KEEN SOLUTION SDN BHD v LE APPLE BOUTIQUE HOTEL (KLCC) SDN BHD & ANOR CaseAnalysis | [2022] MLJU 1348 Keen Solution Sdn Bhd v Le Apple Boutique Hotel (KLCC) Sdn Bhd & Anor [2022] MLJU 1348 Malayan Law Journal Unreported HIGH COURT (KUALA LUMPUR) AZLAN SULAIMAN JC COMPANIES (WINDING-UP) NO WA-28NCC-611-09 OF 2021 21 June 2022 Gan Khong Aik (with Gwee Xi Wen) (Gan Partnership) for the petitioner. Edward Kuruvila (Kuruvilla, Yeah & Benjamin) for the first respondent. Gavin Jayapal (with Tanusha Sharma Nesaratnam) (Gavin Jayapal) for the second respondent. Ho Zhi Qian for the supporting creditor (PGCG Assets Holdings Sdn Bhd). Azlan Sulaiman JC: GROUNDS OF JUDGMENT [WINDING-UP PETITION (ENCLOSURE 1) Overview [1] The 2 nd Respondent is a contributory of the 1 st Respondent (ìthe Companyî) in that it holds 55% of the fully paid-up shares in the Company. Both Respondents have appealed against my decision on 24 May 2022 to, inter alia, allow the Petition filed by the Petitioner to wind-up the Company and to appoint one Bala Krishnan all Ponniah (ìBala Krishnanî) as the liquidator. This Judgment sets out the reasons for my decision. Salient background facts [2] Sometime in 2013, the Petitioner and the 2 nd Respondent, a hotel operator, entered into a joint-venture to run and operate a hotel business, through the Company as the joint-venture vehicle. The Company was an existing company incorporated in October 2011, At the time, the Companyís name was ìEsquire Bayview Sdn Bhdî, and the Petitioner and the 2 nd Respondent fancified its name to ì Le Apple Boutique Hotel (KLCC) Sdn Bhdî on 30.12.2013. [3] Though the Petitioner neither adduced nor alleged any formal joint venture agreement between it and the 2 nd Respondent and the 2 nd Respondent denied the existence of any joint-venture with the Petitioner, the documents do indicate a joint-venture between the them, with the Company as the joint-venture vehicle. I will come to that in due course in this Judgment. [4] Under the terms of the joint-venture, the Petitioner and the 2 nd Respondent would respectively hold 450,000 shares (45%) and 550,000 shares (55%) in the Company. By virtue of that shareholding, the 2 nd Respondent would be entitled to nominate three directors to the Companyís Board of Directors (ìthe 2 nd Respondentís Representativesî), and the Petitioner, two (ìthe Petitionerís Representativesî). Their respective nominees were: The Petitionerís Representatives Page 2 of 18 Keen Solution Sdn Bhd v Le Apple Boutique Hotel (KLCC) Sdn Bhd & Anor [2022] MLJU 1348 Thum May Yin (ìThumî) Chai Sook Tieng (ìChaiî) The 2 nd Respondentís Representatives Datoí Lee Ee Hoe (ìDatoí Leeî) Datoí Sri Koh Yock Heng (ìDatoí Sri Kohî) Saw Soo Ming (ìSawî) [5] On 18 October 2014, the Company entered into a Tenancy Agreement (ìthe Tenancy Agreementî) with PGCG Assets Holdings Sdn Bhd (ìthe Landlordî) for a tenancy of the Landlordís premises at No. 160, Jalan Ampang, 50450 Kuala Lumpur (ìthe Premisesî). The Companyís common seal was affixed to the signing page of the Tenancy Agreement, witnessed by two of the 2 nd Respondentís Representatives, Datoí Sri Koh and Saw. [6] Though Recital (2) of the Tenancy Agreement mentions an earlier Lease Agreement dated 18 December 2013 for the Landlord to lease the Premises to the Company, Recital (2) does go on to state that ìthe parties have since agreed to terminate the Lease Agreement and enter into this Tenancy Agreement to supersede the Lease Agreement.î [7] Even though the terms of that superseded Lease Agreement are not relevant here, the Lease Agreement is in itself relevant to indicate that the joint-venture between the Petitioner and the 2nct Respondent had been activated as early as December 2013, through a lease of the Premises from then until 18 October 2014. [8] Under the terms of the Tenancy Agreement, the initial tenancy was for just one year, from 1 December 2013 to 30 November 2014. However, in reality, the entire tenancy period could potentially be up to twenty-nine years. This is because, under clauses 7(b)(aa) to 7(b)(ccc) of the Tenancy Agreement, the tenancy period could be extended for twenty-eight renewal terms for a period of one year each time. The pre-condition for each renewal was that, not less than two months before the expiry of the then-tenancy period (i.e. by 30 September of that year), the Company would have to submit a renewal request each time to the Landlord. As long as there was no existing breach of the terms of the Tenancy Agreement at the time of such request, the Landlord was obliged to grant that one year extension. [9] The proviso to Clause 7(b) of the Tenancy Agreement provided for what would happen if the tenancy was not extended: ìProvided that in the event the Tenant shall fail to serve the required written request for renewal as stipulated above within the respective periods stipulated above, then the option to renew shall automatically and irrevocably lapse and the Landlord shall be free of all obligations whatsoever to grant the Tenant a further tenancy and the Landlord and his agents shall be entitled to put up a notice or signboard for the purpose of securing new Tenants at the Demised Premises without any objection or hindrance from the Tenant.