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2025 MarsdenLR 639
HIGH COURT MALAYA KUALA LUMPUR
GEMA KUKUH SDN BHD – Appellant
Versus
FELDA PROPERTIES SDN BHD – Respondent
[Civil Suit No: WA-22C-63-08/2022]
Only a liquidator of a wound-up company may initiate legal proceedings on behalf of the company; actions taken without liquidator's consent are invalid.
Headnote:(A) Companies Act 2016 - Section 486(1)(a) - Winding-Up proceedings - Action filed by a company in liquidation without liquidator's consent is invalid - Only the liquidator may initiate legal proceedings on behalf of the company - The action was struck out as it was filed more than 5 years after winding-up and lacked necessary authority. (Paras 12-22)
(B) Legal standing - A contributory or creditor can only file an action on behalf of a wound-up company if the liquidator refuses to do so, and with Court's sanction - The Court found no basis for the Stay Application, and the action was dismissed. (Paras 23-35)
Facts of the case:
The plaintiff, Gema Kukuh, was ordered wound-up and in liquidation since December 2017. The action was filed in August 2022 by a former director without the liquidator's consent, claiming damages from Felda Properties for contract termination. (Paras 2-4)
Findings of Court:
The action was invalid due to lack of liquidator's authorization, and the Stay Application was dismissed. Costs were awarded against the plaintiff personally. (Paras 35-38)
Issues: The main issues addressed were the validity of the action filed by a company in liquidation and the authority of the liquidator in initiating legal proceedings. (Paras 12-22)
Ratio Decidendi: The court held that only a liquidator has the authority to bring or defend actions on behalf of a wound-up company, and any action taken without this authority is invalid. (Paras 12-22)
Result: The action was struck out, and the Stay Application was dismissed with costs awarded to the defendant.
| Table of Content |
|---|
| 1. validity of action post winding-up order. (Para 1 , 2 , 3 , 4 , 5 , 6) |
| 2. legal representation and liquidator's role. (Para 7 , 8 , 9 , 10 , 11) |
| 3. liquidator's authority to initiate actions. (Para 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 22 , 23) |
| 4. court's power to authorize litigation. (Para 20 , 21 , 24 , 25 , 26) |
| 5. liquidator's decision to conduct litigation. (Para 30 , 31 , 32) |
| 6. delay in action initiation. (Para 33 , 34) |
| 7. court's orders and costs allocation. (Para 35 , 36 , 37) |
[PRELIMINARY ISSUE AND STAY APPLICATION]
Introduction
[1] This Judgment is on the preliminary issue as to whether this action can be maintained when the Plaintiff, ("Gema Kukuh") filed it more than 5!4 years after it had been ordered wound-up ad was still in liquidation, on the instructions of one of its former directors and contributories and not by the appointed liquidator, and without any consent or sanction by the winding-up Court. This Judgment will also be on Gema Kukuh's application filed on 19 December 2025 to stay the proceedings in this action ("Stay Application").
Salient Facts
[2] On 20 December 2017, in Alor Setar High Court Winding-Up Petition No: 28-33-11/2-2016 filed by one of its creditors, Gema Kukuh was ordered wound-up, and the Official Receiver was appointed as its liquidator ("Winding-Up Order"). As Gema Kukuh had its registered and business address in Kedah and was wound-up on the order of the Kedah High Court, the Director of the Jabatan Insolvensi Malaysia Cawangan Kedah Darul Aman assumed the role of its liquidator ("Liquidator"). That Winding-Up Order still subsists and has neither been set aside nor stayed.
[3] On 27 August 2022, Gema Kukuh filed this action through Messrs. Nanthini & Co ("Messrs. Nanthini"), who was taking instructions to do so from one Amirul Syuhadah binti Arefin ("Amirul"). Amirul was/had been a director and shareholder of Gema Kukuh after having purchased all of the shares in Gema Kukuh by a Share Sale Agreement dated 19 March 2014 ("Share Sale Agreement"). In this action, Gema Kukuh is claiming against the Defendant ("Felda Properties") for a declaration that Felda Properties' termination on 23 December 2016 of a construction contract between them was invalid, and is further claiming unpaid sums of RM331,593.46, the retention sum of RM1,161,948.40, special and general damages for loss of profits, interest and costs. The Statement of Claim does neither plead nor disclose the winding-up proceedings or the Winding-Up Order against Gema Properties.
[4] On Amirul's instructions, by a letter dated 7 September 2022, Messrs. Nanthini then submitted Amirul's application to the Liquidator for a sanction for him to proceed with the action and to appoint Messrs. Nanthini to represent the Plaintiff ("Amirul's Application").
[5] By a letter dated 27 September 2022 to Messrs. Nanthini & Co ("Liquidator's 1st Letter"), the Liquidator informed Messrs. Nanthini that, based on Amirul's Surat Aku Janji dated 4 September 2022, it had allowed Amirul's Application, subject to further conditions, inter alia, for a competent 'Penjamin' providing the Liquidator with an 'Aku Janji Penjamin' and a 'Bon Jaminan', and further depositing the sum of RM7,000.00 with the Liquidator. Further, neither the Liquidator nor Gema Kukuh's estate would be responsible or held responsible for any failure, loss or costs involved in or imposed by that action; the 'Penjamin' would bear all costs; and that the lawyers having the conduct of the matter would inform the Liquidator in writing of the progress of the case from time to time.
[6] On 16 April 2024, Aliza J (before whom this action was) raised a query to the parties about the validity of the action in view of the High Court's decision in March 2022 in Small Medium Enterprise Development Bank Malaysia Berhad v. Oren Venture Sdn Bhd & Ors And Another Case [2022] 12 MLJ 247; [2022] 6 CLJ 148 ("Oren Venture").
[7] That same day (16 April 2022), Messrs. Nanthini wrote
