Low Kin Fai and Joyce Low for the Petitioner [Messrs CY Wong, Ng & Partners] Anantha Krishna for the Respondent [Messrs Anantha Krishnan] LAIN-LAIN 1. ) Nazihah Hanis for CIMB Bhd, Supporting Creditor [Messrs Sidek Teoh Wong & Dennis] 2. )

IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR (COMMERCIAL DIVISION) COMPANIES (WINDING UP) NO. WA-28NCC-615-06/2019 In the Matter of Section 465(1)(e) and Section 466(1)(a) of the Companies Act, 2016 And In the Matter of Companies (Winding-Up) Rules, 1972 And In the Matter of Action Apparel Sdn Bhd (Company No: 689350-X) BETWEEN JACDEX INTERLOGISTICS SDN BHD (Company No: 689350-X) …PETITIONER AND ACTION APPAREL SDN BHD (Company No: 689350-X) …RESPONDENT JUDGMENT (Enclosure 1) 1 Introduction 1. The petitioner herein, Jacdex Interlogistics Sdn Bhd (Petitioner) had commenced winding up proceedings (Petition) against Action Apparel Sdn Bhd (Respondent) in enclosure 1 hereto pursuant to sections 465(1)(e) and 466(1)(a) of the Companies Act 2016 for the failure of the Respondent to pay the sum of RM1,997,973.71 (Debt) via a statutory notice of demand dated 9.5.2019 (Statutory Notice). 2. There is also before this Court an application in Enclosure 38 by CIMB Bank Berhad to inter alia intervene and appoint Datuk Ng Seng Liong and Ng Choon Jin of Messrs SL Ng Corporate Solutions Sdn Bhd as joint liquidators of the Respondent (Enclosure 38). Background 3. The Respondent carries on business of inter alia fabrics, clothing and other related articles. 4. The Respondent had between 12.5.2018 and 3.7.2018 made various purchases from the Petitioner for inter alia fabrics, zipper, ladies dress, and jump suits amongst others amounting to RM1,997,973.71 of which the petitioner had charged interest at the rate of 2% per month on the amounts due and is claiming a sum of RM718,287.27 from the respondent as late payment interest. 5. After receiving 3 part payments from the Respondent, the Respondent had thereafter issued 12 post dated cheques in January 2019 amounting to RM2,414,356.60 to the Petitioner but 2 had sought indulgence and extension of time to delay the deposit of the said post dated cheques until April 2019 which the Petitioner had agreed. There were further requests to delay depositing the remaining post dated cheques. 6. After some time, the Petitioner had issued the Statutory Notice on 9.5.2019 and due to the Respondent failing to make payment within the 21 day provided in the same, the Petitioner had commenced to file this Petition. Petitioner’s case 7. It is submitted by the Petitioner that the Petition is essentially grounded on the Respondent’s inability to pay the debt due and owing by the Respondent to the Petitioner in the sum of RM2,600,743.25 for goods sold and delivered to the Respondent and a further sum of RM718,287.27 for late payment charges and less 3 payments made which have been accepted, admitted and acknowledged by the Respondent. 8. It is further submitted by the Petitioner that in accepting, admitting and acknowledging the debt, the Respondent had issued 12 post dated cheques amounting to RM2,414,356.60 but never the less sought indulgence and extension of time to delay the deposit of the said post dated cheques until April 2018 which the Petitioner agreed. Never the less when the first post dated cheque was deposited, the said cheque did not clear and was returned. Thereafter there was a request by the Respondent on 3 other occasions to delay depositing the remaining post dated cheques. 3 9. It is alleged by the Petitioner that after the Statutory Notice was issued, the respondent’s director and shareholder, one Amara Singam a/l Vamakulasingan (Amara) had proposed 2 settlement options to the petitioner’s solicitors which were eventually not accepted and that another director and shareholder from the Respondent, Chan Chuen Pooi (Chan) had simultaneously requested from the Petitioner via whatsapp communication for indulgence and extension of time to settle the Debt. Respondent’s Contentions 10. The Respondent claims that the identity of the party from whom the Respondent purchased the goods have been intentionally omitted and that the Petitioner had not exhibited any sales vouchers to prove that the Respondent actually purchased the goods from the Petitioner and that the SSM search on the Petitioner only shows that the Petitioner’s business is described as an indent sales agent and that there are not in the business of clothing. 