IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR COMPANIES (WINDING-UP) PETITION NO. 28NCC-379-05/2015
In the matter of Open Fibre Sdn Bhd (Company No. 783109-M)
In the matter of Section 218(f) and (i) of the Companies Act, 1965
RANJEET SINGH SIDHU
1. OPEN FIBRE SDN. BHD.
2. ZULIZMAN BIN ZAINAL ABIDIN
3. KU HASNIZA HANI BINTI KU HASHIM
4. ROSLINA BINTI IBRAHIM
5. SHAILEN A/L POPATLAL … RESPONDENTS
(Court Enclosure No. 34)
1. This case raises a novel point on whether a winding up petition can be transferred from the winding up court to a civil court to be heard together with a civil suit.
B. Two legal proceedings and parties therein
2. In this winding up petition (This Petition) –
(a) the petitioner is Mr. Ranjeet Singh Sidhu (Mr. Ranjeet);
(b) the first respondent is Open Fibre Sdn. Bhd. (Open Fibre);
(c) the second respondent is Encik Zulizman bin Zainal Abidin (Encik Zulizman);
(d) the third respondent is Puan Ku Hasniza binti Hani Ku Hashim (Puan Ku Hasniza);
(e) the fourth respondent is Puan Roslina binti Ibrahim (Puan Roslina); and
(f) the fifth respondent is Mr. Shailen a/l Popatlal (Mr. Shailen).
Open Fibre, Encik Zulizman, Puan Ku Hasniza, Puan Roslina and Mr. Shailen will be collectively referred to in this judgment as the “Respondents”.
3. In Kuala Lumpur High Court (Commercial Division) Civil Suit No. 22NCC-179-06/2015 (Civil Suit), the parties are as follows:
(a) the first plaintiff is Mr. Ranjeet while the second plaintiff is Tan Sri Syed Mohd. Yusof bin Tun Syed Nasir (Tan Sri Syed Mohd. Yusof). Mr. Ranjeet and Tan Sri Syed Mohd. Yusof will be collectively referred to in this judgment as the “Plaintiffs”;
(b) the first defendant is Zavarco PLC, a company incorporated in the United Kingdom on or about 29.6.2011. Zavarco PLC’s former name was Vasseti (UK) PLC;
(c) the second defendant is Zavarco Bhd. Zavarco Bhd. was formerly known as Vasseti Bhd.;
(d) the third defendant is Open Fibre;
(e) the fourth defendant is a law firm, Messrs Gunavathy Manikam (Messrs Gunavathy);
(f) the fifth defendant is a law firm, Messrs AR Yahya & Co (Messrs Yahya);
(g) the sixth defendant is Encik Zulizman;
(h) the seventh defendant is Puan Ku Hasniza;
(i) the eighth defendant is Puan Roslina;
(j) the ninth defendant is Mr. Shailen;
(k) the tenth defendant is Tunku Mazlina Binti Tunku Abdul Aziz (Tunku Mazlina);
(l) the eleventh defendant is Encik Zarudin bin Ramlee (Encik Zarudin);
(m) the twelfth defendant is Mr. Teoh Hock Peng (Mr. Teoh);
(n) the thirteenth defendant is Paneagle Holdings Bhd. (Paneagle Holdings);
(o) the fourteenth defendant is Vertu Capital Ltd. (Vertu), a company incorporated in the Cayman Islands;
(p) the fifteenth defendant is Aries Telecoms Ltd. (Aries), a company incorporated in Jersey; and
(q) the sixteenth defendant is Mr. Vinai Varayananda (Mr. Vinai), a Thai national.
C. This Petition
4. In This Petition, Mr. Ranjeet has made many allegations which have been also been made in the Civil Suit. I will discuss these averments together when I elaborate on the Civil Suit subsequently in this judgment.
5. Mr. Ranjeet applied to wind up Open Fibre on the following 2 grounds:
(a) Open Fibre’s directors had acted in the affairs of Open Fibre in their own interests rather than in the interests of Open Fibre’s members as a whole and/or in a manner which is unfair and unjust to the other members of Open Fibre within the meaning of s 218(1)(f) of the Companies Act 1965 (CA); and/or
(b) it is just and equitable to wind up Open Fibre under s 218(1)(i) CA.
6. This Petition prayed for, among others, the following relief:
(a) Open Fibre be wound up;
(b) RSM NWT Advisory Services Sdn. Bhd. be appointed as liquidators of Open Fibre; and
(c) the appointed liquidators of Open Fibre, do forthwith commence investigation and subsequent recovery of any unauthorized and/or wrongful and/or misappropriated funds of Open Fibre.
D. Civil Suit
7. The Civil Suit has been filed by the Plaintiffs –
(a) as shareholders of Zavarco PLC in a representative capacity for the benefit of Zavarco PLC;
(b) for the benefit of Zavarco Bhd. because Zavarco PLC controls Zavarco Bhd.; and
(c) for the benefit of the Plaintiffs themselves.
8. The Plaintiffs are shareholders of Zavarco PLC and are not shareholders of Zavarco Bhd.
9. The Plaintiffs allege that the “wrongdoers” are in control of Zavarco PLC and Zavarco Bhd. and these “wrongdoers” have perpetrated fraud on the minority. Hence, this derivative action filed by the Plaintiffs for the benefit of both Zavarco PLC and Zavarco Bhd.
10. V Telecoms Bhd. (V Telecoms) is now known as Aries Telecoms (M) Bhd. V Telecoms is the operating entity within Zavarco PLC’s group of
companies (Zavarco Group). V Telecoms’ principal business is in the provision of fibre optic network and has licenses as network facilities provider as well as network services provider (Telecommunication Business). The Telecommunication Business was at the material time, the core business of Zavarco PLC and Zavarco Bhd.
D1. Share swaps
11. Sometime in 2009 or 2010, Mr. Ranjeet and Mr. Shaileen discussed ways to collaborate to enhance the business of V Telecoms. It was agreed between Mr. Ranjeet and Mr. Shaileen that –
(a) V Telecoms was to be injected into Zavarco Bhd. and be part of a listing exercise; and
(b) Open Fibre was to be jointly owned by Mr. Ranjeet and Mr. Shaileen.
12. As a result of the collaboration between Mr. Ranjeet and Mr. Shaileen, Open Fibre and Zavarco Bhd. executed a share purchase agreement dated 13.12.2010 (2010 Share Swap). The 2010 Share Swap provided for, among others, the following:
(a) Open Fibre transferred 1,046,000,000 ordinary shares held by Open Fibre in V Telecoms (approximately 91% of the ordinary shares in V Telecoms) to Zavarco Bhd.; and
(b) the consideration of Open Fibre’s transfer of shares (held by Open Fibre in V Telecoms) was RM396,000,000 in the form of a new issue of 3,960,000 ordinary shares of RM100 each in Zavarco Bhd., to Open Fibre.
13. Upon the completion of the 2010 Share Swap –
(a) V Telecoms became a subsidiary of Zavarco Bhd.; and
(b) the following became shareholders of Zavarco Bhd. –
(i) Open Fibre;
(ii) Mr. Ranjeet;
(iii) Tan Sri Syed Mohd. Yusof;
(iv) Dato’ M. Harisharan Pal Singh; and
(v) General (Retired) Dato’ Sri Hj. Suleiman bin Mahmud (Shareholders).
