1. ) Chung Yoo Hock 2. ) Oceanergy Gases Sdn Bhd v Zumatex Engineering Sdn Bhd

Case Significance

Grants a winding-up order under sections 465 and 466 of the Companies Act 2016 on an undisputed debt, the statutory presumption of insolvency being unrebutted and the company having admitted in its own affidavits that it could not pay the judgment sum.

This High Court (Kuala Lumpur) decision concerns a petition to wind up a company on the ground of inability to pay its debts, together with the company's application to stay the petition. The petitioners presented a petition under section 465 of the Companies Act 2016, invoking sections 464(1)(b), 465(1)(e), 466(1)(a), 466(1)(c) and 466(2) of the Companies Act 2016 and the Companies (Winding-Up) Rules 1972, to wind up the respondent company. The court granted the petition, giving rise to the respondent's appeal, and separately dismissed the respondent's application to stay the petition pending the determination of a related suit; that dismissal was not appealed, and the court noted that there had been a total of four unsuccessful applications for a stay in several courts, including the Court of Appeal.

The company-law issue was whether the respondent was unable to pay its debts so as to justify a winding-up order, engaging the statutory presumption of insolvency where a company neglects to pay a sum demanded under a statutory notice of demand. On the findings, the debt in question was an undisputed outstanding sum, and the presumption of insolvency was left unrebutted, there having been no setting aside or stay of the underlying judgment.

The court found that the respondent had defaulted in paying the judgment sum and had defaulted on the sum demanded under the notice, and, importantly, that the respondent had admitted in its own affidavits that it was not in a position to pay the judgment sum. On that basis the court held that section 466(1)(c) of the Companies Act 2016 was satisfied, and in the circumstances made the order to wind up the company under the petition, with costs of RM5,000, subject to allocatur. The judgment illustrates the making of a winding-up order on an undisputed debt where the statutory presumption of insolvency is unrebutted and the company has admitted its inability to pay.