Pilecon Engineering Berhad v Cahaya Kelang Construction Sdn Bhd & Anor

Appellant(s): Pilecon Engineering Berhad

Respondent(s):

• Cahaya Kelang Construction Sdn Bhd
• Pnsb Acmar Sdn Bhd

• YA Datuk Ravinthran a/l Paramaguru
• YA Datuk Mohamed Zaini Bin Mazlan
• YA Dato' Ahmad Fairuz bin Zainol Abidin

• The appellant's claim against the respondents was for a debt owed to its wholly-owned subsidiary, which the appellant asserted had been assigned to it.
• The subsidiary had entered into a series of settlement deeds with the respondents to resolve a debt of RM4.5 million for construction works, agreeing to partial cash payment and transfer of properties.
• The appellant's Board Resolution purported to accept the transfer of "contra properties" from the respondents to settle part of the subsidiary's debt to the appellant, shortly before the subsidiary was wound up.

• Whether the purported assignment of debt from the subsidiary to the appellant constituted an undue preference, considering the subsidiary was wound up shortly after the transaction.
• Whether the restrictive clauses in the settlement deeds between the subsidiary and the respondents precluded the appellant from claiming against the second respondent or from seeking a monetary sum instead of property transfer.
• Whether there was a valid and enforceable assignment of the debt from the subsidiary to the appellant, specifically requiring a written assignment by the assignor under the Civil Law Act 1956.

• The Court of Appeal affirmed the dismissal of the appellant's claim, holding that although the High Court erred in applying the Companies Act 2016 retrospectively, the transaction was still void as an undue preference under the Companies Act 1965.
• The Court further upheld that the appellant had no valid cause of action against the second respondent due to restrictive clauses in the original deeds, and that the appellant's claim for a monetary sum was inconsistent with its Board Resolution for property transfer.
• The Court concluded there was no valid and enforceable assignment of the debt to the appellant, as it lacked a written assignment from the assignor (the subsidiary) as required by Section 4(3) of the Civil Law Act 1956.