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2016 MarsdenLR 2203
Ambank (M) Berhad – Plaintiff
Versus
Malaysian Coal & Minerals Corporation SDN BHD – Defendant
The winding-up court has inherent discretion to allow or deny intervention in proceedings, assessing necessity, commercial interests, and the potential for appeal success based on established special circumstances.
Headnote:(A) Companies Act 1965 - Sections 218 and 221 - Winding-up proceedings - Questions considered include whether a non-creditor can intervene and stay the petition - Petitioner obtained a judgment in default and filed a winding-up petition after non-payment - Court resolved intervention rights and declined to intervene due to lack of necessity - Court took intrinsic jurisdiction to dismiss intervention despite recognized commercial interests of interveners - Stay of winding-up order granted pending appeal, promoting efficient resolution and aiding commercial viability. (Paras 1-60)
(B) Court's discretion - The court has inherent power to stay, but interventions from non-creditors/ non-contributors are not automatically justified - Special circumstances have to be established. (Paras 8, 60)
(C) Commercial insolvency - The respondent failed to pay the demanded sum within statutory notice period establishing presumption of insolvency - Respondent's character and use of assets are essential considerations in determining winding-up necessity. (Paras 40-44)
(D) Costs - Costs of the unsuccessful party in the appeal are awarded to the successful party. (Paras 38, 61)
WONG KIAN KHEONG JC:
JUDGMENT
(Court enclosure no s. 1, 14, 32 and 42)
A. Introduction
1. This winding up petition (This Petition) raises, among others, the following questions:
(1)whether a party who is neither a creditor nor a contributory of a respondent company, can apply for leave of the winding up court to intervene in the winding up proceedings against the respondent company (1st Question);
(2)if the 1st Question is answered in the affirmative, can the purchaser of one of the real properties of the respondent company (Respondent) apply for –
(a)leave to intervene in This Petition; and
(b)a stay of This Petition pending the completion of the sale in question;
(3)whether the Respondent can apply to stay the Petition pending the completion of the sale of the Respondent’s two pieces of real property; and
(4)what is the test to be applied under s 73Courts of Judicature Act 1964CJA) and rule 13 of the Rules of Court of Appeal 1994 (RCA) on whether the Respondent can obtain a stay of the winding up order pending the disposal of the Respondent’s appeal to the Court of Appeal against the winding up order.
B. Facts
2. The petitioner bank (Petitioner) had obtained a judgment in default of appearance against the Respondent in the Kuala Lumpur High Court (HC) on 20.10.2014 (Judgment). The Petitioner then obtained an order from the HC to amend the Judgment on 29.1.2015 (Amended Judgment). According to the Amended Judgment, the Respondent shall pay –
(1)a sum of RM1,331,629.47 as at 4.2.2014;
(2)interest, including penalty interest, at stipulated rates for specified periods of time; and
(3)costs.
3. On 29.4.2015, the Petitioner’s solicitors served by hand a demand (Statutory Demand) under s 218(2)(a)Companies Act 1965CA) for, among others, the Respondent to pay a sum of RM1,174,449.21 (Demanded Sum) as at 29.4.2015 within 21 days from the receipt of the Statutory Demand. The Demanded Sum consisted of the following:
(1)an amount of RM1,331,629.47 due under the Amended Judgment as at 4.2.2014;
(2)interest amounting to RM141,319.74 as calculated according to Amended Judgment;
(3)costs; and
(4)less 3 payments made by the Respondent to the Petitioner on 20.5.2014, 19.6.2014 and 27.1.2015 totalling RM300,000.00.
4. The Respondent did not pay the Demanded Sum within the 21 days’ period as stipulated in the Statutory Demand. Consequently, the Petitioner filed This Petition to, among others, wind up the Respondent and to appoint the Official Receiver (OR) as the liquidator of the Respondent.
C. Two interlocutory applications
5. In Court enclosure no. 14 (Court Enc. No. 14), the Respondent filed a summons in chambers for the following orders, among others:
(1)This Petition be struck out (1st Prayer in Court Enc. No. 14). The Respondent’s learned counsel withdrew the 1st Prayer in Court Enc. No. 14 in his written submission;
(2)as an alternative to the 1st Prayer in Court Enc. No. 14, all proceedings in This Petition be stayed under the court’s inherent jurisdiction until the Respondent completes the sale of the Respondent’s two real properties (2 Sales) as follows –
(a)a two-storey shop office held under Master Title No. PN 30378, Lot 28055, Mukim Setapak, Kuala Lumpur (KL Shop Office) which has been charged to the Petitioner under the National Land Code (NLC); and
(b)a piece of industrial land held under Title No. PN 16690, Lot 28664, Mukim Sungai Karang, Kuantan, Pahang (Kuantan Land) which has been charged to AmIslamic Bank Bhd. (AIBB) under the NLC (2nd Prayer in Court Enc. No. 14);
(3)if and when necessary, the Petitioner to consent to the 2 Sales (3rd Prayer in Court Enc. No. 14); and
(4)costs of Court Enc. No. 14 to be borne by the Petitioner.
6. On 4.11.2015, Unison Marine (M) Sdn. Bhd. (Proposed Intervener) filed an application in court enclosure no. 32 (Court Enc. No. 32) for, among others, the following orders:
(1)all proceedings in This Petition be stayed until the disposal of Court Enc. No. 32 (1st Prayer in Court Enc. No. 32);
(2)the Proposed Intervener be giv
