IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR (COMMERCIAL DIVISION)
COMPANIES WINDING-UP NO: 28NCC-1081-12/2013
In the matter of Section 218 of the Companies Act 1965
In the matter of Bostonweb Academy Sdn Bhd (Company No. 574585-X)
In the matter of the Companies (Winding Up) Rules 1972
NADIN PROPERTIES SDN BHD
(Company No. 86214-A) … PETITIONER
BOSTONWEB ACADEMY SDN BHD
(Company No. 574585-X) … RESPONDENT
(Court enclosure no. 23)
1. This is an application (This Application) by a creditor [Malaysia Venture Capital Management Bhd. (Applicant)] of a wound up company (Respondent), to stay permanently the Respondent’s winding up order under s 243(1) of the Companies Act 1965 (CA).
2. The interesting feature of this case is that the Respondent has been granted a license by the Ministry of Higher Education (MHE) to start a college (College) offering courses on information and communication technology (College License). By way of This Application, the Applicant, a wholly owned subsidiary of Ministry of Finance Inc., proposed to restructure the Respondent’s shareholding and debts with a view to revive the Respondent so as to carry on the College’s educational venture (College Venture).
3. The petitioner company (Petitioner) has let out property to the Respondent for which the Respondent owed rent to the Petitioner.
4. There was an earlier proposal under s 176(1) CA to restructure the debts and shareholding of the Respondent (Restructuring Proposal). According to the Restructuring Proposal –
(a) all the Respondent’s debts would be paid at the rate of RM0.01 for every RM5.00 of debt (Restructured Debts);
(b) the Restructured Debts would not be paid in cash but in the form of shares in Exotium Sdn. Bhd. (Exotium), the Respondent’s holding company. Exotium owns all the shares in the Respondent; and
(c) there was a plan to have a public listing Exotium’s shares.
5. The High Court has sanctioned the Restructuring Proposal on 4.3.2013 (Court’s Sanction For Restructuring).
6. On 16.8.2013 the Petitioner obtained a judgment in the Kuala Lumpur Magistrate’s Court against the Respondent in respect of arrears of rent due from the Respondent to the Petitioner amounting to RM425,955.65 (as of 2.5.2013) (Petitioner’s Judgment).
7. In execution of the Petitioner’s Judgment, the Petitioner obtained an order for the public auction of the Respondent’s assets on 6.11.2013. The auction proceeds amounted to RM80,000 which left an outstanding judgment debt of RM347,255.65 due from the Respondent to the Petitioner (Respondent’s Debt Due To Petitioner).
8. On 6.12.2013 the Petitioner filed a winding petition (Petition) against the Respondent on the ground that the Respondent was commercially insolvent as the Respondent was unable to repay the Respondent’s Debt Due To Petitioner.
9. On 4.8.2014, this court allowed the Petition and wound up the Respondent (Winding Up Order) and the Official Receiver (OR) was appointed to be the Respondent’s liquidator.
10. The Respondent owed a sum of RM19,400,068.15 to the Applicant (Respondent’s Debt Due To Applicant).
11. The OR as the Respondent’s liquidator conducted meetings of the Respondent’s contributories and creditors on 18.2.2015 (Meetings). At the Meetings –
(a) the Applicant presented the Restructuring Proposal;
(b) Exotium as the Respondent’s contributory supported the Restructuring Proposal;
(c) there are 3 creditors of the Respondent, namely –
(i) the Petitioner;
(ii) the Applicant; and
(iii) Ricoh (M) Sdn. Bhd. (Ricoh) to whom the Respondent owed a sum of RM161,922; and
(d) the Applicant supported the Restructuring Proposal while the Petitioner objected to it. Ricoh did not attend this creditors’ meeting.
