The breakdown of mutual trust and confidence among family members in a family company justifies winding up under the just and equitable ground, irrespective of the company's profitability.

JUDGMENT

Ravinthran Paramaguru JCA:

Introduction

[1] There are two appeals before us. Both appeals originate from the same decision of the High Court sitting in Sibu which is dated 6 November 2017. The matter before the High Court was the petition by Kathryn Ma who is the executor of the estate of her late husband, Datuk Wong Kie Nai (WKN). Kathyrn Ma applied to wind up WTK Realty Sdn Bhd under s 465(1)(h) of the Companies Act 2016 which is the "just and equitable provision". The learned Judicial Commissioner granted the petition and wound up WTK Realty Sdn Bhd. Her Ladyship also granted the ancillary orders. However, a stay was subsequently granted.

[2] The appellant in the first appeal (Appeal Q-02(NCvC)(A)-2476-12- 2017) is WTK Realty Sdn Bhd. The two appellants in the second appeal (Appeal Q-02(NCvC)(A)-2490-12-2017) are the contributories of WTK Realty Sdn Bhd They are also the brothers of the late WKN.

Background Facts

[3] The undisputed background facts set out in the judgment of the High Court are as follows. WTK Realty Sdn Bhd is a company founded by the late Datuk Wong Tuong Kwang in 1981. Over the years, it has grown into a large conglomerate controlling many companies with diverse commercial interests in Malaysia, Liberia, Australia, the British Virgin Islands (BVI), Singapore and Papua New Guinea (PNG). But WTK Realty Sdn Bhd remained the flagship company of the business empire founded by the late Datuk Wong Tuong Kwang.

[4] After suffering a stroke in 1993, the founder handed over management of the WTK Group to his sons, namely, Datuk Wong Kien Nai (WKN), Datuk Wong Kie Yik (WKY) and Wong Kie Chie (WKC). Datuk Wong Tuong Kwang passed away intestate on 10 November 2004. Apart from his three sons, he was survived by his wife (since deceased) and three daughters. Thereafter, the WTK Group was managed by WKN until he was stricken with illness and passed away on 11 March 2013. WKN left behind his widow (Kathyrn Ma), a son (Neil Wong) and a daughter (Mimi Wong). All three are beneficiaries of the estate under a Will. Kathryn Ma became the executor of the estate of WKN. She was granted probate in Malaysia and other jurisdictions where the WTK Group had business interests.

Dispute

[5] Since the death of WKN, at least 43 suits were filed in Sarawak alone involving companies in the WTK Group. On the one side was Kathryn Ma and/or companies controlled by her. On the other side are families of WKY and WKC and/or companies which they controlled.

[6] Some of the litigation instituted by the two factions involved applications to wind up companies controlled by the other side. For example, on 13 June 2016, Arctic Star Sdn Bhd was a company in which the majority stake was held by the estate of WKN. WKY and one Haji Wahab Bin Ismail as contributories applied to wind it up under the just and equitable provision. The respondent company did not object to the petition. In the later part of 2016, Kathryn Ma successfully wound up five companies in the WTK Group on 17 October 2017. In May of 2017, Kathryn Ma filed five winding up petitions which included the instant one which is against the flagship company of the WTK Group.

Grounds Of The Petition

[7] As we said earlier, Kathryn Ma had relied on the just and equitable provision of s 465(1)(h) of the Companies Act 2016 to wind up WTK Realty Sdn Bhd She averred that WTK Realty Sdn Bhd is a family company. She pleaded that the estate of WKN owns 8,168,000 shares of WTK Realty Sdn Bhd which represents 42.65 per cent of the total shareholding. It must be pointed out that of these shares, 5,252,000 are disputed. In addition, her son Neil Wong owns 800,000 shares which amounts to 4.8% of the total shares. The rest of the shares are held by WKT, WKC and their children. She also averred that since the days of the founder, ownership of shares was passed down to the successive generations of the Wong family. Similarly, control of the company at the board level was also passed down as her children and the