AUGUSTINE A/L T.K. JAMES (LIQUIDATOR FOR BEGAN CONSTRUCTION SDN BHD) LIEW CHONG MIN

AUGUSTINE A/L T.K. JAMES (LIQUIDATOR FOR BEGAN CONSTRUCTION SDN BHD) LIEW CHONG MIN

Service of the winding‑up petition at the company's registered office imparted knowledge to the director (1st Respondent); dispositions made after presentation of the petition are void; many payments were repayments to related parties without supporting documentation and thus did not benefit the general body of creditors nor were they bona fide; therefore the dispositions (net RM1,496,730.38 excluding RM20,000 and RM120,000) are void and the 1st and 2nd Respondents are liable to repay; the 3rd Respondent acted on instructions without knowledge and is not liable under s541.

Citation
W-02(A)-1297-07/2022 (Mahkamah Rayuan)
Parties
Appellant / Liquidator / Plaintiff in High Court: Augustine A/L T.K. James (Liquidator for Began Construction Sdn Bhd); 1st Respondent / Defendant: Liew Chong Min; 2nd Respondent / Defendant: Ng Tuck Weng; 3rd Respondent / Former Solicitors for the Company: Tan Kinv Tat (The Law Chambers of Tan Kinv Tat)
Court
A
Jurisdiction
Malaysia
Judgment Date
11 January 2024
Case Number
W-02(A)-1297-07/2022 (Mahkamah Rayuan)
Procedural Posture
Civil Appeal Concerning Company Winding‑up and Avoidance/validation of Dispositions / Court of Appeal Judgment on Consolidated Appeals (appeal Heard; Judgment Delivered)
Outcome
Appeal 1296 allowed in part against the 1st and 2nd Respondents; dispositions totalling RM1,496,730.38 (excluding RM20,000 to Optad and RM120,000 to QST) declared void; appeal dismissed against the 3rd Respondent; Appeal 1297 allowed to the same extent; High Court decision set aside in part.
Legal Topics
Avoidance of Dispositions After Presentation of Winding‑up Petition, Validation of Dispositions, Directors' Duties and Knowledge of Proceedings, Undue Preference and Repayments to Related Parties, Liability of Third Parties and Officers Under S541
Source Language
Malay/English
Company Law Insolvency Law Civil Procedure Avoidance of Dispositions After Presentation of Winding‑up Petition Validation of Dispositions Directors' Duties and Knowledge of Proceedings Undue Preference and Repayments to Related Parties Liability of Third Parties and Officers Under S541

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 4 Authorities cited 12 Party arguments 2 Amounts and remedies 5
Sign in to unlock

Parties

Augustine A/L T.K. James (Liquidator for Began Construction Sdn Bhd)

Appellant / Liquidator / Plaintiff in High Court

Liew Chong Min

1st Respondent / Defendant

Ng Tuck Weng

2nd Respondent / Defendant

Tan Kinv Tat (The Law Chambers of Tan Kinv Tat)

3rd Respondent / Former Solicitors for the Company

Procedural Posture

Civil Appeal Concerning Company Winding‑up and Avoidance/validation of Dispositions / Court of Appeal Judgment on Consolidated Appeals (appeal Heard; Judgment Delivered)

Legal Issues

  1. 1 Whether dispositions of company funds made after presentation of the winding‑up petition are void under Companies Act 2016
  2. 2 Whether the court can validate dispositions under the Companies Act and the tests for validation (benefit to general body of creditors or bona fide/good honest intention)
  3. 3 Whether the 1st Respondent had knowledge of the winding‑up petition and thus precluded a bona fide defence

Ratio Decidendi

Service of the winding‑up petition at the company's registered office imparted knowledge to the director (1st Respondent); dispositions made after presentation of the petition are void; many payments were repayments to related parties without supporting documentation and thus did not benefit the general body of creditors nor were they bona fide; therefore the dispositions (net RM1,496,730.38 excluding RM20,000 and RM120,000) are void and the 1st and 2nd Respondents are liable to repay; the 3rd Respondent acted on instructions without knowledge and is not liable under s541.

Court Disposition

Appeal 1296 allowed in part against the 1st and 2nd Respondents; dispositions totalling RM1,496,730.38 (excluding RM20,000 to Optad and RM120,000 to QST) declared void; appeal dismissed against the 3rd Respondent; Appeal 1297 allowed to the same extent; High Court decision set aside in part.

Orders

  • Disposition of RM1,496,730.38 declared void except RM20,000 paid to Optad Marketing Sdn Bhd and RM120,000 paid to QST Solutions Sdn Bhd
  • Order that the 1st and 2nd Respondents are liable for the amounts listed in encl.1 paragraphs (a), (b), (c) and (f) to (o) (i.e. repayment to the company/liquidator)