14. Zavarco PLC was incorporated on 29.6.2011 with the then intention of injecting the entire Zavarco Bhd. and its subsidiaries into Zavarco PLC. As agreed between Mr. Ranjeet and Mr. Shaileen, Zavarco PLC was the
vehicle which was to be listed on the Frankfurt Stock Exchange, Germany (FSX).
15. Zavarco PLC’s directors at the material time were Puan Roslina, Tunku Mazlina, Encik Zarudin, Mr. Teoh, Tan Sri Syed Mohd. Yusof, Mr. Gustav Carl Jan Brunner (Mr. Gustav) and Mr. Hirofumi Ouchi (Mr. Hirofumi). Tan Sri Syed Mohd. Yusof, Mr. Gustav and Mr. Hirofumi ceased to be Zavarco PLC’s directors on or around 25.7.2014 when they were not re-elected as directors of Zavarco PLC at Zavarco PLC’s annual general meeting of shareholders (AGM).
16. As intended, simultaneously and/or concurrently with the incorporation of Zavarco PLC and the issuance of 1.2 billion ordinary share capital of Zavarco PLC (of Euro 0.10 each), the Shareholders and the Plaintiffs executed a sale of shares agreement on 29.6.2011 (2011 Share Swap).
17. The 2011 Share Swap provided for, among others, as follows:
(a) the entire issued and paid-up share capital of Zavarco Bhd. held by the Shareholders, was transferred to Zavarco PLC;
(b) in return for the transfer of the Shareholders’ shares (in Zavarco Bhd.) to Zavarco PLC, Zavarco PLC issued 1,500,000,000 ordinary shares of Euro 0.10 each to persons stated in Schedule 2 to the 2011 Share Swap (Recipients) although at the material time, Schedule 2 to the 2011 Share Swap was left blank; and
(c) the Recipients were to be made available to Zavarco PLC by 23.7.2011 or such other dates as agreed by the parties to the 2011 Share Swap.
18. The Plaintiffs allege that the list of Recipients has been agreed between Mr. Ranjeet and Mr. Shaileen and this agreement is as follows:
(a) both Mr. Ranjeet and Mr. Shaileen would have equal shareholding in Zavarco PLC upon Zavarco PLC’s listing on the FSX; and
(b) the equal shareholding of Zavarco PLC between Mr. Ranjeet and Mr. Shaileen, would take into account the following –
(i) shares to be allocated to Tan Sri Syed Mohd. Yusof; and
(ii) shares to be issued to various other investors including employees who had subscribed for shares in Zavarco PLC.
19. The 2011 Share Swap was completed which resulted in Zavarco PLC holding the entire issued and paid-up share capital of Zavarco Bhd.
20. By 3.8.2011, Zavarco PLC’s share capital was increased to a total of 1,500,000,000 ordinary shares. The entire share capital of Zavarco PLC had been issued to the Recipients as agreed between Mr. Ranjeet and Mr. Shaileen.
21. After the issuance of Zavarco PLC’s shares to the Recipients, the shareholding of Zavarco PLC was split between Mr. Ranjeet and Mr. Shaileen on an equal basis as originally agreed.
22. The original intention between Mr. Ranjeet and Mr. Shaileen to hold their equal number of shares in Zavarco PLC through Open Fibre, was subsequently and mutually varied in that Mr. Ranjeet and Mr. Shaileen would each hold his block of shares, individually or through nominees. Mr. Ranjeet’s shares were held by him personally and through his nominees. Mr. Shaileen’s shares were held by, among others, his nominees, VCB AG and Paneagle Holdings.
23. Zavarco Bhd. held at the material time 91% of the shares in V Telecoms.
24. The directors of Zavarco PLC at the material time were Mr. Shailen, Puan Roslina, Tunku Mazlina, Encik Zarudin and Mr. Teoh.
25. Encik Zarudin, Tunku Mazlina, Mr. Teoh and Puan Roslina were Zavarco Bhd’s directors at the material time.
26. Open Fibre’s only directors at the material time, were Encik Zulizman and Puan Ku Hasniza.
27. The Plaintiffs aver that –
(a) Mr. Shailen is the “true, sole or substantial” owner and/or controller of Zavarco PLC, Zavarco Bhd., Open Fibre, Paneagle Holdings, Vertu and Aries; and
(b) the directors of Zavarco PLC, Zavarco Bhd., Open Fibre, Paneagle Holdings, Vertu and Aries are accustomed to act in accordance with Mr. Shailen’s directions or instructions.
D2. Alteration of Open Fibre’s shareholding
28. At all material times and prior to May 2014, Open Fibre’s ordinary shares were held by the following persons:
(a) Mr. Ranjeet – 99,999 shares;
(b) Encik Zulizman – 133,330 shares. Tan Sri Syed Mohd. Yusof has disputed this transfer of Open Fibre shares to Encik Zulizman in another court proceedings which is still pending;
(c) Puan Ku Hasniza – 100,000 shares; and
(d) Puan Roslina – 1 share.
29. Prior to May 2014, Open Fibre’s preference shares were held by the following persons:
(a) Primawin Ltd. (Primawin), a company incorporated in British Virgin Island (BVI), holds 96,000,000 preference shares;
(b) China Finance Ltd. (China Finance), a company incorporated in Samoa, holds 150,000,000 preference shares; and
(c) Arab Emirates Capital Ltd. (AEC), a company incorporated in BVI, holds 150,000,000 preference shares.
30. The Plaintiff alleges that Primawin, China Finance and AEC are wholly and substantially owned and/or controlled by Mr. Shailen.
31. On or around 18.5.2014, just a few days before the filing of the Civil Suit, Primawin purportedly “converted” 6,000,000 out of its 96,000,000 preference shares of Open Fibre into ordinary shares (Disputed 6 Million Open Fibre Ordinary Shares). This “conversion” has been disputed in another court proceedings which is still pending.
32. On or around 28.5.2014, in furtherance of fraud, Primawin purportedly transferred the Disputed 6 Million Open Fibre Ordinary Shares to Encik Zulizman.
33. The Plaintiffs aver that the purported transfer of Open Fibre shares from Tan Sri Syed Mohd. Yusof to Encik Zulizman, Primawan’s purported “conversion” and purported transfer of the Disputed 6 Million Open Fibre
Ordinary Shares to Encik Zulizman, was part of an overall scheme to transfer the control of Open Fibre’s shareholding to Mr. Shailen through Mr. Shailen’s nominee, namely Encik Zulizman, with the active assistance and/or participation of Open Fibre’s board of directors (BOD).
