UNDERSTANDING THE LEGAL PRINCIPLES: STRIKING OUT A WINDING-UP PETITION

Procedural Framework: Order 18 Rule 19 & Order 92 Rule 4

The guiding legal principles governing the striking out of pleadings and petitions in Malaysian courts are trite and well-settled. An application to strike out is principally anchored upon Order 18 Rule 19(1) and Order 92 Rule 4 of the Rules of Court 2012 (ROC 2012):

Order 18 Rule 19(1) Rules of Court 2012:
“The Court may at any stage of the proceedings order to be struck out or amended any pleading or the endorsement, of any writ in the action, or anything in any pleading or in the endorsement, on the ground that:
(a) it discloses no reasonable cause of action or defence, as the case may be;
(b) it is scandalous, frivolous or vexatious;
(c) it may prejudice, embarrass or delay the fair trial of the action; or
(d) it is otherwise an abuse of the process of the court, and may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be.”

Furthermore, Order 92 Rule 4 expressly preserves the inherent powers of the court to make any order necessary to prevent injustice or curtail the abuse of judicial process.

The Supreme Court Locus Classicus: Bandar Builder Sdn Bhd

In the leading Supreme Court authority of Bandar Builder Sdn Bhd & 2 Ors v. United Malayan Banking Corporation Bhd [1993] 4 CLJ 7, Mohamed Dzaiddin SCJ (later Chief Justice of Malaysia) authoritatively laid down the guiding threshold for striking out applications:

1. Plain and Obvious Cases Only: Recourse to a striking out application should only be made in plain and obvious cases where the action is manifestly unsustainable;
2. Obviously Unsustainable: The procedure is applicable only when the claim or defense is obviously bad, hopeless, and doomed to failure;
3. No Minute Examination of Facts: The summary jurisdiction cannot be exercised by conducting a minute, detailed trial of contested facts or voluminous documents on affidavits;
4. Points of Law Requiring Argument: If there is a point of law which requires serious discussion and mature consideration, the matter must proceed to trial and cannot be summarily struck out; and
5. Complete Absence of Viable Cause: The court must be thoroughly satisfied that there is no reasonable cause of action or that the claim is frivolous, vexatious, or an abuse of process.

Judicial Definitions of Statutory Limbs: Middy Industries

In Middy Industries Sdn Bhd & Ors v. Arensi-Marley (M) Sdn Bhd [2012] 1 LNS 830, Ramly Ali JCA (later Federal Court Judge) clarified the precise judicial definitions of the statutory limbs under Order 18 Rule 19(1):

• “Scandalous”: Matters which improperly cast a derogatory light upon a party’s moral character, or pleadings containing abusive, offensive, and irrelevant averments.
• “Frivolous or Vexatious”: Actions or statements that are entirely groundless, lacking any realistic prospect of success, and initiated primarily to harass, embarrass, or annoy the opposing party. The court examines the broader factual history to determine whether a claim is obviously unsustainable.
• “Abuse of Court Process”: Deploying the judicial process for an improper collateral purpose or unlawful objective rather than the bona fide vindication of rights. The courts will intervene swiftly to prevent the administration of justice from being utilized as an instrument of oppression.

Does Order 18 Rule 19 Apply to Strike Out Winding-Up Petitions?

Yes. Although winding-up petitions are initiated pursuant to company insolvency legislation rather than ordinary civil writs, appellate jurisprudence in Malaysia has firmly confirmed that Order 18 Rule 19 applies directly to winding-up proceedings:

• Si & Si Sdn Bhd v. Hazrabina Sdn Bhd [1996] 2 MLJ 509 (Federal Court): The Federal Court established that the provisions of Order 18 Rule 19 govern company winding-up petitions, enabling a respondent company to apply for summary striking out.
• Blue Valley Plantation v. Periasamy a/l Kuppannan & Ors [2011] 5 MLJ 521 (Federal Court): Zaki Tun Azmi CJ reaffirmed that the High Court is seized of statutory jurisdiction under the Rules of Court and inherent jurisdiction under Order 92 Rule 4 to strike out a winding-up petition.
• Ho Num Chon & Anor v. Tech-Lab Manufacturing Sdn Bhd [2017] 9 MLJ 32: Nazlan JC (now JCA) confirmed that a company facing an unsubstantiated or abusive petition may invoke Order 18 Rule 19 to have the petition dismissed prior to full hearing.

Conclusion

Striking out under Order 18 Rule 19(1) of the Rules of Court 2012 represents a crucial procedural shield for corporations faced with groundless, vexatious, or predatory winding-up petitions. Where a petition is presented without bona fide debt or constitutes an abuse of process, the High Court possesses the full jurisdictional mandate to strike it out summarily, insulating solvent businesses from unwarranted commercial injury.

Disclaimer: This article is for informational purposes only and does not constitute formal legal advice. For targeted counsel regarding corporate insolvency defense, debt litigation, or striking out applications, please contact Hasrina Hakimi Advocates & Solicitors directly.