Concrewall Building System (IBS) SDN. BHD. v Z & Z BINA SDN. BHD. PENCELAH Kontrek Shahdan Sdn Bhd. (in Liquidation)
Outcome
I find that the Respondent has failed to raise any bona fide dispute to the debt claimed in the Statutory Notice and the Petition, I hereby grant the orders prayed for in the Petition with costs.
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Practice Areas
Judges (1)
Counsel (5)
Case Significance
Confirms that a technical irregularity in serving a statutory notice of demand does not defeat a winding-up petition, and may be cured under section 582 of the Companies Act 2016, where the respondent has engaged with the petition and suffered no substantial injustice.
This High Court decision at Kuala Lumpur, in the Commercial Division, concerns a winding-up petition presented under sections 465 and 466 of the Companies Act 2016, and the effect of an irregularity in the service of the statutory notice of demand. The petitioner sought to wind up the respondent company on the basis of its failure to satisfy a summary judgment obtained in the Sessions Court, for a sum exceeding RM193,000 including interest and costs. The petitioner had issued a statutory notice of demand and served it at the respondent's purported business address. At the hearing the respondent's counsel conceded that the only live issue was whether the service of the statutory notice was irregular and, if so, whether that irregularity invalidated the petition.
The court analysed whether an irregularity in service defeats a winding-up petition where the respondent has suffered no substantial injustice. It drew on authority, including ET Mix Sdn Bhd v Sun Steel Construction Sdn Bhd and Pengurusan Bersama Anson v CTS Properties Sdn Bhd, for the principle that where a company has entered appearance and filed an affidavit opposing the petition, it is plainly aware of the case against it, and any irregularity in the service of the notice of demand does not prejudice it. It considered the curative effect of section 582(1) and (2) of the Companies Act 2016, which allows the court to overlook procedural irregularities that cause no substantial injustice.
Applying those principles, the court found that the respondent had filed an affidavit in opposition and had thereby demonstrated full knowledge of the case against it, so that it suffered no substantial injustice from any irregularity in service, which was accordingly curable. It held this to be an appropriate case for a winding-up order. The judgment is a useful illustration of the principle that a technical defect in the service of a statutory demand will not defeat a winding-up petition where the respondent has engaged with it and suffered no prejudice.
Did the irregular service of the statutory notice invalidate the petition?
No. The court held that where a company has entered appearance and filed an affidavit opposing the petition, it is aware of the case against it and suffers no prejudice from any irregularity in service. Any such irregularity was curable, including under the curative provisions in section 582(1) and (2) of the Companies Act 2016, and did not invalidate the petition.
On what debt was the petition founded?
The petition was founded on the respondent's failure to satisfy a summary judgment obtained by the petitioner in the Sessions Court, in a sum exceeding RM193,000 including interest and costs. Finding no substantial injustice from the service irregularity, the court held this an appropriate case for a winding-up order.
Statutes Cited
Cases Cited (1)
Judgment
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Read on eJudgmentSource: eJudgment (wa-28ncc-367-04-2024)