î [10] The Tenancy Agreement contained the usual clauses for the payment of a Security Deposit and a Utility Deposit, and for advance payment of rental for each month on or before the seventh day, with the absolute determination of the tenancy for non-payment. Two other provisions of the Tenancy Agreement relevant to this case are clauses S(g) and 6(d), which respectively provide as follows: ì5(g) that the TENANT shall not make any structural or otherwise exhibit on the exterior of the Demised Premises or the windows without first obtaining the written consent of the Landlord. If such consent as aforesaid is granted, the TENANT shall pay the costs thereof and when the term hereby created expires or when it is terminated for any reason whatsoever, the TENANT shall endevour to revert the Demised Premises to its original state and conditions to the entire satisfaction of the Landlord and should the TENANT refuse to do so, the Landlord may deduct such expenses from the security deposit and if the security deposit is insufficient, the Landlord shall be at liberty to claim against the TENANT for the balance as a liquidated debt for the costs incurred. In any event any structural or other alteration made to the Demised Premises shall inure for the benefit of the Landlord;î Page 3 of 18 Keen Solution Sdn Bhd v Le Apple Boutique Hotel (KLCC) Sdn Bhd & Anor [2022] MLJU 1348 ì6(d) that the Landlord shall return the Security and Utility Deposit referred to above free of interest upon the TENANTís compliance of the terms and conditions set forth hereinabove for such refund.î [11] It is not in dispute that the 2 nd Respondentís Representatives had caused the Company to issue that renewal request to the Landlord six times, for extended tenancies of the Premises for the periods of 1 December 2014 to 30 November 2015, 1 December 2015 to 30 November 2016, 1 December 2016 to 30 November 2017, 1 December 2017 to 30 November 2018 and 1 December 2018 to 30 November 2019, and 1 December 2019 to 30 November 2020. However, the Company did not renew the tenancy of the Premises beyond 30 November 2020. [12] By Affidavits affirmed on 28.9.2021 in these winding-up proceedings, two of the 2 nd Respondentís Representatives, Datoí Sri Koh for the Company and Saw for the 2 nd Respondent, identically deposed to the circumstances behind the Companyís decision not to renew the tenancy of the Premises beyond November 2020. I will call it ìthe Alleged Arrangementî because it is the subject matter of a civil suit between the Company and the Landlord, which I shall come to in due course. The Alleged Arrangement involved the CEO and Director of the Landlord, one Dato Wong Weng Kung (ìDatoí WWKî). This is what they said: ìI verily state that in or about January 2019, the tït Respondent handed-over operations of the Hotel to PGCG Assets. This was done solely on the mutual understanding that: a. Datoí WWK would take over the day-to-day management and running of the hotel operations to, inter alla, ascertain whether or not the PGCG Assets would have an interest to continue operating No. 160 as a hotel operation; b. the 1 st Respondent would not intend to exercise its option to renew the TA (pursuant to Clauses 7(b)(aa)-(ccc)) beyond 30.11.2020; c. PGCG Assets would notify the 1 st Respondent as soon as possible as to when the 1 st Respondent may begin work to restore and/or revert No. 160 its original state in accordance with Section 5(g) of the Tenancy Agreement; and d. in the event PGCG Assets intended to continue operating No. 160 as a hotel operation and would thereby retain the benefit of the 1 st Respondentís capital expenditure towards No. 160, that PGCG Assets would make a one- time payment offer which would be acceptable to compensate the 1 st Respondent.î [13] By a letter dated 19 October 2020 to the Company entitled ìNotice of Entry And Taking Possession Of Demised Premisesî (ìthe Landlordís Noticeî) the Landlord noted the failure of the Company to renew the tenancy and informed it of the ensuing consequences. The Landlord also demanded for payment of outstanding rental for June- October 2020 amounting to RM1,375,000.00. This is what the letter said: ìDate: 19th October, 2020 Dear Sir/Madam, NOTICE OF ENTRY AND TAKING POSSESSION OF DEMISED PREMISES OUTSTANDING RENTAL FOR THE MONTH OF JUNE, JULY, AUGUST, SEPTEMBER & OCTOBER 2020 DEMISED PREMISES: NO. 160, JALAN AMPANG, 50450 KUALA LUMPUR. We refer to the above matter and the Tenancy Agreement dated 18 October 2014 as renewed by the supplemental letter dated [ ] 2015, by the supplemental letter dated [ ] 2016, by the supplemental letter dated [ ] 2017, by the supplemental letter dated [ ] 2018, and by the supplemental letter dated [] 2019 (ìTenancy Agreementí?. We note that you have failed to exercise your option to renew the Tenancy Agreement for a further term of one (1) year pursuant to clause (6) of the Tenancy Agreement and the tenancy to the Demised Premises has thereby lapsed on 18th October, 2020. Pursuant to clause (6) of the Tenancy Agreement, be free from all obligations whatsoever to grant you a further tenancy Page 4 of 18 Keen Solution Sdn Bhd v Le Apple Boutique Hotel (KLCC) Sdn Bhd & Anor [2022] MLJU 1348 and we hereby serve you this notice of entry and taking of possession of the Demised Premises with effect from 19th October, 2020. Please find enclosed a copy of the police report dated 19 October 2020, for your record. Take note that pursuant to clause 5(g) the Tenancy Agreement, you are required to revert the Demised Premises to its original state and condition to the satisfaction of the Landlord. In view that you have failed to renew the Tenancy, and we as landlord has hereby rightfully taken back possession of the Demised Premises, kindly note that we shall utilise the Security Deposit and Utility Deposit to deduct for such cost and expenses for re-instatement and to settle any other outstanding charges or utilities, and should the Security Deposit and Utility Deposit be insufficient to settle all such cost, expenses and other outstanding charges, we reserve right to claim the same from you as debt due and owing to us. Kindly also take note that you have also as at the date or this letter, failed to make payment to us the monthly rental for the month of June, July, August, September and October 2020, amounting to RM1,375,000.00 and we hereby give you notice and hereby Demand that you shall settle the same within fourteen (14) days from the date of this letter, failing which we reserve our right to institute legal proceedings against you as debt duly owed by you to us, without further notice to you. Yours sincerely, PGCG ASSETS HOLDINGS SON BHD -sgd- DATOí WONG WENG KUNG Chief Executive Officer Cum Directorî [14] The Company responded to the Landlordís Notice by a letter dated 3 November 2020. Neither Respondent adduced the whole letter. The portion they adduce said: ìPGCG Assets Holdings Sdn Bhd BY HAND/A.R. REGISTERED POST E-5-2, Megan Avenue 1, Block E Jalan Tun Razak 50400 Kuala Lumpur Attn: Datoí Wong Weng Kung (Chief Executive Officer) Dear Sirs, Re: Notice of Entry and Taking Possession of Demised Premises, Outstanding Rental for the Month of June, July, August, September & October 2020, Demised Premises: No. 160, Jalan Ampang, 50450 Kuala Lumpur We refer to your letter to us dated 19.10.2020 bearing the above caption which was only received by us on 23rd Oct, 2020 (ìyour letterí). We also refer to the Tenancy Agreement between PGCG Assets Holdings Sdn Bhd and Le Apple Boutique Hotel (KLCC) Sdn Bhd dated 18.10.2014 (ìthe Tenancy Agreementí ) in respect of No. 160, Jalan Ampang, 50450 Kuala Lumpur (ìthe Demised Premisesí), 2. In response to paragraphs 1, 2 and 3 of your letter, we write to state as follows:- (a) on or about 01.02.2019, you took over vacant possession of the Demised Premises from us and have since then, proceeded and run the operations of Le Apple Boutique Hotel KLCC (i.e. the Demised Premises) with little or no input from us; (b) as such, we are perplexed by your letter given that the issue of us exercising our option to renew the Tenancy Agreement in respect of the Demised Premises for a further term of one (1) year never arose;î [15] Nothing happened for almost one year after that. Then, under the Companyís Circular Resolution dated 26 October 2020 signed by the 2 nd Respondentís Representatives (ìthe Companyís Resolutionî), Datoí Sri Koh was given full authority: ìto attend to all matters arising from and/or in connection with the Tenancy Agreement dated 18.10.2014 (ìthe Tenancy Page 5 of 18 Keen Solution Sdn Bhd v Le Apple Boutique Hotel (KLCC) Sdn Bhd & Anor [2022] MLJU 1348 Agreementí) between the Company and PGCG Assets Holdings Sdn. Bhd. (Company No.: 201201009751 (983271-U) (ìPGCGí) and the Notice of Entry from PGCG to the directors of the Company dated 19.10.2020 (ìthe Noticeí) , including but not limited to:- (i) appointing and instructing solicitors to act for and on behalf of the Company to respond to the Notice; (ii) appointing and instructing solicitors to act for and on behalf of the Company to explore, commence and exhaust any and all claims by the Company against PGCG, in Court or otherwise; and (iii) appointing and instructing solicitors to act for and on behalf of the Company in resisting and/or defending any and all claims by PGCG against the Company, in Court or otherwise.