The court ruled that a liquidator may only be removed upon clear evidence of unfitness; the interests of creditors are paramount in liquidation decisions.

JUDGMENT

(Enclosure 1)

Nadzarin Wok Nordin JC:

[1] In the Form of Summons dated 7 October 2021 in encl 1 (Application), the Applicant herein, Oon Brothers Electrical Trading Sdn Bhd ("Applicant") has applied to this Court for inter alia an order that Datuk Mohd Afrizan bin Husain (Proposed Liquidator) be appointed as the liquidator for Temasek Land Sdn Bhd ("Company").

[2] The grounds of the Application are as follows:

(i) the Applicant is the Company's director and shareholder;

(ii) the Company is involved in medium to large scale projects, building management, construction and infrastructure works and is an ISO 90001 Construction Industry Development Board (CIDB) certified;

(iii) prior to the liquidation the Company had no less than 10 ongoing projects;

(iv) the Statement of Affairs (SOA) shows that the Company's current assets far outweigh its current liabilities;

(v) the Company was wound up and the Jabatan Insolvensi Malaysia, the 2nd Respondent (R2) herein was appointed the interim liquidator of the Company on 27 June 2019;

(vi) The Company does not have any secured or partially secured creditors;

(vii) As such, although the Company is in a winding-up status, it is solvent;

(viii) On 6 July 2020, this Court had granted a temporary stay pursuant to s 492 Companies Act 2016 for a period of 12 months to amicably settle the sums due from the Company's debtors. However, the company's efforts to settle with its debtors were unsuccessful;

(ix) The only other option left is for the Company to institute legal proceedings. However, this cannot be done since the Company's property (including debts which is a thing in action) can only vest in a liquidator and only a liquidator may sue or defend in the name of the Company;

(x) It is for the benefit of the parties interested in the liquidation and the Company's ongoing projects and ISO and CIDB certifications that the Proposed Liquidator be appointed expeditiously for the purposes of recovering its current assets and discharging its current liabilities.

[3] The Applicant has on 6 December 2021 filed in a Notice of Discontinuance in encl 9 to withdraw the action against R2.

Applicant's Case

[4] It is submitted by the Applicant that the Application is necessitated by the fact that only a liquidator may sue or defend in the name of the Company.

[5] The Applicant further submits amongst others that:

(i) R2, as a provisional liquidator, has no authority to defend, sue, wind up, determine creditors rights or distribute the assets of the Company among its creditors;

(ii) therefore, the appointment of the proposed liquidator will necessarily benefit the creditors as it will ensure that recovery of the Company's assets and the liquidation process is completed expeditiously and economically.

Respondents Opposition

[6] In opposition to the Application, Oon Brothers Electrical Trading Sdn Bhd who was the Petitioner in the Winding Up Petition and the 1st Respondent herein (R1) has submitted inter alia that:

(i) the Applicant has failed to satisfy the criteria of "cause shown" to remove a liquidator and/or any clear evidence that the liquidator is not a fit person to perform his / her duty;

(ii) R2 was hindered from performing their duty due to the Stay Order and therefore the Applicant cannot now claim that R2 as the Official Receiver had failed to perform or carry out its duty;

(iii) R2's Report clearly shows that the wishes of all the creditors in objecting to the appointment of the Proposed Liquidator.

Findings Of The Court

Interim Liquidator

[7] As R2 has been appointed the Interim Liquidator of the Company, R2 has under s 476(2) of the Companies Act 2016 all the functions and powers of a liquidator subject to such limitations and restrictions as may be prescribed in the rules or as the Court may specify in the order appointing him. The said section provides that:

"(2) The interim liquidator shall have and may exercise all the functions and powers of a liquidator subject to such limitations and restrictions as may be pres