Vincent Ng J:

Preamble

[1]. Enclosure 1 is the plaintiffs' application for, inter alia , an order for sale of shares subject to two charging orders absolute dated 8 February 2001 and 10 August 2001 respectively and that the proceeds arising therefrom be utilised towards satisfaction of two judgment debts due and owing by the defendant.

Background

[2]. In order to fully appreciate the circumstances that led to this application, it is necessary to review the history of these proceedings. Briefly it is as follows.

[3].Vide Civil Suit No: D1-22-1438-99, the plaintiffs obtained two summary judgments against the defendant dated 23 March 2000 and 16 June 2000 respectively for a total sum of RM4,000,000 (the judgments).

[4]. It is noteworthy that defendant did not appeal against the judgments so entered against him nor did he seek to stay the same.

[5]. In an attempt to execute the judgments, the plaintiffs took out an application for charging orders in respect of 2,660,002 shares in Biografik (M) Sdn Bhd (Biografik shares) and 100,001 shares in Inalap International Sdn Bhd (Inalap shares). At all material times, the shares were registered under the defendant's name.

[6]. A consent charging order absolute was recorded in respect of the Inalap shares whereas the learned Senior Assistant Registrar (SAR) granted the charging order absolute in respect of the Biografik shares after extensive submissions from both sides.

[7]. Needless to say, the defendant filed an appeal against the decision of the learned SAR, which has since been dismissed.

[8]. Hence, this instant application to execute upon the judgments.

Sole Point Of Law

[9]. The defendant did not file any affidavit opposing the application but sought instead to rely on a sole point of law.

[10] It is pertinent to note that the defendant's objection (as was the case during the charging order stage) was only in respect of the Biografik shares.

[11]. The sole ground of the defendant's challenge to the plaintiffs' application was founded on s. 223 of the Companies Act 1965 (the Act) which reads as follows:

Any disposition of property of the company including things in actionand any transfer of shares or alteration in the status of the members of the company made after the commencement of winding up by the Court shall unless the Court order otherwise be void. (emphasis added)

[12]. It was the defendant's contention that in light of the alleged couple of winding up petitions against Biografik (M) Sdn Bhd commenced prior to this instant application, any transfer of Biografik shares would be an alteration in the status of the members of the company. And, that s. 223 of the Act comes into play, as the plaintiffs failed to secure the benefits of the charging orders before the commencement of the winding up. Further, the defendant argued that it was only opened to the winding up court to make an order under s. 223 of the Act.

[13]. In essence, it was the argument of the defendant that to allow this application would be to allow a violation of s. 223 of the Act.

[14]. Despite the defendant's attempt to blur the distinction between the company and its shareholders, it is trite law that the shareholder of a company is a distinct and separate legal entity from the company in which he holds shares (see Abdul Aziz bin Atan & Ors v. Ladang Rengo Malay Estates Sdn Bhd [1985] CLJ 370 (Rep); [1985] 1 CLJ 255; [1985] 2 MLJ 165 at 167).

[15]. The plaintiffs' application is for recovery of two money judgments against a defendant by means of charges against his personal property, which although is in the form of company shares, has nothing to do with the company itself. In other words, the plaintiffs are the creditors of the shareholder, not the company.

[16]. It is also trite law that s. 223 of the Act applies to creditors of the company and its true purpose is to protect the property of the company for equal distribution amongst the unsecured creditors of the company in question. The true intenti