C. This Application
12. On 11.3.2015, the Applicant filed This Application on the following grounds:
(a) the Applicant is the biggest creditor of the Respondent in terms of the amount of the Respondent’s Debt Due To Applicant;
(b) at the Meetings, the Restructuring Proposal has been supported by the Applicant as the Respondent’s biggest creditor and Exotium (as the Respondent’s sole contributory);
(c) the most valuable asset of the Respondent is the College License which is non-transferable and is terminated upon the Respondent’s liquidation; and
(d) if This Application is allowed –
(i) the Restructuring Proposal can be implemented whereby the Respondent’s creditors may be repaid in the form of shares in Exotium; and
(ii) the Respondent will be able to “re-activate” the College License and resume the College’s Venture and generate income for the Respondent.
D. Petitioner’s objection to This Application
13. The Petitioner opposes This Application on the following grounds:
(a) the Applicant has not obtained OR’s prior sanction to file This Application. Reliance was placed on the following cases –
(i) the Federal Court’s judgment in Zaitun Marketing Sdn Bhd v Boustead Eldred Sdn Bhd (formerly known as Boustead Trading (1985) Sdn Bhd)  2 MLJ 749; and
(ii) the Court of Appeal case of HLE Engineering Sdn Bhd v HTE Leterik Bumi JV Sdn Bhd  2 MLJ 661;
(b) the Applicant has failed to obtain leave of this winding up court under s 226(3) CA to make This Application as required by the High Court case of Pengurusan Danaharta Sdn Bhd v Kasawa (M) Sdn Bhd  MLJU 754 (Kasawa);
(c) there is unexplained delay of 9 months in filing This Application from the date of the Winding Up Order. The Petitioner cited the High Court’s
judgment in Tiong Hung Ming v Kalimantan Hardwood Sdn Bhd, Weeluk Holding Sdn Bhd (Applicant)  MLJU 381;
(d) the Applicant has failed to present any bona fide scheme to pay the Respondent’s debts. The Petitioner was not included in the scheme for which the Respondent had obtained the Court’s Sanction For Restructuring. Under the Restructuring Proposal, the Petitioner will only be paid 0.2% of the Respondent’s Debt To Petitioner which is unreasonable considering that the Respondent’s shareholder, Exotium, is not paying any of the Respondent’s debts; and
(e) the Petitioner’s search of the Respondent with the records of Companies Commission of Malaysia (SSM Search), shows that the Respondent has a secured creditor, Affin Bank Bhd (ABB), with 2 “unsatisfied” charges.
E. Applicant’s submission
14. In support of This Application, the Applicant advances the following
(a) as the Respondent’s creditor, the Applicant has locus standi to make This Application under s 243(1) CA;
(b) the OR’s report which was ordered by this court under s 243(2) CA, stated that the Respondent only has assets worth RM42,000. Based
on this value of the Respondent’s assets, if the Respondent’s liquidation is completed, the Petitioner will only get a “return” of RM745.56. If however, assuming This Application is allowed and the Restructuring Proposal is accepted, the Petitioner will obtain shares in Exotium worth RM17,362; and
(c) if This Application is allowed, it is “envisaged” that the Respondent will generate income by “re-activating” the College License and resuming the College Venture. The Respondent’s shareholders will then be able to monetize their shares in Exotium when Exotium’s shares are publicly listed. Accordingly, the Restructuring Proposal and a permanent stay of the Winding Up Order, is in the interest of the Respondent’s creditors.
F. OR’s report
15. When This Application was first heard in this court, this court ordered the
OR to prepare a report pursuant to s 243(2) CA.
16. The OR’s report stated, among others:
(a) the Respondent has 3 unsecured creditors, namely the Petitioner, Applicant and Ricoh, with debts totalling RM19,561,990.48;
(b) the Respondent has no secured creditor. This is surprising as the SSM Search exhibited in the Petitioner’s affidavit which opposes
This Application, shows ABB as the Respondent’s secured creditor;
(c) the Respondent has cash of RM2,000 and furniture worth RM40,000;
(d) the OR has not received any proposal from the Applicant to settle the Respondent’s debts; and
(e) the OR leaves to this court to decide This Application.
G. Applicant can file This Application under s 243(1) CA
17. Section 243 CA provides as follows:
“(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 ought to be stayed, make an order staying the proceedings either altogether or for a limited time on such terms and conditions as the Court thinks fit.
