THEOW SAY KOW @ TEOH KIANG SENG, HENRY v 1. ) HIGHWAY LANDMARK SDN. BHD. 2. ) TAN SAI HONG 3. ) TEOH KIANG HONG

Case Significance

Illustrates that a winding-up petition under sections 465(1)(f) and (h) of the Companies Act 2016 is not a vehicle for resolving a disputed shareholding or relitigating a debt claim already rejected, the court striking out such a petition as res judicata and disclosing no reasonable cause of action.

This High Court decision concerns a winding-up petition presented under sections 465(1)(f) and (h) of the Companies Act 2016 and the respondent company's application to strike it out under Order 18 rule 19 of the Rules of Court 2012. The petitioner and the third respondent are sons of the second respondent, who had passed away, and the family owns a number of companies including the first respondent company. The petitioner claimed to be a shareholder by virtue of a 2012 transfer of shares to him, alleged that management and control of the company's properties and funds were held by the third respondent and his wife to his exclusion, and claimed repayment of an advance of about RM6.1 million said to have been made for the purchase of development land, which remained unpaid. On that basis he sought winding up on the oppression ground in section 465(1)(f) and on the just-and-equitable ground in section 465(1)(h). The court found that the petitioner's shareholding was itself disputed — earlier proceedings had concluded that he was no longer a shareholder, having divested his shares, and had provided no evidence to prove that shares were held on trust for him — and that a winding-up petition is not the proper forum in which to resolve a disputed question of shareholding. It further found that the alleged advance of about RM6.1 million had been rejected in previous suits, so that the petition disclosed no reasonable cause of action and amounted to a repetition of decided matters barred by res judicata. Concluding that there was no satisfactory basis to form the opinion that it would be just and equitable to wind up the company, the court allowed the striking-out application and dismissed the petition, with costs on an indemnity basis against the petitioner and his solicitors. The judgment illustrates that winding up is not a vehicle for resolving disputed shareholding or relitigating settled debt claims.