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2022 MarsdenLR 233
COURT OF APPEAL PUTRAJAYA
PROLINK MARKETING SDN BHD – Appellant
Versus
AMBANK ISLAMIC BERHAD – Respondent
[Civil Appeal No: W-02(NCC)(A)-158-01/2021]
The court affirmed that a High Court can issue conditional winding-up orders under the Companies Act 2016, provided the conditions relate to the winding-up process.
Headnote:(A) Companies Act 2016 – Sections 465(1)(e), 466(1)(a), 469(1) – Conditional winding-up order – The High Court issued a conditional order requiring the appellant to pay sums demanded by the respondent before a specified date, failing which winding up of the appellant would occur – The court clarified that it had the power to make such an order. (Paras 1, 8, 10, 26)
(B) Winding-up proceedings – Discretion – The court's discretion in winding-up applications allows for conditional orders which relate to the winding-up process, rather than independent remedies; such conditions should be reasonable and relevant to the context of the winding-up. (Paras 11, 27)
Facts of the case: The respondent obtained a substantial judgment against the appellant, which led to a statutory demand and the subsequent winding-up petition, prompting a conditional winding-up order from the High Court if certain payment conditions were not met.
Findings of Court: The High Court's order was upheld as it fell within its discretionary powers, emphasizing compliance with statutory provisions allowing conditional orders in winding-up applications.
Issues: Whether the High Court had the authority to impose a conditional winding-up order and whether such conditions are appropriate under the CA 2016.
Ratio Decidendi: The court found that the High Court's order was valid, as it both served a legal purpose and adhered to the provisions of the CA 2016 regarding winding up procedures.
Result: Appeal dismissed.
JUDGMENT
[1] This is an appeal against the High Court's conditional winding-up order dated 5 August 2020 in which the High Court ordered the appellant to pay the full sum demanded by the Petitioner under the Petition dated 5 December 2019 and the Statutory Notice of Demand dated 7 November 2019 before 5 January 2021. Failing to comply with the said order, the appellant shall be wound up on the said date, 5 January 2021.
The Background Facts
[2] On 21 October 2019, in suit No WA-22M-253-04/2019, the respondent obtained a final judgment against the appellant at the Kuala Lumpur High Court. The judgment obtained by the respondent was for the following sum:
(a) RM15,470,245.98 calculated as of 31 March 2019 under Multi-Trade Facility-i (1); Islamic Bankers Acceptance 1;
(b) Late Payment Charges (Ta'widh) at the Inter-Bank Islamic Money Market Rate (current rate as of 1 April 2019 was 3.22% per annum and subject to changes from time to time) on the principal outstanding under Multi-Trade Facility-i (10) Islamic Bankers Acceptance 1 in the sum of RM14,963,862 calculated on the daily basis from 1 April 2019 until the date of full settlement;
(c) RM10,343,134.55 calculated as of 31 March 2019 under Multi-Trade Facility-i (2): Islamic Bankers Acceptance 2;
(d) Late Payment Charges (Ta'widh) at the Inter-Bank Islam Money Market Rate (current rate as of 1 April 2019 was 3.22% per annum and subject to changes from time to time) on the principal outstanding under the Multi-Trade Facility-i (2): Islamic Bankers Acceptance 2 in the sum of RM9,989,717 calculated on the daily basis from 1 April 2019 until the date of full settlement.
(e) RM13,128,193.32 calculated as of 15 April 2019 under the Term Financing-i;
(f) Late Payment Charges (Ta'widh) at the rate of 1.0% per annum calculated on the daily basis on the balance outstanding under Term Financing-i Facility (RM6,541,220.93 as of 15 April 2019) from 16 April 2019 until the maturity date or the date of the judgment whichever is earlier;
(g) Late Payment Charges (Ta'widh) at the Inter-Bank Money Market Rate (current rate as of 16 April 2019 was 3.21% per annum and subject to changes from time to time) on the balance outstanding calculated on daily basis under the Term Financing-i from the maturity date of the judgment whichever is earlier until the date of full settlement;
(h) RM11,205.47 calculated as of 15 April 2019 under the Complementary Term Financing-i;
(i) Late Payment Charges (Ta'widh) at the rate of 1.0% per annum calculated on daily basis on the balance outstanding under Complementary Term Financing-i (RM10,287.71 as of 15 April 2019) from 16 April 2019 until the maturity date or the date of the Judgment whichever is earlier;
(j) Late Payment Charges (Ta'widh) at the Inter-Bank Islamic Money Market Rate (current rate as of 16 April 2019 was 3.21% per annum and subject to changes from time to time) on the balance outstanding calculated on daily basis under Complementary Term Financing-i from the maturity date or the date of the Judgment whichever is earlier until the date of full settlement; and
(k) Cost in the sum of RM4,000.
[3] The respondent then served on the appellant the Statutory Notice of Demand dated 7 November 2019 pursuant to s 465(1)(e) and s 466(1)(a) of the Companies Act 2016 ("The CA 2016"), demanding the judgment sums as alluded to above. In the same notice, the respondent also gave notice that, unless the appellant paid the said sums to the respondent within 21 days from the date of the service of the notice, the appellant shall be deemed unable to pay the appellant's debt and winding-up proceedings may be taken against the appellant.
[4] However, the appellant failed to pay the sum demanded in the said notice.
[5] Consequently, on 5 December 2019, the respondent filed the Winding up Petition at the High Court Kuala Lumpur and served on the appellant the sealed copy of the Petition with the Affidavit Verifying Petition. The respondent as the Petitioner, had appli
