1. TAN KIM TIAN (NO. K/P: 460414-71-5127) 2. TAN BAN SENG (M) SDN BHD (No. Syarikat) 033599-W) 1. TAN KIM CHUAN (NO. K/P: 501216-10-5385) 2. PRO[ERLAND REALTY SDN BHD (No. Syarikat: 046138-T)

1. TAN KIM TIAN (NO. K/P: 460414-71-5127) 2. TAN BAN SENG (M) SDN BHD (No. Syarikat) 033599-W) 1. TAN KIM CHUAN (NO. K/P: 501216-10-5385) 2. PRO[ERLAND REALTY SDN BHD (No. Syarikat: 046138-T)

The Court of Appeal held the joint liquidators acted within their statutory powers by appointing an independent valuer and offering the properties by first right of refusal at market value; absent bad faith, arbitrariness or irrationality the court must not substitute its commercial judgment for that of liquidators under s236(3) CA 1965. The High Court erred in directing open tender and substituting its view; the appeals were allowed and the sale process ordered to follow the parties' agreed terms (Exhibit A) and valuation (Exhibit B).

Citation
W-02(IM)-1087-05/2018/W-02(IM)-1088-05/2018 (Mahkamah Rayuan)
Parties
Appellant: Tan Kim Tian; Appellant: Tan Beng Seng (M) Sdn Bhd; Respondent: Tan Kim Chuan; Respondent: Properland Realty Sdn Bhd (in liquidation); Joint Liquidator / Party: Onn Kien Hoe; Joint Liquidator / Party: Yew Fooi
Court
IM
Jurisdiction
Malaysia
Judgment Date
2 January 2020
Case Number
W-02(IM)-1087-05/2018/W-02(IM)-1088-05/2018 (Mahkamah Rayuan)
Procedural Posture
Civil Appeal Under Companies Act (post‑winding‑up Applications) / Court of Appeal Judgment (appeal Heard and Decided)
Outcome
Appeals allowed; High Court's orders directing open tender set aside and replaced by terms agreed in Exhibit A and valuation Exhibit B; no order as to costs
Legal Topics
Liquidator Powers, Judicial Supervision of Liquidators, Section 236(3) Companies Act 1965, First Right of Refusal, Sale of Company Property
Source Language
Malay/English
Company Law Insolvency and Liquidation Civil Procedure Liquidator Powers Judicial Supervision of Liquidators Section 236(3) Companies Act 1965 First Right of Refusal Sale of Company Property

Case Brief

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Parties

Tan Kim Tian

Appellant

Tan Beng Seng (M) Sdn Bhd

Appellant

Tan Kim Chuan

Respondent

Properland Realty Sdn Bhd (in liquidation)

Respondent

Onn Kien Hoe

Joint Liquidator / Party

Yew Fooi

Joint Liquidator / Party

Procedural Posture

Civil Appeal Under Companies Act (post‑winding‑up Applications) / Court of Appeal Judgment (appeal Heard and Decided)

Legal Issues

  1. 1 Whether the court should substitute its decision for the liquidators on method of sale of company property
  2. 2 Whether the joint liquidators validly offered and entered into a first right of refusal based on an independent valuation
  3. 3 Whether the High Court erred in directing open tender despite an agreed valuation and acceptance by a contributory

Ratio Decidendi

The Court of Appeal held the joint liquidators acted within their statutory powers by appointing an independent valuer and offering the properties by first right of refusal at market value; absent bad faith, arbitrariness or irrationality the court must not substitute its commercial judgment for that of liquidators under s236(3) CA 1965. The High Court erred in directing open tender and substituting its view; the appeals were allowed and the sale process ordered to follow the parties' agreed terms (Exhibit A) and valuation (Exhibit B).

Court Disposition

Appeals allowed; High Court's orders directing open tender set aside and replaced by terms agreed in Exhibit A and valuation Exhibit B; no order as to costs

Orders

  • Joint Liquidators to procure updated valuation from KGV for the three properties within 30 days
  • Lot PT 21 to be sold by first right of refusal to the Appellants by private treaty at the price in the latest valuation; if latest valuation is lower than KGV 28.12.2017 valuation then the 2017 valuation applies