AUGUSTINE A/L T.K. JAMES 1. ) LIEW CHONG MIN 2. ) NG TUCK WENG 3. ) TAN KINV TAT

AUGUSTINE A/L T.K. JAMES 1. ) LIEW CHONG MIN 2. ) NG TUCK WENG 3. ) TAN KINV TAT

Service of the winding‑up petition at the company's registered/business address under Rule 25(1) imputed knowledge to the 1st Respondent (a director). As a consequence, dispositions made after presentation of the petition are void unless validated. The Court found many dispositions were repayments to persons/companies connected to the 1st Respondent without proper documentary support and therefore were not shown to be beneficial to the general body of creditors nor made in good and honest faith; those dispositions are void. The 1st and 2nd Respondents were ordered jointly and severally liable for the specified dispositions (excluding two specified payments). The 3rd Respondent (solicitor)...

Citation
W-02(A)-1296-07/2022 (Mahkamah Rayuan)
Parties
Appellant / Liquidator: Augustine A/L T.K. James (Liquidator for Began Construction Sdn Bhd); 1st Respondent / Director: Liew Chong Min; 2nd Respondent / Director: Ng Tuck Weng; 3rd Respondent / Solicitor (the Law Chambers of Tan Kinv Tat): Tan Kinv Tat
Court
A
Jurisdiction
Malaysia
Judgment Date
11 January 2024
Case Number
W-02(A)-1296-07/2022 (Mahkamah Rayuan)
Procedural Posture
Civil Appeal (company Winding‑up / Post‑winding Proceedings) / Court of Appeal Judgment on Appeals W 02(a) 1296 07/2022 and W 02(a) 1297 07/2022
Outcome
Appeal W-02(A)-1296-07/2022 allowed in part and W-02(A)-1297-07/2022 allowed in part; High Court decision set aside in part. Specific dispositions after presentation of winding‑up petition declared void and 1st and 2nd Respondents held liable; 3rd Respondent not personally liable.
Legal Topics
Avoidance of Dispositions After Presentation of Winding‑up Petition, Validation of Dispositions, Undue Preference, Directors' Duties and Knowledge, Liability of Third‑party Solicitors, Application of Companies Act 2016 Sections 213, 471/472 and 541
Source Language
Malay/English
Company Law Insolvency Law Civil Procedure Legal Profession Avoidance of Dispositions After Presentation of Winding‑up Petition Validation of Dispositions Undue Preference Directors' Duties and Knowledge +2 more

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Parties

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

Appellant / Liquidator

Liew Chong Min

1st Respondent / Director

Ng Tuck Weng

2nd Respondent / Director

Tan Kinv Tat

3rd Respondent / Solicitor (the Law Chambers of Tan Kinv Tat)

Procedural Posture

Civil Appeal (company Winding‑up / Post‑winding Proceedings) / Court of Appeal Judgment on Appeals W 02(a) 1296 07/2022 and W 02(a) 1297 07/2022

Legal Issues

  1. 1 Whether dispositions made after presentation of winding‑up petition are void
  2. 2 Whether the 1st Respondent had knowledge of the winding‑up petition
  3. 3 Whether dispositions were bona fide or beneficial to the general body of creditors and thus capable of validation

Ratio Decidendi

Service of the winding‑up petition at the company's registered/business address under Rule 25(1) imputed knowledge to the 1st Respondent (a director). As a consequence, dispositions made after presentation of the petition are void unless validated. The Court found many dispositions were repayments to persons/companies connected to the 1st Respondent without proper documentary support and therefore were not shown to be beneficial to the general body of creditors nor made in good and honest faith; those dispositions are void. The 1st and 2nd Respondents were ordered jointly and severally liable for the specified dispositions (excluding two specified payments). The 3rd Respondent (solicitor)...

Court Disposition

Appeal W-02(A)-1296-07/2022 allowed in part and W-02(A)-1297-07/2022 allowed in part; High Court decision set aside in part. Specific dispositions after presentation of winding‑up petition declared void and 1st and 2nd Respondents held liable; 3rd Respondent not personally liable.

Orders

  • Disposition totaling RM1,496,730.38 as listed in encl.1 paragraph 1 is declared void, except for paragraph 1(d) (RM20,000 to Optad Marketing Sdn Bhd) and paragraph 1(e) (RM120,000 to QST Solutions Sdn Bhd)
  • Order in terms of encl.1 paragraph 2: 1st and 2nd Respondents are jointly and severally liable to pay the Company and/or the Liquidator the amounts listed in encl.1 paragraphs 1(a), 1(b), 1(c) and 1(f) to 1(o)