11. It is contended by the Respondent that the Petitioner is involved in unlicensed money lending and that the sums being demanded by the Petitioner is illegal and unenforceable and this Court was then invited to consider certain evidence. 12. It is thus submitted by the Respondent that the debt is bona fide disputed. 4 13. The Respondent further contends that without a judgment, the above issues should first be determined by the civil courts and not this winding up court. 14. It is also submitted inter alia by the Respondent that: (a) the Petitioner has exhibited without prejudice communication (b) the purported admissions are inadmissible when the transactions are illegal Courts Findings 15. After examining the various exhibits at exhibit P8 of Enclosure 1 being the emails dated 23.4.2019, 24.5.2019 and 19.6.2019 as well as the emails dated 28.5.2019, 31.5.2019 and 3.6.2019 in exhibits P11 in enclosure 1 and exhibit P2 in enclosure 7 and the whatsapp communications found at exhibit P4 of enclosure 17, this Court is satisfied that the Respondent had on many occasions seeked from the Petitioner for indulgence and extension of time to settle the Debt. These exhibits are on its own strong evidence that there was a course of business transactions as per the details in the Petition and that the Debt is acknowledged and admitted as being owed by the Respondent as well as evidence of the Respondent seeking indulgence to pay the Debt which is proof of the Respondent being unable to pay the Debt and consequently of the Respondent’s insolvency by their statements that they were facing financial difficulties. 5 16. I further note that these admissions referred to above emanate from the Respondent’s own directors, Amara and Chan and that they are clear and unequivocal admission of the Debt. A similar situation had occurred in Lafarge Concrete (M) Sdn Bhd v Gold Trend Builders Sdn Bhd [2012] 6 MLJ 817 where inter alia the appellant accepted the proposed settlement but counter proposed a further term, namely the imposition of interest until final payment of the debt. The respondent accepted those terms but defaulted in the payment of the third instalment. When the appellant issued a section 218 notice demanding repayment of the debt, the respondent belatedly paid the third instalment, which the appellant acknowledged and the Court of Appeal therein had held: “Based on admitted sums and figures, the ultimate sum of RM37,163.95 was true and correct. There was no bona fide dispute as to that debt. It could not be to the contrary.” and also that: “with respect, the issue of prior termination of the settlement was an absolute red herring. The time granted by the appellant for payment by instalments had passed. And when that had passed, the appellant was more than entitled to issue the s 218 notice in April 2008, to demand for payment of the then six overdue instalments and agreed interest. Acceptance of the third instalment after issuance of the s 218 notice was of no consequence, as the correct amount was claimed. If at all, the payment of only the third instalment but not the entire debt proved that the respondent was unable to pay its debt to the appellant.” 6 17. This Court also notes that the Petitioner has challenged the Respondent to provide its current financial report setting out its assets and liabilities but the Respondent has failed to do so. 18. I have also considered the Respondent’s allegations that the debt is disputed as an illegal money lending. With respect, I find no such evidence of the same, what more contemporaneous evidence of any challenge as to the transaction between the parties being an illegal money lending transaction and I further find that this was never raised by the Respondent prior to the Petition herein. From the evidence of the respective Petitioner’s tax invoices and delivery orders at exhibit P3 of enclosure 1, I am satisfied on a balance of probabilities that the Debt is premised on goods sold and delivered as evidenced by the Petitioner’s tax invoices and delivery orders which were duly acknowledged by the Respondent. 19. In this respect I have examined at exhibit CCP-1 in the respondent’s Affidavit In Reply at enclosure 13, a screen shot of a bank account statement in RHB Bank Bhd dated 1.10.2018 to 31.1.10.2018 showing the transfer of RM293,577.98 by the Petitioner into a RHB Bank account, but there are no details of who the said account belongs to, as well as an alleged screen shot of certain details of 2 account numbers belonging to one Lau Yoon Koong (Lau) and an interest amount of RM5871.55 also stated therein in a subsequent screen shot at exhibit CCP-2 in enclosure 13. 