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WONG THAI KUAI
& ANOR V. KANSAS CORPORATION SDN BHD
HIGH COURT [KUALA LUMPUR]
RAMLY HAJI ALI, J
COMPANIES (WINDING UP) NO. D5-28-364-2006
27 FEBRUARY 2007
IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR
(COMMERCIAL
DIVISION)
COMPANIES (WINDING UP) NO. D5-28-364-2006
In the matter of section 218
Companies Act 1965
And
In the matter of KANSAS CORPORATION SDN BHD (179834-P)
BETWEEN
1. WONG THAI KUAI
2. THONG YOKE LAN - PETITIONERS
AND
KANSAS CORPORATION SDN BHD (179834-P) - RESPONDENT
CORUM
DATUK RAMLY HAJI ALI
JUDGE HIGH COURT
KUALA LUMPUR
(COMMERCIAL DIVISION)
GROUNDS OF JUDGMENT
1. The Petitioners brought this winding-up petition against the Respondent
pursuant to section 218 of the Companies Act 1965 (the Act) on the ground
that the Respondent was unable to pay its debt and that it is just and
equitable that the Respondent company be wound-up.
2. The Petitioners claim from the Respondent for a sum of RM320,826.30 being
liquidated damages for late delivery of shop-houses built by the Respondent.
A statutory notice under section 218 of the Act has been issued to the
Respondent. There is no judgment obtained by the Petitioners in respect of
the amount claimed.
Factual Backgrounds
3. The Respondent is a licensed developer and undertook to develop a project
known as "Prima Selayang" consisting of a 4 storey shoplots (consisting of
110 units of shop-office) (the "Project").
4. Vide a Sale and Purchase Agreement dated 24.12.1996 (the "S & P"), the
Respondent with the consent of Perbadanan Kemajuan Negeri Selangor, a
statutory body incorporated in Malaysia under the Selangor State Development
Corporation Enactment, 1964 agreed to sell to the Petitioners (the
"Purchasers") and the Petitioners agreed to purchase the shop office
building distinguished as 4 storey shop-office, Type A1, Lot No. 6, Prima
Selayang-Phase 1 (the "Property") for the consideration of RM770,000.00.
5. Pursuant to clause 20.2.1 of the said S & P, the Respondent agreed
to deliver vacant possession of the said Property to the Petitioners within
thirty-six (36) months from the date of approval of the Proposed Building
Plans.
6. The Respondent obtained the approved Building Plans for the Development
on 14.5.1997. As such the Respondent's obligation to deliver vacant
possession to the Petitioners expires on/or before 13.5.2000.
7. Further, pursuant to clause 20.22 of the said S amp; P, it was agreed
that in the event the Respondent failed to deliver vacant possession of the
said Property within the 36 months as agreed, the Respondent shall pay to
the Petitioners agreed liquidated damages at the rate of eight per centum
(8%) per annum of the Purchase Price on a daily basis commencing from the
expiry of the 36 months and any extensions (if available) till the date of
the notice from the Respondent to the Petitioners to take possession of the
said Property.
8. It was also agreed between the Petitioner and the Respondent that:-
(a) Clause 19 of the S & P:
"...All outgoings including quit rents, rates, assessment in respect of
the Property shall from the date of this agreement be borne by the
Purchaser...";
(b) Clause 20.1 of the S & P: "The Purchaser shall not be entitled to
vacant possession of the Property until the Purchaser shall have duly paid
to the Developer all monies payable..."; and
(c) Clause 20.2.3 of the S & P: "Upon completion of the Property and
such completion is so certified by the Developer's Building Consultant and
provided that the Purchaser shall have paid to the Developer all
installments and all monies payable under this agreement and shall have
performed and observed all the covenants on the Purchaser's part herein
contained the Developer shall by a written notice to the Purchaser request
the Purchaser to accept delivery of vacant possession of the Property..."
9. Vide their solicitor's letter
dated 26.7.2005, the Petitioner demanded a sum of RM320,826.30 as agreed
liquidated damages as at 26.7.2005.
10. Subsequently, the Petitioner Vide their solicitor's letter dated
8.8.2005 issued a statutory demand on the Respondent pursuant to Section 218
of the Companies Act 1965 for the said "debt".
