COURT OF APPEAL SUBMISSION

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DALAM MAHKAMAH RAYUAN MALAYSIA (BIDANGKUASA RAYUAN) RAYUAN SIVIL NO. P-02-2820-10 ANTARA 1. FORWARD PERCEPTION SDN BHD [NO. SYARIKAT: 314720-H) 2. LEE KIM SAI …PERAYU-PERAYU DAN TAN SOON KEAT …RESPONDEN DALAM PERKARA MENGENAI MAHKAMAH TINGGI MALAYA DI PULAU PINANG SYARIKAT (PENGGULUNGAN) NO. 28-81-2009 Dalam Perkara Mengenai Seksyen 217(2)(b) dan/atau Seksyen 218(1)(f) dan (i) Akta Syarikat 1965 Dan Dalam Perkara Mengenai Forward Perception Sdn Bhd (No. Syarikat: 314720-H) Dan Dalam Perkara Mengenai Kaedah-kaedah Syarikat (Penggulungan) 1972 Antara Tan Soon Keat …Pempetisyen Dan 1. Forward Perception Sdn Bhd

Transcript of COURT OF APPEAL SUBMISSION

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DALAM MAHKAMAH RAYUAN MALAYSIA

(BIDANGKUASA RAYUAN)

RAYUAN SIVIL NO. P-02-2820-10

ANTARA

1. FORWARD PERCEPTION SDN BHD[NO. SYARIKAT: 314720-H)

2. LEE KIM SAI …PERAYU-PERAYU

DAN

TAN SOON KEAT …RESPONDEN

DALAM PERKARA MENGENAI MAHKAMAH TINGGI MALAYA DI PULAU PINANG SYARIKAT (PENGGULUNGAN) NO. 28-81-2009

Dalam Perkara Mengenai Seksyen 217(2)(b) dan/atau Seksyen 218(1)(f) dan (i) Akta Syarikat 1965

Dan

Dalam Perkara Mengenai Forward Perception Sdn Bhd (No. Syarikat: 314720-H)

Dan

Dalam Perkara Mengenai Kaedah-kaedah Syarikat (Penggulungan) 1972

Antara

Tan Soon Keat …Pempetisyen

Dan

1. Forward Perception Sdn Bhd(No. Syarikat: 314720-H)

2. Lee Kim Sai …Responden-responden

THE RESPONDENT’S WRITTEN SUBMISSION

[1] INTRODUCTION

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This Submission is filed by the Respondent/Petitioner in respect of the Appeal filed by the Appellants’ against the decision delivered by the Honourable Judge of High Court at Penang on 10.5.2010 in favour of the Winding Up Petition filed by the Respondent.

It is of utmost importance for This Honourable Court to take note of the fact that this Appeal is a non-starter on the basis that the Company is wound up and that the 2nd Appellant does not have authority to file this appeal on behalf of the Company, i.e. 1st Appellant.

[2] THE APPLICATION

i. The Respondent/Petitioner’s Humble Petition before High Court at Penang was an application by the abovenamed Respondent/Petitioner for an Order For Winding Up to be made against the 1st Appellant, Forward Perception Sdn Bhd which was filed before the Penang High Court on 17.6.2009 with the Affidavit Verifying Petition which was affirmed by Tan Soon Keat [the Respondent/Petitioner] on 19.6.2009.

ii. Further, the following affidavits have been filed in compliance with the provisions of the Companies Winding Up Rules 1972:

a. “Afidavit Penyampaian Mohamad Kassim Kaesevan B. Abdullah” affirmed on 30.7.2009;

b. “Afidavit Penyampaian Ahmad Razali Bin Mat Sab” affirmed on 30.7.2009;

c. “Afidavit Penyampaian Jonathan Gabriel Augustine” affirmed on 18.8.2009; and

d. “Afidavit Penyampaian Mohamad Kassim Kaesevan B. Abdullah” affirmed on 18.8.2009.

iii. The Respondent/Petitioner has complied with Rule 32 (1) of the Companies Winding Up Rules 1972 wherein the Respondent/Petitioner has made an application for the Registrar’s Certificate to be granted by way of an Ex-Parte Summons-In-Chambers dated 18.8.2009 supported by an Affidavit In Support affirmed by Karin Lim Ai Ching on 18.8.2009. The

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said Registrar’s Certificate was granted by This Honourable Court on 21.8.2009.

iv. The Solicitors for the 2nd Appellant has filed an Affidavit in Opposition of the said Petition affirmed by Lee Kim Sai on 21.8.2009.

v. The Respondent/Petitioner has objected to the admissibility of the said Affidavit in Opposition on the ground that the said Affidavit In Opposition was filed out of time since the Affidavit In Opposition of the Respondent/Petitioner’s Petition has to be filed at least 7 days before the hearing of the said Petition.

Refer to:-

[1] Rule 30 (1) Companies Winding Up Rules 1972 [marked as “Tag-A” Respondent/Petitioner’s Bundle of Authorities [RBA]] states as follows:-

“ Affidavits in opposition to a petition that a company may be wound up shall be filed and a copy thereof served on the Petitioner or his solicitor at least seven days before the time appointed for the hearing of the petition”.

[2] The High Court case of Dataprep (Malaysia) Sdn Bhd v. Utas Lambang Sdn Bhd [2009] 7 CLJ 163 [marked as “Tag-B” RBA] held that :-

“ (1) Rule 30(1) of the Companies (Winding-Up) Rules 1972 is mandatory as it incorporates the word ‘shall’. The case of Ng Thoong Chen v. Kedah Marble Sdn Bhd was only a high court decision while the case of Coruses and Daffodils (M) Sdn Bhd v. Development and Commercial Bank Bhd was a Court of appeal decision. This court was bound by the Court of Appeal decision due to the practice of ‘binding precedent.’(para 6)

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(2) The petition should be allowed solely on the ground of no affidavit in opposition was filed. However, even if the affidavit which was filed was admitted, the respondent was in a position of not being able to pay its debts and therefore must also be wound up. The respondent’s position was one of being unable to pay its debts under s. 218(1)(e) of the Companies Act 1965. (paras 11 & 12)”.

vi. The Respondent/Petitioner further submits that the time prescribed by Rule 30(1) of the Companies Winding Up Rules 1972 (hereinafter referred to as “the said Rules”) is a mandatory requirement and as such the Appellant’s Affidavit In Opposition should not be accepted by This Honourable Court on the basis that the delay in the filing of the said Affidavit In Opposition is a clear and blatant contravention of the mandatory time prescribed by Rule 30(1) of the said Rules.

vii. In light of the above, the Respondent/Petitioner also submits that any application for the extension of time by the Appellants should not be entertained by This Honourable Court on the grounds that the law on the filing of any Affidavit In Opposition is clear and is made mandatory under the said Rules and the failure of the Appellants to comply with the same is a blatant disregard of the said Rules and its importance and such failure was committed with the intention of delaying the due process of the Court, albeit the hearing of the Petition.

viii. The delay on the part of the Appellants is a non- compliance which is not curable by invoking Order 1A RHC 1980 since Rule 30(1) of the said Rules is a mandatory or fundamental requirement without any room for recourse.

