THE HIGH COURT OF MALAYA AT KUALA LUMPUR

(COMMERCIAL DIVISION)
SUIT NO: 28NCC-876-10/2011

GAN SENG BIANG

v.
PRIYAMAS EXPORT CORPORATION SDN. BHD.

GROUNDS OF JUDGMENT

Enclosure 1 is the petition filed by the Petitioner for the following

order:a)

That the Respondent be wound up under the provisions

of section 218(1)(e) of the Companies act 1965;

b)

That the Director general of Insolvency Malaysia be

pointed as the Liquidator of the Company; and

c)

Cost to be paid out of the assets of the Company.

Brief Background
According to the Petition filed by the Petitioner the Respondent is
indebted for the sum of RM127,000.00 together with interest at the
rate of 4% on the said sum from 28.9.2005 until the date of realization.

The said amount is pursuant to the judgment obtained on 29.10.2009

in Kuala Lumpur High Court Suit No. S2-22-786-2008.

Preliminary objection
The Learned counsel for the Respondent raised the following
preliminary objections:a)

The validity and admissibility of the Petitioners Affidavit

Verifying Petition affirmed on 10.10.2012 is inadmissible,
illegal, null and void. The said Affidavit did not comply
with the provision of the Commissioners for Oaths Rules
1993 and is therefore in contravention of Rule 13(2)(b)
of the Commissioners for Oaths Rules 1983 as the
translation and the interpretation of the contents of the
said Affidavit was made by the solicitor when it should
have been a Commissioner of Oaths who authenticated
the aforesaid Affidavit. It is submitted that the solicitor
representing the Petitioner is prohibited from translating
and interpreting the contents of the said Affidavit to the
Petitioner in Chinese (Re: O41 Rule 9 Rules of the High
Court 1980 (RHC)). Even an Advocate and Solicitor
appointed as a Commissioner for Oaths pursuant to
Rule 11 of the Commissioners for Oaths Rules 1993, is
not empowered to exercise any of the functions specified
in paragraphs (a) to (d) of Rule 11 of the said Rule. The
Solicitor is also prohibited from translating as well as and
interpreting the contents of the said Affidavit Verifying
Petition to the deponent Petitioner Gan Seng Biang in
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Chinese, pursuant to the mandatory provisions of the

aforesaid Rules.

The Counsel further submits since the Commissioners for

Oath Rules 1993 came into force on 1.4.1993 the Rules
together with Form 6 will prevail and override Order 41
Rule 1(8) Rules of the High Court (RHC). Therefore all
affidavits authenticated by a Commissioner of Oaths on
and after 1.4.1993 must abide with Rules 13(2)(b) and
Rule 13(3) and Form 6 in order to be valid. Rule 13(2)(b)
read together with rule 13(3) and Form 6 are mandatory
and breaches of the provisions are incurable.(Re: Duli
Yang Amat Mulia Tunku Ibrahim Ismail Ibni Sultan
Iskandar Al-Haj v. Datuk Captain Hamzah Mohd Noor
& Another Appeal [2009] 4 CLJ 329).

b)

The validity and admissibility of the Petitioners Affidavit

in Reply affirmed on 10.2.2012 and the Petitioner Affidavit
in Support affirmed on 21.2.2012 for extension of time is
inadmissible, illegal, null and void as the said translation
and interpretation can only be done by a Commissioner
for Oaths pursuant to the aforesaid Rule 13(b).

The certification in the jurat appearing on in the said

Affidavit Verifying Petition, is illegal, null and void.

It is also the submission of the Learned Counsel for the

Respondent that pursuant to Order 41 Rule 8 of the RHC
1980 no affidavit shall be sufficient if sworn before the
solicitor. It is further submitted that the said Affidavit
Verifying Petition was not at all

filed within four (4) days

after the Petition had been presented, as mandatorily

required by Rule 26 of the Companies (Winding-Up)
Rules, 1972 and therefore the Petition in the absence of
an Affidavit Verifying the Petition as mandatorily required
by the Rule 26 is inherently a nullity.

