evidence that this contributory is one of the parties to the merger exercise which has left the Respondent with few assets. For this reason, it is in the interest of the contributory to avoid a private liquidator investigating the circumstances of the merger. This is, yet, another reason why I refuse to exercise my discretion in favour of the contributory, for stay of the Winding-Up order;
c) The minimum amount that needs to be outstanding from a company to enable the commencement of a Winding-Up petition is only RM500 (see Sec. 218 (2) (a) of the Companies Act ). As such, the uncertainty, if any, in the judgment of the High Court, forming the foundation of this petition cannot be a basis to challenge the Petitioner's entitlement to commence the petition bearing in mind that the judgment of the High Court runs into millions. Besides, the proper forum to challenge the correctness of the judgment is the Court of appeal and not the Winding-Up Court.
d) Since no change of solicitors has been filed in the Winding- Up petition commenced by the petitioner, there is no reason for this Court to question the entitlement of Messrs Tetuan Gill & Tang to represent the Petitioner in Enc. 15.
I order the Applicant / Contributory to pay the sum of RM15,000 by way of costs to the petitioner. Such costs to be paid within 14 days of this order.