Refer to :-

DULI YANG AMAT MULIA TUNKU IBRAHIM ISMAIL IBNI SULTAN ISKANDAR AL-HAJ

v.

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Datuk Captain Hamzah Mohd Noor & Another Appeal [2009] 4 CLJ 329

CIVIL PROCEDURE : Rules of court – Non-compliance – Scope of O. 1A RHC 1980 – Order 1A cannot supersede fundamental or mandatory requirements of rules of court – Order 1A cannot be invoked when a party intentionally disregards compliance with rules of court – Order 1A cannot be invoked to cure failure to comply with prerequisites of O. 6r. 7(2A) RHC 1980

The Federal Court in the DULI YANG AMAT MULIA TUNKU IBRAHIM ISMAIL IBNI SULTAN ISKANDAR AL-HAJ v. Datuk Captain Hamzah Mohd Noor & Another Appeal [2009] 4 CLJ 329 [marked as “Tag-C” RBA] has held as follows :-

“ (4) A general provision such as O. 1A RHC must not supercede a mandatory requirement of the Rules. Order 1A RHC cannot be invoked when a party intentionally disregards in complying with the rules. Thus in this case, O. 1A RHC did not apply as the respondents had intentionally disregarded O.6 r. 7(2A) RHC for their own reasons. (para 46)

(5) In the context of the Rules of the High Court 1980 the phrase “...technical non-compliance...” refers to non-compliance with a rule with a rule which is not fundamental or mandatory in nature. Order 1A RHC cannot be invoked to cure the failure to comply with the prerequisites O. 6 r. 7(2A) RHC. The answer to question two was in the negative. (paras 48, 49 & 50).”

ix. Furthermore, the said Petition was presented upon the 1st and 2nd Appellants on 3.7.2009 and 17.7.2009 respectively. That being the case, the Respondent/Petitioner submits that the Appellants had ample time to file their Affidavit in Opposition before the hearing of the Petition albeit, in compliance with Rule 30(1) of the said Rules. The Appellants’ failure to do so is a clear and blatant disregard of the mandatory requirement prescribed by the said Rules and the said Petition.Refer to :-

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[1] It was held in Crocuses & Daffodils (M) Sdn Bhd v. Development & Commercial Bank Bhd [1997] 3 CLJ 485 [marked as “Tag-D” RBA] as follows :-

“ [2] The service of all affidavits on the bank had clearly and blatantly contravened r.30(1) of the Rules and, therefore, the trial Judge was right in refusing to admit them. Consequently, as the affidavits were in admissible, there was no evidence of the company’s cross-claim which warranted the notice to be heard on its merits.

[3] Furthermore, the petition was presented five years ago and the company’s indebtedness had been established as long ago as in 1984. Proceedings in the form of execution of judgements should never be allowed to drag on, more so where such proceedings concern the compulsory winding-up of a company.”

x. The Respondent/Petitioner further submits that due to the inadmissibility of the said Affidavit In Opposition on the basis that there has been an inordinate delay in filing the said Affidavit in Opposition, the 2nd Appellant is thus presumed to have failed to file any affidavit in reply to the Respondent/Petitioner’s Petition and hence such failure is treated as an admission by the Appellants of the facts as asserted by the Respondent/Petitioner in his Petition.

Refer to :-

The Court of Appeal in the case of Ng Hee Thoong & Anor v. Public Bank Bhd [1995] 1 MLJ 283 [marked as “Tag-E” RBA] has held that:-

“(1) In evaluating affidavit evidence, where one party makes a positive assertion upon a material issue, the failure of his opponent to contradict it is usually treated as an admission by him of the fact so asserted.”

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xi. Hence, in light of the above, the Respondent/Petitioner humbly submits that the Affidavit in Opposition which was filed by the Solicitors for the 2nd Appellant is bad and should not be admissible.

[3] THE PRELIMINARY OBJECTIONS RAISED BY THE RESPONDENT/PETITIONER’S SOLICITORS

[1] The Delay in the Filing of the Affidavit In Opposition

a. The Delay in the filing of the Affidavit In Opposition is a clear contravention of the mandatory requirement of Rule 30 Companies (Winding-up Rules) 1972. The counsel for the Respondent/Petitioner further referred to the following Court of Appeal cases in addition to the Court of Appeal case of Crocuses & Daffodils (M) Sdn Bhd v. Development & Commercial Bank Bhd (which has set the binding precedent) which have referred and followed the said Court of Appeal case on the strict compliance of Rule 30 Companies (Winding-up) Rules 1972:-

i. Ayer Molek Rubber Co. Bhd v. Mirra Sdn Bhd [2008] 2 CLJ 459 [marked as “Tag-F” RBA] wherein Abdul Hamid Embong JCA has held that :

“ (1) The appellant had ample time (over two months) when the petition was served on it on 13 January 2006 to file an affidavit in opposition pursuant to r. 30(1) of the Companies (Winding-up) rules 1972 (‘Rules’). On 23 March 2006, when the petition was fixed for hearing, that affidavit in opposition had not been filed. The petition was adjourned to 13 April 2006, thus giving the appellant a further opportunity to file its affidavit in opposition, which may have been considered to be in compliance with r. 30(1) of the Rules. However, even by 13 April 2006, the appellant failed to indicate its intention to oppose the petition. Therefore, against the factual background of this instant case, the learned judge’s exercise of her discretion in not adjourning the matter when it came up for hearing was correct.

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There was no merit in the appellant’s complaint that it had been deprived of its rights to be heard since it was the appellant who was entirely at fault. Crocuses & Daffodils (M) Sdn Bh v. Development & Commercial Bank Bhd (foll);..”