î [16] On 14 December 2020, the Company filed Kuala Lumpur High Court Civil Suit No: WA-22NCVC-832-12/2020 against the Landlord alleging breach by the Landlord of the Alleged Arrangement and seeking the following relief: ìUnjust Enrichment and/or Quantum Meruit (a) an Order for the payment of special damages in the sum of RM19,644,322.00 by the Defendant to the Plaintiff being the total sum of the Plaintiffs Capital Expenditure towards the Demised Premises (i.e. the costs and expenses incurred by the Plaintiff towards renovation and/or alteration costs to convert the Demised Premises into a hotel) (as at 31.07.2019); (b) an Order for the assessment of damages in respect of all other day-to-day operational expenditure throughout the term of Tenancy (i.e. for the period 01.12.2013 to 30.11.2020); Breach of Contract (c) an Order for the payment of special damages in the sum of RM1,650,000.00 by the Defendant to the Plaintiff being a refund of the Security Deposit and Utility Deposit; Other Relief (d) general damages; (e) exemplary damages; (f) interest at the rate of eight percent (8%) per annum on any sums awarded by this Honourable Court to the Plaintiff from the date of 30.11.2020 up until the date of full payment and/or settlement by the Defendant; (g) costs on an indemnity basis; and (h) such further and/or other reliefs as this Honourable Court deems fit and proper.î [17] The Landlord contests the Civil Suit and denies the Alleged Arrangement. [18] On 21 June 2021, the Company obtained summary judgment against the landlord for restitution of the Security and Utility Deposit of RM1,650,000.00 paid under the Tenancy Agreement. The full trial of all of the Companyís other claims, initially fixed for 13-14 April 2022, has now been re-scheduled to 9 -11 January 2023. [19] On 3 September 2021, the Petitioner filed this Winding-Up Petition against the Company and also included the 2 nd Respondent as a party. I allowed it on 25 April 2022. Petition [20] By the Petition, the Petitioner applied to wind-up the 1 st Respondent under ss. 465(1) (c) and (h) of the Companies Act 2016 (ìthe Actî) and to appoint Bala Krishnan as the liquidator. [21] Sections 465(1) (c) and (h) of the Act provide: ìThe Court may order the winding-up if - (c) the company does not commence business within a year from its incorporation or suspends its business fro a whole year; Page 6 of 18 Keen Solution Sdn Bhd v Le Apple Boutique Hotel (KLCC) Sdn Bhd & Anor [2022] MLJU 1348 (h) the Court is of the opinion that it isjust and equitable that the company be wound up.î [22] In the Petition, the Petitionerís main ground for winding-up the Company is the collapse of the substratum of the Company: (i) At all material times, the 2 nd Respondent as the majority shareholder of the Company and through the 2 nd Respondentís Representatives had full management and control of the business and affairs of the Company. (ii) The failure of the 2 nd Respondentís Representatives to renew the tenancy under the Tenancy Agreement from November 2020 has resulted in the cessation of the business of the 1 st Respondent. Consequently, the Company is dormant and financially insolvent, and the purpose and object of the joint- venture through the Company can no longer be attained. (iii) There is a complete breakdown of mutual trust and confidence between the Petitioner and the 2 nd Respondent in the management of the Company and a statement in the conduct of the affairs of the Company caused by failure of the 2 nd Respondentís Representatives to: (a) give the Petitionerís Representatives access to the Companyís financial statements for the financial year ending 31.7.2020; (b) prepare the financial statements for the financial year ending 31.7.2021; (c) failing to prepare the Directorsí Report as required under s. 252 of the Act; (d) failing to circulate copies of the Companyís financial statements for the financial year ending 31.7.2020 and 31.7.2021 to the Petitionerís Representatives; (e) failing to lodge the said financial statements and reports with the Registrar of the Companies Commission of Malaysia; (f) leaving the Petitionerís Representatives in the dark over the Companyís financial status; (g) managing the Companyís affairs in disregard of and in prejudice to the Petitionerís interests as a 45% shareholder in the Company and further putting the Petitionerís Representatives at risk of contravening the Act. [23] In response to the Affidavits affirmed by the 2 nd Respondentís Representatives on behalf of the Company and the 2 nd Respondent to oppose the Petition, the Petitioner has further alleged that the Petitionerís Representatives were neither informed nor consulted about the Alleged Arrangement or about the Civil Suit and that there have not been any Directorsí Meetings since March 2020. [24] I think it is also crucial to point out that, at the hearing of the Petition, Counsel for the Company conceded that the hotel at the Premises had been the only business of the Company since the joint venture began and that the Company had not operated any other hotel or hotel business since then. Analysis of the Petitionerís allegations [25] I find that the Company and the 2 nd Respondent had failed to deny or rebut any of the Petitioners allegations, including the allegation