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2021 MarsdenLR 4262
HIGH COURT MALAYA KUALA LUMPUR
RE: TENAGA GAGAH SDN BHD
[Post (Winding-Up) Application No: WA-28PW-212-07/2021]
The removal of a liquidator requires showing cause, and creditor wishes must be considered even if not unanimously supportive.
Headnote:(A) Companies Act 2016 – Section 521 – Liquidation – The Court considered the wishes of the creditors during the proceedings regarding the appointment of liquidators, noting that the principles of removing a liquidator require showing of cause, per case law precedents. (Paras 24, 50)
Facts of the case: The applicants sought to remove Wong Weng Foo as liquidator based on creditor wishes from a meeting, where Chan Siew Mei was favored. The liquidator's impartiality was questioned due to previous actions.
Findings of Court: The Court upheld that creditor wishes must be considered and that unilaterally acting against those wishes could justify removal of a liquidator.
Issues: The main question was whether the actions and conduct of Wong Weng Foo constituted grounds for his removal as liquidator.
Ratio Decidendi: The Court ruled that the removal of a liquidator must account for the interests of creditors, prioritizing proper conduct and cooperative management among joint liquidators.
Result: The application to remove Wong Weng Foo was allowed.
JUDGMENT
(Enclosure 1)
[1] By way of the notice of Motion in encl 1 (Motion), the applicants, Residensi Laguna Joint Management Body, ("Applicants"), a creditor of the company in liquidation, Tenaga Gagah Sdn Bhd (Company) had applied for inter alia the following order and reliefs:
(i) that Wong Weng Foo be removed as liquidator of the Company and
(ii) if prayer (i) is allowed, Wong Weng Foo is to be released as liquidator of the Company
[2] The grounds in support of the Motion were that:
(a) none of the creditors who attended the creditors meeting (Creditors Meeting) which was held by the Official Receiver (OR) on 9 January 2021 wanted Wong Weng Foo to be the liquidator of the Company as none of them had voted for him
(b) the majority of the creditors at the said Creditors Meeting wanted Chan Siew Mei to be the liquidator of the Company
(c) the wishes of the creditors must be given due regard
(d) i t would not be in the interest of the liquidation /creditors for Wong Weng Foo to remain in office any longer
[3] 3 creditors have also filed their affidavit in Support of the Motion.
[4] The company was wound up on 31 July 2014 by an order of this Honourable Court and Ler Cheung Chye and Lum Tuck Leong ("Former Liquidators") were appointed as liquidators of the Company.
[5] On 8 August 2014, a separate winding-up order was granted against the Company whereby WWF was appointed as a liquidator of the Company.
[6] The Company subsequently lodged an appeal to the Court of Appeal against the winding-up order dated 78 August 2014 vide Civil Appeal No: W-02(NCC)-1544-09/2014. The appeal was allowed on 7 July 2015 and the winding-up order dated 31 July 2014.
[7] The Court of Appeal however, varied the winding-up order dated 31 July 2014 where the Official Receiver was appointed as a provisional liquidator of the Company and the appointment was to take effect from 31 July 2014.
[8] In the circumstances, the Former Liquidators ceased to be the liquidators of the Company.
[9] The Court of Appeal indicated to the relevant parties to file and application to the Winding-Up Court to nominate a liquidator for the Company.
[10] Hence, two (2) notices of motion were filed before the Winding-Up Court to appoint liquidators for the Company, detail of which are as follows:
(a) Notice of Motion filed by one Kuh Cho Sen on 30 August 2016 ("Enclosure 101") to appoint the Former Liquidator of the Company; and
(b) Notice of Motion filed by several creditors on 1 November 2016 ("Enclosure 104") nominating WWF to be appointed as the liquidator of the Company
[11] The Winding-Up Court dismissed encl 101 and allowed encl 104 which led to WWF's appointment as a liquidator of the Company.
[12] The applicants of encl 101 filed an appeal against the Winding-Up Court's decision dismissing encl 101 and allowing encl 104.
[13] Pursuant to an Order dated 6 December 2017 granted by the Court of Appeal vide Civil Appeal No: W-02(IM)(NCC)-1048-05/2017 heard together with Civil Appeal No: W-02(IM)(NCC)-1049-05/2017, WWF's appointment as a liquidator of the Company of he Company was stayed and the Official Receiver was appointed as the provisional liquidator of the Company.
[14] Sometime on 19 December 2018, the Official Receiver called for a creditors' meeting on 9 January 2019 ("Creditors' Meeting").
[15] During the Creditors' Meeting, the majority of the creditors present, which included the JMB (88 out of 91 creditors) voted and chose Chan Siew Mei (NRIC No: 660710-028-5306) ("CSM") of Messrs KPMG Deal Advisory Sdn Bhd ("KPMG") as the preferred liquidator of the Company.
[16] By a Consent Order recorded before the Court of Appeal on 19 March 2019 ("Consent Order"), CSM was appointed as the liquidator of the Company with effect from 19 March 2019 (Exhibit NWM-12 of encl 5, p 87-92/PDF Page 99-104).
[17] WWF was unhappy with the recording of the Consent Order and he proceeded to file two (2) applications for leave to appeal to the Federal Court against the recording of the
