Legal Update 9 of 2011
Winding up – standing to sue and appointment of a provisional liquidator.
CASE:
Wiraflor (M) Sdn Bhd v Bio Science Capital Sdn Bhd [2011] 2 MLJ 94
ISSUE:
Winding up – standing to sue and appointment of a provisional liquidator.
BRIEF FACTS:
• When the respondent (Bio Science) failed to settle a statutory demand sum, the petitioner (Wiraflor) presented a petition for winding up on grounds that Bio Science was insolvent.
• Afraid that they might dissipate assets pending the making of the winding up order, Wiraflor also applied for a provisional liquidator to be appointed. This was supported by one Rohani, another creditor of Bio Science.
• However, Bio Science and its directors applied to strike out their petitions and applications on the grounds that Wiraflor and Rohani were not creditors and that they were solvent.
• Wiraflor and Rohani argued that they were creditors based on a document titled 'List of Creditors @ 12 June 2009'.
• But Bio Science contended that the said list was merely a working paper which was prepared without reference to all the relevant books and papers because they were, at the time, in the possession of an appointed receiver and manager.
DECISION: Wiraflor's application allowed.
• Bio Science's contention that the list was merely a working paper cannot hold especially when it was used in earlier court proceedings. Furthermore, they did not contest the existence of the list nor the purpose of which it was drawn up.
• The word 'estimated' that appears after 'General Creditors' seems to only qualify the correctness of the amounts owed rather than whether the person was a creditor or not.
• Although Wiraflor had received a cheque for RM446,632.75 after the presentation of the winding petition, it had not encashed that cheque to date.
• The mere fact of the offer of payment or tendering a cheque to settle the monies due to the petitioner after the presentation of the winding up petition did not take away the petitioner's right in law to prosecute further this petition.
• On the facts of the case, it was also clear that Bio Science was insolvent and there was a need to protect the assets of Bio Science pending the making of the winding up order. As such, a provisional liquidator will be appointed.
