2011 MarsdenLR 2859

ZAKI TUN AZMI, ZULKEFLI MAKINUDDIN, MOHD GHAZALI YUSOFF
BLUE VALLEY PLANTATION BHD – Appellant
Versus
PERIASAMY KUPPANNAN & ORS – Respondent

The court held that a winding-up petition can be struck out if deemed vexatious or an abuse of process, particularly when the petitioner delays proceedings or refuses reasonable settlement offers.

Headnote:(A) Companies Act 1965 - Winding-Up Rules 1972 - Application to strike out a petition to wind up a company based on inordinate delay and allegations of vexatious conduct - The appellant failed to pay a consented sum, prompting respondents to file for winding up - The petition was filed after a long delay, during which substantial amounts were tendered into court. The court reaffirmed that delaying tactics impeded justice and may even constitute abuse of process. (Paras 1, 14, 22)

(B) Conduct of creditors - The refusal of creditors to accept payments can be deemed vexatious when intended solely to exert pressure beyond financial claims - Conditions of payment must be fair to prevent litigation abuse. (Paras 6, 12, 33)

Facts of the case:
The appellant, a public company, faced a winding-up petition from twenty-two respondents alleging non-payment of a consent judgment totaling RM5,453,924.75, along with certain lands. The consent order mandates payment and property allocation, served in 1997, with final actions leading to a petition in 2000 without immediate prosecution by respondents. (Paras 3, 4)

Findings of Court:
The Court of Appeal upheld that there was an inordinate delay in seeking to strike out the petition and condoned the respondents' inaction regarding timely proceedings. Court declared that petitioning for winding up aims to serve genuine interests rather than creating leverage for collateral advantages. (Paras 5, 14, 30)

Issues: The court examined whether grounds existed for striking out the winding-up petition and if such actions were pursued in good faith. It considered the legitimacy of delaying applications and the resulting injustice to the parties involved. (Paras 1, 14, 23)

Ratio Decidendi: The court established that the refusal to accept a tendered payment coupled with unreasonable delay and continuous pressure for unwarranted benefits constitutes a vexatious abuse of judicial resources, thereby warranting dismissal of the winding-up petition. (Paras 12, 22, 33)

Result: Appeal allowed; petition to wind up struck out.