Saturday, 12 November 2011

UPDATE: MESSRS S. S. TIEH

MESSRS S. S. TIEH
PEGUAM BELA & PEGUAM CARA/ADVOCATES & SOLICITORS
UNIT NO. C907, LEVEL 7, CENTRE WING 2,
METROPOLITAN SQ,
JALAN PJU 8/1,
BANDAR DAMANSARA PERDANA,
47820 PETALING JAYA,
SELANGOR DARUL EHSAN,
MALAYSIA
TEL: 03-7722 1812
FAX: 03-2050 2737
ELECTRONIC MAIL: messrs.sstieh@gmail.com

MALAYSIA-COMPANIES WINDING-UP PROCEEDINGS-AN AFFIDAVIT VERIFYING PETITION WHICH IS AFFIRMED PRIOR TO THE FILING OF A WINDING-UP PETITION DOES NOT RENDER THE PROCEEDINGS FATAL


In Fisher Scientific (M) Sdn Bhd v Progenix Research Sdn Bhd [2011] MLJU 738, it was held that:-

"...On the issue that the petition is not properly presented before the court - which may stand as preliminary objection for non compliance of Rule 26 of Companies Winding Up Rules 1972 which states:
"Every petition for the winding-up of a company by the Court shall be verified by an affidavit referring thereto. The affidavit in Form 7 shall be made by the petitioner or by one of the petitioners, if more than one, or, in case the petition is presented by a corporation, by some director, secretary or other principal officer thereof, and shall be sworn after and filed within four days after the petition is presented, and the affidavit shall be prima facie evidence of the statements in the petition."

The respondent had relied on the following cases to drive home this point. The cases are namely:
(a)        Hong Leong Finance Bhd. v Delta Drive (M) Sdn. Bhd. [1996] 6 MLJ 239 the High Court had this to say:

"Based on the earlier finding that because of the wording of para. 2 of the Form 7 is standard, the affidavit verifying petition could only be sworn after the petition. No evidence to the contrary was brought to the attention of this court. It would appear that because of the wordings of r. 26, the petition and the affidavit verifying petition cannot be filed contemporaneously. The affidavit shall be sworn after and filed within four days after the petition is presented."

(b)        Chin Yoon Timber Co. v Overseas Lumber Bhd. [1978] 2 MLJ 173 where the High Court had held:

"The principle governing an affidavit is that it must be made in some cause or mater which is actually pending in the court."

In the instant case I am satisfied that the affidavit verifying the petition is regular. Even if there is any such irregularity as advocated by the respondent the Companies Act 1965 as well as the rules gives sufficient power to the court to condone the irregularity provided an application is made to the court and it can be demonstrated that the respondent will suffer no prejudice and/or injustice. The said Act and rules in respect of non-compliance reads as follows:
Section 355 of the Companies Act 1965:
(2)                      No proceeding under this Act shall be invalidated by any defect, irregularity or deficiency of notice or time unless the Court is of opinion that substantial injustice has been or may be caused thereby which cannot be remedied by any order of the Court.
(3)                      ity or deficiency.
                           Rule 194 (1) of the Companies (Winding Up) Rules 1972:

"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 caused by the defect or irregularity and that the injustice cannot be remedied by any order of the Court."


(iv)        Support for the proposition that an affidavit verifying the petition before the petition was filed does not make the petition  sterile, is found in a number of cases and approved by Court of Appeal in Delta Drive (M) Sdn. Bhd. v Hong Leong Finance Bhd [2007] 4 CLJ 435, Re MohdShatifbin Sapie, exp Malayan Banking Bhd.  [1992J 2 MLJ 102 and Sari Atlantic Sdn Bhd v AikKim Enterprise [1988] 1 MLJ 201...."

MALAYSIA-WINDING-UP PROCEEDINGS-A PETITIONER IS NOT ENTITLED TO BROADEN HIS CASE TO MORE THAN THAT WAS STATED IN HIS PETITON


In Fisher Scientific (M) Sdn Bhd v Progenix Research Sdn Bhd [2011] MLJU 738, it was held that:-

"...The petitioner is not entitled in law to broaden his case more than what was stated in his petition and the respondent's affidavit in opposition should sufficiently rebut the petitioner's allegation in the petition. Support for this proposition can be garnered from a number of cases...."

MALAYSIA-A RESTATEMENT OF THE LAW: RULE 30 OF THE COMPANIES (WINDING-UP) RULES 1972 IS MANDATORY


In Fisher Scientific (M) Sdn Bhd v Progenix Research Sdn Bhd [2011] MLJU 738, it was held that:-

"[3] The petitioner says that since the affidavit in opposition was in breach of rules the issues raised by the respondent cannot be entertained at law based on the Court of Appeal decision in the following cases namely:

(i)          In Crocuses & Daffodils (M) Sdn. Bhd. v Development & Commercial Bank Bhd. [1997] 3 CLJ 485 the court made the following observations:

"The service of all the affidavits on the bank had clearly and blatantly contravened the mandatory time requirement prescribed by r. 30(1) of the Rules and, therefore, the trial Judge was right in refusing to admit them. Consequently, as the affidavits were inadmissible, there was no evidence of the company's cross-claim which warranted the notice to be heard on its merits."