11. In response, the Respondent Vide its solicitor's letter dated 15.8.2005,
disputed the Petitioners' claim on the premise inter alia that, the said
Property in question was uncompleted and the entire project was stagnant.
12. As the demand were not honoured by the Respondent within twenty one (21)
days from its issuance the Petitioner proceeded to file the winding-up
Petition, hence the present suit before this Court. There are 37 creditors
(who are also purchasers of the units in the said Project) oppose the
Petition (Opposing Creditors).
13. The said project had been abandoned since the year 2000. Pursuant to a
meeting held at the Lembaga Perumahan Dan Hartanah Selangor on 25.6.2005
under the guidance of the Chairman of "Jawatankuasa Tetap Perumahan,
Pengurusan Bangunan Dan Setinggan" Yang Berhormat Dato' Haji Mohd Mokhtar
bin Haji Ahmad Dahlan in the presence of the purchasers, the Respondent's
representatives, the Majlis Pebandaran Selayang's representatives, parties
had agreed to revive the said abandoned project and come to a settlement
agreement whereby the Respondent will complete and continue with the said
project and apply for the Temporary Certificate of Fitness.
14. To this effect, the Respondent and the Opposing Creditors had entered
into a Supplemental Agreement dated 24.10.2005.
15. Under this Supplemental Agreement, the Respondent had completed 66 units
of the said Project with practical completion certificate from the architect
and had delivered vacant possession of the said 66 units via letter dated
16.3.2006.
16. The Respondent had also obtained individual titles for each shop-lot
units including the units belonging to the Petitioners and Opposing
Creditors.
17. All deposits and contributions to Tenaga Nasional Berhad (TNB) and
Syarikat Bekalan Air Selangor (SYABAS) had been duly paid.
18. Via letter dated 30.11.2006, the Respondent confirmed that it had
completed 97% of building works on the remaining 44 units of the shop-office
and is continuing to work on these units progressively.
19. The Petitioners had filed this Petition to wind up the Respondent
company despite them being invited to join to support the revival and
completion of the said Project.
Preliminary Issue
20. In the present case, the Petitioner had failed and/or omitted to state
in its intitulement, under which limb of section 218 the Petitioner was
moving the Court.
21. Section 218 of the Act provides for various circumstances under which a
Petition can be presented. The circumstances are stipulated from section
218(1)(a) to (n) of the Act.
22. However the Petitioners in the present case had failed and/or omitted to
state the particular sub-section under which the Petition was presented.
23. In the Court of Appeal case of Cheow Chew Khoon (t/a Cathay Hotel) v.
Abdul Johari bin Abdul Rahman [1995] 4 CLJ 127; [1995] 1 MLJ 457, the Court
held as follows:-
"An originating process requiring an intitulement must state, with
sufficient particularity, either in its heading or in its body, the statute
or rule of Court under which the Court is being moved, otherwise it would be
an embrassing pleading and liable to be struck out...".
Further, the Court held that:-
"The summons does not... state any particular rule of Court in its
intitulement. Now, I think that is not only wrong but plainly embarrassing.
How, might one ask, is a Defendant or the Court to determine which rule of
Court the Plaintiff is invoking unless he explicitly specifies it? If a
Defendant and the Court should have to conduct a close examination of the
supporting affidavit in each case in order to determine the particular
jurisdiction or power that is being invoked by an originating summons or
other originating process that requires an intitulement, then a Plaintiff
will be at liberty to shift from one rule to another or indeed from one
statute to another as it pleases him without any warning whatsoever to his
opponent or the Court. It would make a mockery of the principle that there
must be no surprise in civil litigation...".
24. A case on point to support this contention would be the Court of Appeal
decision of Kok Fook Sang v. Juta Vila (M) Sdn. Bhd. & Ors [1997] 2 CLJ 116.
In this case the Petitioner had also filed the Petitioner without making a
specific reference to the sub-section to section 218(1) of the Act. His
Lordship, Justice Mahadev Shanker, held that:-
"Where a Petitioner presents a petition to wind-up a company under section
218(1) of the Act, it is incumbent upon him to state which of these grounds
he is relying upon and not ask the Court to search his Petition for facts
which may be thought capable of being slotted into some particular
sub-section."