20. I have further examined exhibit CCP-3 in enclosure 13 which is a document termed “Payment-transaction Status” bearing reference no.1811017460784 dated 17.10.2018 @ 14:30:18 as the time listed 7 therein and find that the same shows Lau as the payee for an amount of RM146,788.99 and another similar document bearing reference no.1811017460827 dated 17.10.2018 @ 14:31:11 as the time listed therein also for the sum of RM146,788.99 with both documents showing the Petitioner listed therein as the ‘senders name/beneficiary’s name’ and that both Amara and Chan are termed as “authorizers’ to the said bank account and that the said. 21. This Court has thereafter also examined exhibit CCP-4 in enclosure 13 which appears to be a screen shot stating “8/9 to 8/10 $293577.98 interest $5871.55 + additional interest for 7 days $1369.97 + $5871.55 total interest = $7241.52 interest” and “ Pls pay to LEE ENG LOO HLBB1200010001202” and a further “Payment-transaction Status” bearing reference no.180419336770 dated 19.4.2018 @ 09:48:52 as the time listed therein and that the same shows Lau as the payee for an amount of RM5,871.55 as well another Payment-transaction Status” bearing reference no.180620655586 dated 20.6.2018 @ 14:35:53 as the time listed therein with one Lee Eng Loo (Lee), who is a director of the Petitioner, listed as the payee for an amount of RM5, 871.55 as well as another Payment-transaction Status” bearing reference no.18107466383 dated 17.10.2018 @ 16:28:40 as the time listed therein and that the same shows Lee as the payee for an amount of RM5,871.55 with all the documents showing the Petitioner listed therein as the ‘senders name/beneficiary’s name’. 22. In the same exhibit CCP-4 in enclosure 13, there are also 10 of the Respondent’s payment vouchers dated 12.12.2017, 8.1.2018, 8.2.2018, 8.3.2018, 19.4.2018, 20.6.2018, 27.6.2018, 12.7.2018, 8 3.9.2018 and 17.10.2018 respectively with each showing payment of the sum of RM5,871.55 stated to be for ‘Payment fully settled, no other future charges” with description therein being ‘Director AC- Agnise (Loan/Advances) – Andrew’ but with the voucher dated 20.6.2018, 27.6.2018, 12.7.2018, 3.9.2018 and 17.10.2018 having a slight difference where the description therein states ‘Director AC- Agnise (Loan/Advances) – Andrew Lee Eng Loo’. 23. With respect, this Court is unable to find any link between the said exhibits CCP 1- 4 in enclosure 13 to that of the Petitioner and the Respondent and/or the goods sold transaction referred to in the Petition or to the illegal money lending transaction as the same appear from the Respondent’s own documents being its Payment Vouchers at exhibit CCP-4 in enclosure 13 to be related to Lee’s “loan/advances” and thus this Court holds, at the risk of being repetitious, that the Debt has been proven by the Petitioner on a balance of probabilities as premised on goods sold and delivered as evidenced by the Petitioner’s tax invoices and delivery orders which were duly acknowledged by the Respondent and that the Respondent has failed to prove to this Court that there is a bona fide dispute as to the debt. 24. I am also unconvinced of the alleged ‘threat’ which the Respondent contends the Petitioner had made and which the Respondent alleges is evidenced from the whatsapp communication as seen in exhibit CCP-4 in enclosure 13. This Court is of the view that the entire whatsapp communications must be viewed as whole and not by the selective process of referring to a number of whatsapp communications to determine if there was indeed a threat made by 9 the Petitioner as this would not render the full and complete picture of the events that had happened. The said evidence in exhibit CCP- 4 in enclosure 13 only states that one Andrew Jacs was coming to ‘make noise’ and ‘cause trouble’ as ‘ I don’t trust u anymore u prepare to close down’ which in my view is not a ‘threat’ as alleged by the Respondent as if it was, the Respondent would or should, have lodged a police report on the same, but this appears from the evidence before this court as not being done and would thus be in my view an ‘afterthought’ raised to avoid payment of the Debt. I am further fortified in my finding on this issue, as the Respondent’s deponent, Chan, appears from the evidence at exhibit P4 on enclosure 17 in the what’s app communications, to have repeatedly asked for time and indulgence to pay the Debt for and on behalf of the Respondent which is contrary to the Respondent’s contentions in the Petition. 