Back
2021 MarsdenLR 2993
HIGH COURT MALAYA JOHOR BAHRU
TITAN RITZ SDN BHD – Appellant
Versus
ZHUOYUAN ISKANDAR SDN BHD; SQUARE STONE HOLDINGS SDN BHD (APPLICANT) (ENCL 1) – Respondent
[Post Companies (Winding Up) No: JA-28PW-8-01/2021]
The doctrine of Res Judicata prohibits relitigation of issues already decided, and the statutory requirements under Section 493 of the Companies Act must be met for terminating a winding up order.
Headnote:(A) Companies Act 2016 – Section 493 – Winding Up – Application to terminate Winding Up Order – The court dismissed the application by the shareholder on grounds of Res Judicata, as the core issues had been adjudicated in previous proceedings, where the Respondent was deemed unable to pay its debts. The Applicant failed to meet the requirements stipulated under Section 493. (Paras 6, 7, 11, 13)
(B) Doctrine of Res Judicata – The court emphasized that once an issue has been conclusively determined, it cannot be relitigated. (Paras 6)
(C) Requirements for Termination of Winding Up – The necessity for proof regarding the satisfaction of debts is crucial before the termination of a Winding Up Order can be considered. (Paras 7, 11)
Facts of the case: The respondent company was wound up following a petition by the creditor. The applicant, a shareholder, attempted to relitigate the inability of the respondent to pay its debts, previously determined by the Winding Up Court.
Findings of Court: The application to terminate the winding up was dismissed with costs as it lacked merit and failed to satisfy statutory requirements.
Issues: The main issues included whether the Applicant could relitigate previously determined matters and if the requirements under the Companies Act for terminating a winding up were met.
Ratio Decidendi: The court reiterated the principle of Res Judicata, disallowing relitigation of resolved issues, and confirmed that the statutory provisions of the Companies Act must be adhered to for a valid termination of a winding up.
Result: Application dismissed with costs.
JUDGMENT
[Enclosure 1]
Introduction
[1] This is an application by Square Stone Holdings Sdn Bhd ("the Applicant") to terminate the Winding Up Order against the Respondent Company Zhuoyuan Iskandar Sdn Bhd ("the Respondent"). An order to wind up the Respondent was made on the petition of Titan Ritz Sdn Bhd ("the Petitioner") on 11 June 2020.
Background Facts
[2] The Applicant is at all material times a shareholder of the Respondent. A Winding Up Order ("the Winding Up Order") was made against the Respondent on 11 June 2020 by the High Court in JA-28NCC-286-12/2019 by YA Datuk See Mee Chun.
[3] Subsequent to the Winding Up Order, the Respondent filed an appeal against the Winding Up Order to the Court of Appeal vide J-02(NCC)A-803-07/2020. The appeal by the Respondent was struck out by the Court of Appeal on 10 December 2020.
[4] The Applicant, as a shareholder of the Respondent, by this application, is now attempting to relitigate the issues decided by the High Court when it made the Order to wind up the Respondent.
Applicant's Submission
[5] In this application, the Applicant is relying on the same arguments it put before the Learned Judge in the Winding Up Court. The Applicant again submits that it had settled a sum of RM17,803,707.00 by way of contra, plus a cash value of RM133,560.12.
However, the Petitioner submitted in the Winding Up Court that the Respondent only settled a sum of RM15.8 million before the hearing date, leaving a balance of RM4,744,285.95. The Learned Judge accepted the Petitioner's submission that the sum of RM4,744,285.95 was due and owing at the date of hearing of the petition and accordingly, made an order to wind up the Respondent.
[6] It is trite law that since the Winding Up Court has decided that the Respondent was unable to pay its debt at the date of hearing of the petition, this Court ought not allow the Applicant here to relitigate the issue which has been decided by the Winding Up Court and the subsequent dismissal of the Respondent's appeal against the order. The issue is clearly barred by the doctrine of Res Judicata.
[7] Besides the doctrine of Res Judicata, which would bar the Applicant's attempt to relitigate the issues after having exhausted its legal avenues, this application does not meet the requirements of the Companies Act 2016 (" CA ").
The power of this Court to terminate any winding up is provided by s 493 of the CA , which states:
493 POWER OF Court TO TERMINATE WINDING UP
(1) At any time after an order for winding up has been made, the Court may, on the application of the liquidator or of any creditor or contributory and on proof to the satisfaction of the Court that all proceedings in relation to the winding up of the company ought to be terminated, make an order terminating the winding up of the company as the Court thinks fit.
(2) In making an order under subsection (1), the Court may take into consideration, but not limited to, the following facts:
(a) the satisfaction of the debts;
(b) any agreement by the liquidators, creditors, contributories and other interested parties; or
(c) other facts that the Court considers appropriate.
[8] The day after the Winding Up Order was granted, the Respondent had, via its then solicitors, Messrs Anad & Noraini, issued a letter dated 12 June 2020 to the Petitioner's solicitors, Messrs Han & Partners, admitting that after taking into account the alleged sum of RM17,803.707.00, the Respondent is still indebted to the Petitioner for the outstanding sum of RM2,520,818.83 (the outstanding sum of which the Petitioner states is even higher).
The said letter dated 12 June 2020 by Messrs Anad & Noraini has been exhibited as Exhibit A-2 of the Petitioner's Affidavit in Reply.
[9] In any event, this outstanding sum of RM2,520.818.93, alleged and admitted by Respondent itself, was more than sufficient to wind up the Respondent and until fully settled, for the Respondent to remain wound up.
[10] In addition, the Applicant has also failed to ad
