AFFIN ISLAMIC BANK BERHAD v GLOBAL VETERINARY SDN BHD

Case Significance

Illustrates that an unsatisfied judgment debt, followed by an unanswered statutory demand, provides a strong foundation for a winding-up order under section 465(1)(e) of the Companies Act 2016, and underscores the mandatory nature of the timing rules for opposition affidavits under the Companies (Winding-Up) Rules 1972.

This decision of the High Court's Commercial Division in Kuala Lumpur concerns a creditor's winding-up petition presented under section 465(1)(e), read with section 466(1)(a), of the Companies Act 2016, on the ground that the company was unable to pay its debts. The petitioning bank relied on a judgment in default it had obtained against the company in December 2024, which remained valid, binding and unpaid and had not been varied or set aside, so that it stood as a final and conclusive debt. A statutory notice of demand had been served on the company at its registered and business addresses, and the twenty-one-day period had lapsed without payment or any bona fide offer to settle, giving rise to the statutory presumption that the company was unable to pay its debts. A procedural issue arose at the hearing: the company had filed its affidavit in opposition only a few days before the hearing, and the bank objected that this breached rule 30(1) of the Companies (Winding-Up) Rules 1972, which is mandatory, the affidavit having been filed out of time and without any application for an extension. Counsel for the company candidly admitted the late filing, explaining that his firm had only recently been appointed, and sought time to explore settlement and to apply for an extension. The court was not persuaded that a recent change of solicitors excused non-compliance with a mandatory rule, particularly where no formal application for an extension of time had ever been filed. The court treated the rule as mandatory and, more fundamentally, found that the company had adduced no evidence to rebut the statutory presumption of inability to pay. Satisfied that the company was unable to pay its debts within the meaning of the Act, the court granted the winding-up petition with costs of RM5,000. The judgment illustrates the strength of an unsatisfied judgment debt as a foundation for winding up and the strictness of the winding-up rules on the timing of opposition affidavits.