(2) On any such application the Court may, before making an order, require the liquidator to furnish a report with respect to any facts or matters which are in his opinion relevant.
(3) An office copy of every order made under this section shall be lodged by the company with the Registrar and with the Official Receiver within fourteen days after the making of the order.
Penalty: One thousand ringgit. Default penalty.”
18. Under s 243(1) CA, the 3 following categories of persons may apply for a permanent stay of a winding up order:
(a) the liquidator of the wound up company in question;
(b) the wound up company’s “contributory” [defined in s 4(1) CA to include the company’s shareholder]; and
(c) the wound up company’s “creditor’. The CA does not define who is a “creditor’.
19. This court is satisfied that the Applicant is a “creditor’ of the Respondent for the following reasons:
(a) the OR’s report referred to the “Statement of Affairs” (SOA) filed by the Respondent’s former director under s 234(1) CA. Section 234(1) CA provides as follows –
““Statement of company’s affairs to be submitted to [OR]
234(1) There shall be made out and verified in the prescribed form and manner and submitted to the [OR] or the liquidator, as the case requires, a statement as to the affairs of the company as at the date of the winding up order showing –
(a) the particulars of its assets, debts and liabilities;
(b) the names and addresses of its creditors;
(c) the securities held by them respectively;
(d) the dates when the securities were respectively given; and
(e) such further information as is prescribed or as the Official Receiver or the liquidator requires .”
The SOA which has been filed with the OR as the Respondent’s liquidator, states that the Applicant is one the Respondent’s 3 creditors. The Petitioner does not dispute the accuracy of this statement in the SOA regarding the fact that the Applicant is the Respondent’s creditor; and
(b) the Applicant’s representative attended the Meetings and the Petitioner did not object to the Applicant’s right to attend as a creditor of the Respondent. As such, the Petitioner is estopped from denying that the Applicant is the Respondent’s creditor – please see the Federal Court’s judgment delivered by Gopal Sri Ram JCA (as he then
was) in Boustead Trading (1985) Sdn Bhd v Arab-Malaysian Merchant Bank Bhd  4 CLJ 283, at 294, as follows –
“ The time has come for this Court to recognise that the doctrine of estoppel is a flexible principle by which justice is done according to the circumstances of the case. It is a doctrine of wide utility and has been resorted to in varying fact patterns to achieve justice. Indeed, the circumstances in which the doctrine may operate are endless ”
H. Applicant need not obtain leave from winding up court
20. Section 226(3) CA provides as follows;
“Actions stayed on winding up order
226(3) When a winding up order has been made or a provisional liquidator has been appointed no action or proceeding shall be proceeded with or commenced against the company except –
(a) by leave of the Court; and
(b) in accordance with such terms as the Court imposes.”
21. Under s 226(3)(a) CA, leave of winding up court is only needed when there is an action or proceeding ”against’ the wound up company. This is clear from the Federal Court’s judgment delivered by Steve Shim CJ (Sabah &
Sarawak) in CGU Insurance Bhd v ASEAN Security Paper Mills Sdn Bhd & Other Appeals  2 CLJ 1, at 4 and 9-10, as follows –
There are three appeals before us, all involving the same issue of law. As such, we propose to deal with them together. Leave to appeal was granted by the Federal Court on 22 February 2001 on the following questions:
(1) Whether an appeal against the decision in favour of a company under liquidation falls within the meaning of the phrase ‘action or proceeding’ in section 226(3) of the Companies Act, 1965, so that no appeal could be prosecuted without leave under the said provision.
(2) Whether an application for security for costs by a defendant in an action commenced by a company under liquidation falls within the meaning of the phrase ‘action or proceeding’ in section 226(3) of the Companies Act, 1965, so that no application for security for costs could be commenced and/or proceeded with, without leave under the said provision.