Abdul Hamid Embong JCA further quoted the case of Crocuses & Daffodils (M) Sdn Bhd v. Development & Commercial Bank Bhd [1997] 3 CLJ 485 wherein the Court of Appeal in the case of Crocuses held, inter alia that:

“ Moreover, r. 30(1) of the 1972 Rules is mandatory in nature and therefore the judge was correct when he refused to admit all four affidavits in opposition for non-compliance of r. 30. The fact that the four affidavits were only relied upon on 24 November 1995 did not alter the position as such affidavits were intended for use in the earlier hearings which never took place as all the earlier hearings were adjourned for some reason or other.”

ii. In Anvest Corporation Sdn Bhd v. Wong Siew Choong Sdn Bhd [2008] 3 CLJ 317 [marked as “Tag-G” RBA] Abdul Hamid Embong JCA has once again held that :

“ [10] This court had in the case of Crocuses & Daffodils (M) Sdn Bhd v. Development & Commercial Bank Bhd [1997] 3 CLJ 485 held that r. 30(1) of the 1972 Rules is mandatory in nature and that there must be strict compliance with it.

[11] An affidavit in opposition is crucial as this would form the basis for the winding-up court to make an appropriate order (see r. 30(2)).”

iii. In the case of Unispan Formwork Sdn Bhd v. Kim Choy Tractor Works Sdn Bhd [2004] 4 CLJ 151 [marked as “Tag-H” RBA] Alizatul Khair Osman JC has followed the Court of Appeal decision of Crocuses in Crocuses & Daffodils (M) Sdn Bhd v. Development and Commercial Bank on the strict compliance of the mandatory requirement in rule 30

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of the said Rules wherein Her Ladyship has held that:-

“ [1] By virtue of the Court of Appeal decision in Crocuses & Daffodils (M) Sdn Bhd v. Development and Commercial Bank, r. 30(1) of the Rules is mandatory and does not admit an exercise of discretion by the court. Further, the affidavit in opposition was filed on the day of the hearing of the petition itself. This was clear violation of r. 30(1) that required the filing thereof at least seven days before the time appointed for the hearing of the petition. Even if the court had an overriding discretion to extend or abridge time by virtue of r. 193, there were no merits in the application for adjournment. The respondent had more than ample time to file the said affidavit if it seriously intended to oppose the petition. The reasons advanced by the respondent for its tardiness were not sufficiently cogent to justify the court’s exercise of its discretion, if any. The fact that the respondent waited until the last minute to file the said affidavit could only lead one to conclude that it was intended or calculated to delay proceedings and was therefore not bona fide. Although r. 193 empowers the court to grant an extension or abridgement of time, the decision in Crocuses & Daffodils indirectly ruled that r. 193 did not admit the exercise of such discretion in the case of affidavits filed under r. 30.

[2] There was no formal application for an extension of time filed by the counsel for the Appellants

a. The counsel for the Respondent/Petitioner further submitted that no application for extension for time was filed by the counsel for the 2nd

Appellant and distinguished the facts of the case before This Honourable Court with that of the case of Unispan Form Work Sdn Bhd v. Kim Choy Tractor Works Sdn Bhd wherein in the above case, a formal application for extension was filed but the said

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application for extension was not allowed whereby Alizatul Khair Osman JC has further held at page 153 and 154 of the grounds of judgement as follows:-

“ On the day of hearing of the petition on 4 September 2003, counsel for respondent, En T. Gunalan applied for an adjournment on the ground that he has just filed the affidavit in reply (opposing the petition) together with an application for extension of time to file the affidavit that same morning. According to counsel he has just received instructions and obtained the necessary documents from his client (respondent) on Tuesday (i.e. 2 September 2003) and hence could only file the affidavit and the application that day. He therefore requested for a short and final adjournment.

Secondly, counsel relied on the Court of Appeal decision of Crocuses & Daffodils (M) Sdn Bhd v. Development and Commercial Bank [1997] 3 CLJ 485 (Crocuses & Daffodils) to argue that r. 30(1) of the Companies (Winding-up) Rules 1972 (the winding-up Rules) is a mandatory requirement and the court therefore has no discretion to grant an extension of time to file the affidavit.

In reply, counsel for the respondent did not deny that they had known of the petition since 23 December 2002 and was in fact served on 10 March 2003. They however contend that the delay was attributed to their inability to obtain the relevant documents from the respondent until just a few days before the hearing date. Hence, their failure to file the affidavit in reply within the prescribed time. Counsel further claimed that the application (for adjournment) was not intended to frustrate the petition but to enable the respondent to defend the petition. According to counsel the affidavit filed by the respondent shows relevant issues.”

b. It was submitted that the counsel for the 2nd

Appellant who had in fact admitted that they had knowledge of the petition was under the impression

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that an extension for time to file the Defence as agreed by the counsel for the Respondent/Petitioner for the Civil Suit at the High Court of Malaya at Penang Civil Suit No. 22-401-2009 extended to this Petition and was her mistake.

c. The counsel for the Respondent/Petitioner contended that the reasons for the delay as stated by the counsel for the Appellants has been from the Bar Table and those reasons for the delay were not deposed in the said Affidavit In Opposition and as such should not be admitted.

d. Furthermore, the counsel for the Respondent/Petitioner had referred to Her Ladyship’s judgement in Unispan form Work Sdn Bhd v. Kim Choy Tractor Works Sdn Bhd on the issue of extension of time to file the Affidavit In Opposition at page 154, 155 & 156 which reads as follows:-

It must be stated here that as the affidavit in opposition was only filed that same morning, the said affidavit was not yet in the court file and was therefore not before the court.

As stated by the Court of Appeal in Crocuses & Daffodils (supra), s. 221(1) of the Companies Act 1965 (the Act) empowers the court with a discretion to grant an adjournment at the hearing of a creditor’s petition. However, the court here is constrained from exercising its discretion to grant an adjournment for the following reasons:

Firstly, this court is bound by the Court of Appeal’s decision in Crocuses and Daffodils which held that rule 30(1) of the Winding-Up Rules is mandatory and does not admit of an exercise of discretion by the court. Rule 30(1) provides thus: “Affidavits in opposition to a petition that a company may be wound-up shall be filed and a copy thereof on the Petitioner or his solicitor at least seven days before the time appointed for the hearing of the Petition. (emphasis added).