D3. Kuala Lumpur High Court Civil Suit No. 22NCC-164-05/2014 (Suit No. 164)
34. On or about 12.5.2014, Open Fibre filed Suit No. 164 against Zavarco PLC and Zavarco Bhd.
35. Messrs Gunavathy represented Open Fibre while Messrs Yahya acted for both Zavarco PLC and Zavarco Bhd.
36. On or around 23.7.2014, Open Fibre, Zavarco PLC and Zavarco Bhd. entered into a consent judgment (Consent Judgment).
37. The Consent Judgment provided for the following orders, among others:
(a) Zavarco Bhd. to transfer immediately all shares owned by Zavarco Bhd. in V Telecoms to Open Fibre and Zavarco PLC was ordered to allow Zavarco Bhd. to carry out the Consent Judgment;
(b) both Zavarco PLC and Zavarco Bhd. to transfer immediately control and management of V Telecoms to Open Fibre together with all the documents of V Telecoms; and
(c) Zavarco PLC to issue new shares (based on the market price of Zavarco PLC’s shares) to Open Fibre equivalent to RM150,000,000 and allot the same to Open Fibre as full settlement of a RM150,000,000 liability placed on V Telecoms due to the negligence of the officers of Zavarco PLC and Zavarco Bhd. between the years 2011 to 2012 for utilizing the said sum for the interest of Zavarco PLC and Zavarco Bhd.
38. The Plaintiffs allege that Suit No. 164 and the Consent Judgment were sham proceedings in furtherance of and/or pursuant to a conspiracy to defraud Zavarco PLC and/or Zavarco Bhd. designed primarily to –
(a) misappropriate the core business of Zavarco PLC and Zavarco Bhd., namely V Telecoms, to Open Fibre (and by extension, to Mr. Shailen); and
(b) cause Open Fibre to gain effective control of Zavarco PLC and Zavarco Bhd.
D4. Carrying out Consent Judgment
39. On or around 27.2.2015, purportedly pursuant to the Consent Judgment, Zavarco PLC issued and allotted 7,052,159,653 shares (of Euro 0.10 each) to Open Fibre. This issuance and allotment effectively gave Open Fibre
(and by extension, Mr. Shailen) ownership and control of approximately
82.5% of the shares in Zavarco PLC.
40. The Plaintiffs had recently discovered the following:
(a) V Telecoms had been injected into Aries and Aries is now the sole shareholder of V Telecoms;
(b) the sole shareholder of Aries is Vertu;
(c) the shareholders of Vertu are Open Fibre (holding 91% of the issued and paid-up share capital of Vertu) and Paneagle Holdings (holding 9% of the issued and paid-up share capital of Vertu);
(d) Open Fibre is now substantially owned and controlled by Mr. Shailen through Encik Zulizman; and
(e) the sole shareholder of Paneagle Holdings is Paneagle Sdn. Bhd. (Paneagle SB). Mr. Shailen wholly owns and controls Paneagle Holdings through Encik Zulizman and Encik Wan Alias.
D5. Allegations of conspiracy
41. The Plaintiffs allege that by overt acts pleaded in the Statement of Claim (SOC), Mr. Shailen was part of a conspiracy with various persons stated in the SOC to –
(a) defraud Zavarco PLC, Zavarco Bhd. and the court in Suit No. 164; and/or
(b) injure the Plaintiffs by unlawful means, namely by misappropriating V Telecoms from Zavarco PLC and Zavarco Bhd.
42. By reason of the Alleged Conspiracy, the Plaintiffs have suffered loss and damage.
D6. Allegations against Messrs Gunavathy and Messrs Yahya
43. The Plaintiffs aver that Messrs Gunavathy and Messrs Yahya have knowingly assisted and/or participated to carry and/or execute the Alleged Conspiracy.
D7. Plaintiffs’ prayer for relief
44. The SOC applies for the following relief, among others:
(a) the Consent Judgment be set aside;
(b) a declaration that the transfer of all ordinary shares in V Telecoms to Open Fibre or any other party through the Consent Judgment, is null and void;
(c) an order that Aries transfers all the shares in V Telecoms back to Zavarco Bhd. within 8 days from the date of this court’s order and for all incidental orders and/or directions to effect such a transfer;
(d) an order that Open Fibre deliver up and/or cause to be delivered to the Plaintiffs all documents of V Telecoms that were transferred and/or taken through the Consent Judgment within 8 days from the date of this court’s order;
(e) an order that all shares in Zavarco PLC that were issued and/or transferred to Open Fibre through the Consent Judgment be cancelled within 8 days from the date of this court’s order and Zavarco PLC’s share register be rectified and restored accordingly;
(f) as against Encik Zulizman, Puan Ku Hasniza, Puan Roslina, Mr. Shailen, Tunku Mazlina, Encik Zarudin and Mr. Teoh –
(i) damages for fraud, conspiracy and breach of fiduciary duty; and/or
(ii) exemplary damages; and
(g) as against Messrs Gunavathy and Messrs Yahya damages for knowingly assisting in the fraud, conspiracy and breach of fiduciary duty.
E. This application
45. In court enclosure no. 34 (This Application), the Petitioner applies for This Petition to be heard together with the Civil Suit pursuant to Order 4 of the Rules of Court 2012 (RC) and/or the inherent jurisdiction of this court.
F. Relevant provisions in CA and Order 4 RC
46. Sections 218(1) and 221 CA provide as follows:
“Circumstances in which company may be wound up by Court 218(1) The Court may order the winding up if –
(a) the company has by special resolution resolved that it be wound up by the Court;
(b) default is made by the company in lodging the statutory report or in holding the statutory meeting;
(c) the company does not commence business within a year from its incorporation or suspends its business for a whole year;
(d) the number of members is reduced in the case of a company (other than a company the whole of the issued shares in which are held by a holding company) below two;
(e) the company is unable to pay its debts;
(f) the directors have acted in the affairs of the company in their own interests rather than in the interests of the members as a whole, or in any other manner whatsoever which appears to be unfair or unjust to other members;
(g) an inspector appointed under Part IX has reported that he is of opinion –
(i) that the company cannot pay its debts and should be wound up; or
(ii) that it is in the interests of the public or of the shareholders or of the creditors that the company should be wound up;
(h) when the period, if any, fixed for the duration of the company by the memorandum or articles expires or the event, if any, occurs on the occurrence of which the memorandum or articles provide that the company is to be dissolved;
(i) the Court is of opinion that it is just and equitable that the company be wound up;
(j) the company has held a licence under the Banking and Financial Institutions Act 1989 or the Islamic Banking Act 1983, and that license has been revoked or surrendered;
(k) the company has carried on Islamic banking business, licensed business, or scheduled business, or it has accepted, received or taken deposits in Malaysia, in contravention of the Islamic Banking Act 1983 or the Banking and Financial Institutions Act 1989, as the case may be; or
(l) the company has held a license under the Insurance Act 1996 and –
(i) that license has been revoked;
(ii) Bank Negara Malaysia has petitioned for its winding up under subsection 58(4) of the Insurance Act 1996; or
(iii) an order under paragraph 59(4)(b) of the Insurance Act 1996 has been made in respect of it;
(m) the company is being used for unlawful purposes or any purpose prejudicial to or incompatible with peace, welfare, security, public order, good order or morality in Malaysia; or
(n) the company is being used for any purpose prejudicial to national security or public interest.
Powers of Court on hearing petition
221(1) On hearing a winding up petition the Court may dismiss it with or without costs or adjourn the hearing conditionally or unconditionally or make any interim or other order that it thinks fit, but the Court shall not refuse to make winding up order on the ground only that the assets of the company have been mortgaged to an amount equal to or in excess of those assets or that the company has no assets or in the case of a petition by a contributory that there will be no assets available for distribution amongst the contributories.
