Mira and Mei Hwa have initially been partners in bakery business situated Ayer Keroh. 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 in Melaka, and ask how to incorporate a company limited by share. Mira 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. Mira becomes the shareholder for the company with 10,000 ordinary shares with a nominal value of RM1. Mei Hwa 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 0.80 cents per share.

After the incorporation of the company, the board of directors has invited Mei Hwa’s sister, Mei King, who has a business in the UK to become one of the directors. Mei King then purchased branded kitchen utensils from the UK to sell it at their new branches of the bakery.

Mira, 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. Mira submitted her claim to SAS Assurance in respect of the damaged product, and the insurance company refused to entertain her request. From January to May 2019, the business continued to decline, and in July, 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, applications, and Conclusion on
a claim by the liquidator against the insurance company.