The Court of Appeal in upholding the learned judge’s decision to disallow admission of the four affidavits for failure to comply with r. 30(1) of

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the Winding-up Rules, opined that by its words and expression r. 30(1)of the said rules is mandatory in nature and hence must be strictly complied with.In the instant case the affidavit in opposition was filed on the day of the hearing of the petition itself. This is in clear violation of r.30(1) which requires the affidavit to be filed and a copy thereof served on the petitioner or his solicitor at least seven days before the time appointed for the hearing of the petition. Counsel for the petitioner cited the case of Soda KL Plaza Sdn Bhd v. Noble Circle (M) Sdn Bhd [2002] 2 MLJ 367 in support [2002] 2 MLJ 367 in support of her contention that the word “shall” in r. 30(1) is mandatory in nature which does not admit of an exercise of discretion by the court. To my mind it is not necessary for this court to satisfy itself on the effect of the word “shall” in r. 30(1) as the court of Appeal has already affirmatively rules in this issue. Suffice it to say that this court is bound by such a ruling and consequently the court has no alternative but to deny the respondent’s application for an adjournment to enable it to file the affidavit concerned.”

e. It was also submitted by the counsel for the Respondent/Petitioner in reliance of the judgement in Unispan that Winding up Proceedings should be heard expeditiously and this applies similarly to the case before This Honourable Court especially when the Respondent/Petitioner has complied with Rule 32 of the Companies (Winding-up) Rules 1972 (hereinafter referred to as “the said Rules”).

f. The counsel for the Respondent/Petitioner also submitted that the Petition was served on the counsel for the 2nd Appellant as early as in July and that they had ample time albeit one month to file their Affidavit In Opposition but had slept on their rights to do so and such action should not be entertained by This Honourable Court as it may prejudice the Respondent/Petitioner in the sense that this Respondent/Petitioner would not be heard expeditiously and an Order for Winding Up of the 1st Appellant as envisaged by the counsel for the Respondent/Petitioner may not be obtained on

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the 1st hearing date despite having complied with the requirements under Rule 32 of the said Rules.

g. Furthermore, it was also submitted by the counsel for the Respondent/Petitioner that the act of the counsel for the 2nd Respondent in filing the Affidavit In Opposition was an act calculated to delay the proceedings before This Honourable court and thus is not bona fide. This was based on the following excerpts from Her Ladyship’s judgment in the case of Unispan at page 155:-

“ Secondly, even if it can be argued (which the court doubts in view of the Court of Appeal’s firm ruling on this issue) that despite the strict wording of r. 30(1), the court maintains an overriding discretion to extend or abridge the time appointed by the Rules by virtue of r. 193 of the Winding-up Rules, this court finds that there are no merits in the application for adjournment.

..As exhorted by Faiza Tamby chik J in Soda K.L. Plaza Sdn. Bhd. (supra) “it is trite law that rules of the court must be obeyed and in order to justify any exercise of discretion in favour of a party there must be material to satisfy the court that such discretion ought to be exercised.” Although this is the first date of hearing of the petition, it is well established that as a general rule, winding-up proceedings should be heard expeditiously (see Re Pek Chuan Development Ltd [1988] 1 MLJ 140, the judgement of chan Sek Keong, JC (as he then was)). The same view was expressed by the Court of Appeal in Crocuses & Daffodils wherein Siti norma Yaacob JCA (as she then was) pronounced “Proceedings in the form of execution of judgement should never be allowed to drag on and more so, when such proceedings concern the compulsory winding-up of a company”. Hence the respondent should not have waited until the last minute to file an affidavit in opposition particularly since they had eight months to do so. Such an act could only lead one to conclude (although this was denied by the respondent’s solicitors) that it was intended or calculated

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to delay proceedings and is therefore not bona fide.”

h. The counsel for the 2nd Appellant had referred to the cases of Arab Malaysian Merchant Bank v. Orient Apparel Bhd [1999] 2 CLJ 647, Ng Thoong Chen v. Kedah Marble Sdn. Bhd. 2002] MLJU 199, Arise Enterprise Sdn. Bhd. V. Feiyen Sanherk Hardware Sdn. Bhd. [2002] 5 CLJ 13 and had argued that all these cases did not follow the binding precedent in Crocuses & Daffodils and stated that the decision of the Court of Appeal in that case confined to its own facts.

i. However, the counsel for the Respondent/Petitioner counter-argued that the decisions in the Court of Appeal cases of Ayer Molek and Anvest as well as the High Court cases of Unispan and Mettube were derived at based on different facts from the facts of the case in Crocuses and as such the argument by the counsel for the 2nd Appellant on this issue do not hold water.

j. Further, the High Court Authorities relied on by the counsel for the 2nd Appellant were in fact addressed by Her Ladyship in the case of Unispan and had been distinguished based on the judgement at page 155 and 156 of the grounds of judgement below:-

“ Finally I would like to refer to the case of Arab Malaysian Merchant Bank v. Orient Apparel Bhd [1999] 2 CLJ 647 which was cited by the respondent’s counsel in support of his submission before the court. The learned judge in the said case had at p. 653 expressed the following view with respect to the Court of Appeal’s decision in Crocuses & Daffodils:

Having read Crocuses carefully it would appear to me that all the Court of Appeal had ruled in that case was that rule 30 was mandatory in nature. It did not however consider the power of the court to condone the irregularity under s. 194(1) of the Companies (Winding-Up) Rules 1972 which provides that no proceedings under the Act or the rules shall be invalidated by any formal defect or any irregularity unless the court is of the opinion that substantial injustice has been

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caused by the defect or irregularities and that the injustice cannot be remedied by any order of the court. It follows therefore the court of appeal’s decision in Crocuses must construed to apply only to the factual peculiarity of that case.

This view was endorsed in the subsequent case of Ng Thoong Chen v. Kedah Marble Sdn. Bhd. [2002] MLJU 199, and Arise Enterprise Sdn. Bhd. V. Feiyen Sanherk Hardware Sdn. Bhd. [2002] 5 CLJ 13. With respect to the views expressed in the abovesaid cases, r. 194 of the winding-Up Rules is to my mind is a saving clause which seeks to preserve the validity of winding-up proceedings in the event of any formal defect or irregularity unless the court is of the opinion that substantial injustice has been caused by such defect or irregularity under r. 194(1) can perhaps be gleaned from r. 194(2) which provides that no defect or irregularity in the appointment or election of a receiver, liquidator or member of a committee of inspection shall vitiate any done by him in good faith.”

k. The counsel for the 2nd Appellant drew an analogy between Rule 26 of the Companies (Winding-up) Rules 1972 and Rule 30 of the similar Rules and further referred to cases which concerned the Affidavits Verifying Petition above and had submitted that if the compliance with Rule 26 could be loosened by allowing an application for an extension of time in the filing of the Affidavit Verifying Petition, then similarly, compliance with Rule 30 should not be made mandatory wherein an application for extension of time should be allowed in the event there has been a delay in the filing of the Affidavit In Opposition in pursuance to Rule 30 of the said Rules and hence Rule 194 should apply as a saving provision in the this case to cater for the late filing of the Affidavit In Opposition.

l. However, the counsel for the Respondent/Petitioner had counter argued that such an analogy should not be drawn since loosening in the compliance of Rule 26 only caters for technicalities in respect of premature swearing of the Affidavit Verifying

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Petition and thus does not apply in this case before This Honourable Court since the default here is the late filing of the Affidavit In Opposition. This has been reiterated by Alizatul Khair Osman JC in the case of Unispan at page 156 of the grounds of judgement as follows:-

“ Rule 194(1) thus envisages a defect or irregularity which is technical in nature such as the premature swearing of an affidavit.