Decision of the Preliminary Objection (PO)

After considering the submissions and the authorities submitted by
both Counsels I dismissed the PO raised by the Respondent for the
following reasons:a)

The Respondent was given leave to file and serve the

Affidavit in Opposition. Rule 30(1) of the Winding Up
Rules states,
(1) Affidavits in opposition to a petition that a company may be
wound up shall be filed and a copy thereof served on the
petitioner or his solicitor at least seven days before the time
appointed for the hearing of the petition.
(2) Any affidavit in reply to an affidavit filed in opposition to a
petition (including a further affidavit in support of any of the facts
alleged in the petition) shall be filed within three days of the date
of service on the petitioner of the affidavit in opposition and a
copy of the affidavit in reply shall be forthwith served on the
opposing petitioner or his solicitor.
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However Rule 193 provides that,

The Court may, in any case in which it shall see fit extend
or abridge the time appointed by these Rules or fixed by
any order of the Court for doing any act or taking any
proceeding..

Leave was also granted to the Petitioner to file an

Affidavit in Reply and Affidavit is support. Furthermore
Rule 194(1) provides that,
No proceedings under the Act or the Rules shall be
invalidated by any formal defect or any irregularity, unless
the Court is of the opinion that substantial injustice has
been caused by the defect or irregularity, and that the
injustice cannot be remedied by any order of the Court..

Even if no leave was granted no substantial injustice

has been caused by the irregularity, if any.

b)

Rule 13 of the Commissioner for Oath Rules 1993

referred to by the Respondent Counsel provides that,
(1) In the course of performing his duties, a Commissioner for
Oaths shall pin at the top left shirt pocket an identification tag
described in Form 5.
(2) In exercising his functions, a Commissioner for Oaths shall
personally attend to any person requiring his services and shall
(a) verify the identity, the personal particulars as given in the
identity card or passport, and the address of the person
making the declaration, affirmation, affidavit, oath, or
statement before the Commissioner;
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(b) read over and explain the contents of the documents

and the exhibits attached thereto to the deponent or maker
of the document, if the deponent or maker of the document
is blind, illiterate or does not understand the language written
in the document, before certifying that he has done so in the
jurat;
(c) initial any alteration made in the document to be sworn
or affirmed;
(d) not affix his seal to any document unless the deponent
or maker of the document signs or affixes his thumbprint
thereto before him;
(e) refuse the services of his office when the Commissioner
has cause to suspect that any person before him is engaging
in deception, fraud, duress, or any other illegal conduct;
(f) carry out the functions of his office in a prompt,
reasonable and business-like manner; and
(g) make himself available to conduct all functions of his
office at regular and reasonable hours..

The jurat shall be as prescribed in Form 6 (Rule 13(3)).

Order 40 Rules of the RHC Court provides as follows,

(1) Subject to paragraphs (2) and (3), every affidavit sworn in a cause
or matter must be entitled in that cause or matter.
(2) Where a cause or matter is entitled in more than one matter, it shall
be sufficient to state the first matter followed by the words "and other
matters", and where a cause or matter is entitled in a matter or matters
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and between parties, that part of the title which consists of the matter or
matters may be omitted.
(3) Where there are more plaintiffs than one, it shall be sufficient to
state the full name of the first followed by the words "and others", and
similarly with respect to defendants.
(4) Every affidavit must be expressed in the first person and must state
the place of residence of the deponent and his occupation or, if he has
none, his description, and if he is, or is employed by, a party to the
cause or matter in which the affidavit is sworn, the affidavit must state
that fact.
(4A) In the case of a deponent who is giving evidence in a professional,
business or other occupational capacity the affidavit may, instead of
stating the deponent 's place of residence, state the address at which
he works, the position he holds and the name of his firm or employer, if
any.
(5) Every affidavit must be divided into paragraphs numbered
consecutively, each paragraph being as far as possible confined to a
distinct portion of the subject.
(6) Dates, sums and other numbers must be expressed in an affidavit
in figures and not in words.
(7) Every affidavit must be signed by the deponent and the jurat must
be completed and signed by the person before whom it is sworn.
(8) A jurat must be in one of the forms in Form 78..

For the purpose of the Petition O40 RHC is applicable. The solicitor
being of Chinese descent, translated and explained the Affidavit to

the Deponent in the Chinese language. The Commissioner for Oath

had duly signed the Affidavit after being satisfied that the Deponent
understood the affidavit as translated and explained by the solicitor.
There is no provision in the RHC prohibiting the solicitor form
translating and explaining the said Affidavit to the Deponent. The
Petitioner has duly complied with format as set out in Form 78 (d),
(d)

To an affidavit by a person who does not understand English.

