Ranjit Singh, Elizabeth Lau and Hazel Siau for the Applicants [Messrs Elizabeth Lau] Kwan Will Sen and Pang Huey Lynn for the Respondent Liquidators [Messrs Lim Chee Wee Partnership]

Ranjit Singh, Elizabeth Lau and Hazel Siau for the Applicants [Messrs Elizabeth Lau] Kwan Will Sen and Pang Huey Lynn for the Respondent Liquidators [Messrs Lim Chee Wee Partnership]

Leave under s471(1) Companies Act 2016 is granted because the applicants established prima facie that Liew, as directing mind and will of LBB during the period, caused transfers of RM85,191,000 from the 2nd applicant to LBB and that LBB may be a knowing recipient; the relief sought is proprietary and involves...

Source-derived case information.

Citation
POST COMPANIES WINDING UP NO. WA-28PW-442-11/2020 (Mahkamah Tinggi)
Parties
Applicant: Khee San Berhad; Applicant: Khee San Food Industries Sdn Bhd; Respondent (in Liquidation): London Biscuits Berhad (In Liquidation)
Court
High Court
Jurisdiction
Malaysia
Judgment Date
20 April 2021
Case Number
POST COMPANIES WINDING UP NO. WA-28PW-442-11/2020 (Mahkamah Tinggi)
Procedural Posture
Application for Leave to Commence Proceedings Under Section 471 Companies Act 2016 in Winding Up / Interlocutory Application for Leave (hearing and Reserved Decision)
Outcome
Application granted in part; leave granted to commence civil proceedings against London Biscuits Berhad (In Liquidation) under section 471 Companies Act 2016
Legal Topics
Leave Under S471 Companies Act 2016, Knowing Receipt, Constructive Trust, Tracing Remedy, Attribution of Director's Knowledge to Company, Election and Proof of Debt/estoppel
Company Law Insolvency and Winding Up Equity and Trusts Civil Procedure Directors' Duties and Fiduciary Law Leave Under S471 Companies Act 2016 Knowing Receipt Constructive Trust +3 more

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Parties

Khee San Berhad

Applicant

Khee San Food Industries Sdn Bhd

Applicant

London Biscuits Berhad (In Liquidation)

Respondent (in Liquidation)

Procedural Posture

Application for Leave to Commence Proceedings Under Section 471 Companies Act 2016 in Winding Up / Interlocutory Application for Leave (hearing and Reserved Decision)

Legal Issues

  1. 1 Whether the applicants are entitled to leave under s471(1) Companies Act 2016 to sue London Biscuits Berhad (LBB) for knowing receipt and constructive trust
  2. 2 Whether the applicants' claim can be adequately dealt with in the winding up or requires a civil trial
  3. 3 Whether a prima facie case exists against LBB to justify leave

Ratio Decidendi

Leave under s471(1) Companies Act 2016 is granted because the applicants established prima facie that Liew, as directing mind and will of LBB during the period, caused transfers of RM85,191,000 from the 2nd applicant to LBB and that LBB may be a knowing recipient; the relief sought is proprietary and involves tracing which cannot be adequately obtained through winding up or by proof of debt; the proof of debt did not constitute an election because the applicants lacked knowledge of the claim at the time of filing (BDO report postdated the POD).

Court Disposition

Application granted in part; leave granted to commence civil proceedings against London Biscuits Berhad (In Liquidation) under section 471 Companies Act 2016

Orders

  • Leave granted to the applicants to commence proceedings against London Biscuits Berhad (In Liquidation) for knowing receipt and to seek proprietary/constructive trust remedies in RM85,191,000
  • Court orders made in terms of the application before the Court dated 20 April 2021