Having considered the relevant authorities, we prefer the approach adopted in Humber and Rahmat Ali. Although we accept that an appeal or an application for security of costs can be construed as a proceeding per se, nevertheless it is essential to determine whether it is a proceeding being instituted or commenced against the company under liquidation in s. 226(3) of the Act and that must necessarily depend on whether the said proceeding is in the nature of a defensive action or otherwise. The factual circumstances
therefore come into play. In the Ipoh suit, the facts show that the appeal lodged by the appellant is not a proceeding intended to fasten liability on the respondent (the company under liquidation) or its assets but is essentially a proceeding commenced or instituted by the appellant with the object of exculpating itself from liability arising out of an action commenced or initiated by the respondent. The appellant is not a claimant as such nor is it a creditor of the respondent. It is not seeking to make any inroads into the assets of the respondent but merely to set aside a liability pinned on it by virtue of a successful action brought against it by the respondent.
Clearly, the appeal is in the nature of a defensive action. The same must apply to the application for security of costs lodged by the appellant in the Kuala Lumpur suit. In the circumstances, we take the view that the appeal or the application for security of costs does not fall within the meaning of the phrase “action or proceeding … proceeded with or commenced against the company” in s. 226(3) of the Act.
Given the conclusions above and for the reasons stated, the answers to both the questions posed for our consideration must be in the negative.”
22. Based on CGU Insurance Bhd, This Application is “not a proceeding intended to fasten liability” on the Respondent or “to make any inroads into the assets” of the Respondent. In fact, This Application seeks to stay permanently the Winding Up Order under s 243(1) CA. Furthermore, s 243(1) CA is not subject to s 226(3)(a) CA. Nor does s 226(3) CA state that s 226(3) CA shall prevail over s 243(1) CA. Accordingly, I reject the
Petitioner’s contention and decide that no leave from the winding up court is required under s 226(3) CA for This Application.
23. In Kasawa –
(a) the respondent company had been earlier wound up by a High Court order dated 24.5.2000 (1st Order) on the petition of another creditor;
(b) a contributory of the respondent company had obtained a stay of the 1st Order under s 243 CA (Stay of 1st Order);
(c) the petitioner filed a second petition to wind up the respondent company (2nd Petition) and the respondent company applied to stay or strike out the 2nd Petition on the ground, among others, no leave of the winding up court had been obtained under s 226(3) CA; and
(d) the High Court struck out the 2nd Petition on the ground that the petitioner had not obtained leave of the winding up court under s 226(3) CA to file the 2nd Petition.
24. I am of the following respectful view regarding Kasawa:
(a) Kasawa does not concern the issue of whether an application under s 243 CA requires leave of the winding up court under s
226(3) CA. As such, Kasawa can be easily distinguished from this case;
(b) the Federal Court’s decision in CGU Insurance Bhd was not referred to in Kasawa. According to CGU Insurance Bhd, s 226(3) CA only applies to suits against wound up companies which seek to fasten liability on those companies so as to make inroads into those companies’ assets; and
(c) the Stay of 1st Order would mean that s 226(3) CA cannot apply to the 2nd Petition in Kasawa.
I. No prior sanction from OR is required for This Application
25. Zaitun Marketing Sdn Bhd and HLE Engineering Sdn Bhd concerned suits filed by companies (plaintiff companies) which were subsequently wound up. According to Zaitun Marketing Sdn Bhd and HLE Engineering Sdn Bhd –
(a) after the winding up of the plaintiff companies, the liquidators of the plaintiff companies have the conduct of the prosecution of those suits; and
(b) if the plaintiff companies’ creditors or contributories wish to prosecute those suits, they need the prior sanction of the liquidators.
26. This Application does not concern a suit by the Respondent. Hence, Zaitun Marketing Sdn Bhd and HLE Engineering Sdn Bhd cannot apply to This Application. Accordingly, no prior sanction of the OR as the Respondent’s liquidator, is required for This Application.
J. How should an application under s 243(1) CA be decided?
27. Section 243 CA has been considered in the following 2 cases:
(a) the Federal Court’s judgment delivered by Mohd. Dzaiddin FCJ (as he then was) in Vijayalaksmi Devi a/p Nadchatiram v Dr. Mahadevan a/l Nadchatiram & Ors  2 MLJ 709, at 716-718; and
(b) Arifin Jaka J’s (as he then was) decision in the High Court case of Ting Yuk Kiong v Mawar Biru Sdn Bhd & Anor  3 CLJ 136, at 139.
