1. ) Dato' Chang Jong Yu 2. ) Iconic Bina Sdn Bhd 3. ) Laman Kejora Sdn Bhd 4. ) Permai Ikhlas Sdn Bhd 5. ) Cerah Teguh Sdn Bhd v 1. ) Kuala Ibai Property Sdn Bhd 2. ) Modern Mode Sdn Bhd 3. ) Saham Terbilang Sdn Bhd 4. ) Woo Thin Choy 5. ) Chai Owi Yok 6. ) Ong Pee Leong 7. ) Ong Kee Hin

Case Significance

Illustrates section 351 of the Companies Act 2016 as a protective jurisdiction: an injunction may issue to restrain a misuse of the winding-up process aimed at dealing with a company's land pending resolution of the dispute.

This Court of Appeal decision concerns the misuse of a company's winding-up and statutory remedies, and the availability of injunctive relief under section 351 of the Companies Act 2016. The appellants — an individual businessman together with several corporate entities — had sought, before the High Court, an injunction to protect land and interests said to belong to a company referred to in the judgment as Ibaimas, against dealings by the respondent companies and individuals. The High Court declined the relief, and the appellants appealed. The central question on appeal was whether the respondents had improperly deployed the winding-up process and related statutory mechanisms to acquire or deal with the disputed lands, and whether that conduct warranted an injunction under section 351 to preserve the status quo pending resolution of the underlying dispute.

The Court of Appeal held that the circumstances did disclose a misuse of the winding-up process such as to engage section 351 of the Companies Act 2016, and that appellate intervention was justified. It allowed the appeal and set aside the High Court's decision and order dated 25 October 2024. In its place the Court granted the injunction substantially as prayed, restraining each of the respondents — whether acting personally or through their directors, employees, agents, servants, contractors, sub-contractors or solicitors — from giving effect to, or taking any step to transfer or vest, the lands or any interest in the lands belonging to Ibaimas, or from creating any fresh interest over them.

The judgment is a useful illustration of how the courts treat section 351 as a protective jurisdiction: the winding-up machinery of the Companies Act 2016 is not to be turned into an instrument for stripping a company of its assets, and an injunction may issue to arrest dealings that would otherwise render the eventual determination of the dispute nugatory. It also shows the appellate court's willingness to substitute its own discretionary relief where the first instance court has, in its view, misdirected itself on the reach of the statutory remedy.