Sworn (or affirmed) on the ......................... day of ............, 19...........

at..............through the interpretation of...........................
(if the interpreter is not a Court Interpreter add the following:
"the said........................having been first sworn that he had truly,
distinctly, and audibly translated the contents of his affidavit to the
deponent............................and that he would truly and faithfully interpret
the oath (or affirmation) about to be administered unto him the
said .............................................;).
Before me
........................................
Commissioner for Oaths

I shall now deal with the Petition in Enclosure 1.

Enclosure 1
The Petition is filed as a result of a judgment obtained by the
Petitioner on 29.10.2009 in the Kuala Lumpur High Court Civil Suit
No.: 5-22-786-2008 for the sum of RM127,000.00 together with
interest and cost thereon.

The parties had entered into a Sale and Purchase Agreement dated
sometime in October 2003 whereby the Petitioner was the Purchaser
and the Respondent, the Vendor. The aforesaid Judgment sum of
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RM127,000.00 is the refund of the deposit sum paid by the Petitioner

to the Respondent upon the termination of the said Sale and
Purchase Agreement.

Clause 2.4 of the aforesaid Sale and Purchase Agreement, provides

that in the event the deposit sum of RM127,000.00 is not refunded
or repaid by the Respondent to the Petitioner, then the Petitioner
shall be entitled to commence winding up proceedings against the
Respondent. The Petitioner then proceeded to file a Winding-up
Petition against the Respondent. Subsequently the parties however
came to an agreement and the said Winding-up Petition was
withdrawn. It was agreed that should the Respondent fail to pay the
sum of RM127,000.00, the Petitioner was entitled to file a Winding up
action based on the earlier Sessions Court judgment for the lower
sum of RM57,390.30 plus costs. However, the Petitioner was given
the option to claim for the lower sum or the larger sum of
RM127,000.00. When the Respondent did not pay the deposit the
Petitioner decided to claim for the larger amount of RM127,000.00.
The Petitioner filed a writ in the High Court and judgment was entered
against the Respondent. The High Court Judgment has been affirmed
and upheld by the Court of Appeal.

Section 218(2)(a) of the Companies Act 1965 provides that a

company shall be deemed to be unable to pay its debts if a creditor to
whom the company is indebted in a sum exceeding five hundred
ringgit and notice of it has been given requiring the company to
pay the sum so due and thereafter neglected to pay that sum. The
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failure on the part of the company to pay as demanded would

trigger the presumption that the company is unable to pay its debt.

This presumption is rebuttable and the onus will then shift onto the
Respondent to show that it is able to pay the debt and serve an
affidavit in opposition to the Petition. According to the case of
Morgan Guaranty Trust Co of New York v. Lian Seng Properties
Sdn Bhd [1991] 1 MLJ 95, prima facie a creditor, like the Petitioner
here, who has not been paid has the right to file a petition for windingup whatever its other motives may be. In the instant case there is
a Letter of Guarantee whereby the Respondent had unconditionally
and irrevocably guaranteed to pay the Petitioner on demand all sum
remaining unpaid towards the purchase of solvents and chemicals by
the principal debtor. Justice Abdul Malik Ishak JCA in the case of
Gulf Business Construction (M) Sdn Bhd v. Israq Holding Sdn
Bhd [2010] 1 LNS 360 said that,
The test to ascertain commercial insolvency is rather simple. It is
this. That the company is unable to meet the current debts as they
fall due. And such a company may still be categorised as unable
to pay its debts even though the company has substantial wealth
which cannot be realised immediately and even though on
liquidation the company will be able to meet all its liabilities..

In the case of Sri Hartamas Developemnt Sdn. Bhd. v. MBF

Finance Bhd [1992] 1 CLJ 303 the Supreme Court held that a
company may have wealth locked up in investments not presently
realizable.yet if it has no assets available to meet its current
liabilities, it is commercially insolvent and may be wound up..
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I have perused and considered the submissions and authorities of the

Parties and based on the above considerations and reasons I find
that the Petition should be allowed as there is sufficient evidence to
show that the Respondent is insolvent and unable to pay its debts.

t.t.
( HASNAH BINTI DATO MOHAMMED HASHIM )
Judge
High Court of Malaya
Kuala Lumpur.
15th June 2012

Counsels:
For the

Respondent/Appellant:

Messrs. Paul Cheah & Associates

-

Venu Nair

For the Petitioner/Respondent:

Messrs. Saw & Co.
-

S.H. Saw

Official Receiver
-

Azmi Mashud

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