JUDGMENT

Gunn Chit Tuan SCJ:

These were appeals from cases which were heard together in the High Court at Kuala Lumpur by V.C. George J who approved an agreement by Counsel that the issues raised in the petition in Companies Winding-Up No. D3-42-211-87, Originating Summons No. D3-31-162-87 and Originating Summons No. D3-31-165-87 could be resolved by the Court answering the several questions set out in the following "Statement of the Case by Provisional Liquidators":

1. The intention of this statement of case, which has been prepared with the approval of solicitors of several of the concessionaires and of that of the committee of inspection, is to provide the Court with the factual background relating to the claims put forward by several concessionaires and consignors, and to state the questions for determination by the Court.

2. There are four applications before this Court for hearing on 1 and 2 December 1988 and they are:

(a) an originating summons by Wan Lee Brothers Sdn. Bhd. and Palmajaya Sdn. Bhd. in Originating Summons No. D3-162-87;

(b) an originating summons by Equipment Dynamics Sdn. Bhd. in Originating Summons No. D3-31-165-87;

(c) the notice of motion of the Provisional Liquidators in Companies Winding-Up No. D3-42-211-87;

(d) a further notice of motion (enclosure) the same petition. (sic).

3. The claims that fall for determination by the Court can broadly be divided into two categories,

(i) that of "concessionaires" which are the subject matter of applications (a), (b) and (c) above and the other,

(ii) that of "consignors" which comprise application (d).

(iii) Even amongst the concessionaires they can then be sub-divided into two sub-categories:

(a) those concessionaires who have formal agreements with the companies (application (a) above) and;

(b) those concessionaires who have agreements evidenced by letters (application (b)).

In the case of consignors, it appears that most of the agreements are evidenced by letters.

4. The basis of the claim of all the concessionaires and consignors are that they are not to be treated as ordinary unsecured creditors of the various companies within the Emporium Group but that they are in a special category altogether i.e. that they are beneficiaries of a trust.

5. The factual background relating to this dispute arises in this manner. What is commonly known as the Emporium & Supermarket Group, of which Emporium & Supermarket Holdings Berhad was merely one company, comprised of 29 separate legal entities, which are the subject matter of various winding-up petitions which come up for disposal on 7 December 1988, and these 29 companies were running a total of 60 operating outlets. All these outlets were in the business of either supermarkets and/or department stores and some of them were also carrying out fast-food business, restaurants, eateries and confectioneries.

6. At one time the Emporium Group was the largest chain of retail department stores in Malaysia. Some time in 1985 the Group started experiencing cashflow problems and were unable to settle payments to their various suppliers within the usual 90-day credit period. Some of these suppliers being apprehensive as to their payments then entered into special arrangements with the Emporium Group, which are elaborated in the paragraphs below. It must be emphasized that besides the concessionaire and consignor arrangement there were a whole lot of ordinary suppliers who continued to trade with the Emporium Group on the usual credit basis. These ordinary suppliers and other trade creditors and the unsecured portions of financial assistance given by banks and other financial institutions form the bulk, in numbers and amounts, of the Emporium Group's creditors, as compared to the concessionaires and consignors.

7. In the case of some concessionaires, the initial arrangements, entered into in late 1985, was that the concessionaire leased out a specific space within the department store itself where they would exhibit the goods. F