that the 2 nd Respondentís Representatives had full management and control of the business and affairs of the Company. As the 2 nd Respondentís Representatives had full management and control of the business and affairs of the Company, then it would have the documents and records to rebut these allegations, if they indeed existed. Since they did not, I can only conclude that there were none. [26] In their Affidavits opposing the Petition, the Company and the 2 nd Respondent allege that they do not have the documents and records because they have been denied access to them by the Landlord. In my mind, that allegation is feeble and unacceptable. [27] Firstly, according to the Alleged Arrangement (which they allege but which I must add there was not produced before me an iota of evidence), they had handed over the operations of the Companyís hotel at the Premises to the Landlord in or about January 2019. In that hand over and in vacating the Premises, surely the Company and the 2 nd Respondent would have secured and taken with them all of those documents, as any tenant giving up a premises to Landlord would and reasonably be expected to. Page 7 of 18 Keen Solution Sdn Bhd v Le Apple Boutique Hotel (KLCC) Sdn Bhd & Anor [2022] MLJU 1348 [28] Secondly, the Company instructed solicitors and through them filed the Civil Suit against the Landlord in December 2020, and in it provided details and particulars of the loss and damage it was claiming, with its successful application for summary judgment of part of the claim being filed on 3.3.2021 and the full trial of the rest of the claim at the time being fixed in April 2022. How could all of that have transpired if they did not have their files and documents? Surely all those documents were needed for the summary judgment and before the claim in the Civil Suit was set down for trial. It is common for bundled of documents to be directed at case management for trials to be scheduled. [29] Thirdly, if they were truly deprived of access to their own documents by the Landlord, why had they not written to the Landlord for them and, if refused, applied to the Court for an order to have access to them or for the Landlord to deliver them up? They could have done that at any time after January 2019, and the Companyís Resolution in October 2020 gave Datoí Sri Koh full authority to do so. Yet there was no evidence of any of that. [30] As for Minutes of the Board Meeting on 7 December 2021 attended by the Petitionersí Representatives and the 2 nd Respondentís Representatives in which, inter alia, Datoí Sri Koh proposed the appointment of accountants to prepare the Companyís audited accounts for 2020 and 2021, which was supposed to be done after the documents were retrieved from the Landlord and the Hotel Premises, I view those Minutes with a great degree of circumspection. Though it confirms that those accounts for 2020 and 2021 had not been prepared as of December 2021 and does nothing to dispel or rebut any of the Petitionerís allegations, the timing of that Meeting being called (i.e. after the Affidavits in this winding-up proceedings had been exhausted), suggests it was called in afterthought and worse still, as a tactical manoeuvre. Furthermore, as Datoí Sri Koh had already been given full authority by the Companyís Resolution in October 2020 to do all of that, then what was resolved in that Meeting came across as being rather superfluous and contrived. In addition, there was no evidence of any steps taken by the Respondents after that to get those documents. Whether the Petitioner has made a case for winding-up [31] It is clear from the Companyís and the 2 nd Respondentís response to the Petition, as well as from the Civil Suit, that, by the Alleged Arrangement, they had intended for the Company to cease operating the hotel at the Premises from January 2019, when they handed back the operations to the Landlord. There was also no evidence of any intention as plan to pursue any alternative hotel, and none has been pursued since. The Respondents have not adduced a single document for pursuing the Companyís business for post-January 2019. Nor have any of the 2 nd Respondentís Representatives even averred to what they intended the Company to do, or what plans they had for it. They basically shut-up shop from January 2019 without informing the Petitioner. [32] In these circumstances I hold that the Petitioner has made a case for winding-up under s. 465(1)(c) of the Act on the ground that, when the Petition was filed on 3 September 2021, the Company had suspended its business for more than a year. In fact, well more than two, from January 2019. [33] I am also inclined to hold that these facts make it is just and equitable to winding-up the Company under s. 465(1)(h) of the Act. [34] In Gulf Business Construction (M) Sdn Bhd v lsraq Holding Sdn Bhd [2010] 5 MLJ 34 , Abdul Malik Ishak JCA said, in paragraphs [23] and [24]: ìWhat is just and equitable would vary from case to