(2) The Court may on the petition coming on for hearing or at any
time on the application of the petitioner, the company, or any person who has given notice that he intends to appear on the hearing of the petition –
(a) direct that any notices be given or any steps taken before or after the hearing of the petition;
(b) dispense with any notices being given or steps being taken which are required by this Act, or by the rules, or by any prior order of the Court;
(c) direct that oral evidence be taken on the petition or any matter relating thereto;
(d) direct a speedy hearing or trial of the petition or any issue or matter;
(e) allow the petition to be amended or withdrawn; and
(f) give such directions as to the proceedings as the Court thinks fit.
(3) Where the petition is presented on the ground of default in
lodging the statutory report or in holding the statutory meeting, the Court may instead of making a winding up order, direct that the statutory report shall be lodged or that a meeting shall be held and may order the costs to be paid by any persons who, in the opinion of the Court, are responsible for the default.”
47. Order 4 rule 1 RC reads as follows:
“ Consolidation of causes or matters
Order 4 rule 1(1) Where two or more causes or matters are
pending, and if it appears to the Court that –
(a) some common question of law or fact arises in both or all of them;
(b) the rights to relief claimed therein are in respect of or arise out of the same transaction or series of transactions; or
(c) for some other reason it is desirable to make an order under this rule,
the Court may order the causes or matters to be consolidated on such terms as it thinks just or may order the causes or matters to be tried at the same time or one immediately after another or may order any of the causes or matters to be stayed until after the determination of any other of the causes or matters.
(2) An order for consolidation shall be made in Form 1
and shall direct that the cause or matter in which the application is made shall be carried on as or under such other cause or matter and that the title of such other cause or matter be amended by adding thereto the title of the cause or matter in which the application is made.
(3) Upon such order being made, the file of the
cause or matter in which the application is made shall be transferred to and added to the file of such other cause or matter, and the copy of the
order shall be left in place of the file so transferred, and a memorandum of the transfer shall be entered in the cause book against the cause or matter so consolidated.”
G. Parties in Civil Suit should be heard in This Application
48. As stated above, the Civil Suit concerns many parties which have not been cited in This Petition (Affected Parties). The cause papers related to This Application, understandably, have not been served by the Petitioner’s solicitors on the Affected Parties.
49. I am of the view that if an application is made in one case (1st Case) to consolidate or to hear together the 1st Case with another case (2nd Case) and if there are Affected Parties (cited in the 2nd Case but not the 1st Case), the court should –
(a) consider giving notice of the consolidation or joint hearing application to the Affected Parties;
(b) invite the Affected Parties to file affidavits to support or oppose the consolidation or joint hearing application; and
(c) invite the Affected Parties to submit, orally and/or in writing, on whether the Affected Parties support or oppose the consolidation or joint hearing application
50. The Proposed Approach is supported by the following reasons:
(a) the court will have the benefit of the factual position and submission of the Affected Parties when the court exercises its discretion in deciding
to allow or not the consolidation or joint hearing application. Hence, the Proposed Approach is in the interest of justice; and
(b) if the consolidation or joint hearing application is allowed in the 1st Case without hearing the Affected Parties, the Affected Parties may subsequently apply to “deconsolidate” the 1st and 2nd Cases (Deconsolidation Application) or have separate hearings for the 1st and 2nd Cases. The following cases have established that parties affected by a consolidation order under Order 4 rule 1(1) RC may make a Deconsolidation Application –
(i) in Woodsville Sdn Bhd v Tien Ik Enterprises Sdn Bhd & Ors and other appeals  2 CLJ 853, at 862, Ariffin Zakaria JCA (as he then was) held as follows in the Court of Appeal –
“The only way for either of the parties to overcome the earlier order for consolidation is for the parties to apply to the court for a deconsolidation order. (See Lewis v. Daily Telegraph (No. 2)  2 QB 601 CA)f
(emphasis added); and
(ii) Suriyadi Halim Omar J (as he then was) decided as follows in the High Court case of Maybank Finance Bhd v Sharp Trillion (M) Sdn Bhd  5 CLJ 452, at 454, 455-456, 457-458 and 460 –
“Can a court “deconsolidate” after having granted the consolidation order much earlier? I believe so. Based on that belief I acquiesced to that application found in encl. 47 which prayed that that consolidation order be set aside.
Before the substantive submissions of both parties commenced,
I was informed that there were no explicit statutory provisions in the Rules of the High Court which permitted me to “deconsolidate” the action after granting the earlier order.
Before explaining my reasons for granting the “deconsolidation order”, I need to stress that, even though the Rules of the High Court 1980 is silent on matters of this nature, or even the usage of this phrase, I find it highly effective in explaining the scenario. In its simplicity the situation is explained well. In the event the prayers of encl. 47 were allowed, technically speaking I would not be “deconsolidating” the case but merely putting parties in their original footing, after having reconsidered the matter. This would be so, as, once the order of 8 July 1998 was cast aside, status quo would return, thus ensuring that the four original actions would effectively be tried separately. There would be of no necessity to issue a consequential deconsolidation order.
In spite of the above clarification, for purposes of efficacy, I will continue using the phrase “deconsolidation order”, as prayer (a) of encl. 47 had printed and used the word “deconsolidate”. The grounds that I depended on to justify my setting aside/deconsolidation order could be split into three grounds, alternative in nature, namely that:
1. as the order had not been sealed and extracted (perfected), I was thus not prevented from recalling and reopening the matter
2. as the inherent power of the judge being in conflict with explicit statutory provisions did not arise here, on the premise none were promulgated, a judge therefore has the jurisdiction to formulate the remedies; and
3. even if the order could be construed as final, (and did not permit its setting aside as it would be thereafter subject to an appeal) it did not prevent the court from modifying it.
Inherent Powers Of Court To Formulate A Remedy When Necessary
Order 92 r. 4 of the Rules of the High Court states that nothing in the Rules shall be deemed to limit or affect the inherent powers of the court to make an order as may be necessary to prevent injustice or to prevent an abuse of the process of the court. This provision which arms the judge with an effective weapon, has never failed to be invoked by judges whenever the situation warrants it. In the course of utilising these inherent powers, the judge must ensure that it does not have the effect of overriding express provisions. It is quite safe to say after scrutinising the rules of the High Court, that the fear of the inherent powers of the judge being in conflict with express statutory provisions, in relation to any deconsolidation application will not arise here. This is so as no express provisions have been promulgated with regard to it. The
question that begs to be answered at this stage, is whether in the circumstances of the case, the court could formulate a remedy of deconsolidation when none has been provided for by parliament. Case laws are inclined towards the positive (Ho Yoke Kwei & Anor v. Ong Eng Hin  1 CLJ 647;  4 MLJ 292). In the case of Loo Chay Meng v. Ong Cheng Hoe (Gamuda Sdn Bhd Garnishee)  1 MLJ 445, VC George J (as he then was) had occasion to stress that in a situation where there arises a lacuna in the face of the rules which causes a procedural injustice, in that it cannot be said that the rules contain provision making available sufficient remedies, the court not only is entitled to but obliged to make any order as may be necessary to prevent the injustice.