25. The above principle of law was applied with approval in the recent case
of Ho Siew Choong & Ors v. Everworth Sdn. Bhd. [2005] 2 CLJ 273 (High
Court). In that case the Petitioner merely stated that the Petition was
filed pursuant to section 218(e) and (i). The High Court Judge, struck off
the Petition for non compliance with the provision under the Act.
26. Similarly in the present case before this Court, the Petitioner had also
failed to identify with clarity under which sub-section of the said Act, the
Petition was presented.
27. Hence this Court is of the view that from the principles of law laid
down, the present Petition ought to be struck out for want of compliance.
The strict compliance of law in the Companies Act 1965, especially when one
intends to wind up the company is analogous to "an accused person standing
fora murder trial, whereby the benefit of the doubt must always given to the
accused". The Court is burdened with the rules of natural justice and also
under an obligation to ensure that the Petitioners themselves are not in
breach of any provision and/or rule of law, when they petition to wind-up a
company.
28. On this score alone, the Petition ought to be struck off.
29. Even assuming the Court is wrong in coming to the above conclusion, the
Court shall now deal with the merit of the Petition.
30. The present Petition was filed by the Petitioners on the strength of a
statutory notice issued by the Petitioners under section 218 of Act, on the
assumption that the Respondent has failed or unable to pay its debt during
the twenty one (21) days mentioned in the notice. In this case, there is no
judgment obtained by the Petitioner against the Respondent in respect of the
amount claimed. That being the case, the Petitioners must satisfy the Court
that they are "creditors" and the amount claimed as stated in the 218 notice
was actually "owing and due". The notice of indebtedness issued under
section 218 is not evidence of the debt. In other words, the Petitioners
must prove that they are "creditors" and the Respondent company is a
"debtor". If the debt is disputed substantially and the Petitioners are not
considered as "creditors", then the Petitioners have no locus standi to file
the petition for winding-up of the Respondent based on the said notice.
31. In the present case, the debt claimed in the notice is seriously
disputed by the Respondent. As such the Petitioners will have to prove their
claim in Court. This claim is based on contract and is not automatically
paid as opposed to the claim by house buyer under the Housing Developers
(Control & Licensing) Act 1966.
32. In the case of Syarikat Mohd Noor Yusof Sdn. Bhd. v. Polibina
Engineering Enterprise Sdn. Bhd. (in liquidation) [2005] 2 CLJ 676; [2006] 1
MLJ 446, Court of Appeal held at page 446 that:-
"(1) ... in his matter, there
was no judgment debt and the debt claimed was disputed. Therefore, the
notice of indebtedness issued under section 218 was not evidence of the
debt;
(2) ... The indebtedness was clearly disputed and the sum referred to in
the Respondent's notice issued under section 218(2) was not a judgment
sum. The notice was nothing more than a letter of demand sent by the
Respondent's solicitors, the purpose of which was to invoke the
presumption of inability to pay its debts. The Respondent would still have
to prove that it was a creditor and that the sum so stated in the notice
was owing and so due."
33. The Court in the case of
Jurupakat Sdn. Bhd. v. Kumpulan Good Earth (1973) Sdn. Bhd. [1988] 1 CLJ 618
(Rep); [1988] 2 CLJ 649; [1983] 3 MLJ 49 at page 49 held that:-
"(1) It is common ground that
there is no judgment debt in the present case. The question for the Court
to consider is whether the Petitioner is a creditor and the Respondent
company is a debtor.
(2) From the evidence, it is clear that the Respondent company disputed
the alleged debt claimed by the Petitioner. Indeed, the Respondent company
claimed that the Petitioner is in a debit balance. In the circumstances,
the Petitioner is not a creditor as envisaged in section 217 if the
Companies Act 1965.
(3) The Petitioner is not entitled to file the Petition, as it has no
locus standi. The action of the Petitioner in filing the Petition is
an abuse of the process of the Court."
34. In the present case, there
are reciprocal obligations present in the said S &P. The first is the
Respondent's obligation to deliver as a developer and the Petitioners'
obligation to pay the consideration in full. With regards to their
respective obligations the Court refers to:
(i) Clause 20.2.1 of the said S
& P on he Respondent's obligation to deliver vacant possession;
(ii) Clause 20.2.2 of the said S & P on the Respondent's liability to pay
liquidated damages if Clause 20.2.1 is not fulfilled; and
(iii) Clause 19 and 20.2.3 of the said S & P on the Petitioners'
obligation to pay the consideration in full.