.......In all these cases the court held that the defect or irregularity is purely formal and therefore curable under r. 194(1). Rule 194(1) does not in my view apply to the present case. Here, the issue is whether the court has power to extend or abridge the time for filing the affidavit in opposition as required by r. 30(1). Although r. 193 of the Winding-up Rules (which is the relevant provision in this case) empowers the court to grant such extension or abridgement, the Court of Appeal in ruling as it did that r. 30 is mandatory/ in nature has directly (in my view) ruled that r. 193 does not admit the exercise of such discretion in the case of affidavits filed under r. 30.

For the above reasons therefore, the court is compelled to dismiss the respondent’s application for adjournment for the purpose of filing the said affidavit and to order to instead the winding-up of the respondent company as prayed for in the petition, the appointment of the official receiver as liquidator and costs to be paid out the assets of the respondent company.”

m. Hence, the counsel for the Respondent/Petitioner had submitted that the case of Unispan Form Work Sdn Bhd had referred to the cases of Arab Malaysian Merchant Bank v. Orient Apparel Bhd [199] 2 CLJ 647, Thoong Chen v. Kedah Marble Sdn. Bhd. [2002] MLJU 199 and Arise Enterprise Sdn. Bhd. V. Feiyen Sanherk Hardware Sdn. Bhd. [2002] 5 CLJ 13 [which were referred to by the 2nd

Appellant’s Solicitor] and had distinguished those cases by ruling that the irregularity under r. 194 envisages a defect or irregularity which is

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technical in nature and thus does not apply to the facts of the case of Unispan since the issue in the case of Unispan was whether the court has power to extend or abridge the time for filing the affidavit in opposition as required by r. 30(1).

n. Moreover, the counsel for the Respondent/Petitioner further submitted that the case of Unispan had also adopted the Court of Appeal decision in the case of Crocuses & Daffodils (M) Sdn Bhd v. Development and Commercial Bank which had held that rule 30 of the said Rules is a mandatory requirement and as such r. 193 and r. 194 do not apply as a saving clause in circumstances wherein the Appellants have failed to comply with the time prescribed in rule 30 of the said Rules.

o. The counsel for the Respondent/Petitioner, in addition, had relied on another High Court authority of Mettube Sdn Bhd v Taiace Engineering Sdn Bhd [2009] 1 LNS 134 which had referred to the cases of Ayer Molek Rubber Co. Bhd v. Mirra Sdn. Bhd., Anvest Corporation Sdn Bhd. v. Wong Siew Choong and Dataprep (Malaysia) Sdn. Bhd. v. Utas Lambang Sdn. Bhd. which have held that Rule 30 Companies (Winding-up) Rules 1972 is a mandatory requirement and should be adhered to.

p. Thus in Mettube Sdn Bhd v Taiace Engineering Sdn Bhd [2009] 10 CLJ 267 [marked as “Tag-I” RBA], the High Court had held as follows:-

“ a) The respondent had not filed an affidavit in opposition within 7 days before today’s hearing.

b) Court decisions have held that Rule 30 Companies (Winding-up) Rules 1972 is a mandatory requirement and had to be adhered to.i) Ayer Molek Rubber Co. Bhd. v. Mirra Sdn.

Bhd. [2008] 2 CLJ 459

ii) Anvest Corporation Sdn. Bhd. v. Wong Siew Choong [2008] 3 CLJ 317

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iii) Vovici Corporation v. MCSB Data Systems (unreported as judgement just came out.)

iv) Dataprep (Malaysia) Sdn. Bhd. v. Utas Lambang Sdn. Bhd. [2009] 7 CLJ 163

e) The Companies (Winding up) Rules are very strict because winding up is a very serious action. Both petitioner and respondent company is in law given rights to be heard in court. Petitioner has complied with all the requirements to have the petition be granted today. Instead there is a blatant failure on the part of the respondent to file an affidavit to oppose the petition. I refer to Dataprep (Malaysia) Sdn. Bhd. v. Utas Linkage Sdn. Bhd. [2009] 7 CLJ 163.

The facts of this case is similar to that as our case ie, it has been more than 4 months since we serve the petition on the Respondent and also we serve the petition on Encik Isa bin Ismail.

Enough time has been given to everybody to appoint counsel to file their respective affidavit to oppose the petition. It is not fair today to prejudice petitioner even more when the petitioner has complied with all the requirements under the law. The default is that of the respondent.

Decision:-

If the respondent intends to contest a winding up petition it should file an affidavit to oppose the petition under Rule 30(1) of the Companies (Winding-up) Rules 1972 which reads as follows:-

“30(1) Affidavits in opposition to a petition that a company may be wound up shall be filed and a copy thereof served on the petitioner or his solicitor at least seven days before the time appointed for the hearing of the petition.”

However, the respondent issued and served to the petitioner a notice of intention to appear under Rule 28 Companies (Winding-up) Rules 19 72. at the

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hearing, counsel for the respondent urged the Court to adjourn the winding up proceeding on the basis that it had filed unfortunately on the day before the hearing the application to strike out and set it aside this petition for winding up respondent company.

If the respondent is serious in contesting the matter, it should have filed those application months ago immediately after it was served with petition on 27 November 2008. It has more than two and a half months to do so. Instead, it filed the application on the day before the proceeding. I find that this is an attempt to simply delay the hearing of the petition.

It is an undisputed fact that an affidavit to oppose the petition under rule 30 of the Companies (Winding-up) Rules 1972 was not filed.

In the court of Appeal case of Crocuses and Daffodils (M) Sdn. Bhd. v. Development & Commercial Bank [1997] 3 CLJ 485, Siti Norma JCA (as she then was) said:-

“By their words and expression, r. 30(1) is mandatory in nature and as such the learned Judge was correct when he refused to admit all four affidavits in opposition for non-compliance of that particular rule. The fact that the four affidavits were only relied upon on 24 November 1995 does not alter the position as such affidavits were intended for use in the earlier hearings which never took place as all the earlier hearings were adjourned for some reason or other.”