Therefore, in the alternative, as judges are conferred with inherent powers as provided for in the Rules of the High Court, I was obliged to formulate a remedy to overcome the problem that had occurred pursuant to the earlier consolidation order. In the circumstances of the case, so as to avoid injustice, the granting of the setting aside/deconsolidation order was in order.
Modifying A Consolidation Order
As much as O. 4 r. 1 of the Rules of the High Court provide for the consolidation of actions, the Legislature has also seen it fit to provide provisions which have the reverse effect. That pertinent provision is O. 15 r. 5, which confers power on judges to order separate trials. This provision reads:
(1) If claims in respect of two or more causes of action are included by a plaintiff in the same action or by a defendant in a counterclaim, or if two or more plaintiffs or defendants are parties to the same action, and it appears to the Court that the joinder of causes of action or of parties, as the cause may be, may embarrass or delay the trial or is otherwise inconvenient, the Court may order separate trials or make such other order as may be expedient.
The Supreme Court Practice 1995 vol. 1 part 1 at p. 197, had this to say regarding O. 15 r. 5 of the Rules of the Supreme Court:
This rule enables the Court to exercise effective supervisory control over the joinder of parties and the joinder of causes of action. Rules 1 and 4, providing respectively for the joinder of causes of action and of parties, are both made subject to this rule. The rule applies where either the causes of action or the Joinder of parties or both may embarrass or delay the trial or is otherwise inconvenient.
To wind up the matter, my course of action was an act of recalling and reopening the matter, and thereafter setting aside that earlier order. This was possible as:
1. the order of consolidation of 8 July 1998 was yet to be perfected;
2. a better understanding of the situation showed that each case had different problems involving different issues and differing questions of law. The consolidation would embarrass or delay the trial, or otherwise would create inconvenience to all parties, including the court; and
3. it was desirable in the name of justice that the cases be tried separately .”
If the Affected Parties have been given a right to be heard in respect of a consolidation or joint hearing application and a consolidation order or joint hearing order has been made, the Affected Parties may be estopped by the issue estoppel principle, the second rule of res judicata doctrine (please see Peh Swee Chin FCJ’s judgment in the Supreme Court case of Asia Commercial Finance (M) Bhd lwn Kawal Teliti Sdn Bhd  3 MLJ 189, at 198 and 199-200), from –
(1) making a subsequent deconsolidation application; or
(2) applying subsequently to have separate hearings or trials.
Accordingly, the Proposed Approach avoids the need for the Affected Parties to expend time, effort and costs to challenge subsequently a consolidation order or joint hearing order. This in turn, ensures the economic and expeditious disposal of cases.
51. When This Application was first heard by me on 8.7.2015, I informed learned counsel for all parties in This Petition regarding the Proposed Approach. To the credit of all the learned counsel in This Petition, they agreed to the Proposed Approach. Hence, this court directed the cause papers for This Application to be served on the Affected Parties. Thereafter, I fixed a case management for This Application (CM) on 28.7.2015 and directed my learned Senior Assistant Registrar to invite learned counsel for all the Affected Parties to attend the CM.
52. On the CM date, this court invited the Affected Parties to file –
(a) affidavits to support or oppose This Application; and
(b) to file written submission in support of or in opposition to This Application.
53. The Affected Parties together with the Respondents had filed affidavits and written submissions to oppose This Application.
54. When This Application was heard on 14.8.2015, this court invited the Affected Parties’ learned counsel to submit orally in respect of This
Application. Learned counsel for the Respondents and Affected Parties submitted orally on why This Application should not be allowed.
H. Petitioner’s contentions
55. The Petitioner’s learned counsel forwarded the following submission in support of This Application:
(a) the winding up court has the power to make any “other order’ under s 221(1) CA. Accordingly, this court can order a joint hearing of This Petition with the Civil Suit (Joint Hearing) by virtue of the phrase “any … other order’ in s 221(1) CA;
(b) the Companies (Winding Up) Rules 1972 (CWUR) are silent on the Joint Hearing. As such, Order 4 rule 1 RC applies to This Application. Reliance was placed on the Mahadev Shankar JCA’s judgment in the Court of Appeal case of Fairview Schools Bhd v Indrani a/p Rajaratnam & Ors (No 1)  1 MLJ 99;
(c) additionally or alternatively, this court has inherent jurisdiction to hear This Application. The Petitioner cited Clement Skinner JC’s (as he then was) judgment in the High Court in Ngan Tuck Seng & Anor v Ngan Yin Hoi  5 MLJ 509;
(d) This Application should be allowed because there are sufficient common issues of law and/or fact in This Petition and Civil Suit which warrant a Joint Hearing; and
(e) a Joint Hearing will avoid the possibility of conflicting findings of fact made by different courts in This Petition and Civil Suit in respect of the same or similar factual issues.
I. Does winding up court have power to order Joint Hearing?
56. I am not able to find any Malaysian case which has ordered a consolidation or joint hearing of a winding up petition with a civil case. All the cases cited by learned counsel for parties in This Petition and the Affected Parties, do not deal with the question of whether a winding up court has the power to order a consolidation or joint hearing of a winding up petition with a civil suit.
57. In Woodsville Sdn Bhd, 4 winding up petitions were consolidated by consent of the parties. It was stated in Woodsville Sdn Bhd, at p. 861 and 862, as follows:
“On this same issue the Supreme Court in their judgment stated as follows:
The four separate petitions were consolidated by consent of both parties. They agreed as a matter of convenience to proceed with the first petition in D2-28-187-90 and agreed that
orders made in the first petition would bind the other petitions as well. The learned judge said so in her written judgment and these are borne out by the notes of evidence recorded by the learned judge. As it happened, the learned judge after hearing the first petition and making the orders therein made similar orders for the other petitions.
We do not think the judge was wrong in this respect. The parties themselves had agreed to the procedure adopted.
They cannot now complain. The parties in the four petitions are the same. The facts relied on are the same.
Judging from the judgment of the Supreme Court, the issue of consolidation of the 4 petitions must have been raised before the court otherwise the court would not have made the finding as it did. The Supreme Court in its judgment clearly stated that it made the finding based on the notes of proceedings before the court showing that the parties had agreed to the consolidation and for that reason it was no longer open to the parties to complain about it.
On the findings by the High Court and the Supreme Court that these 4 petitions had been consolidated the learned counsel for the liquidators submitted that this finding is not the ratio decidendi in this case, but merely obiter dicta, therefore, they are not binding on this court. With respect to the learned counsel we do not think that is the issue before us. We are here considering whether or not the finding of the Supreme Court on the issue of consolidation of the 4 petitions is binding on this court. In this regard we agree with the petitioner that the Supreme Court in its judgment had clearly made a finding on this issue and that finding, in our view, is final and binding
on us. Therefore, based on that finding the 4 petitions must be treated as being consolidated pursuant to the order of the High Court”
It is clear that Woodsville Sdn Bhd does not concern the consolidation of a winding up petition and a civil case.
