High Court settles dispute between companies, avoiding winding-up order

Fadley Faisal

The High Court has granted for an indefinite stay on a winding-up order to a company in a first of its kind application.

Chief Justice Dato Seri Paduka Steven Chong made the order yesterday in the case between petitioner, Pehin Dato Haji Adanan bin Haji Mohd Yusof, trading under the name and style of Begawan Pehin Dato Haji Md Yusof dan Anak-Anak, and respondent MSS Mega Company Sdn Bhd.

The petition filed on November 16, 2019 arose from when the petitioner filed a Creditor’s petition on March 27, 2018 against the respondent company on the grounds that they were unable to pay debts to the petitioner.

At a hearing on June 9, 2018, both parties and another creditor agreed to an adjournment made by the court to make way for negotiations towards an amicable settlement.

The respondent eventually agreed to pay the petitioner and the other creditor by monthly instalments, but, fell into arrears.

This led to the petitioner filing the application for a winding-up order to be made against the respondent, who in turn applied for a stay against the order.

The Chief Justice, on deciding the case, said that the “court’s jurisdiction to grant a stay is discretionary and the onus is on the company applying for a stay to make out a positive case for a stay”.

Among the discretionary powers, the court took into consideration the respondent company’s circumstances, the respondent having fully paid its debts to the petitioner and the other creditor, and the fact that both the petitioner and the other creditor had no objections to an indefinite stay to the winding-up order.

The Court granted the stay on giving thought that an indefinite stay will enable the respondent to carry on its business and honour its contractual commitments.

“A refusal of stay will force the respondent to cease operations which will cause disruption to the (waste disposal) services it provides and the loss of employment to 26 employees,” the Chief Justice said on handing judgement.

Eugene Loh of Messrs Yusof Halim and Partners represented the petitioner while Mohd Shazale bin Haji Mat Salleh of Messrs Mohd Shazale Salleh represented the respondent.