35. The Respondent had three (3)
years from the date of the said S & P to deliver vacant possession to the
Petitioners. The last date to do so was on 13.5.2000.
36. However, the Petitioners on their own accord defaulted on the
progressive payment towards the purchase price of the Property. The
Petitioner had failed and/or refused and/or neglected to pay the sum of
RM5,580.00, which was part of a progressive payment towards the purchase
price of the Property.
37. The Petitioners defence to the non payment is that they did not receive
the notice for payment and in the event the amount was not paid they are
entitled to exercise their right of set-off against what is being claimed by
them.
38. The Court cannot accept this argument. The right to set-off in the
present case is not available to the Petitioners as the Petitioners
themselves had defaulted their obligations to pay the consideration in full.
As such the Respondent's obligations pursuant to clauses 20.2.1 and 20.2.2
of the S & P have not accrued pursuant to clause 20.2.3 of the same.
39. In this regard the Court would like to refer to the case of Lim Yee Khei
v. Berjaya Times Square Sdn. Bhd. [2003] 1 CLJ 527 (High Court). The Court
in dealing with similar scenario as present held that:
"Whilst the Defendant had delayed the delivery of vacant possession of
the said property to the Plaintiff, the set-off was not yet available to the
Plaintiff unless the period for completion had transpired."
The Court further held that:-
"In the present case the amount that is purportedly claimed by the Plaintiff
is not yet due, and therefore the true nature of the amount that is claimed
by the Plaintiff is not essentially in the nature of a cross-claim for debt
or damages that are due."
40. In the Privy Council case of Loh Wai Lian v. S.E.A. Housing Corporation
Sdn. Bhd. [1987] 1 LNS 37; [1987] 2 MLJ 1, the Purchaser also initiated a
claim for liquidated ascertained damages pursuant to the contract executed
between the parties when the vendor failed to deliver vacant possession
within the agreed period and subsequently refused to pay the final
progressive payment towards the purchase price. The Privy Council held
that:-
"the only sensible construction of clause 17 is that it imposes an
obligation to pay in substitution for any other right to damages which sum
to be calculated and ascertained at a particular date and that until sum has
been ascertained it does not become due and cannot be sued for."
In essence the Privy Council decided that until and unless the Purchaser in
that case had fulfilled his obligation in full and the building has yet to
be completed, the right to sue for damages for late delivery is not
available and hence cannot be sued for.
41. The above considerations clearly indicate that the debt in question (as
claimed by the Petitioners in the present case) is seriously disputed by the
Respondent. This Court (being Winding-Up Court) is not an appropriate forum
for the Petitioners to establish their claim. The Petitioners should have
filed a separate action in the Civil Court for that purpose. This Court is
not a "debt collection agency". On this ground alone, the present Petition
cannot stand and ought to be dismissed with costs.
42. Even assuming the above finding is wrong and assume the Court finds that
the Petitioners are 'creditors' and the debt is not disputed, the Court
shall now consider whether on the issues of public policy and balance of
justice, the Petition ought to be granted or not.
Winding-Up Order - Discretionary Power of the Court
43. The Court has a discretionary power to wind-up a company under sections
218 of the Companies Act 1965. The use of the permissive word "may" in
sections 217, 218 and 221 of the Act rather than the mandatory "must" or
"shall", gives the Court a discretion whether or not to wind-up a company,
even if the Petitioners have shown that they are 'creditors' and the debt in
question is not disputed.
44. On this issue the Court is in full agreement with Siti Norma Yaakob J in
the case of Kim Wah Theatre Sdn. Bhd. v. Fahlum Development Sdn. Bhd. [1990]
1 LNS 42; [1990] 2 MLJ 511 where she held:-
"The law on the functions of the Court when dealing with a Petition for
the compulsory winding-up of a company is that once the debt has been proved
to be unpaid and that the company is insolvent, the Petitioner is entitled
to a winding-up order ed debito justitiae. However, whilst continuing to
recognise the Creditor's prima facie right to a winding-up order, there are
instances where such right is subject to the discretion provided by the
language of section 221(1) of the Companies Act 1965, in that the Court may
decide not to do so. One of such instances is where the Petition is opposed
by a majority of the Creditors."
