1. ) K&A MANAGEMENT SDN BHD (DALAM PENGGULUNGAN) 2. ) Chong Chuan Long 1. ) Liputan Canggih Sdn Bhd 2. ) Ascot Heights Sdn Bhd 3. ) LBCN Development Sdn Bhd 4. ) Extrogold Sdn Bhd 5. ) Redztikah Sdn Bhd 6. ) Eureka Fountain Sdn Bhd 7. ) Tul

1. ) K&A MANAGEMENT SDN BHD (DALAM PENGGULUNGAN) 2. ) Chong Chuan Long 1. ) Liputan Canggih Sdn Bhd 2. ) Ascot Heights Sdn Bhd 3. ) LBCN Development Sdn Bhd 4. ) Extrogold Sdn Bhd 5. ) Redztikah Sdn Bhd 6. ) Eureka Fountain Sdn Bhd 7. ) Tul

The Court of Appeal held that where the Companies Act does not provide a direct statutory remedy for alleged misconduct by a liquidator (such as alleged contempt or abuse of process), third parties may invoke the court’s inherent jurisdiction to seek leave from the Winding-Up Court to commence committal proceedings; the High Court was wrong to find no locus standi and to dismiss the leave on the basis of lack of probability of success and breach of natural justice, therefore Appeal B-02(IM)-1180 is allowed (ex parte leave reinstated) and Appeal B-02(IM)-1284 is dismissed.

Citation
B-02(IM)-1284-09/2020 (Mahkamah Rayuan)
Parties
Appellant (b 02(im) 1180 09/2020; Respondent in B 02(im) 1284 09/2020): Liputan Canggih Sdn Bhd; Appellant (b 02(im) 1180 09/2020; Respondent in B 02(im) 1284 09/2020): Ascot Heights Sdn Bhd; Appellant (b 02(im) 1180 09/2020; Respondent in B 02(im) 1284 09/2020): LBCN Development Sdn Bhd; Appellant (b 02(im) 1180 09/2020; Respondent in B 02(im) 1284 09/2020): Extrogold Sdn Bhd; Appellant (b 02(im) 1180 09/2020; Respondent in B 02(im) 1284 09/2020): Redztikah Sdn Bhd; Appellant (b 02(im) 1180 09/2020; Respondent in B 02(im) 1284 09/2020): Eureka Fountain Sdn Bhd; Appellant (b 02(im) 1180 09/2020; Respondent in B 02(im) 1284 09/2020): Tulus Kembang Sdn Bhd; Appellant (b 02(im) 1284 09/2020): K & A Management Sdn Bhd (in liquidation); Respondent (b 02(im) 1180 09/2020); Appellant (b 02(im) 1284 09/2020): Chong Chuan Long (liquidator)
Court
IM
Jurisdiction
Malaysia
Judgment Date
12 August 2021
Case Number
B-02(IM)-1284-09/2020 (Mahkamah Rayuan)
Procedural Posture
Civil Appeals From High Court Winding Up Jurisdiction Concerning Leave to Commence Committal Proceedings Against Liquidator / Court of Appeal Judgment on Consolidated Interlocutory Appeals (leave and Natural Justice Issues)
Outcome
Allow Civil Appeal B-02(IM)-1180-09/2020; Dismiss Civil Appeal B-02(IM)-1284-09/2020; reinstate ex parte leave order dated 12.7.2019.
Legal Topics
Locus Standi to Sue Liquidator, Leave to Commence Proceedings Against Liquidator, Ex Parte Applications and Natural Justice, Probability of Success Test for Leave
Source Language
Malay/English
Company Law Civil Procedure Contempt of Court Inherent Jurisdiction of the Court Locus Standi to Sue Liquidator Leave to Commence Proceedings Against Liquidator Ex Parte Applications and Natural Justice Probability of Success Test for Leave

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Parties

Liputan Canggih Sdn Bhd

Appellant (b 02(im) 1180 09/2020; Respondent in B 02(im) 1284 09/2020)

Ascot Heights Sdn Bhd

Appellant (b 02(im) 1180 09/2020; Respondent in B 02(im) 1284 09/2020)

LBCN Development Sdn Bhd

Appellant (b 02(im) 1180 09/2020; Respondent in B 02(im) 1284 09/2020)

Extrogold Sdn Bhd

Appellant (b 02(im) 1180 09/2020; Respondent in B 02(im) 1284 09/2020)

Redztikah Sdn Bhd

Appellant (b 02(im) 1180 09/2020; Respondent in B 02(im) 1284 09/2020)

Eureka Fountain Sdn Bhd

Appellant (b 02(im) 1180 09/2020; Respondent in B 02(im) 1284 09/2020)

Tulus Kembang Sdn Bhd

Appellant (b 02(im) 1180 09/2020; Respondent in B 02(im) 1284 09/2020)

K & A Management Sdn Bhd (in liquidation)

Appellant (b 02(im) 1284 09/2020)

Chong Chuan Long (liquidator)

Respondent (b 02(im) 1180 09/2020); Appellant (b 02(im) 1284 09/2020)

Procedural Posture

Civil Appeals From High Court Winding Up Jurisdiction Concerning Leave to Commence Committal Proceedings Against Liquidator / Court of Appeal Judgment on Consolidated Interlocutory Appeals (leave and Natural Justice Issues)

Legal Issues

  1. 1 Whether third parties who are not creditors or contributories have locus standi to seek leave to commence committal proceedings against a liquidator
  2. 2 Whether the court’s inherent jurisdiction can be invoked to obtain leave where statute provides no remedy for the specific misconduct alleged
  3. 3 Whether obtaining ex parte leave in these circumstances breached natural justice

Ratio Decidendi

The Court of Appeal held that where the Companies Act does not provide a direct statutory remedy for alleged misconduct by a liquidator (such as alleged contempt or abuse of process), third parties may invoke the court’s inherent jurisdiction to seek leave from the Winding-Up Court to commence committal proceedings; the High Court was wrong to find no locus standi and to dismiss the leave on the basis of lack of probability of success and breach of natural justice, therefore Appeal B-02(IM)-1180 is allowed (ex parte leave reinstated) and Appeal B-02(IM)-1284 is dismissed.

Court Disposition

Allow Civil Appeal B-02(IM)-1180-09/2020; Dismiss Civil Appeal B-02(IM)-1284-09/2020; reinstate ex parte leave order dated 12.7.2019.

Orders

  • Reinstate ex parte order dated 12.7.2019 granting leave to apply for committal proceedings against the liquidator
  • Order global costs of RM20,000 for the two appeals to be paid to the applicants by the liquidator from the assets of the company in liquidation