case. Thus, a company may be wound up where it is just and equitable that the company should be wound up. So many reasons can be advanced to wind up a company under thejust and equitable principle, and the following illustrations would suffice: (a) where the substratum of the company has gone ( Galbraith v Merito Shipping Co Ltd 1947 SC 446; Re Kitson & Co Ltd [1946] 1 All ER 435 (CA) ; Re Mediavision Ltd [1993] 2 HKC 629; Re Senson Auto Supplies Sdn Bhd [1988] 1 MLJ 326 and Re Goodwealth Trading Pte Ltd [1991] 2 MLJ 314 ); (b) where the companyís main object for its existence has lapsed (In re Haven Gold Mining Company (1881-82) 20 Ch D 151 (CA); In re German Date Coffee Company (1881-82) 20 Ch D 169 (CA); In re Red Rock Gold Mining Co Ltd (1889) 61 LT 269 (CA); In re Palace Restaurants Limited [1914] 1 Ch 492 (CA) and Re Baku Consolidated Oilfields Ltd [1944] 1 All ER 24); (c) where the principal object of setting up the company can no longer be achieved ( Re Perfectair Holdings Ltd [1990] BCLC 423); Page 8 of 18 Keen Solution Sdn Bhd v Le Apple Boutique Hotel (KLCC) Sdn Bhd & Anor [2022] MLJU 1348 (d) where the companyís only business is ultra vires the company (In re Crown Bank (1890) 44 Ch D 634); (e) where the company is carrying on business at a loss and the remaining assets of the company are insufficient to pay its debts (In re Wey and Arun Junction Canal Company (1867) 4 LR Eq 197; In re Diamond Fuel Company (1879) 13 Ch D 400 (CA) and Re Great Northern Copper Mining Co of South Australia Ltd Ex p The Co (1869) 20 LT 347); (f) where there is no reasonable hope of ultimate profit for the company ( Davis & Co Ltd v Brunswick (Australia) Ltd; Brunswicke-Balke-Collender Co and Brunswick Radio Corporation [1936] 1 All ER 299 at p 309 (PC)); (g) where the relationship of the parties in the company has broken down irretrievably ( Re Chynchen Associates Ltd [1987] 1 HKC 311); (h) where there is a lack of confidence among the shareholders that threaten the very existence of the company ( Re San Imperial Corp Ltd (No 2) [1980] 1 HKC 463); (i) where the winding up of the company would open the door to investigate the misconduct of the directors or promoters of the company (In re General Phosphate Corporation; In re Northern Transvaal Gold Mining Company; In re Delhi Steamship Company [1895] 1 Ch 3; In re Bleriot Manufacturing Aircraft Company (Limited) (1916) 32 TLR 253; In re The Newbridge Sanitary Steam System Laundry Ltd (1917) 1 IR 67 and In re The Varieties Limited [1893] 2 Ch 235). The list is endless. It is not exhaustive.î [35] In Tan Keen Keong v Tan Eng Hong Paper & Stationery Sdn Bhd & Ors and other appeals [2021] 2 CLJ 318, Mary Lim FCJ approved of this passage in the Gulf Business Construction case and said: ìThe term Just and equitableí is thus not construed ejusdem generis; instead it should be interpreted as intended, has been and should continue to be, general. How or when it would be just and equitable to wind up a company is necessarily a fact sensitive exercise, its parameters and application largely dependent on perspective and context; the breadth of this statutory jurisdiction is actually illustrated through the many case scenarios or context and should never be read down or narrowly. As opined in Chow Kwok Chuen, ëUltimately, whether equity should intervene must necessarily depend on the justice of the caseí.î [36] The facts here are that the Company was a joint-venture vehicle between the Petitioner and the 2 nd Respondent, to run a hotel business at the Premises, and that was the only business of the Company. According to its filings with the Companiesí Commission of Malaysia, its nature of business is ìHotel Operator And Its related Services.î It ran that business at the Premises from December 2013. Then, around January 2019, the 2 nd Respondent having the control of the management and affairs of the Company had unilaterally decided that the Company would cease and relinquish the running of that hotel business already established at the Premises, without any other alternative hotel business for the Company planned. For over three years until now, there is not even a whiff or a hint of a suggestion by the 2 nd Respondent or the Company for what the Company is to do or pursue. In my view, in those circumstances it was just and equitable for the Company to be wound-up. [37] I would also hold that it is just and equitable to order the Company to be wound-up because of the way in which the 2 nd Respondent has disregarded and treated the Petitioner in respect of the management and the affairs of the Company. They were parties to a joint-venture, which means that they owed fiduciary duties to each other, and their relationship was premised on a degree of mutual confidence and trust. Yet the evidence shows that the 2 nd Respondent had failed to arrange for the Companyís financial accounts for 2022 and 2021; had kept the Petitioner out of the Companyís business; had unilaterally decide to cease