45. The learned author of the Law of Company Liquidation (3rd Ed.)
(Australia) at page 61 under the title "Discretion to Refuse Order" has
expressed his view as follows:-
"Indeed, it is now settled that the Creditor's rights are always subject
to the overriding discretion which is reposed in the Court both the
introductory words of section 364 and by the permissively worded language of
section 367(1), with the result that the Court is never bound to make an
order merely upon proof of a ground for winding-up, but has a discretion to
decide whether or not it will do so. Its power to refuse an order is,
however, fairly strictly regulated and is exercised in accordance with
principles which are relatively well defined."
46. The same principle was also adopted and followed by Kamalanathan Ratnam
JC in the case of Pilecon Engineering Bhd. v. Remaga Jaya Sdn. Bhd. [1996] 1
LNS 105; [1997] 1 MLJ 808 when he said (at page 812) as follows:-
"However, notwithstanding the fact that an unpaid Creditor of a company
is entitled to a winding-up order ex debito justitiae, I hold that rule is
subject to exceptions. These are where:
(i) the Petitioner's debt amounts to less than RM500.00;
(ii) the debt is bona fide disputed by the Respondent;
(iii) the Respondent has paid or tendered payment of the Petitioner's debt;
(iv) the winding-up is opposed by other Creditors; and
(v) the Respondent is in the process of being wound-up voluntarily."
Right of the Petitioners to Wind-up the Respondent v. Right of Majority
of the Creditors
47. The Court is of the view that the right to have a company wound-up is a
right which belongs not to the Petitioners alone, but to all the class of
unsecured creditors to which the Petitioners belong whereby the Opposing
Creditors are the majority.
48. In the case of Pilecon Engineering Bhd. v. Remaja Jaya Sdn. Bhd. (supra)
at page 812, the Judge was referred to the case of Re Criggglestone Coal Co.
Ltd. [1906] 2 Ch D 327 at pp 331:-
331, where Buckley J said:-
"The right ex debito justitiae is not his individual right, but his
representative right. If a majority of the class are opposed to his view,
and consider that they have a better chance getting payment by abstaining
from seizing the assets, then, upon general grounds and upon section 91 of
the Companies Act 1862, the Court gives effect to such right as the majority
of the class desire to exercise. This is no exception. It is a recognition
of the right, but affirms that it is the right not of the individual, but of
the class; that it is for the majority to seek or to decline the order as
best serves the interest of their class. It is a matter upon which the
majority of the unsecured creditors are entitled to prevail, but on which
the debtor has no voice."
49. In the case of Re A,B,C. Coupler & Engineering Co. Ltd. [1961] a All E.R.
354, the Petition is opposed by a number of Creditors whose debts
(disregarding those owed to the subsidiary companies of the company) amount
to 18,328 Pounds odd, that being a sum about 800 Pounds larger than the debt
owed to the petitioning creditors. It was said by the learn Judge Pennycuick
J at page 356:-
"It seems to me, however, that it must still be right, having regard to
the terms of section 346, to have regard to the wishes of the majority of
the creditors. Although those wishes may not be conclusive, they still
posses great weight, and it seems to me that, where the wishes of the
majority of the creditors are, on the face of them, reasonable, the Court
ought to follow those wishes in the absence of any special circumstances."
50. Further, at page 357, the Judge went on to say that:-
"In all the circumstances, it seems to me that in the present case the
right course for me to take is to have regard to the wishes of the majority
in value of the creditors (disregarding the subsidiary companies) and to
refuse to make an order on the Petition."