........the exercise of the High Court’s discretion in rejecting the purported settlement on the very day of the hearing of the petition and its refusal for an adjournment was, in the circumstances, not wrong. The appellant was required in law to file an affidavit in opposition to the petition, which it had not done (r. 30(1) of the Companies (Winding-up) Rules 1972.”

q. In light of the cases referred to above, the counsel for the Respondent/Petitioner had submitted that the Affidavit in Opposition was

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filed out of time which is a clear contravention of the mandatory Rule 30 of the Companies (Winding-up) Rules 1972 and any application for the extension of time in pursuance to r. 193 and r.194 should not be entertained on the basis that these saving clauses have no application to the case before This Honourable Court based on the cases as highlighted above and in any event there is no formal application for the extension of time made here.

[3] Order 1A is pari materia with Rule 194 Companies (Winding-up) Rules 1972

a. The counsel for the Respondent/Petitioner had submitted that Order 1A is pari materia with Rule 194 of the said Rules and thus the Federal Court case of DULI YANG AMAT MULIA TUNKU IBRAHIM ISMAIL IBNI SULTAN ISKANDAR AL-HAJ v. Datuk Captain Hamzah Mohd Noor & Another Appeal [2009] 4 CLJ 329 [marked as “Tag-C” RBA] should be followed wherein the courts have now moved towards the view of applying the saving provision of Order 1A sparingly and upholding the need for strict compliance with the mandatory requirements such as in the case before This Honourable Court albeit Rule 30(1) of the said Rules.

b. The counsel for the Respondent/Petitioner had also referred to the case of Chong Keat Realty (which was referred to by the counsel for the 2nd

Appellant) and distinguished the said case with the case of DULI YANG AMAT MULIA TUNKU IBRAHIM ISMAIL IBNI SULTAN ISKANDAR AL-HAJ v. Datuk Captain Hamzah Mohd Noor & Another Appeal [2009] 4 CLJ 329 [marked as “Tag-C” RBA] and contended that the Courts are more inclined to follow the decision in DULI YANG AMAT MULIA TUNKU IBRAHIM ISMAIL IBNI SULTAN ISKANDAR AL-HAJ v. Datuk Captain Hamzah Mohd Noor & Another Appeal wherein the words “shall” and “must” are used in the provision with the intention of ensuring that the rules are complied with and no discretion is to be given as far as the compliance with the prerequisites are concerned.

c. Also, in DULI YANG AMAT MULIA TUNKU IBRAHIM ISMAIL IBNI SULTAN ISKANDAR AL-HAJ v. Datuk Captain

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Hamzah Mohd Noor & Another Appeal[2009] 4 CLJ 329 [marked as “Tag-C” RBA], Zaki Tun Azmi CJ has held that :

“A party who is late in filing the relevant papers must obtain an order from the court to extend the time, if such extension is required and is permitted by the Rules.”

d. Hence, applying this excerpt to the case before This Honourable Court, the counsel for the Petitioner had expressly highlighted to This Honourable Court that the counsel for the 2nd

Appellant has not obtained any such order from the Court for an extension of time and thus an extension of time should not be allowed in this case.

e. Moreover, the decision in DULI YANG AMAT MULIA TUNKU IBRAHIM ISMAIL IBNI SULTAN ISKANDAR AL-HAJ v. Datuk Captain Hamzah Mohd Noor & Another Appeal further states that the stringent rules are introduced to prevent abuse by the parties which creates backlog of cases and results in a false number of pending cases. As such, the Respondent/Petitioner submitted that Rule 30 should be strictly enforced as required by the rule otherwise rule 30 would become a dead letter and the object of the said rule would be defeated.

[4] The Deadlock in the management of the company was not caused by the Respondent/Petitioner

a. The counsel for the 2nd Appellant had submitted that the Respondent/Petitioner is at fault for causing the deadlock in the management of the company.

b. The counsel for the Respondent/Petitioner had counter-argued that the 1st Appellant is comprised of only 2 directors and as such when there arises a situation whereby there are 2 differing schools of thought, then a deadlock in the management of the Company would take place since the directors could not meet eye-to-eye with each other and where there is a irretrievable breakdown mutual trust and confidence.

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Refer to :-

1. Chua Kien How v. Goodwealth Trading Pte Ltd & Anor [1992] 2 SLR 296 [marked as “Tag-J” RBA];

2. Grand Choice Sdn Bhd v. Direct Idea Sdn Bhd [1998] 1 CLJ Supp 427 [marked as “Tag-K” RBA].

c. In light of the above, the counsel for the Respondent/Petitioner had prayed that the Preliminary Objection be allowed and the Affidavit In Opposition be rendered inadmissible resulting in the 2nd Appellant failing to file any affidavit in reply to the Respondent/Petitioner’s Petition following the case of Ng Hee Thoong & Anor v. Public Bank Bhd [1995] 1 MLJ 283 [marked as “Tag-E” RBA].

d. Hence, based on the above, the

Respondent/Petitioner’s preliminary objection was allowed by the Honourable High Court Judge at Penang. In light of this, the High Court Judge at Penang has not erred in law in allowing the Respondent/Petitioner’s prayers in the Petition since all the evidence of irregularities committed by the Appellants have been presented before the Learned Judge before the preliminary objection was allowed.

[4] THE GROUNDS FOR THE WINDING UP PETITION

[A] The Substratum of the Company is no longer in existence and/or will not be effected

a. The Respondent/Petitioner submits that the substratum of the Company is no longer in existence and/or will not be effected for the following reasons:-

i. Lee Cheng Guat, being the beneficial owner of Lot 1416 no longer intends to let the Company hold the land known as Lot 1416 and insist on its return.

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ii. Further, it is a dormant company with no business transactions effected.

iii. The Registrar of Companies has written letters to the company for failure to submit accounts and summoned a fine as penalty on the company and had further threatened to wind up the Company being a dormant Company.

iv. The land of which the company is holding on trust has been requested by the beneficiary to be returned to the beneficiary as no action has been taken on this.

v. The land has been abandoned and infested. As a result, summons were issued by MPPP against the Company upon which the Respondent/Petitioner had, vide a letter asked the Appellants for a discussion on this but the Appellants have failed to do so. The Respondent/Petitioner has on his own accord rectified the offences under the summons.

vi. Monies to the purchase of the land was paid from the respective beneficiaries of the land. In addition Lee Cheng Guat has paid other related expenses, taxes, quit rent and assessment etc. for the Land.

b. Hence based on the above, the Respondent/Petitioner submits that the substratum of the company has been lost due to the fact that the purpose for which the 1st

Appellant has been formed is no longer in existence i.e to purchase the land known as Lot No. 1416, H.S.(D) 291 (the GRN 61820) and Lot 1417, H.S.(D) 292 (the GRN 61821) both situated in Section 3, Bandar Georgetown, Daerah Timur Laut, Penang (hereinafter referred to as “the said land”) since the beneficial owner no longer intends to let the 1st Appellant hold the land known as Lot 1416 on trust and insists on its return.