58. My research is unable to unearth any Singaporean, Australian, New Zealand and English case on whether a winding up court can order a consolidation or joint hearing of a winding up petition with a civil suit.
59. I refer to Abdul Hamid Mohamad JCA’s (as his Lordship then was) judgment in the Court of Appeal case of Maril-Rionebel (M) Sdn Bhd & Anor v Perdana Merchant Bankers Bhd & Other Appeals  3 CLJ 248, at 266-269, as follows:
“/ have had the advantage of reading the judgment of my learned brother Gopal Sri Ram JCA. / agree entirely with his views. However, I only wish to add a few words to further emphasise my unhappiness (and his too) about the way winding-up petitions are often conducted. Indeed what / am saying here is no more than what / have earlier said on at least four occasions when / was sitting in the High Court. Reference can be made to Buildcon-Cimaco Concrete Sdn. Bhd. v. Filotek Trading Sdn. Bhd.  4 CLJ 135, Antara Elektrik Sdn. Bhd. v. Bell & Order Berhad  6 MLJ 385, Sun Microsystems Malaysia Sdn. Bhd. v. K.S. Eminent Systems Sdn. Berhad  4 CLJ 72 and recently SP Setia Berhad v. Gasing Heights Sdn. Bhd.  6 CLJ 55.
As pointed out by my learned brother Gopal Sri Ram JCA, the unhealthy trend is, upon being served with a petition, instead of defending the petition proper at the hearing of the petition, the respondent makes all kinds of interlocutory applications. That would invariably stall the hearing of the petition proper. If the application is dismissed, the respondent would appeal to the Court of Appeal or may even try to go further, further delaying the hearing of the petition. I have come across cases where even an order made by the senior assistant registrar under r. 32 of the Companies (Winding-up) Rules 1972 was appealed against and when the appeal was dismissed, the respondent further appealed to the Supreme Court – see Asia Commercial Finance (M) Berhad v. Lum Choon Realty Sdn. Bhd (Penang High Court Companies Winding-up No: 28-60-92). Of course, having filed the notice of appeal, the respondent then filed a notice of motion to stay all proceedings pending the disposal of the appeal by the then Supreme Court. When the notice of motion was dismissed, another appeal was filed. The effect is that the hearing and disposal of the petition is delayed.
One of the most abused procedure adopted in winding up proceedings is the application to strike out the petition under O. 18 r. 19 of the RHC 1980 and/or the inherent jurisdiction of the court.
In Buildcon-Cimaco Concrete Sdn. Berhad  4 CLJ 135 I pointed out the undesirability of applying such procedure to a winding up petition:
Besides, the Companies (Winding-up) Rules 1972 provides its own scheme of procedure for a s. 218 winding-up petition which is more simplified and geared for speedy disposal. RHC 1980, for example, provides for appearance (conditional and unconditional), discoveries, interrogatories, judgment in default of pleading, summary judgment (O. 14), striking out of pleadings (O. 18 r. 19), summons for directions and setting down for trial. Hearing date is only given after the directions made in the summons for directions are complied with and the case has been set down for trial. Perhaps because of these requirements which take some time to be complied since the filing of a writ, that procedures for judgment in default of pleading, summary judgment and the striking out of the writs
and pleadings are provided, for quick disposal in clear-cut cases.
The scheme under the Companies (Winding-up) Rules 1972 is different. When the petition is issued out of court, a hearing date is given straight away. Whatever has to be done, eg, service, advertisement, compliance with r. 32, will have to be done before the hearing date. The court is supposed to hear the petition straight away on the date fixed for hearing, the very first time it comes up before it. If everything is done as scheduled, the petition is heard on the date first fixed for hearing. That is what the rules envisage. In the circumstances, there is no necessity for provisions for judgment in default, summary judgment or striking out the pleading or trial on issues. I am of the view that that is the reason why the Companies (Winding-up) Rules 1972 do not provide for such procedures. They are not necessary.
Furthermore, more often than not, resort to O. 18 r. 19 of RHC 1980 in a winding-up proceedings results in the delay in the hearing of the petition. The application is usually filed one or two weeks before the date fixed for the hearing of the petition. Application is made for it to be heard first, supposedly, to save the court’s time.
In reality, it delays the hearing of the petition. Whenever there is such an application, inevitably, the hearing of the petition is delayed. Not only will the petition be adjourned for the application to be heard first, but if dismissed, there will be an appeal to the higher court(s).
These views were reiterated in Antara Elektrik Sdn. Bhd v. Bell & Order
Bhd  6 MLJ 385 this time in Malay.
In Sun Microsystems Malaysia Sdn. Bhd  4 CLJ 72, I stressed the difference between the procedure in respect of a writ action under the RHC 1980 and a winding-up petition under the Companies (Winding-up) Rules 1972:
It is important to note that the procedure in a winding-up proceeding as provided by the Companies (Winding-Up) Rules 1972 is different from the procedure in a writ action as provided by the Rules of a High Court 1980 (RHC 1980). In a winding up proceeding, the procedure is simple and brief. That is what it is meant to be. When a petition is filed, the senior assistant registrar gives a hearing date straightaway before the petition is issued. The petitioner is expected to do everything he or it has to do in terms of complying with the procedural requirements eg, serving, gazetting and advertising, before the hearing date. The petition is to be heard on the date fixed for hearing.
On the other hand, in a writ action upon filing no date (be it for hearing or for mention) is given by the senior assistant registrar. He merely signs the writ and issues it. The writ itself clearly says:
We command you that within eight days after the service of this writ on you, inclusive of the day of such service, you do cause an appearance to be entered for you at the suit of… And take notice, that in default of you so doing the plaintiff may proceed therein to judgment and execution. (emphasis added.)
The trial date is a long way off. Indeed, there may not be none at all. It is important that the procedure applicable in a writ action should not be incorporated into a winding-up proceeding. It is not meant to be. Appearance is required (and provided for) in a writ action so that the plaintiff will know whether to take a judgment in default or not. If an appearance is filed, followed by defence, then at the close of the pleadings, the plaintiff should apply for directions and ask for the case to be set down for trial. In other words, he asks for a trial date. That is not necessary in a winding-up petition because the hearing date has been given even before the petition is issued. That is why there is no provision for appearance, defence, summons for directions, setting down for trial etc. in a winding up proceeding.
Finally, the same view was reiterated in SP Setia Berhad (Kuala Lumpur High Court Winding-up Petition No: D8-28-173-2000).
Having written on it four times and in two languages, it is timely that my learned brother Gopal Sri Ram JCA and this court come out strongly against such practice, which, at the very least is delaying the hearing and disposal of winding-up petitions, which is unfair to the petitioners and clogging the court docket ”
60. As a matter of stare decisis, I am bound by Abdul Hamid Mohamad JCA’s judgment in the Court of Appeal case of Maril-Rionebel (M) Sdn Bhd.
61. As explained by Abdul Hamid Mohamad JCA in Maril-Rionebel (M) Sdn Bhd, winding up petitions should be speedily disposed of. In Infovalley Life Sciences Sdn Bhd v Srimelan Sdn Bhd  1 AMCR 707, at 713715, I have followed Abdul Hamid Mohamad JCA’s judgment in Maril-Rionebel (M) Sdn Bhd and dismissed an application to stay the hearing of a winding up petition based on a police report lodged by the respondent company (which had alleged the commission of an offence committed by the petitioner against the respondent company).
