Liew Chia Soon 1. ) LOH TECK WAH 2. ) Fintree Capital Sdn Bhd 3. ) Kang Moon Chin

Liew Chia Soon 1. ) LOH TECK WAH 2. ) Fintree Capital Sdn Bhd 3. ) Kang Moon Chin

The Court of Appeal concluded the High Court erred: the applicant used the IJM/JMO mechanism for a collateral purpose in an ongoing shareholder dispute (mala fide/abuse of process), the insolvency evidence was unreliable and failed to account for contingent assets (fees receivable), and material facts (including the applicant's wider interest and related proceedings) were not adequately disclosed; therefore the IJM and JMO were set aside.

Citation
W-02(A)-1232-06/2021 (Mahkamah Rayuan)
Parties
Appellant (1st Intervener in High Court): PNL Capital Sdn Bhd; Appellant (2nd Intervener in High Court): PNL Business Services Sdn Bhd; Appellant (3rd Intervener in High Court): PNL Trading Sdn Bhd; Appellant (4th Intervener in High Court): Subang Industry Park Sdn Bhd; Appellant (5th Intervener in High Court): Tian An Trading Sdn Bhd; Appellant (6th Intervener in High Court): Liew Chia Soon; 1st Respondent (applicant in High Court): Loh Teck Wah; 2nd Respondent (target Company / Respondent in High Court): Fintree Capital Sdn Bhd; 3rd Respondent: Kang Mooi Chin
Court
A
Jurisdiction
Malaysia
Judgment Date
21 February 2022
Case Number
W-02(A)-1232-06/2021 (Mahkamah Rayuan)
Procedural Posture
Civil Appeals From High Court Judicial Management Proceeding (originating Summons) / Court of Appeal Judgment on Consolidated Appeals (appeal Hearing and Judgment)
Outcome
Appeals allowed. High Court orders appointing Interim Judicial Manager and Judicial Manager set aside. Decisions of IJM and JM set aside unless ratified by Fintree. Costs awarded.
Legal Topics
Judicial Management, Interim Judicial Management, Abuse of Process, Shareholder Disputes, Anton Piller Order, Non Disclosure in Ex Parte Applications
Source Language
Malay/English
Company Law Insolvency Law Civil Procedure Corporate Governance Judicial Management Interim Judicial Management Abuse of Process Shareholder Disputes +2 more

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Parties

PNL Capital Sdn Bhd

Appellant (1st Intervener in High Court)

PNL Business Services Sdn Bhd

Appellant (2nd Intervener in High Court)

PNL Trading Sdn Bhd

Appellant (3rd Intervener in High Court)

Subang Industry Park Sdn Bhd

Appellant (4th Intervener in High Court)

Tian An Trading Sdn Bhd

Appellant (5th Intervener in High Court)

Liew Chia Soon

Appellant (6th Intervener in High Court)

Loh Teck Wah

1st Respondent (applicant in High Court)

Fintree Capital Sdn Bhd

2nd Respondent (target Company / Respondent in High Court)

Kang Mooi Chin

3rd Respondent

Procedural Posture

Civil Appeals From High Court Judicial Management Proceeding (originating Summons) / Court of Appeal Judgment on Consolidated Appeals (appeal Hearing and Judgment)

Legal Issues

  1. 1 Whether the IJM/JMO application was mala fide and an abuse of process used to further a shareholder dispute
  2. 2 Whether requirements of ss.404 and 405 Companies Act 2016 were satisfied (company unable to pay debts; likelihood of rehabilitation/realisation)
  3. 3 Whether ex-parte IJM order was justified and whether there was material non-disclosure

Ratio Decidendi

The Court of Appeal concluded the High Court erred: the applicant used the IJM/JMO mechanism for a collateral purpose in an ongoing shareholder dispute (mala fide/abuse of process), the insolvency evidence was unreliable and failed to account for contingent assets (fees receivable), and material facts (including the applicant's wider interest and related proceedings) were not adequately disclosed; therefore the IJM and JMO were set aside.

Court Disposition

Appeals allowed. High Court orders appointing Interim Judicial Manager and Judicial Manager set aside. Decisions of IJM and JM set aside unless ratified by Fintree. Costs awarded.

Orders

  • Set aside Order dated 20.1.2021 appointing Interim Judicial Manager and any related interim orders
  • Set aside Judicial Management Order made by the High Court and appointment of Judicial Manager