Cindy and Mandy have initially been partners in bakery business. Both of them intend to expand their business and form a limited company. They go to UMG Corporate Consultants Sdn Bhd, one of a secretarial firm, and ask how to incorporate a company limited by share. Cindy also informs that the number of her shareholder for her new company is only two and both of them is going to become directors of the company. Cindy becomes the shareholder for the company with 10,000 ordinary shares with a nominal value of RM1. Mandy has a financial problem and cannot pay the shares in full. She, therefore, was allowed to pay partly for the shares at the rate of 0.70 cents per share.

After the incorporation of the company, the board of directors has invited Mandy sister, Annie, who has a business in the overseas to become one of the directors. Annie then purchased branded kitchen utensils from the oversea to sell it at their new branches of the bakery.

Cindy, considering the amount of money that has been used to purchase the branded kitchen utensil and the cost of freight, bought an insurance coverage for their shipment by using her own name from SAS Assurance. The goods were severely damaged when they arrive in Malaysia. Cindy submitted her claim to SAS Assurance in respect of the damaged product, and the insurance company refused to entertain her request. After several months, the business continued to decline, and, however, the company went into a creditor's voluntary winding up with debts exceeding assets by close to RM1 million.

-Discuss the legal issues, relevant law, application, and conclusion on a claim by the liquidator against the insurance company.