Refer to :-

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Chua Kien How v. Goodwealth Trading Pte Ltd Anor [1992] 2 SLR 296 [marked as “Tag-J” RBA]:-

“ (4) The memorandum of association determining the main object or substratum of the company. The reason is that it was formed as a shelf company by corporators with no particular object in mind. Their purpose was to sell it to whomsoever needed a corporate vehicle quickly in order to start a business. The objects clause was accordingly drafted to include as many objects as the draftsman could think of. They were all ‘paper’ objects designed for all things and for all reasons.

(5) The learned judge was correct in finding that the main object of the company was its restaurant business located at Shaw House specifically and no other place. The original shareholders wanted a corporate vehicle to carry on the restaurant at Shaw House after the Respondent/Petitioner had secured a lease of the premises for that purpose, and they had no other object in mind. There was sufficient evidence from which the court was entitled to infer that the appellant decided to become a shareholder because of the location of the restaurant, he being a friend of the general manager of the landlords. The company’s substratum therefore disappeared with the termination of the lease of the premises.”

c. In view of the above case, it is submitted that the principal object for which the 1st Appellant was established are inter alia:-

i. To carry on business as buyer, seller, importers, manufacturers, producers, dealers, buying or selling commission agents and otherwise deal in goods, merchandise, commodities, plant and machinery and articles of all descriptions.

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ii. To buy or otherwise acquire shares, stocks, debentures, of other securities issued by any other Company to invest upon or without security the moneys of the Company in such manner or may from time to time be determined and to hold any such shares, securities or investments or at any time or times to sell, realise the sums and to re-invest the proceeds.

d. It was also agreed between the beneficial owner and the 2nd Appellant that the Company, i.e. the 1st Appellant is to hold the said land on trust and is to return the said land to the respective beneficiary upon request. Hence, since the purpose for which the 1st Appellant was established is terminated upon the request by the beneficial owner for the return of the said land, hence the substratum of the Company is no longer in existence thus warranting for the need to wind up the 1st Appellant.

e. Furthermore, what is of utmost importance is the fact that the purchaser i.e. Lee Cheng Guat has filed a Civil Suit No. 22-401-2009 at the Penang High Court for inter alia, a Declaratory Order that the 1st Appellant is holding the said Lot 1416 on trust for the purchaser, i.e. Lee Cheng Guat and an Order that the said Lot 1416 is transferred to the said Purchaser, i.e. Lee Cheng Guat for which the said Purchaser had obtained an Order in Terms on 12.4.2012 in respect of an application pursuant to Order 14A Rules of the High Court 1980 filed by the Purchaser, i.e. Lee Cheng Guat.

f. Also, it is also pertinent to note that to date, there is no Appeal which has been filed against the said Order dated 12.4.2012 which has allowed for the said Lot 1416 be transferred to the Purchaser, Lee Cheng Guat.

[B] The Company has failed to file any account from 2003 to 2008 and continuing

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a. The company is in default of lodging the Statutory Report since 2003 and has been compounded by the ROC.

b. The Respondent/Petitioner has requested the company to commence a shareholders’ and directors’ meeting to discuss the draft accounts but the other shareholder and director i.e. the 2nd Appellant has refused to do so.

c. The draft accounts are not in order and there is discrepancy whereby the Respondent/Petitioner has through his solicitor requested the meeting to be held to discuss the accounts but the 2nd

Appellant has refused to do so.

d. In addition, the Respondent/Petitioner’s Solicitors had also written a notice to demand for such meeting but the 2nd Appellant has refused or failed to do the same.

e. The 1st Appellant wanted the Respondent/Petitioner to sign the accounts prepared in advance without discussion and consultation of which the Respondent/Petitioner has refused to so do because it was not a correct reflection of the status.

Refer to :-

Section 217(2)(b) Companies Act 1965 [marked as “Tag-L” RBA] reads as follows : -

“ a petition shall not, if the ground of the petition is default in lodging the statutory report or in holding the statutory meeting, be presented by any person except a contributory or the Minister nor before the expiration of fourteen days after the last day on which the meeting ought to have been held.”

f. The Respondent/Petitioner submits that since one of the grounds for which the said Petition is presented before The Honourable Court at Penang High Court is on the basis that the 2nd Appellant is in default of lodging the Statutory Report since 2003, the Petition can only be presented by a contributory in pursuance to Section 217(2)

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(b) of the Companies Act 1965 and this has been complied with.

Further, the wishes of the creditor i.e. Lee Cheng Guat should supercede that of the contributory since the said land known as Lot No. 1416, H.S.(D) 291 (the GRN 61820 situated in Section 3, Bandar Georgetown, Daerah Timur Laut, Penang is owned by the said creditor and as such is entitled to the return of the said land which is held on trust by the 1st Appellant.

Refer to :-

In Re Camburn Petroleum Products Ltd [1980] 1 WLR 86 [marked as “Tag-M” RBA]:-

“ that a creditor whose debt was established was prima face entitled to a winding up order even though the petition was opposed by a contributory of the company, for although, under sections 225 and 346 of the Companies Act 1948, the court had a discretion to consider the wishes of a contributory, it would ordinarily attach little weight to such wishes in comparison with the weight it attached to the wishes of any creditor who proved both that he was unpaid and that the company was “unable to pay its debts”; that while, therefore, the court had jurisdiction to adjourn the creditor’s petition, it would only do so in exceptional circumstances which justified that course, and since any injustice caused to the contributory, C, would be far outweighed by the injustice which an adjournment would cause to the petitioning creditor, the court would make an immediate winding up order.”

[C] DEADLOCK IN DECISION AND SHAREHOLDERS AND DIRECTORS’ MEETING

a. Since there are only 2 shareholders and 2 directors, the Respondent/Petitioner has requested for a meeting vide his solicitors to resolve numerous issues but the 2nd Appellant has refused to comply. Further since there are 2 shareholders and 2 directors there will be a deadlock in all aspects.

