JUDGMENT

Yew Jen Kie (JCA):

[1] This is an appeal by the Appellant against the decision of the learned Judicial Commissioner, given on 3 December 2017, in granting the winding up order against the ZZ Holdings.

[2] The winding up petition filed by ZZ Trading is premised on the just and equitable ground under s 218(1)(i) of the Companies Act 1965 and the complaint is that there is a breakdown of trust and confidence among the members of ZZ Trading and ZZ Holdings.

Background Facts

[3] Gleaning from the Petition dated 15 April 2016 [Record of Appeal vol 1 - part A & B, pages 8-23], the background facts can be summarised as follows.

[4] The patriarch of the family, the late Kwan Chee Hang and his wife, Wong Nyuk Ching incorporated Kwan Chee Hang Sdn Bhd ["KCHSB"] on 14 September 1981. The primary business of KCHSB was in property letting business and to act as investment holding company. Besides the late Kwan Chee Hang and his wife, their two sons, namely, Kwan Hiuang @ Kwan Huang Cheng ["Michael"] and Kwan Hung Cheong ["Matthew"] were also involved in this family business.

[5] KCHSB thereafter incorporated ZZ Trading on 25 April 1994 [formerly known as Zung Zang Wood Product Sdn Bhd] to carry out wood manufacturing business. ZZ Trading is a wholly owned subsidiary of KCHSB.

[6] ZZ Holdings was incorporated on 13 August 1997 to act as an investment holding company. ZZ Trading held 80% of the shares whereas Matthew held the remaining 20% of the shares. Matthew and his wife, Elaine Gay Chow Song ["Elaine"] are the only director of ZZ Holdings after the passing of the late Kwan Chee Hang.

[7] ZZ Plantation was incorporated on 4 April 1995 to undertake oil palm plantation business and it currently holds 2,846.17 acres of plantation land. ZZ Holding held 80% of the shares whereas Matthew held the remaining 20% of the shares.

[8] Granright Enterprise was incorporated on 20 December 1995 to deal in transportation construction, civil and building construction and oil palm planation business. ZZ Holdings was the majority shareholding of Granright holding 170,000 shares, that is, 85% of the shareholding, whereas Elaine held the remaining 30,000 of the shares. [KCHSB, ZZ Holdings, ZZ Plantation and Granright will be referred to as the "family companies".]

[9] However, unbeknown to the family members/shareholders of the family companies, Matthew and Elaine committed fraudulent acts in respect of ZZ Holdings, ZZ Plantation and Granright by fraudulently diluted and/or divested the interest of the family companies to themselves in June 2003.

[10] Matthew and Elaine fraudulent caused ZZ Trading to dispose of its 80% shareholding in ZZ Holdings to both of them in equal portion making them the absolute owner of ZZ Holdings and having full control over ZZ Plantation and Granright, both of which own substantial plantation land.

[11] After the discovery of the fraudulent acts of Matthew and Elaine in 2006, the late Kwan Chee Hang and Wong Nyuk Ching confronted Matthew during the Extraordinary General Meeting of KCHSB convened on 12 May 2007. Despite admitting to all his wrongdoing, Matthew had refused to undo the same and/or to rectify the register of member of the family companies affected by his wrongdoings.

[12] KCHSB, Kwan Chee Hang and Wong Nyuk Ching then pursued against Matthew and Elaine and filed the following two suits in High Court seeking for various orders and declarations to rectify the register of members of the family companies and to undo all the fraudulent transfers and allotment of shares falsely and fraudulently procured by them. The two High Court suits are as follows:

a. Suit No S22-24 of 2008 was in respect of the fraudulent act against ZZ Plantation and ZZ Holding;

b. Suit No S22-26 of 2008 was in respect of the fraudulent acts perpetrated against Granright and ZZ Holdings. [The two High Court suits will be referred together as the "two High Court Suits"].

[ZZ Trading [then known as Zung Zang Wood Product (ZZWP), ZZ Planta