JUDGMENT

Arifin Zakaria FCJ:

Background

[1] This is an appeal against the majority decision of the Court of Appeal dated 17 June, 2005 (Abdul Aziz Mohamad JCA (as he then was) dissenting) in dismissing the appeal by the appellant.

The Facts

[2] The undisputed facts of the case are as follows:

[3] A petition for winding-up was filed by Savant Asia Sdn. Bhd. ("the appellant") through its solicitors, Zaid Ibrahim & Co., on 22 March 1999 in respect of a debt of RM141,750 owed by Sunway PMI-Pile Construction Sdn. Bhd. ("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 appellant for the exact amount of RM141,750. The cheque was cleared on 11 May 1999. The petition however was published in the Star newspaper on 12 May 1999 despite the fact that the debt had been settled on 11 May 1999.

[4] The respondent brought an action at the High Court against the appellant for libel on account of the advertising of the petition in the Star newspaper on 12 May 1999 by the appellant after the debt had been fully settled. Joined as the 2nd defendant in the High Court were the solicitors who acted for the appellant in the winding-up proceedings ("the solicitors").

[5] The respondent alleged that there was malicious intention on the part of the appellant since the respondent has already settled the debt.

[6] In the libel action the appellant and the solicitors were separately represented.

[7] Both the appellant and the solicitors deny that there was malicious intention on their part on the grounds that there was a legal duty on their part to proceed with the advertisement of the petition notwithstanding the settlement of the debt by the respondent.

[8] In the course of the proceedings the appellant and the solicitors applied under O. 14A and/or O. 33 r. 2 and 5 of the Rules of High Court 1980 (the RHC) for the issue of absolute/qualified privilege raised in the pleading to be tried as a preliminary issue before the trial of the action and all further proceedings to be stayed.

[9] The learned High Court Judge after hearing submissions on 22 May 2003 on the suitability of the two summonses, directed the appellant to adopt the question as framed by the solicitors for the sake of convenience and to facilitate proceedings. The appellant did not object. The issue as framed reads as follows:

Whether upon the facts as alleged in paragraphs 6, 7 and 10 of the statement of claim and the defence of absolute privilege and/or qualified privilege raised and pleaded in paragraph 23 and 24 of the statement of defence of the second defendant, the plaintiff's claim is maintainable in law and/or in fact by reason of absolute and/or qualified privilege.

[10] The application was dismissed. The learned High Court Judge agreed that the advertisement is a mandatory requirement, but if and only if the appellant intends to proceed with the hearing of the petition. In his grounds of judgment, the learned judge expressed his finding in the following words:

I have dismissed the defendants' applications on the ground that since there is an allegation by the plaintiff of malicious intent on the part of the defendants, which the defendants deny (hence there is a dispute on a material fact), I do not think that it is appropriate that I should consider the issue of qualified privilege as raised by the defendants as a preliminary issue and without the need for a trial. It would have been a different matter if malicious intent is not an issue, or that the allegation of malicious intent is not disputed by the defendants.

Further, there is another difficulty: the defendants' application is based on a misconception of the law _ the misconception being that under rule 24 of the Company (Winding-Up) Rules 1972 it was mandatory for them to advertise the petition. True, it was mandatory for them to advertise the petition within the prescribed period: but it was o