51. The Court was also referred to the case of Kim Wah Theatre Sdn. Bhd. v.
Fahlum Development Sdn. Bhd. (supra). In that case, together with the
Respondent, the large number of the other creditors opposing the Petition
are Purchasers of the low cost flats that the Respondent, as housing
developers, are trying to complete on a housing project known as Taman
Rishah, at Jelapang, Ipoh pursuant to a joint venture agreement the
Respondent had with the owners of the land. The total value of the debts
owed by the Respondent to all the opposing creditors amount to over RM36
million whilst the value of those favouring a winding-up order total just
over RM5 million. It was held by the Judge at page 512 that:-
"The law on the functions of the Court when dealing with a Petition for
the compulsory winding-up of a company is that once the debt has been proved
to be unpaid and that the company is insolvent, the Petitioner is entitled
to a winding-up order ex debito justitiae. However, whilst continuing to
recognise the creditor's prima facie right to a winding-up order, there are
instances where such right is subject to the discretion provided by the
language of section 221(1) of the Companies Act 1965, in that the Court may
decide not to do so. One of such instances is where the Petition is opposed
by a majority of the creditors. In Re ABC Coupler & Engineering Co. Ltd., it
was held that in deciding whether to make a compulsory winding-up order, the
Court should have regard to the wishes of the majority of the creditors,
because these wishes, although not conclusive, posses great weight and
if they are reasonable, the Court should follow them in the absence of
special circumstances."
52. By referring to the above mentioned cases, the Court is of the view that
in considering whether or not to allow the petition filed by the
Petitioners, this Court should consider the voice of the majority of
creditors in the same class as the Petitioners, that is the Opposing
Creditors.
53. In this present case, there were 66 creditors who already got their
units completed with certificate of practical completion and amongst them,
they are 37 creditors who have filed notices of opposition to the winding-up
of the Respondent. Although the Petitioner may have prima facie right to an
order to wind-up the Respondent, this is a right that belongs to the class
of creditors of whom the Petitioners are one.
54. The main ground for the 37 Opposing Creditors opposing the winding-up of
the Respondent is that because the Respondent had under the Supplemental
Agreement which was entered between the Respondent and the Opposing
Creditors, completed 66 units of the said Project leaving a balance of 44
units and for these remaining units, the Respondent has completed 97% of
building works and now is in the stages of completing the balance of the
said building as stated in its letter dated 30.11.206.
55. Furthermore, since the said Project is nearing completion and is in its
final stages, the Respondent should be given the opportunity to complete the
said Project and obtain the Certificate of Fitness for all the units.
Furthermore, the majority of the creditors wishes need to be considered, as
it is the public interest and the interest of the developer who is
proactively coming forward and completing the units and applying to obtain
the Certificate of Fitness be allowed to continue and complete the said
project.
56. In the case of Kim Wah Theatre Sdn. Bhd. v. Fahlum Development Sdn. Bhd
(supra), it was held by the Judge at page 512 that:-
"Admitted the judgment debt is due to the Petitioner since 1986 but when
balancing the wishes of the Petitioner against the wishes of the purchasers
that make up the majority of the creditors, I consider no special
circumstances have been shown by the Petitioner to warrant the winding-up
being made in its favour. On those findings, I had ordered a stay for ten
(10) months as that was the undertaking given by the Respondent that they
would be able to complete the flats on Phase IV by that time and with the
profits derived, pay out the debt due to the Petitioner. On that
undertaking, I had then adjourned the Petition to 3 September 1990."
57. By referring to the above-mentioned cases, the Court is of the view that
this Court should consider the voice of the majority of the creditors and
allow the Respondent to complete the said Project and obtain the Certificate
of Fitness for all the units especially when he Respondent is willing and
able to complete the said Project.
Public Interest Consideration
58. The Court is of the view that in exercising discretion whether or not to
wind-up the Respondent, the Court should also consider not only the interest
of the Petitioner but also the public interest which includes the 37
Opposing Creditors, who opposed the said winding-up Petition.
59. In their various affidavits, the Petitioners have failed to show that
the Respondent were unwilling or unable to complete the completion of the
units and obtain the Certificate of Fitness. Furthermore, should the
Respondent be wound-up, there would be no benefit which could accrue to the
Petitioners and the Petitioners would gain nothing other than the
satisfaction of winding-up the Respondent and the said Project will come to
a stand still with no person to immediately take over. Further, the security
guards employed by the Respondent guarding the said Project would also no
longer be there opening the units from being stripped by vandalism of the
wires, steels, windows and etc. which had happened before.
60. The abandoned project such as the present case should be completed and
delivered to the buyers including the Petitioners and the Opposing Creditors
rather than abandoned totally because of a fruitless winding-up order.