62. I am of the view that –
(a) s 221(1) (including the phrase “any … other order’) CA;
(b) s 221(2)(a) to (f) CA; and
– should be construed in a manner which will promote the object of a speedy disposal of winding up petitions as elucidated by Abdul Hamid Mohamad JCA in Maril-Rionebel (M) Sdn Bhd (Purposive Construction).
The RC provides for entry of appearance, default of appearance, pleadings, judgment in default of pleadings, discovery, interrogatories, pre-trial case management, trial and assessment of damages for civil suits (which are not provided for winding up petitions in CWUR). As such, a consolidation or a joint hearing of a winding up petition with a civil suit, in my opinion, will defeat the Purposive Construction.
63. I am of the further view that the Purposive Construction is supported by the following considerations:
(a) s 2(1)(b) of the Interpretation Acts 1948 and 1967 (IA) provides that Part I of IA applies to CA which has been revised under the Revision of Laws Act 1968 (RLA). CWUR is a subsidiary legislation made by the Rules Committee under s 372 CA and s 16 of the Courts of Judicature Act 1964. Section 2(1)(e) IA states that Part I of IA also applies to CWUR, a subsidiary legislation made after the 31 December 1968, under CA (which has been revised under RLA).
Section 17A in Part I of IA states as follows –
“Regard to be had to the purpose of Act
17A. In the interpretation of a provision of an Act, a construction that would promote the purpose or object underlying the Act (whether that purpose or object is expressly stated in the Act or not) shall be preferred to a construction that would not promote that purpose or object.”
In Palm Oil Research and Development Board Malaysia & Anor v Premium Vegetable Oils Sdn Bhd & Another Appeal  3 MLJ 97, at 105-106, 108-109 and 130, the Federal Court applied s 17A IA to give a purposive interpretation of the Palm Oil Research and Development Act 1979.
The Purposive Construction [of s 221(1), (2) CA and CWUR] is in accordance with s 17A IA;
(b) under s 221(1) CA, the winding up court may make any one of the 3 following orders (3 Possible Orders) –
(i) the winding up court may stay the petition with or without condition;
(ii) the winding up petition may be dismissed; or
(iii) the winding up court may wind up the respondent company.
The 3 Possible Orders (without power to the winding up court to consolidate or order a joint hearing of a winding petition with a civil suit) are consistent with the Purposive Construction;
(c) r 163 CWUR provides as follows –
“Upon winding-up order Judge may order transfer of action to himself
163 Where an order has been made for the winding-up of a company the Judge shall have power without further consent to order the transfer to him of any action cause or matter pending brought or continued by or against the company.”
Under r 163 CWUR, a winding up court may only transfer a pending civil suit filed by or commenced against a respondent company, to the winding up court provided that the respondent company has been wound up. The rationale of r 163 WUR is understandable – as the respondent company has been wound up, all civil suits concerning the wound up respondent company may be transferred to the winding up court.
According to r 163 CWUR –
(i) a winding up court has no power to transfer a civil case involving the respondent company to the winding up court before a winding up order is made against the respondent company; and
(ii) a winding up court has no power to transfer a winding up petition to the civil court for any reason, whether to consolidate or to be jointly heard with a civil case (involving the respondent company) or otherwise. In Panaron Sdn Bhd v Univac Switchgear Sdn Bhd  9 MLJ 498, at 510, I have decided that r 163 CWUR only empowers civil cases involving wound up companies to be transferred to the winding up court and not the converse.
Rule 163 CWUR supports the Purposive Construction by ensuring that winding up petitions are expeditiously disposed of without being delayed by applications to transfer winding up petitions to the civil courts hearing suits filed by or against the respondent companies. In view of r 163 CWUR, I reject the Petitioner’s submission that CWUR are silent on whether the winding up court can order a consolidation or joint hearing of a winding up petition with a civil suit.
This Application is contrary to r 163 CWUR because –
(1) the Petitioner has applied to transfer This Petition to the civil court; and
(2) Open Fibre has not been wound up by this court;
(d) Order 1 rule 2(2) RC has expressly provided that RC do not apply in relation to winding up proceedings in respect of which CWUR have been made under CA. As elaborated above, r 163 CWUR has expressly provided for transfer of civil cases involving wound up respondent companies to a winding up court. It is to be noted that under Order 88 rule 2 RC, winding up proceedings cannot be commenced by originating summonses – item 2 in Appendix C to RC;
(e) Order 4 rule 1(1) RC applies where “two or more causes or matters are pending” in the civil court and not in the winding up court. This view is premised on the following reasons –
(i) Order 4 rule 1 RC cannot be interpreted in a manner which will be contrary to the Purposive Construction; and
(ii) an application of Order 4 rule 1 RC to winding up proceedings, will be inconsistent with the specific provision of r 163 CWUR and is not allowed under Order 1 rule 2(2) RC; and
(f) if the winding up court has the power to consolidate or transfer a winding up petition to a civil court for the petition to be consolidated or jointly heard with a civil suit, the purpose of a speedy disposal of winding up petition is not only defeated but this may also give rise to an abuse of court process by a respondent company. Such an abuse of
court process may be in the form of a respondent company filing an application to consolidate or transfer the winding up petition to the civil court so as to delay unnecessarily the hearing of the petition. Upon the winding up court’s dismissal of this consolidation or transfer application, the respondent company may further hinder the expeditious disposal of the winding up petition by appealing to the Court of Appeal and thereafter to the Federal Court.
64. I have not overlooked the court’s inherent jurisdiction to prevent injustice or abuse of court process. I am not inclined to invoke the court’s inherent jurisdiction to decide This Application for the following reasons:
(a) any exercise of the court’s inherent jurisdiction to hear This Application will be contrary to the Purposive Construction;
(b) for reasons explained later in this judgment, injustice will be caused to Messrs Gunavathy and Messrs Yahya if This Application is allowed. I am not satisfied that if This Application is dismissed, there will be any injustice occasioned to any party, including the Petitioner; and
(c) there is no abuse of court process by any party in This Petition so as to justify this court to hear and allow This Application. To the contrary, as explained in the above sub-paragraph 63(f), if the winding up court has the power to allow This Application, respondent companies may abuse court process by filing consolidation or transfer applications which may unnecessarily delay the expeditious disposal of winding up petitions.
65. If the above view is correct, namely the winding up court has no power to order a consolidation or joint hearing of a winding up petition with a civil suit
(c) acquiescence, and/or
by parties cannot confer jurisdiction or power on the winding up court to consolidate or hear jointly a winding up petition with a civil suit. This is clear from Gopal Sri Ram JCA’s (as he then was) judgment in the Federal Court case of Fung Beng Tiat v Marid Construction Co  2 MLJ 413, at 421.
66. Based on the above reasons, this winding up court has no power to order a Joint Hearing under s 221(1), (2) CA and CWUR. Furthermore, to accede to This Application will be contrary to r 163 WUR. Accordingly, This Application is dismissed on the above grounds.
