AMBANK (M) BERHAD v EG ISMAA DYNAMIC SDN. BHD.

Case Significance

Illustrates the treatment of a defective (undated) opposing affidavit under the overriding interest of justice, and applies the established inability-to-pay test in allowing a winding-up petition under section 466(1) of the Companies Act 2016.

This High Court decision at Temerloh concerns a winding-up petition presented by a bank against a company under section 466(1) of the Companies Act 2016 (Akta Syarikat 2016), read with the Companies (Winding-Up) Rules 1972. The petition was founded on the company's inability to pay its debts. The company opposed the petition, contending among other things that the petitioner had failed to take into account cheques it had issued, which, it argued, showed that it was not unwilling to settle the debt. A preliminary procedural challenge also arose over the affidavit filed to oppose the petition, which was undated.

The court addressed the procedural point first. It considered whether an undated affidavit opposing the petition was defective and whether it could nonetheless be used, by reference to Order 41 rule 9 of the Rules of Court 2012 and rule 30 of the Companies (Winding-Up) Rules 1972, together with the overriding-interest-of-justice provision in Order 1A of the Rules of Court 2012. On the substantive question, the court applied the settled principle that a winding-up petition is founded on a demonstrated inability to pay a debt, and that the two matters to be examined are whether the debt is established and whether the company is unable to pay it.

Weighing the company's opposition, including its reliance on the cheques and any suggestion of a rescheduling of the debt, against the evidence of its inability to pay, the court was satisfied that the statutory ground was made out and that the company had not shown a genuine, substantial basis for resisting the petition. It accordingly allowed the winding-up petition. The judgment is a useful illustration of the court's treatment of a procedural defect in an opposing affidavit under the overriding interest of justice, and of the established test for winding up a company that is unable to pay its debts.