(ii)         In Gulf Business (M) Sdn. Bhd. v Israq Holding Sdn. Bhd. [2010] 5 MLJ 34 the Court of Appeal had this to say:

"the clear and unambiguous words employed in r. 30(1) of the Companies (Winding-Up) Rules 1972 must be given effect and, accordingly, the impugned affidavit cannot be relied upon in opposing the petition to wind-up the respondent."

[4] The parties have relied on the following cases: - Crocuses & Daffodils (M) Sdn Bhd v Development & Commercial Bank Bhd [1997] 3 CLJ 485;Unispan Form Work Sdn Bhd v Kim Choy Tractor Sdn Bhd [2004] 4 CLJ 151; YPJE Consultancy Service Sdn Bhd v Heller Factoring (M) Sdn Bhd (Formerly known as Matang Factoring Sdn Bhd) [1996] 5 MLJ 511; Daya Anika Sdn BHd v Kuan Ah Hock [1998] 6 ML J 537; Hotel royal Ltd Bhd v Tina Travel & Agencies Sdn Bhd [1990] 1 MLJ 21;Pioneer Concrete (M) Sdn Bhd v Celini Corp Sdn Bhd [1998] 3 MLJ 810; Malayan Banking Bhd v Red Box (Malaysia) Bhd [2000] MLJU108; Re Sunshine Securites (PTE) Ltd Anor v Official receiver And Liquidator of Mosbert Acceptance Ltd [1978] 1 MLJ 57;Genting Sony en Industrial paper Sdn Bhd v WWL Corrugators Sdn Bhd [2000] 5 MLJ 33; Hong Leong Finance Bhd v delta drive (M) Sdn Bhd [1999] 6 MLJ 239; Chin Yoon Timber Co v Overseas Lumber Bhd [1978] 2 MLJ 173; Delta Drive (M) Sdn Bhd v Hong Leong Finance Bhd [2007] 4 CLJ 435; B.P Lim sdn Bhd v Sijori Holdings Sdn Bhd (MT-5)28-l49-2009; Medallion Builders Sdn Bhd v Sinarlim Sdn Bhd(D-22NCC-695-2010); Woodsville Sdn Bhd v Tien Ik Enterprise Sdn Bhd & 4 Ors (D-28-187-1990).
[5] I have read the petition, affidavits and submissions of the parties in details. I take the view the petition must be allowed. My reasons, inter alia, are as follows:

(i)          I am satisfied that the respondent's affidavit in opposition was filed in breach of rule 30 (1) of the winding up rules. The Court of Appeal had repeatedly stated that the said rule is mandatory in nature and ought not be breached if the respondent intends to oppose the petition. I have dealt with this area of jurisprudence in the case of Dato' Ting Check Sii v Datuk Hj Mohammad Tufail Mahmud & Anor [2008] 7 CLJ 453 where I have made the following observations:

"On 7 May 2007 when the petition was called for hearing, the petitioner objected to the last affidavit of the respondent on the grounds that the affidavit was filed out of time. The petitioner relied on the Court of Appeal decision of Crocuses & Daffodils (M) Sdn Bhd v. Development & Commercial Bank Bhd [1997] 3 CLJ 485 to expunge the said affidavit. I heard the submission of the parties and expunged the said affidavit and said that I will state my reasons after hearing the petition. They are as follows:
(a)                      In Bank of Commerce (M) Berhad v. Far East United Industries Sdn. Bhd. [2000] 1 LNS 88, the provision of r. 30(1) of the Companies (Winding Up) Rules 1972 was considered. KN Segara J (as he then was) following the Court of Appeal decision in Crocuses (supra) held that r. 30(1) of the Companies (Winding Up) Rules 1972 specifically provides that affidavit-in-opposition to a winding-up petition must be filed and a copy thereof served on the petitioner or his solicitors at least seven days before the appointed date of hearing of the petition. Further, the court stated that the said rule is mandatory in nature and should be strictly complied with.
(b)                      must be asserted that the winding up rules were made pursuant to s. 372 of the CA 1965 and s. 16of the Courts of Judicature Act 1964 (CJA 1964). A point to be noted is that the High Court has unfettered powers pursuant to s. 25(2)of the CJA 1964 as set out in the schedule under the title 'Additional Powers of High Court'. Under cl. 8 of the 'Additional Powers of the High Court' it is stated that power to enlarge or abridge the time prescribed by any written law for doing any act or taking any proceeding, lies with the court. Therefore, any application must not be made until after the expiration of the time prescribed, provided that this provision shall be without prejudice to any written law relating to limitation. That being the case, to say r. 30 of the winding up rules is mandatory will be in breach of cl. 8 of the additional powers of the High Court to be read with s. 355 of the CA 1965 and r. 193 winding up rules. The observation of the Court of Appeal in Crocuses case in respect of r. 30 of winding up rules will appear to be per incuriam. It would have been appropriate if the Court of Appeal had considered the decision of the Privy Council in Toy Bok Choon v. Tahansan Sdn. Bhd. [1987] 1 CLJ 441;  [1987] CLJ (Rep) 24 where the provision of the winding up rules was considered and the court specifically stated:

'In winding up proceeding the trial judge cannot refuse to read affidavits which have been properly sworn, filed and produced to him unless some opposing party has applied for the attendance for cross-examination of the deponent and that the application has been granted and the deponent does not attend.'..."

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