J. Should court exercise discretion to allow This Application?
67. In the event the winding up court has the power to decide This Application,
I will now proceed to decide the merits of This Application under Order 4 rule 1(1) RC.
68. Before I turn to the merits of This Application, I bear in mind the 3 following matters:
(a) decided cases on whether 2 or more civil cases should be consolidated, jointly heard or otherwise, depends on the exercise of the courts’ discretion based on the particular evidence adduced in those courts. According to Mahadev Shankar JCA’s judgment in the Court of Appeal case of Structural Concrete Sdn Bhd v Wing Tiek Holdings Bhd  1 CLJ 300, at 306, the exercise of judicial discretion in a certain case is not a binding precedent from the view point of the stare decisis doctrine. Reasons and evidence which are considered relevant and decisive in one decided case, may not be pertinent or conclusive in another case;
(b) in administering RC, including Order 4 rule 1(1) RC, the court “shall have regard to the overriding interest of justice”. Furthermore, Order 2 rule 1(2) RC provides that RC “are a procedural code” which is “subject to the overriding objective of enabling the Courts to deal with cases justly’; and
(c) the Petitioner has the legal onus to persuade this court to exercise its discretion to allow This Application under Order 4 rule 1(1) RC.
69. Upon a consideration of all the affidavits filed in This Application, I am not inclined to exercise my discretion under Order 4 rule 1(1) RC to order a Joint Hearing. This decision is based on the following reasons:
(a) the SOC in the Civil Suit only alleges fraud and conspiracy to defraud the Plaintiffs against Messrs Gunavathy and Messrs Yahya in respect of the Consent Judgment recorded on 23.7.2014 in Suit No. 164. Hence, Messrs Gunavathy and Messrs Yahya need only defend themselves against specific allegations in respect of a certain time frame in a particular court matter. In This Petition however, Mr. Ranjeet has raised many allegations regarding complicated transactions (Mr. Ranjeet’s Allegations). Furthermore, Mr. Ranjeet’s Allegations concern matters which have been allegedly agreed between Mr. Ranjeet and Mr. Shailen as early as in 2010. In other words, the factual and legal issues which arise in This Petition span over a period of time commencing from 2010.
If this court orders a Joint Hearing, the Joint Hearing will be a lengthy affair in view of the nature of Mr. Ranjeet’s Allegations. As such, a Joint Hearing will unjustifiably burden Messrs Gunavathy and Messrs Yahya in terms of time, effort and costs (Risk of Injustice to Lawyers). Such a Risk of Injustice to Lawyers, is in itself a sufficient reason to deny This Application;
(b) This Petition concerns questions of law and fact regarding s 218(1)(f) and (g) CA which do not arise in the Civil Suit. There is therefore no common questions of law and fact within the meaning of Order 4 rule 1(1)(a) RC;
(c) the winding up court can only make the 3 Possible Orders in This Petition. However, in the Civil Suit, the Plaintiffs have prayed for remedies which are very different from those applied for in This Petition. The Plaintiffs have prayed for following relief in the Civil Suit, among others –
(i) the setting aside of the Consent Judgment;
(ii) declaratory orders that certain issue of shares and certain transfers of shares through the Consent Judgment are null and void;
(iii) a mandatory order for a certain transfer of shares;
(iv) a mandatory order for delivery of certain documents;
(v) a mandatory order for rectification of a certain share register; and
(vi) compensatory and exemplary damages.
It is clear that the “rights to relief claimed in This Petition and the Civil Suit are not “in respect of or arise out of the same transaction or series of transactions” as envisaged by Order 4 rule 1(1)(b) RC; and
(d) the Affected Parties are rightly not cited as respondents in This Petition. There is therefore no “common parties” in This Petition and Civil Suit.
70. If This Petition is heard separately from the Civil Suit (Separate Hearings), undeniably, there is a possibility that conflicting findings of fact may be reached in these 2 proceedings in respect of the same or similar issues of fact (Risk of Conflicting Factual Findings). I am of the view that the Risk of Conflicting Factual Findings is outweighed by the Risk of Injustice to Lawyers and the matters explained in the above sub-paragraphs 69(b) to
(d). Furthermore, if there are Separate Hearings, the Risk of Conflicting Factual Findings may be mitigated in the following manner:
(a) the Civil Suit should be heard first before the disposal of This Petition as the Civil Suit seeks to set aside the Consent Judgment;
(b) the hearing of This Petition should be stayed pending the disposal of the Civil Suit; and
(c) after the Civil Suit has been decided, the court hearing This Petition will have the benefit of the grounds of the decision in the Civil Suit, including the findings of fact in the Civil Suit. As such, in respect of
factual issues in This Petition which are the same or similar to issues of fact decided in the Civil Suit, the winding up court will know the civil court’s factual findings and its reasons. In such an event, there is a lesser Risk of Conflicting Factual Findings even if there are Separate Hearings.
In view of the above grounds, I am not persuaded that the Risk of Conflicting Factual Findings constitutes “some other reason” under Order 4 rule 1(1)(c) RC whereby it is desirable to order a Joint Hearing.
71. Based on the above reasons, I am not satisfied that the Petitioner has succeeded in discharging the legal onus to satisfy this court that This Application should be allowed. In fact, I am satisfied that the justice of the matter supports Separate Hearings.
72. I award costs of This Application in the sum of RM5,000 each to Messrs Gunavathy and Messrs Yahya because they have managed to persuade me to exercise my discretion to decline This Application (on the assumption that the winding up court has the power to order a Joint Hearing). Such costs shall be paid forthwith by Mr. Ranjeet to Messrs Gunavathy and Messrs Yahya as they are not parties in This Petition and need not wait for the outcome of This Petition.
73. In respect of all the Respondents, I exercise my discretion to order costs of This Application to be in the cause of This Petition. This is because of the novelty of This Application (on whether the winding up court can order a Joint Hearing).
L. Court’s decision
74. This Application is dismissed for the above reasons with –
(a) costs in the sum of RM5,000 each to be paid forthwith by Mr. Ranjeet to Messrs Gunavathy and Messrs Yahya; and
(b) as for all the Respondents, costs of This Application be in the cause of This Petition.
WONG KIAN KHEONG
High Court (Commercial Division)
DATE: 2 NOVEMBER 2015
Counsel for Petitioner:
En. Mohamed Izral Khair, Mr. Daniel Albert, Mr. Edmund Chek, Ms. Villie Nethi & Ms. Gillian Looh (Messrs Ranjit Singh & Yeoh)
Counsel for 1 to 3 Respondents:
Ms. Sia Siew Mun & Mr. Wong Chun Keat (Messrs Sia Siew Mun & Co.)
Counsel for 4 and 5 Respondents:
Mr. Lim Kian Leong, Mr. Shim Mong Seng & Ms. Ng Yin Min (Messrs Lim Kian Leong & Co.)
Counsel for Messrs Gunavathy Manikam: Mr. Wong Hok Mun & Ms. Ms. Koh Peh Siah
(Messrs Azim, Tunku Farik & Wong)
Counsel for Messrs AR Yahya & Co.:
Mr. Robert Low, Mr. C.L Tan & Ms. G Sharmini (Messrs Ranjit Ooi & Robert Low)