A winding-up petition may be struck out for being frivolous or vexatious, especially when the petitioner refuses legitimate payment and acts unreasonably, confirming that a valid payment tender negates the grounds for such a petition.

[1] This appeal basically deals with the issue of whether the petition to wind up the appellant should be struck out under O 18 r 19 of the Rules of High (RHC) 1980. That rule provides for striking off on any pleading on grounds that it is frivolous, vexatious or an abuse of the process of the Court[1]. That O 18 r 19 applies to striking out a petition to wind up a company is well established[2]. In answering whether this petition to wind up the appellant has been filed on the grounds which are frivolous, vexatious or an abuse of the process of the Court, we will also have to consider the following questions. They are:-

a) Whether there was an inordinate delay in filing the application to strike out.

b) Refusal by the respondents to accept payments made into Court by the appellant.

[2] Leave was granted on three questions which will be quoted in the appropriate part of this judgment.

Facts Of The Case

[3] The respondents are twenty-two petitioners who had under one petition filed for the winding up of the appellant, a company registered as a public company on the ground that the Appellant has failed and neglected to pay a sum of RM5,453,924.75 which the appellant had by a consent order agreed to pay the respondents. According to that consent order, appellant was to pay the individual respondents out of the aggregate sum different amounts out of that total amount mentioned earlier within twelve months of the service of the consent order, which period may be extended subject to payment of interest. The consent order dated 18 October 1996, was served on the respondents on 14 March 1997. In addition to payment of these monies to the respondents, each respondent was also to be given pieces of land of varying sizes totalling 65 acres. The respondents have been given vacant possession to those lands and in fact occupied and carried on activities on their respective pieces of lands and deriving income from these activities. For the purpose of this ground of judgment, the facts leading to the consent order need not be cited as they are not relevant to the issues and are not disputed.

[4] As a result of the failure on the part of the applicant to pay the amount due which is paramount to the consent order, in November 2000 the respondents filed a petition to wind up the appellant. Seven years later, an ex parte application for an appointment of provisional liquidator was made. Almost eight months after that, a provisional liquidator was appointed. On 7 November 2008, ie, eight years after petition to wind up was filed, an application was filed under O 18 r 19 to strike out the petition. The Court of Appeal held that there was inordinate delay in filing the application under O 18 r 19 and dismissed the application to strike out.

[5] The appellant justified their actions by arguing that they had paid into Court the amount due under the consent order together with interest towards settlement of the amount due to the respondents. This payment into Court was made in April 2009, more than 12 years after consent judgment was made. That payment was however subject to the conditions that the respondents terminate the petition to wind up the appellant as well as the appointment of the provisional liquidators. According to the appellant, the respondents refused t