61. This has been clearly stated by Kamalanathan Ratnam J in the case of
Pilecon Engineering Bhd. v. Remaja jaya Sdn. Bhd. (supra) at page 813:-
"Recovering an abandoned housing project is akin to injecting life into
the community in that area. Out of that one project much benefit cold be
accrue to the community. Schools will emerge, public utilities will be
provided and the general upliftment of life will no doubt bring harmony and
contentment, thus nurturing a satisfied society. If another opportunity can
be given to the RM to revive this abandoned project, so be it."
62. It would be against public policy if the ordinary house buyers, having
paid the entire purchase price were to be effectively deprived of their
rights under the sale and purchase agreement.
63. In the present case, the Respondent had completed 66 units of the said
Project leaving a balance of 44 units and for these remaining units, the
Respondent has completed 97% of building works and now is continuing to
complete the balance of the said building as stated in is letter dated
30.11.2006.
64. Since the said Project is 97% completed and is in its final stages, it
is of the public interest that the Respondent be given the opportunity to
complete the said Project and obtain the Certificate of Fitness for all the
units.
65. The Petitioners had in their various affidavits stated that it would be
better and faster for an independent party like a liquidator to take over
the Respondent's role to complete the said Project.
66. The Court is reluctant to accept this argument. If the Respondent be
wound-up, all the purchasers including the Opposing Creditors and the
Petitioners will face a serious uncertainty as whichever receiver or
liquidator is appointed it will take a very much longer time to understand
the project and will not be able to have all the paper works, plans and
documents be done in this short time in order to complete the said project
and thereafter obtain the Certificate of Fitness.
67. Further, liquidator needs funds and monies. Where are they going to get
the monies to do and complete the said Project? Here, the Respondent is
willing and able to complete the units with no additional payments. As such,
there is no logic in getting a liquidator to do it, where the Respondent is
willing, able and prepared to complete the said project without additional
monies to be paid by the buyers.
68. This in turn will further burden all the buyers including the Opposing
Creditors who have been waiting patiently for the past ten (10) years and
had been servicing their loan installments and interest without being able
to occupy the units and be liable to pay monies for liquidator to complete
the said project.
69. The same sentiment was also expressed by Kamalanathan Ratnam J in the
case of Pilecon Engineering Bhd. v. Remaja Jaya Sdn. Bhd. (supra) where he
stated that at page 817:-
"If winding-up order is made, then the house buyers will have to look to
the official receiver- and not to the RM - to perform the obligations under
the sale and purchase agreement. This means that it would be the official
receiver who would have to subdivide titles in the case of the landed
properties and obtain strata titles in the case of the apartments, obtain
permanent certificates of fitness and attend to any defects that appear
within the detects liability period. I do not envisage that the official
receiver ought to be burdened with such mundane matters. He neither has the
time nor the facilities, nor the manpower, to do such work. Besides, there
are no assets available for him to utilise the resources. It would be
against public policy if the ordinary house buyers, having paid the entire
purchase price, were to be effectively deprived of their rights under the
sale and purchase agreement."
70. In the circumstances, the Court finds that since the said Project is
nearing completion and is in its final stages, the Respondent should be
given the opportunity to complete the said Project and obtain the
Certificate of Fitness for all the units.
71. In the circumstances, the public policy interest as well as the balance
of justice require that the Respondent should not be wound-up as petitioned
by the Petitioners. The Respondent should be given the opportunity to
continue and to complete the said Project until full completion since the
said Project is 97% completed and is in its final stage; all deposits and
contributions to Tenaga Nasional Berhad (TNB) and Syarikat Bekalan Air
Selangor (SYABAS) had been duly paid, the Respondent is willing and able to
complete the said Project without any additional costs to the buyers
including the Petitioners and Opposing Creditors; and it is the wishes of
the majority of the Creditors (Purchasers) to gave the opportunity to the
Respondent to continue and complete the said Project.
Conclusion
72. On the above considerations the Court finds that the Petition herein
should be dismissed or any one of the following grounds, namely:-
(a) the Petitioners had failed to identify with clarity under which
sub-section of section 218 of the Companies Act 1965, the Petition was
presented; or
(b) the debt in question is seriously disputed by the Respondent and
therefore the Petitioners are not "creditors"; and/or
(c) public policy interest and the balance of justice require that the
Respondent should not be wound-up, but instead to be allowed to complete the
said Project.
73. Therefore the Petition is dismissed with costs. Dated: 27 February 2007. |