28. I have followed the above 2 cases in my recent decision in Ga-Seng Paper Marketing Sdn Bhd v Percetakan Warni Sdn Bhd  4 AMR 221, at 231-235. I have expressed the following view in Ga-Seng Paper Marketing Sdn Bhd, at p. 235-237:
“ I am of the following view regarding s 243(1) CA:
(a) whether a winding up order should be stayed or not under s 243(1) CA, depends on the exercise of the court’s
discretion based on the evidence adduced before the court – the Federal Court case of Vijayalaksmi Devi. It is trite law that the exercise of judicial discretion in a case is not a binding precedent from the view point of the stare decisis doctrine – please see the Court of Appeal’s judgment in Structural Concrete Sdn Bhd v Wing Tiek Holdings Bhd  1 CLJ 300, at 306. Reasons which are considered relevant and decisive in one Section 243 Application, may not be pertinent or conclusive in another Section 243 Application;
(b) the legal burden to persuade the winding up court to exercise its discretion to stay a winding up order under s 243(1) CA is on the applicant – the Federal Court’s judgment in Vijayalaksmi Devi. Even if the petitioner, the company’s liquidator and all the creditors and contributories of the company are unanimously in favour of a Section 243 Application, the winding court may still refuse the Section 243 Application if the applicant fails to discharge the legal onus to satisfy the court to stay the winding up order. In Ting Yuk Kiong, a Section 243 Application was refused despite the OR’s view that the company in question was solvent and the OR’s support for the Section 243 Application;
(c) as decided by the Federal Court in Vijayalaksmi Devi, the legal burden is on an applicant in a Section 243 Application to make “a positive or sufficient case”. The applicant should have a heavy burden as the effect of a stay under s 243(1) CA is permanent and far-reaching – the Court of Appeal case of Vijayalakshmi Devi. If the Section 243 Application is allowed, there is always a risk that the “resurrected” company may subsequently be unable to pay its debts, to the detriment of creditors in particular and the business community in general;
(d) the factors to be considered by the winding up court in considering a Section 243 Application as explained in Vijayalaksmi Devi (Federal Court’s judgment) and Ting Yuk Kiong, are not exhaustive. Judicial discretion of the winding up court in deciding a Section 243 Application should not be fettered as is clear from the phrase “on proof to the satisfaction of the Court that all proceedings in relation to the winding up ought to be stayed” in s 243(1) CA;and
(e) if a company is wound up under s 218(1)(e) CA on the ground that the company is unable to pay its debts –
(i) the winding up court should give more weight to the consideration of public interest and commercial morality, than the wishes of the company’s liquidator, creditors and contributories. This is because the winding up court should be vigilant to ensure that s 243(1) CA is not abused to “resurrect” a commercially insolvent company to the detriment of the creditors in particular and the business community in general;
(ii) subject to the consideration of public interest and commercial morality, the wishes of the commercially insolvent company’s contributories should be given less weight than the interest of the wound up company’s creditors, especially unsecured ones. This is understandable in view of the limited liability of companies and their shareholders as embodied in s 16(5) CA (with such liability on the part of the members to contribute to the assets of the company in the event of its being wound up);
(iii) to substantiate a Section 243 Application, the applicant must adduce credible evidence that if the Section 243 Application is allowed, the wound up company is likely to be commercially solvent and is likely to be able to pay its debts when such debts become due and payable in the future. In other words, there must be cogent evidence of the likelihood of the company’s commercial solvency or cash flow solvency.
