Tee Siew Kai Machang Indah Development Sdn Bhd

Tee Siew Kai Machang Indah Development Sdn Bhd

A party who is neither a creditor nor a contributory lacks locus standi to obtain leave to sue a court-appointed liquidator personally for alleged breaches of contract by the company; the liquidator, acting as agent and pursuant to statutory powers, is not personally liable for carrying out statutory duties absent clear prima facie evidence of misfeasance or personal misconduct, and leave to sue is to be confined to proper persons (creditors or contributories) who can show probable success.

Citation
02(i)-50-07/2018(P) (Mahkamah Persekutuan)
Parties
Appellant; Liquidator of Merger Acceptance Sdn Bhd (in Liquidation): Tee Siew Kai (liquidator of Merger Acceptance Sdn Bhd, in liquidation); Respondent; Formerly Rakyat Corporation Sdn Bhd: Machang Indah Development Sdn Bhd (in liquidation)
Court
i
Jurisdiction
Malaysia
Judgment Date
14 August 2019
Case Number
02(i)-50-07/2018(P) (Mahkamah Persekutuan)
Procedural Posture
Civil Appeal / Final Appeal to Federal Court (grounds of Judgment)
Outcome
Appeal allowed; question of law answered in the negative; decisions below set aside
Legal Topics
Liquidator Personal Liability, Leave to Sue Liquidator, Misfeasance, Estoppel, Breach of Contract, Standing/locus Standi
Source Language
Malay/English
Company Law Insolvency Law Civil Procedure Liquidator Personal Liability Leave to Sue Liquidator Misfeasance Estoppel Breach of Contract +1 more

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Parties

Tee Siew Kai (liquidator of Merger Acceptance Sdn Bhd, in liquidation)

Appellant; Liquidator of Merger Acceptance Sdn Bhd (in Liquidation)

Machang Indah Development Sdn Bhd (in liquidation)

Respondent; Formerly Rakyat Corporation Sdn Bhd

Procedural Posture

Civil Appeal / Final Appeal to Federal Court (grounds of Judgment)

Legal Issues

  1. 1 Whether a party who is neither creditor nor contributory may obtain leave to sue a court-appointed liquidator personally
  2. 2 Whether a liquidator is personally liable for alleged breaches of contract by the company in liquidation
  3. 3 Whether the JVA/PA survived the liquidation and could bind the liquidator personally

Ratio Decidendi

A party who is neither a creditor nor a contributory lacks locus standi to obtain leave to sue a court-appointed liquidator personally for alleged breaches of contract by the company; the liquidator, acting as agent and pursuant to statutory powers, is not personally liable for carrying out statutory duties absent clear prima facie evidence of misfeasance or personal misconduct, and leave to sue is to be confined to proper persons (creditors or contributories) who can show probable success.

Court Disposition

Appeal allowed; question of law answered in the negative; decisions below set aside

Orders

  • High Court and Court of Appeal decisions allowing leave to sue liquidator in person set aside
  • Leave to commence personal action against the liquidator dismissed