A liquidator is entitled to fair remuneration for work done during their appointment, even if the winding up order is later set aside, with costs borne by the losing party in the winding up petition.

Prelusion

[1] The company: Shigen Polycolor Sdn Bhd (Company) was wound up. The Applicant: Mr Khor Yong Yong was appointed the Company's liquidator (Liquidator).

[2] The winding up Petition was presented by the 1st Respondent in this proceeding: Tan Kheng Guan (Tan). Tan made the 2nd Respondent in this proceeding: Chu Kok Khing (Chu), one of the respondents in the winding up Petition. The other respondent in the winding up Petition was the Company (a nominal respondent). The winding up Petition was part of the extended litigation (multiple legal proceedings) between Tan and Chu.

[3] The Liquidator set out to perform his work.

[4] Chu proceeded to apply to set aside the winding up Order. He succeeded. The winding up Order was set aside. The winding up was terminated. The Order appointing the Liquidator was also set aside. The Liquidator's work ceased.

[5] The Liquidator now applies to be remunerated for the period that he performed his work as the Company's liquidator, namely between the date of the winding up Order and the date that the winding up Order was set aside.

[6] Should the Liquidator be remunerated? If yes, who should pay his remuneration and expenses?

The Pertinent Chronology Of Proceedings

[7] The Company was wound up on 19 July 2022. The Liquidator started his work soon after.

[8] The winding up Order, and the Order appointing the Liquidator, were set aside on 24 March 2023 (eight months later).

Jurisdiction And Power To Order The Payment Of Remuneration And Expenses

[9] "Remuneration" means payment for work done and services rendered. In the context of a company's winding up and the ensuing liquidation process, the liquidator's remuneration necessarily means the payment for the work done and for services rendered, and the expenses incurred, as a result of performing the duties and obligations of a liquidator.

[10] Under statute law, s 479(2) of the Companies Act 2016 ( CA ), provides that a liquidator (other than the Official Receiver) is entitled to be remunerated. The remuneration is determined by any of these three ways:

(1) by an agreement between the liquidator and the committee of inspection; or

(2) if there is no agreement or no committee of inspection, by a resolution passed at a creditors' meeting in the prescribed manner; or

(3) if there is no agreement and there is no such resolution passed-by the Court.

[11] Subsection 479(2) of the CA is set out below for reference [With My Emphases Added]:

Section 479 . Remuneration of liquidators in winding up by Court

(2) A liquidator other than the Official Receiver shall be entitled to receive such salary or remuneration by way of percentage or otherwise as is determined by:

(a) an agreement between the liquidator and the committee of inspection, if any;

(b) where there is no agreement or where there is no committee of inspection, a resolution passed at a meeting of creditors by a majority of not less than three-fourths in value and one-half in number of the creditors present in person or by proxy and voting at the meeting and whose debts have been admitted to vote, which meeting shall be convened by the liquidator by a notice to each creditor to which notice shall be attached a statement of all receipts and expenditure by the liquidator and the amount of remuneration sought by him; or

(c) if the agreement or determination under paragraph (a) or (b) fails, the Court.

[12] The parties here agree that there was no agreement b