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2008 MarsdenLR 4931
FEDERAL COURT
RICHARD MALANJUM CJ (SABAH AND SARAWAK), ARIFIN ZAKARIA AND HASHIM YUSOFF FCJJ
CIVIL APPEAL NO 02–22 OF 2005(W)
26 September 2008
Case Summary
Civil Procedure — Disposal of action without trial — Disposal of case on point of law — Outcome of claim resting entirely on answer to question posed — Whether facts in dispute — Whether case suitable for determination under O 14A of the Rules of the High Court 1980
Companies and Corporations — Winding up — Discontinuance of — Debt fully paid to petitioner before advertisement of petition — Whether petitioner may discontinue winding up proceedings — Whether petitioner nevertheless obliged to advertise petition — Whether petitioner had to proceed to obtain court order to retain money paid by company
Companies and Corporations — Winding up — Petition — Advertisement of petition — Petition for winding up advertised in newspaper several months before hearing of petition — Debt fully paid to petitioner before advertisement of petition — Whether advertisement or petition invalid — Whether amounted to defamation — Whether petitioner nevertheless obliged to advertise petition — Whether advertisement of petition mandatory — Whether mere irregularity curable under r 194(1) of the Companies (Winding-up) Rules 1972 — Companies (Winding-up) Rules 1972 r 24
Tort — Defamation — Libel — Defence of absolute privilege — Advertisement of winding-up petition — Debt fully paid to petitioner before advertisement of petition — Whether advertisement amounted to defamation — Whether petitioner nevertheless obliged to advertise petition — Whether advertisement absolutely privileged
A winding up petition was filed by the appellant through its solicitors on 22 March 1999 in respect of a debt owed by the respondent. The hearing date was fixed on 3 September 1999. The petition was served on the respondent on 23 April 1999. On 4 May 1999, the respondent tendered a cheque to the [2009] 5 MLJ 754 at 755 appellant for the exact amount claimed. The cheque was cleared on 11 May 1999. The petition however was published in The Star newspaper on 12 May 1999. The respondent brought an action at the High Court against the appellant and the appellant’s solicitors for libel on account of the advertising of the petition in The Star newspaper after the debt had been fully settled. The appellant and the solicitors applied under O 14A and/or O 33 rr 2 and 5 of the Rules of the High Court 1980 (‘the RHC’) for the issue of absolute/qualified privilege raised in the pleading to be tried as a preliminary issue. The learned High Court judge dismissed the application holding that the advertisement was a mandatory requirement only if the appellant intended to proceed with the hearing of the petition. The appellant’s and the solicitors’ appeal to the Court of Appeal was dismissed. Leave to appeal was granted by the Federal Court on the question whether, where a winding up petition on grounds of presumed insolvency under s 218(1)(e) of the Companies Act 1965 (‘the Act’) has been filed and served on a respondent and the respondent pays the sum stated in the petition to the petitioner, the petitioner is excused from advertising the petition and surreptitiously keeps the money for himself to the exclusion of the other creditors and subsequently withdrawing the petition. The respondent also claimed that the advertisement was not made in accordance with r 24 of the Companies (Winding-up) Rules 19721999, whereas the hearing date was fixed for the 3 September 1999.
Held, allowing the appeal with costs:
(1)Section 219(2) provides that the winding up shall be deemed to have commenced at the time of the presentation of the winding up petition. Once the winding up petition has been duly presented, it sets in motion the relevant provisions of the Act and the Rules vis-à-vis the respondent. The winding up petition was presented on 22 March 1999 and by virtue of s 219(2) of the Act, the winding up of the respondent was deemed to have commenced on that date. The payment of the debt on 11 May 1999 therefore came within the provision of s 223 of the Act as disposition of the property of the r