the Companyís business at the Premises without informing or consulting the Petitioner; and had then pursued the Civil Suit by the Company on its own accord. It did not even have any back-up or alternative plan for what the Company was going to do. That indifferent and disdainful treatment of the Petitioner is a good ground for ending the joint-venture and winding-up the Company. [38] I would also add that, even if the 2 nd Respondent had caused Company to issue a renewal notice of the tenancy so the premises for November 2020 to October 2021, that renewal was not a foregone conclusion. The Landlordís Notice dated 19 October 2020 noted that the Company had failed to pay rental for the months of June to October 2020, which is a breach of the Tenancy Agreement that under clause 7(a) was grounds for determination of the tenancy. As I said earlier each renewal was dependent on there being no existing breach of the Tenancy Agreement. Theoretically, had the Company even wanted to renew for another year in November 2020, the Landlord could have justifiably refused. Page 9 of 18 Keen Solution Sdn Bhd v Le Apple Boutique Hotel (KLCC) Sdn Bhd & Anor [2022] MLJU 1348 Whether the Respondents have valid grounds to oppose the winding-up [39] The Companyís and the 2 nd Respondents opposition and objection to the Petition are identical that I shall take them as common and as one. They can summarized as follows: (i) There was no joint-venture between the Petitioner and the 2 nd Respondent. Instead, the Petitioner was at all times the Landlordís nominee in the Company; (ii) The Petitioner filed the Winding-Up Petition for an ulterior purpose, being to scuttle the Civil Suit, as the Petitioner is in cohorts with the Landlord; (iii) Because of the Civil Suit, the 1 st Respondent should not be would up. The allegation there was no joint venture [40] It was only in these proceedings that the Respondents alleged for the first time that there was no joint-venture between the Petitioner and the 2 nd Respondent, and that the Petitioner was at all times the Landlordís nominee in the Company. There is no mention of that in any documents or letters, nor in the Companyís response to the Landlordís Notice, or even in the Civil Suit. The Directorsí Meeting as late as 7 December 2021 also makes not the slightest mention of that. [41] I also cannot fathom how they can so contend there was no joint venture when the evidence points in that direction. The Petitioner and the 2 nd Respondent do hold 45% and 55% shares in the Company; their representatives are the only named-directors of the Company as contended by the Petitioner; the Companyís business is ìHotel Operator And Its Related Servicesî; and there is a Tenancy Agreement for the tenancy of the Premises that had lasted from October 2014 until they decided on their own accord not to renew it. [42] There is also no statement by then that the RM19.6 million allegedly spent on the Company was from the 2 nd Respondent alone. [43] Further, if there was no joint-venturing between the Petitioner and the 2 nd Respondent then why was the Companyís Resolution of 26 October 2020 and the meeting on 7 December 2021 between their representatives to the Company, on the Companyís affairs? [44] I also note that there is no mention whatsoever in the Civil Suit that the Petitioner is the Landlordís nominee in the Company. [45] In the final analysis, their allegation of the absence of any formal joint-venture agreement between the Petitioner and the Respondent did not stop them from carrying out the Companyís hotel business at the Premises from December 2013 to January 2019. [46] All of these factors strongly suggest to me that the Respondentís allegation that there was no joint-venture was an afterthought. [47] As for these being no formal joint-venture agreement, it is a case of the pot calling the kettle black considering there was no written agreement or any documents whatsoever attesting to or evidencing the Alleged Arrangement with the Landlord. Not a single letter or fax. According to the Companyís and the 2 nd Respondentís affidavits in this winding-up and the Companyís Statement of Claim in the Civil Suit, the Company had allegedly spent some RM19.6m towards renovating and altering the Premises into a hotel. With such a hefty outlay, why was there nothing whatsoever in writing on that Alleged Arrangement? If the Landlord was to compensate the Company for that investment, why was it not put into writing? That is surely strong evidence of negligence and mismanagement by the 2 nd Respondentís in the management and affairs of the Company. They put their own Representatives and the Petitionerís investment into the Company at huge risk. [48] It is for these same reasons that I would give short shrift to the Respondents contention and submission that the running of the hotel was in contravention of the Companyís Memorandum and Articles of Association. They participated in that endeavour all the way. In 2013 