In support of the above opinion, I rely on the Supreme Court’s judgment in Sri Hartamas Development Sdn Bhd v MBF Finance Bhd  1 CLJ (Rep) 303. In Sri Hartamas Development Sdn Bhd, the Supreme Court applied the “commercial solvency” test or the “cash flow solvency” test and not the “balance sheet solvency” test, to ascertain whether the appellant company should be wound up on the ground of its inability to pay its debts. Gunn Chit Tuan SCJ (as his Lordship then was) decided as follows in Sri Hartamas Development Sdn Bhd, at p. 307 and 308 –
“As an alternative ground regarding insolvency, it was contended by Mr. Sri Ram that the learned Judge had applied the wrong legal test when he concluded that the appellant had not rebutted the statutory presumption and was therefore insolvent. Counsel said that in the Court below the appellant had led evidence to show that it is the owner of landed assets worth more than RM500 million. The respondent did not dispute those facts in the Court below and there was therefore no challenge on that point. Nevertheless the learned Judge relied on the decision of the Privy Council in Malayan Plant (Pte) Ltd. v. Moscow Narodny Bank Ltd.
 2 MLJ 53, which held that the appellant had failed to show that it was not insolvent. Counsel submitted that the correct test would be met by answering a question:
“Would the appellant be capable, if necessary, of paying all debts by a realisation of its assets, including any immovable property, and of carrying on some other business if its shareholders so wished out of the net amount realised after payment of all liabilities?”.
It was further submitted that it was no part of the test that a company should have the capability to meet its liabilities out of its own monies, and in support of that submission, the appellant relied on the decision of the Singapore High Court in Re Great Eastern Hotel (Pte) Ltd.  1 MLJ 161. …
In dealing with “commercial insolvency”, that is, of a company being unable to meet current demands upon it, we would respectfully follow the Privy Council in the Malayan Plant case and cite the following observations from Buckley on the Companies Act (13th Edn.) at p. 460:
In such a case it is useless to say that if its assets are realized there will be ample to pay twenty shillings in the pound: this is not the test. A company may be at the same time insolvent and wealthy. It may have wealth locked up in investments not presently realizable; but although this be so, yet if it have not assets available to meet its current liabilities it is commercially insolvent and may be wound
I rely on the “commercial solvency” test or the “cash flow solvency” test as a factor to be considered in a Section 243 Application because if a company is wound up based on the “commercial solvency” test, this same test should be satisfied by an applicant in a Section 243 Application to stay the same winding up order (obtained based on the “commercial solvency” test); and
(iv) evidence to show the likelihood of the company’s commercial solvency may be given as follows –
(1) evidence of a proposal to inject funds or liquid assets into the company by a “White Knight”;
(2) evidence that the company is likely to be given a lucrative contract or transaction which may
provide a source of income to the company;
(3) expert opinion by a qualified and reputable financial consultant or accountant, especially a “companies restructuring specialist”, on the likelihood of the company’s commercial solvency.”
K. Public interest and commercial morality do not support This Application
29. The Respondent has been wound up on the ground of its inability to pay the Respondent’s Debt Due To Petitioner. As held in Ga-Seng Paper Marketing Sdn Bhd, at p. 236, public interest and commercial morality should be the primary consideration in deciding This Application.
30. This court is not satisfied that –
(a) it is in the public interest; and/or
(b) it is conducive to commercial morality
– to allow This Application. This decision is based on the following reasons –
(i) there is no proposal forwarded to this court on –
(1) which investor will inject funds and/or capital to revive the College Venture as well as to settle the Respondent’s present indebtedness of more than RM19 million (excluding the possible secured debt of ABB); and
(2) which able, willing and reputable educational entity is going to manage and administer the College Venture if This Application is allowed. The College Venture can only be successful if there is an able, willing and reputable educational entity to run it. The Applicant has not adduced any evidence of its own capability to run the College;
(ii) the identity of the educational entity to run the College is important as MHE may not allow the College to be run by that entity. No evidence has been adduced by the Applicant to show that MHE is willing to allow the College License to be “re-activated”. In fact, there is no evidence tendered by the Applicant to show that MHE has been informed of This Application;
(iii) without the above proposal, this court will be failing its duty to allow This Application because the interest of the College’s prospective students, their parents and financiers (financial institutions and providers of scholarship), should be safeguarded. Furthermore, if This Application is allowed and the College becomes commercially
insolvent again in the future, Malaysia’s reputation as an educational hub will be adversely affected; and
(iv) the Restructuring Proposal only dealt with certain debts of the Respondent as expressly provided in the Court’s Sanction For Restructuring and does not provide for the commercial revival of the College Venture. The Petitioner was not even included in the Restructuring Proposal.
