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2011 MarsdenLR 2656
HIGH COURT MALAYA KUALA LUMPUR
DINDINGS POULTRY PROCESSING SDN BHD – Appellant
Versus
SUPER KINTA DEPARTMENTAL STORES SDN BHD – Respondent
[Companies Winding Up No: D8-28-41-2005]
A company can be wound-up under Section 218 if it has an undisputed debt exceeding RM500, with the court prioritizing finality in litigation over vague disputes.
Headnote:(A) Companies Act 1965 - Section 218 - Winding-up petition - Petitioner claimed RM74,092.63 outstanding for goods sold and services rendered - Statutory notice served with 21 days to pay - Respondent failed to dispute debt with specificities - Court found no genuine dispute and emphasized finality in litigation regarding the same issue - Application to strike out petition and cross-examine dismissed due to res judicata principles as prior applications were dismissed with costs. (Paras 1-43)
(B) Res judicata and Estoppel - Respondent barred from relitigating issue already determined by the court - Principle emphasized to uphold judicial finality. (Paras 9-14)
(C) Discretion of court in allowing cross-examination - Court upheld that cross-examination unnecessary in light of established documentary evidence supporting petitioner's claim. (Paras 24-30)
(D) Winding-up order - Court allowed winding-up on basis of undisputed debt exceeding statutory minimum - Respondent deemed unable to pay debts as defined under Section 218. (Paras 41-42)
Findings of Court:
The petition was granted, winding-up order issued, and provisional liquidator appointed.
Issues: Whether the respondent genuinely disputed the debt and if the winding-up order was appropriate.
Ratio Decidendi: The court held that vague disputations without substantiation do not negate the evidence of unpaid debts and emphasized the application of res judicata in preventing retries of settled matters.
Result: Petition allowed.
| Table of Content |
|---|
| 1. overview of winding-up petition history (Para 1 , 2 , 7 , 8) |
| 2. details of debt and statutory notice (Para 3 , 4 , 5 , 6) |
| 3. res judicata prevents re-litigation (Para 9 , 13 , 14 , 19) |
| 4. principles of res judicata and estoppel (Para 10 , 11 , 12 , 15 , 16) |
| 5. application to cross-examine deponent details (Para 17 , 24 , 25) |
| 6. grounds for striking out the petition (Para 18 , 20) |
| 7. respondent's burden to provide evidence of dispute (Para 21 , 22 , 23) |
| 8. discretion of court on cross-examination (Para 28 , 29 , 30) |
| 9. winding-up order considerations concerning disputed debts (Para 32 , 33 , 34 , 35) |
| 10. court's approach to the interpretation of debts owed (Para 36 , 37 , 38 , 39 , 40 , 41) |
| 11. final order for winding-up granted (Para 42) |
Prologue
[1] There is a bit of history to this Winding-Up Petition. It was filed on 17 January 2005. On 1 August 2007 the respondent filed 3 interlocutory applications. One was an application for extension of time to file an affidavit to oppose the petition (encl 17). Another was an application to strike out the petition (encl 14) and the third was an application to cross-examine the deponent of the affidavit verifying the petition of one Dr Yap Teow Chong (encl 20).
[2] On 3 September 2007, the court dismissed encl 17 with costs and the court also proceeded to dismiss encls 14 and 20 with costs. The court also on the same date granted an order in terms of the petition and the respondent was accordingly wound up.
Problem
[3] The petitioner in the petition had stated in para 5 that the respondent is indebted to the petitioner in the sum of RM74,092.63 being the balance outstanding sum for goods sold and delivered and services rendered to the respondent and had also set out the particulars of the invoices in terms of its number, date and amount invoiced. The various Statements of Account and Invoices were annexed to the petition and marked exh DPP-1. The petition was verified by an affidavit verifying the petition.
[4] There was also an averment in para 6 that a s 218 Companies Act 1965 statutory notice had been served on the respondent at its registered office giving the usual 21 days to pay the debt failing which the respondent would be deemed to be unable to pay its debts and appropriate action will be taken for the winding-up of the respondent.
[5] There was the usual averment by para 7 of the petition that over 3 weeks had lapsed since the statutory demand was served but the respondent had failed and neglected to pay or satisfy the said sum or any part thereof or to make any offer to the petitioner to secure or compound the same.
[6] The petitioner continued in pp 8 and 9 of the petition to state that the respondent is unable to pay its debts and that in the circumstances it is just and equitable that the respondent be wound-up. The petitioner prayed for the respondent to be wound-up and for the Director General of Insolvency to be appointed the provisional liquidator and for costs to be paid put of the assets of the respondent.
[7] After the Winding-Up Order was made the respondent filed 4 Notices of Appeal to the court of Appeal against each of the interlocutory application that was dismissed as well as the Winding-Up Order. On the hearing of the appeals on 14 March 2011, the official receiver from the insolvency department withdrew the appeals with regard to the decisions on the 3 interlocutory applications and as such the appeals were struck out. With respect to the appeal against the Winding-Up Order, the court of Appeal allowed the appeal on the sole basis that it was improper to grant a Winding-Up Order on a mention date and the court of Appeal further ordered that the Winding-Up Order be set aside and the matter be reverted to the High court for a hearing date to be fixed for the hearing of the petition.
[8] On 17 August 2011, the respondent filed another application to strike out the petition in encl 50 and also another application in encl 52 to cross-examine Dr Yap