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Refer to :-

Chua Kien How v. Goodwealth Trading Pte Ltd & Anor [1992] 2 SLR 296 [marked “Tag-J” RBA] wherein it was held that:-

“(1) Of only two directors of a company cannot agree with each other, and neither can overrule the other, there is a deadlock which if it occurs in a partnership, justifies the court in winding up the partnership.”

b. The counsel for the 2nd Appellant had submitted in his Submission in Reply dated 25.1.2010 filed at the High Court at Penang that the Respondent/Petitioner is at fault for causing the deadlock in the management of the company.

c. The counsel for the Respondent/Petitioner had counter-argued that the 1st Appellant is comprised of only 2 directors and as such when there arises a situation whereby there are 2 differing schools of thought, then a deadlock in the management of the Company would take place since the directors could not meet eye-to-eye with each other and where mutual trust and confidence breaks down irretrievably. Refer to :-

i. Chua Kien How v. Goodwealth Trading Pte Ltd & Anor [1992] 2 SLR 296 [marked as “Tag-J” RBA]; and

ii. Grand Choice Sdn Bhd v. Direct Idea Sdn Bhd [1998] 1 CLJ Supp 427 [marked as “Tag-K” RBA].

[D] BREACH OF FIDUCIARY DUTIES OF DIRECTORS

a. The other director, i.e. the 2nd Appellant is in breach of fiduciary duty as he has failed to act in the interest of the company. The beneficial owner of Lot 1416 has requested for the return of the same for many years and till to date the other directors has refused to act on it. A Civil Suit has also been filed against the

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Appellants in respect of the same in the High Court at Penang.

b. In view of the matters enumerated above, the Respondent/Petitioner states that the affairs of the company is not in order and the company has been exposed to offences under the Companies Act 1965 by the Registrar of Companies and imposition of penalty by the relevant authorities.

c. There is lack of probity and fair dealing in the affairs of the company to the prejudice of the Respondent/Petitioner as the other shareholder has refused to commence a meeting and discuss the accounts and to resolve the issues faced by the Company. There is deadlock in every aspect and substratum of the Company whereby consensus regarding the same cannot be obtained.

Refer to :-

Grand Choice Sdn Bhd v. Direct Idea Sdn Bhd [1998] 1 CLJ Supp 427 [marked as “Tag-K” RBA] reads as follows:-

“[1] The courts have granted winding-up on the “just and equitable” principles in circumstances where (i) the foundation of the company has collapsed (ii) there is a complete deadlock in the management of the company (iii) a shareholder has been excluded completely from the management of the company in breach of a specified understanding (iv) minority shareholders in a family company have been excluded from enjoying the profits from the company (v) in a partnership venture, one partner manages the company to the exclusion of the other partner (vi) mutual trust and confidence breaks down irretrievably.

[3] It was basically a question of fact in the present case whether a deadlock had come about to justify winding-up the respondent. On the evidence, there was a total lack of mutual confidence and

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trust between the parties and there was no way in which they could continue to function as shareholders. The facts as presented point to the existence of a deadlock.”

c. Further, it was also agreed upon by the parties that the said Lots were to be returned to the parties concerned upon request.

d. In light of the above, it is apparent that the establishment of the 1st Appellant is solely for the purpose of sale and purchase of the said Lots and that the said Lots were only held on trust at all material times by the 1st Appellant for the respective beneficiaries.

e. As such, the Respondent/Petitioner submits that it is the other director, i.e. the 2nd Appellant who is in breach of fiduciary duty as he has failed to act in the interest of the company. This is on the basis that despite the beneficial owner of Lot 1416’s request for the return of the same for many years and there is refusal by the other director to act on it. Thus, a Civil Suit has also been filed against the Appellants in respect of the same in the High Court at Penang.

[E] IT IS JUST AND EQUITABLE THAT THE COMPANY BE WOUND UP

a. It is thus just and equitable to wind up the company pursuant to Section 217(2)(b) and Section 218 (1)(d) and/or (i) of the Companies Act 1965 on the following grounds :-

i. There is a failure in lodging the statutory report or in holding the statutory meetings for the year 2003-2008 and the time for lodging such accounts and holding such meetings have long gone.

ii. There has been a break down of mutual confidence and good faith amongst the 2 directors and 2 shareholders who are in charge of the management of the company whereby the 2nd Appellant has repudiated the

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common agreement and the fundamental understanding as aforesaid which existed during the incorporation stage and which was intended to form and sustain the basis of their relationship.

iii. The relationship of trust and confidence between the shareholders has broken down irretrievably due to the conduct of the 2nd

Appellant being the only other director and shareholder.

Refer to :-

Tien Ik Enterprise Sdn Bhd & Ors v. Woodsville Sdn Bhd [1995] 1 MLJ 769 [marked as “Tag-N” RBA] wherein it was held that:-

“(3) It is clear that the parties had agreed in March 1987 to wind up the companies voluntarily and that was clear evidence that they no longer enjoy the confidence of each other and the voluntary winding up was their solution to their problems. While that was not the reason for winding up the companies, it provided convincing evidence of the breakdown of mutual confidence among the parties to justify the winding up on the just and equitable ground.”

iv. This is also further precipitated by the fact the beneficiaries of the land have also lost confidence in each other and the Company.

v. There has been deliberate and consistent violation and disregard of the Respondent/Petitioner’s rights pursuant to the Companies Act and the Articles and he has been deprived of his right to call for the meeting and discuss matters of the Company.

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vi. The manner in which the affairs of the company has been conducted have revealed serious breakdown and deadlock.

vii. There is destruction of the corporate substratum and the destruction of the objects for which the company was formed.

[F] THERE IS NO MERIT IN THE 2 ND APPELLANT’S CASE AS AGAINST THE WINDING UP PETITION

b. Hence the Respondent/Petitioner humbly submits that all the above grounds justify for the winding up of the company pursuant Section 217 (2)(b) and 218 (1) (f) and/or (i) of the Company Act 1965.

[5] CONCLUSION

Based on the arguments and grounds for the filing of the Winding up Petition, the Respondent humbly prays for the dismissal of this Appeal with costs.

Dated this 29th day of August, 2012.

.............................. SOLICITORS FOR THE

RESPONDENT/PETITIONERS MESSRS. PRESGRAVE & MATTHEWS

This Respondent/Petitioner’s Written Submission is filed by Messrs. Presgrave & Matthews, whose address for service at 1st Floor, Chambers of Standard Chartered Bank, No. 2, Beach Street, 10300 Penang, solicitors for the Respondent/Petitioner.

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