L. No evidence to show likelihood of Respondent’s commercial solvency in the future
31. As explained in Ga-Seng Paper Marketing Sdn Bhd, at p. 236, the Applicant has the onus to satisfy this court that there is credible evidence regarding the likelihood of the Respondent’s commercial solvency in the future if This Application is granted.
32. This court is of the view that there is no credible evidence to show that if This Application is allowed, the Respondent is likely to be commercially solvent in being able to pay its debts when such debts become due and payable in the future. This decision is premised on the following reasons:
(a) the Restructuring Proposal, despite being incomplete (for excluding the Respondent’s Debt Due To Petitioner) and notwithstanding Court’s Sanction For Restructuring, did not prevent the winding up of the Respondent. In other words, the commercial viability of the Restructuring Proposal can be severely doubted. This Application is
based solely on the Restructuring Proposal and if the Restructuring Proposal is not commercially viable, this ground in itself justifies the dismissal of This Application;
(b) according to the Restructuring Proposal, the Respondent’s debts are paid in kind (in the form of Exotium’s shares and not in cash) at the ratio of RM0.01 worth of share in Exotium for every RM5.00 debt of the Respondent (Proposed Ratio). The nature of repayment of the Respondent’s debts (in the form of Exotium shares) and the Proposed Ratio, in this court’s view, does not show any likelihood of the future commercial solvency of the Respondent if This Application is granted; and
(c) as stated in the SSM Search, ABB has 2 “unsatisfied” charges. The effect of SSM’s records has been explained by the Court of Appeal’s judgment delivered by Anantham Kasinather JCA in Tan See King & Anor v Anata Knitting Industry (M) Sdn Bhd  2 MLJ 284, at 288, as follows –
“On the particular facts of this case, we are satisfied that this registration of the earlier debentures with the Companies Commission sufficed to serve as sufficient notice of the existence of the fixed charge in favour of the respondent ”
In view of the 2 “unsatisfied’ charges of ABB over the assets of the Respondent, it is difficult, if not impossible, to foresee the commercial solvency of the Respondent in the future if This Application is allowed.
M. Unexplained delay in making This Application
33. The following cases have dismissed applications under s 243(1) CA solely on the ground of delay in making such applications without any reasonable explanation in affidavit evidence:
(a) the Federal Court case of Vijayalaksmi Devi, at p. 722;
(b) Hamid Sultan JC’s (as he then was) decision in the High Court case of Tiong Hung Ming; and
(c) Ga-Seng Paper Marketing Sdn Bhd, at p. 242-243.
34. As contended by the Petitioner’s learned counsel, there has been a delay of 9 months in the filing of This Application (from the date of the Winding Up Order) and such a delay has not been explained in affidavit evidence. Accordingly, this court exercises its discretion to refuse This Application under s 243(1) CA on the ground that there has been an unexplained and excessive delay in making This Application.
N. Applicant has failed to discharge burden in respect of This Application
35. As held in Vijayalaksmi Devi, the Applicant has the legal onus to prove “a positive and sufficient case” under s 243(1) CA so as to persuade this court
to exercise its discretion to allow This Application. In view of the above reasons, this court finds that the Applicant has failed to discharge this burden.
O. Court’s decision
36. Premised on the above Application with costs. reasons, I am constrained to dismiss This
DATE: 21 OCTOBER 2015 WONG KIAN KHEONG Judicial Commissioner High Court (Commercial Division) Kuala Lumpur
Counsel for Petitioner: Mr. M. Edmund (Messrs Vas & Co)
Representative from Respondent’s Liquidator: Puan Norazlina binti Md. Nasir (Official Receiver)
Counsel for Applicant: Mr. Cheong Sek Kwan (Messrs SK Cheong)