JUDGMENTBY: MOHAMED DZAIDDIN FCJ (DELIVERING THE JUDGMENT OF THE COURT)

MOHAMED DZAIDDIN FCJ (DELIVERING THE JUDGMENT OF THE COURT) This appeal arose from an oral decision of the learned judge of the High Court, Johor Bahru given on 26 May 1991 with respect to an award of damages following the striking out of a winding-up petition by the court.

After hearing the counsel on 12 April 1996, we allowed the petitioners appeal with half costs to the petitioner, and we now give our reasons.

The background to this appeal can be summarized as follows. On 12 November 1990, the appellant, who for the sake of clarity shall be referred to as the petitioners filed a winding-up petition against the respondent company under s 218(1) of the Companies Act 1965 (the Act) on the ground that the respondent was unable to pay its debts, ie RM18,260.70, being the balance of the purchase price of goods sold and delivered together with interest. On 4 March 1991, an order for winding up was accordingly granted by the court. However, by consent of the parties, the said winding-up order was set aside, and the petition was set down for full hearing. Meanwhile, on 10 January 1991, the respondent filed an application by way of a notice of motion pursuant to O 18 r 19(1)(b), (c) and (d), seeking an order to strike out the petition and for damages and costs. On 26 May 1991, the learned judge granted the application and ordered that the winding-up petition be struck out; that the petitioner do pay damages to the respondent to be assessed by the registrar, and lastly, the petitioner do pay the respondent the costs of the proceedings. On 22 July 1991, leave to appeal to the then Supreme Court against the learned judges decision in awarding damages to the respondent was granted. Hence, this present appeal.

In arriving at his decision for striking out the winding-up petition under O 18 r 19(1)(d) RHC and awarding damages and costs against the petitioner, there is no doubt in our mind that the learned judge had considered the supporting affidavit of Zainuddin Alani, a director of the respondent, affirmed on 10 January 1991. On the issue of damages, his Lordship must have placed reliance on the following paragraphs of the said affidavit:

(15) I verily believe the present proceedings herein are scandalous,

frivolous, vexatious and it is an abuse of the process of the

court.

(16) The petitioner having withdrawn the earlier suit against the

respondent is now estopped from proceeding with this action.

(17) Upon the issue and the service of the winding-up petition, the

bank accounts of the respondent has been duly frozen and the

respondent is unable to use its banking duly accounts. As the

said account is frozen the respondent is unable to carry on its

business activities and undue loss and damage has occurred to the

respondent.

However, in the Oral Decision, the learned judge did not give any reason for awarding damages against the petitioner but appeared to have followed his earlier decision in Ansa Teknik (M) Sdn Bhd v Cygal Sdn Bhd [1989] 2 MLJ 423 , where the facts are quite similar to the facts herein. At p 425 para F, his Lordship concluded:

I could not help thinking that the filing of the notice of

discontinuance and the subsequent presentation of the winding-up

petition were all acts calculated to circumvent the normal course of

going to trial after the dismissal of the application for summary

judgment under O 14 and to embarrass the respondent. In the

circumstances I considered the presentation of the winding-up

proceedings as an abuse of the process of the court and I accordingly

granted an order in terms of the first three prayers of the

application, ie that the petition be struck out, that costs of the

application be borne by the petitioner and that a date be fixed for

enquiry i

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