and 2014 they entered into a Lease Agreement and then Tenancy Agreement, they spent RM19.6 million, they file the Civil Suit and now went to dishonour the whole hotel venture? That allegation was clearly made in afterthought too. [49] I should also point out that if they take the position that the hotel business is illegal vis-a-vis the Companyís Page 10 of 18 Keen Solution Sdn Bhd v Le Apple Boutique Hotel (KLCC) Sdn Bhd & Anor [2022] MLJU 1348 M&A, then that, too, is a just and equitable ground to wind-up the Company. Abdul Malik JCA did in the Gulf Business Construction case state that it is just and equitable to wind-up a company where the companyís only business is ultra vires the company. The allegation that the Petition was to scuttle the Civil Suit [50] The Respondents allege that the Defendants was filed for a collateral purpose, to scuttle the Civil Suit to the benefit of the Landlord and Datoí WWK, so that the Landlord could avoid paying compensation to the 1 st Respondent. [51] I have several observations to make of this allegation. Firstly, the Company and the 2 nd Respondent do not deny at all the decision to abandon the running of the Companyís business at the Premises, and that there was no alternative hotel business planned for the Company. It was their decision not to extend the Tenancy Agreement and to cease running the hotel at the Premises, and there is no allegation that ëthey were coerced into making that decision. Had they extended the tenancy under the Tenancy Agreement again as they had done several times before, they would not be in the quagmire or predicament they now find themselves in. They in effect gave the Petitioner the grounds to present this Petition. [52] Secondly, the allegation that the winding-up of the Company would automatically mean that the Civil Suit would be scuttled is an assumption not backed up by the provisions of the Act. [53] To prove this allegation, the Respondents would have to establish two matters: i. That the winding up of the Company would by itself scuttle the Civil Suit; ii. That the Petitioner filed the petition to scuttle the Civil Suit. [54] First and foremost, when a company is wound up on an order of the Court, a liquidator is appointed. Even though Bala Krishnan may have been nominated by the Petitioner, he is not appointed by the Petitioner but by the Court. He would therefore first and foremost be an officer of the Court and thereby answerable to the Court. He is neither bound by nor beholden to the party that nominated him. In fact, in my view, he must seek independent legal advice from his own solicitors to avoid any allegation of conflict of interest and bias. [55] Under s. 486(1) and Item (a) of the Twelfth Schedule of the Act, the liquidator has the power to ìbring or defend any action or other legal proceedings in the name and on behalf of the company.î This mean he can still continue with the Civil Suit. [56] Under s. 486(2) of the Act, the Court will always have control over the exercise of the powers by the liquidator, including that power to bring or defend any action or other legal proceedings in the name and on behalf of the company. [57] The contributories of the Company (in this case the Petitioner and the 2 nd Respondent) and other creditors of the Company will always have recourse to s. 486(2) and other provisions of the Act if Bala Krishnan breaches or shirks his duties and responsibilities. There are various provisions under the Act for questioning his conduct of the liquidation and even for removing him, and these include sections 480, 482, 485, 486 and 487 of the Act. The allegation that the Petitioner filed the Petition to scuttle the Civil Suit [58] The Respondents allege that the following is evidence that the Petitioner filed the Petition for a collateral purpose i.e. to scuttle the Civil Suit. [59] First, SSM searches tendered as evidence show that the Petitioner and PGCG Assets share:- (a) a common registered address at 4-3-1, Block 4, Kompleks Kantonmen Prima, Jalan lpoh, Batu 4 Yz, 51200 Kuala Lumpur; (b) a common business address at Unit E-5-2, Megan Avenue 1, E, Jalan Tun Razak, 50400 Kuala Lumpur; and (c) a common Companv Secretary, Mr. Wong Wing Kai @ Weng Fong (NRIC No.: 490629-03-5003) [60] Secondly, Chai Sook Tieng, who is the majority shareholder of the Petitioner holding 77% shares, is also a director of PGCG Assets and the wife of Datoí WWK. Page 11 of 18 Keen Solution Sdn Bhd v Le Apple Boutique Hotel (KLCC) Sdn Bhd & Anor [2022] MLJU 1348 [61] Thirdly, its Annual Report dated 03.02.2020 filed with the United States Securities and Exchange Commission, Prime Global Capital Group Incorporated (hereafter ìPGCG Inc.î) the ultimate shareholder of the Landlord, averred as follows: ìKeen Solution Sdn. Bhd. owns 45% of the shares in Le Apple Boutique Hotel (KLCC) Sdn. Bhd. Chai Sook Tieng is a director and owns 55% of the shares of Keen Solution Sdn. Bhd. Chai Sook Tieng is the spouse of Wong Weng Kung, our