Hasan Lah FCJ:

These two appeals concern the interpretation of s 314 of the Companies Act 1965 (‘the Act’)

Whether the partnership of ARCI Enterprise would qualify as an unregistered company pursuant to s 314 of the Companies Act 1965

These two appeals are against the decision of the Court of Appeal which had allowed the defendants’ appeal against the decision of the High Court given on 26 August 2010. The respondent in Appeal No 02–24 of 2011(W) was the second defendant in the High Court. The respondent in Appeal No 02–25 of 2011(W) was the first defendant in the High Court. The five appellants were the plaintiffs in the High Court. The parties have agreed that both the appeals be heard together as they involved the same question of law.

We reserved our judgment after hearing these appeals. We now give our decision and the reasons for the same.

The brief facts of this case as found by the Court of Appeal are as follows. The plaintiffs claimed to be partners at some point or another in a partnership by the name of ARCI Enterprise which was registered on 8 October 1992 (‘the Partnership’). However a partnership by this name was also registered on 29 July 2004 and 12 January 2006.

The partnership had the following persons as the first partners:

(a)Yee Fook Shin (‘the fifth plaintiff’);

(b)Yee Chong Man;

(c)Yon Kat Keong;

(d)Thein Hock Teck (‘the first plaintiff’);

(e)Yee Fook Choy (‘the second plaintiff’);

(f)Yee Chong Khoon (‘the third plaintiff’); and

(g)Syed Khairul Azhar bin Syed Talib.

The fourth plaintiff is the administrator of the estate of Yong Kat Keong. Yee Chong Man is not involved in the disputes that followed.

Disputes arose in relation to the 5% shares held by Syed Khairul Azhar. He purportedly sold his rights, title and interest in his shares in the partnership to the first defendant who then appointed the third defendant to be its representative in relation to Syed Khairul Azhar’s shares in the partnership.

Over the several years since the dispute arose, not less than nine actions had been commenced in various courts prior to the filing of Suit No D-22NCC-776 of 2009, which is the suit in the instant appeals.

Among the suits filed was Suit No 22–76 of 2001 which was filed by the third defendant in the High Court at Kuantan. The High Court at Kuantan apparently made an order dissolving the partnership. That order was apparently set aside. However, pursuant to that order a meeting of creditors (which included the first defendant) of the partnership was held on 11 May 2007 and the second defendant was appointed as the provisional liquidator of the partnership.

In the meantime Suit No MT(1)–22–82 of 2003 was filed by the first defendant in the High Court at Kuantan to claim a sum of RM6,157,121.57 which was said to be the amount owed by the partnership.

While Suit No MT(1)–22–82 of 2003 was still pending in the High Court at Kuantan, the first defendant filed a creditor’s petition (No MT3–28–15 of 2007) in the Malacca High Court seeking to wind up the partnership for the very same amount claimed in Suit No MT(1)–22–82 of 2003.

The Malacca High Court granted the petition and the second defendant was appointed as the liquidator of the partnership.

The plaintiff then filed the suit (D-22NCC-776 of 2009) at the Kuala Lumpur High Court, from which the appeals before us emanated, to have the winding up order and the appointment of the second defendant as the liquidator be set aside.

Essentially the plaintiffs relied on three main grounds to support their case, namely, that the petition was not served on the partnership but was served on the second defendant as the purported provisional liquidator of the partnership, that the first defendant had not obtained judgment for the sum claimed, and that the partnership had sufficient assets to pay its debts.

The plaintiffs then filed a summons in chambers (‘encl 3’) seeking an order to set aside the winding up order made by the Malacca High Court against the partnership and the appointment of the secon