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2024 MarsdenLR 3242
HIGH COURT SABAH & SARAWAK LABUAN
PROBIS FINANCIAL SERVICES PTY LIMITED – Appellant
Versus
CITY CREDIT INVESTMENT BANK LIMITED – Respondent
[Companies (Winding Up) No: LBN-28NCC-1-10/2023]
The court affirmed the interim liquidator's claim for remuneration, finding it justified based on detailed records of work performed, without requiring creditor approval.
Headnote:(A) Companies Act 2016 - Sections 465(1), 466(1)(a), 466(1)(c), 479(1), and 479(2) - Claim for remuneration by interim liquidator - Court allowed interim liquidator's claim of SGD1,111,638.13 for work done from 16 October 2023 to 15 January 2024, finding the remuneration reasonable based on detailed records of work performed. (Paras 1, 19, 35, 39)
(B) Interim Liquidator's Duties - The burden of proof lies with the interim liquidator to justify the remuneration claimed, demonstrating that the work performed was necessary and in accordance with statutory requirements. (Para 35)
Facts of the case:
The petitioner, a financial service provider in voluntary administration, sought to recover debts owed by the respondent, an offshore investment bank undergoing liquidation. The interim liquidator claimed remuneration for services rendered during the liquidation process. (Paras 7-12)
Findings of Court:
The court found the interim liquidator's remuneration and expenses to be reasonable and justified, granting the claim without opposition from key stakeholders. (Paras 39)
Issues: The main issues included whether the remuneration sought was justified and if the interim liquidator had demonstrated the reasonableness of the claimed amounts. (Paras 26, 35)
Ratio Decidendi: The court held that the interim liquidator provided sufficient evidence to support the claim for remuneration, including a detailed breakdown of work performed and associated costs, affirming that the remuneration did not require creditor approval under section 479(2). (Paras 36, 39)
Result: Claim for remuneration granted.
JUDGMENT
Enclosure 49: Nature Of Dispute
[1] On 18 June 2024, the court allowed the claim for remuneration by Luke Anthony Furler, the interim liquidator of the respondent, to be paid out of the assets of the respondent in terms of encl 49.
[2] The remuneration is for the sum of SGD987,187.50 for work done from 16 October 2023 to 15 January 2024.
[3] There was also a claim for goods and service tax of SGD88,846.88.13, and for SGD35,603.75 in expenses covering the same period.
[4] For convenience, the total sum of SGD1,111,638.13 was referred to as the interim liquidator's remuneration.
[5] An appeal has since been filed by Function Group Limited, one of the creditors of the respondent which opposed encl 49.
[6] Before providing the reasons for allowing encl 49, it may be necessary to narrate the salient facts leading up to the appointment and remuneration claim of the interim liquidator, so as appreciate the scope and nature of his work.
Background Facts
[7] The petitioner, a company incorporated in Australia, carried on business as a financial and insurance service provider. It is in voluntary administration and there are 4 joint administrators.
[8] The respondent, a company incorporated in Labuan, is a licensed offshore investment bank registered with the Labuan Financial Services Authority. It wholly owns City Credit Capital (Labuan) Limited "CCCL"), a licensed foreign exchange and money broker which was placed under liquidation by way of a creditors' voluntary winding up by which one Datuk Tee Guan Pian was appointed its liquidator.
[9] There was a commercial arrangement between the petitioner and the respondent whereby the petitioner was said to be owed monies in USD and Euros.
[10] On 28 April 2023, the petitioner, in need of funds on account of its own clients' withdrawal requests, unsuccessfully requested the respondent to withdraw the whole of its balances. Letters of demand and emails sent in successive months were to no avail.
[11] The respondent's premises in Kuala Lumpur were found to have been vacated. The email address of the principal officer Charles Chan was deactivated.
[12] On 2 October 2023, the petitioner filed its winding-up petition against the respondent in the High court of Sabah and Sarawak, Federal Territory of Labuan, on the basis that the respondent is unable to pay its debts within the meaning of ss 465(1), 466(1)(a) and 466(1)(c) of the Companies Act 2016 .
[13] In elaboration, the petitioner averred that more than 21 days had lapsed since its letters of demand dated 22 June 2023 and 31 July 2023, and the respondent had failed to pay the sums of USD20,635,399.78 and Euros 11,750,264.62 (as at 28 April 2023) or any part thereof or to secure or compound for it to the satisfaction of the petitioner.
[14] The petitioner also averred that considering all the respondent's liabilities - current, contingent and prospective - the respondent is unable to pay its debts, especially since it was announced on 25 August 2023 that the regulatory authority Labuan Financial Services Authority had imposed business restrictions on the respondent for non-compliance with minimum capital and other regulatory requirements.
[15] Shortly thereafter, the petitioner made an ex-parte application for the appointment of Luke Anthony Furler as the interim liquidator of the respondent. On 16 October 2023, the application was granted by Justice Faridz Gohim.
[16] Function Group Limited through Messrs Ravenesan applied to set aside the appointment by encl 27. It was in favour of the winding up but wanted the said Datuk Tee as the liquidator. The respondent through Messrs Wong & Co similarly applied to set aside the appointment by encl 29.
[17] Both challenges over the appointment were dismissed by this court which subsequently granted the interim liquidator's application for accounting and other records of the respondent and CCCL to be handed over by CCCL's liquidator who opposed that discovery application housed in encl 50.
Enclosure