25. With regards the without prejudice communication, I hold that there are in the affidavits before me, no evidence of the alleged communication between the parties respective solicitors being made on a ‘without prejudice’ basis and thus I hold that the communications between the parties respective solicitors are deemed admissible. 26. I also wish to reiterate that a winding up petition need not be based on a judgement and the Respondent’s point on this is thus wholly rejected. One need only look at the numerous case laws on this and suffice for this Court to refer to the same case referred to earlier i.e Lafarge Concrete (M) Sdn Bhd (supra) as an example thereof where the Court of Appeal stated: 10 “a creditor is not required to obtain a judgment before serving a statutory demand …' (The Law of Company Liquidation (4th Ed), by Andrew R Keay at p 83) and 'whether or not judgment had been obtained, an unpaid creditor is, as a general rule, entitled to a winding-up order against a company which is insolvent' (The Law of Company Liquidation (4th Ed), by Andrew R Keay at p 91). Where there is no judgment, it is not uncommon for companies to argue that the debt is disputed. But 'in order to oppose a winding up petition, the respondent must raise a bona fide dispute in both a subjective and objective sense.” 27. This court has also taken judicial notice of the Respondent’s judicial management application at the Shah Alam High Court vide Saman Pemula no. BA-28JM-13-09/2020 which was informed by the Petitioner to this Court on 28.9.2020 in the presence of the Respondent’s counsel and which application was recently dismissed on 23.3.2021 as well as an earlier judicial management application at the Shah Alam High Court which was made known to this Court by the previous Respondent’s counsel at the hearing of the Petition way back on 15.11.2019. 28. By the very fact that the Respondent has tried on 2 previous occasions to obtain a judicial management order, the Respondent has admitted that it is unable to pay its debts by virtue of the same being a requirement under section 404(a) of the companies Act 2016 in a judicial management application. 11 29. Non payment of the Statutory Notice under section 466 (1)(a) of the Companies Act 2016 by the Respondent has consequently triggered the presumption of the Respondent being unable to pay its debt (see Eastool Industries Sdn Bhd v Getfirms Electronics Sdn Bhd [2001] 6 CLJ 151). In the circumstances, as there is no evidence of the Respondent’s solvency before this Court, I hold that the Respondent is unable to rebut the presumption that it is ‘commercially solvent’. See the Supreme Court in Sri Hartamas Development Sdn Bhd v MBf Finance Bhd [1992] 1 CLJ (Rep) 303 which held that: “In dealing with "commercial insolvency", that is, of a company being unable to meet current demands upon it, we would respectfully follow the Privy Council in the Malayan Plant case and cite the following observations from Buckley on the Companies Act (13th Edn.) at p. 460: In such a case it is useless to say that if its assets are realized there will be ample to pay twenty shillings in the pound: this is not the test. A company may be at the same time insolvent and wealthy. It may have wealth locked up in investments not presently realizable; but although this be so, yet if it have not assets available to meet its current liabilities it is commercially insolvent and may be wound up.” 30. Thus, after considering all the evidence before this Court, I hereby hold that order in terms of the Petition is to be granted for paragraphs 27 a, b and d. 31. As to the appointment of a private liquidator as requested in Enclosure 38, I am granting order in terms for Datuk Ng Seng Liong 12 and Ng Choon Jin of Messrs SL Ng Corporate Solutions Sdn Bhd to be appointed as joint liquidators of the Respondent as the Petitioner’s counsel had at the last hearing date on 30.3.2021 confirmed that they have no objections to the same and I hereby grant order in terms for prayers 1, 2, 3, 4, 5 with such remuneration being in accordance with the Companies (Winding Up) Rules 1972 and prayer 6. Dated: 26th day of April 2021 sgd. NADZARIN WOK NORDIN JUDICIAL COMMISSIONER KUALA LUMPUR HIGH COURT Parties: Low Kin Fai and Joyce Low for the Petitioner [Messrs CY Wong, Ng & Partners] Anantha Krishna for the Respondent [Messrs Anantha Krishnan] Nazihah Hanis for CIMB Bhd, Supporting Creditor [Messrs Sidek Teoh Wong & Dennis] 13 Ng Himin for Jelinda Fashion Sdn Bhd, Supporting Creditor [Messrs Justin Faye & Partners] Jagdesh Singh for Kameo Fashion Sdn Bhd, Supporting Creditor [Messrs Mohana Krishnan] 14