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2020 MarsdenLR 90
HIGH COURT MALAYA KUALA LUMPUR
RE: RENTAK ARENA DEVELOPMENT SDN BHD; SPANDAND SDN BHD (APPLICANT) & ANOTHER CASE
[Post (Winding-Up) Nos: WA-28PW-30-01/2020 & 28PW-133-03/2020
The court ruled that the liquidator must act impartially in the best interests of all creditors, emphasizing the importance of creditor support in the appointment process.
Headnote:(A) Companies Act 2016 – Sections 477 and 478 – Companies (Winding Up) Rules 1972 – Appointment of Liquidators – Applications made by Spanland Sdn Bhd and Sabah Development Bank Berhad for the appointment of respective liquidators following the winding up of Rentak Arena Development Sdn Bhd. The Court emphasized the liquidator's duty to act impartially and the need for transparency in remuneration as guided by the Companies (Winding Up) Rules. (Paras 2, 16, 22, 23)
(B) Impartiality of Liquidators – The court reiterated the liquidator's role is to be unbiased and to act for the benefit of all creditors, referencing established case law which clarified the responsibilities and powers entrusted to a liquidator. (Paras 16, 18, 20)
Facts of the case: Rentak Arena Development Sdn Bhd was wound up, with proposed liquidators from Spanland Sdn Bhd and SDBB, highlighting each candidate's qualifications and the creditors' votes from a meeting called to determine the liquidator. (Paras 4-9)
Findings of Court: Ms. Chan Siew Mei was appointed as Liquidator due to her prior work and the creditors' support, while Sundarasan's appointment was dismissed. (Paras 22, 23)
Issues: The court addressed who should be appointed as Liquidator based upon the proposed candidates' qualifications and the creditors' voting outcomes. (Paras 8, 21)
Ratio Decidendi: The court found that the majority support among creditors for Ms. Chan underscored her suitability, and the need for transparent remuneration arrangement favored her appointment. (Paras 22)
Result: Motion 30 dismissed; Motion 133 allowed.
JUDGMENT
[1] There are 2 Notice of Motions before me in 2 separate matters which I have directed to be heard together as they are both in relation to the appointment of Liquidators in place of the Official Receiver for Rentak Arena Development Sdn Bhd (In Liquidation) (Company) being firstly a Notice of Motion under Companies Post Winding Up No WA-28PW-30-01/2020 (Motion 30) filed by Spanland Sdn Bhd (Spanland) and secondly another Notice of Motion vide Companies Post Winding Up No WA-28PW-133-03/2020 (Motion 133) filed by Sabah Development Bank Berhad (SDBB).
[2] Both Motion 30 and Motion 133 were filed pursuant to s 477 of the Companies Act 2016 , whilst Motion 30 had also relied on s 478 of the whereas Motion 133 also included the Companies (Winding Up) Rules 1972 and /or the inherent jurisdiction of the Court.
[3] Motion 30 had applied for one Sundarasan a/l Arumugam (Sundarasan) to be appointed as Liquidator in place of the Official Receiver and was grounded upon the fact that the said Sundarasan was a qualified and suitable person to assume the responsibilities and duties of the liquidator. On the other hand Motion 133 had applied for Chan Siew Mei (Chan) of KPMG Deal Advisory Sdn Bhd to be appointed as Liquidator in place of the Official Assignee on the grounds inter alia that Chan was also a qualified, fit and proper person to be appointed as Liquidator (ii) as it is in the best interest of the Company and its creditors as it will speed up the liqudiation exercise (iii) it will help and reduce the workload of the Official Receiver and clear up backlog of cases (iv) the Motion does jot prejudice any parties who are concerned with the liquidation of the Respondent.
Background Facts
[4] The Company is involved in property development and is the developer of the Templer's Hills Project (Project). To-date only 22 units have been sold in the Project which involved 39 bungalow units and 6 Bungalow lots.
[5] The Company was wound up on 11 February 2019 and the Official Receiver was appointed as the Liquidator of the Company.
[6] It is alleged that Company owes Spanland the sum of RM58,498,638.91 whilst SDBB's debt is for the sum of RM35,066,201.59 being the unsecured portion of debt which are based on banking facilities provided by SBDB to the Company.
[7] The Official Receiver had accepted both Spanland and SDBB's respective proof of debts (POD's) and admitted them.
[8] On 5 June 2020 a general meeting of creditors and contributories (Meeting) was called by the Official Receiver wherein the agenda was to seek the creditors and contributories views in respect of Spanland's and SDBB's Motion and to vote as to which of the proposed liquidators were to take over from the Official Receiver.
[9] At the Meeting, 6 creditors including Spanland and SDBB attended and voted whereas there were no contributories present. The outcome of the Meeting was that:
a) 1 out of 6 creditors (with a total value of RM58,498,638.91) which is 61.89% of the debt admitted by the Official Receiver voted in favour of Sundarasa;
b) 4 out of the 6 creditors (with a total value of RM35,892,840.99) which is 37.98% of the debt admitted by the Official Receiver voted in favour of Chan;
c) 1 out of the 6 creditors (with a total value of RM125,998.32) which is 0.135 of the debt admitted by the Official Receiver abstained from voting.
Spanland's Submissions
[10] Spanland had submitted that Sundarasan was able to administer the Company in an impartial and fair manner, having due consideration to all the creditors and that he had 28 years of experience in the liqiudation of companies which included successfully turning around 13 abandoned projects.
[11] It was alleged by Spanland that there was clear bias by SDBB in its affidavits and submissions that the candidate proposed by them would not give any serious considerations to the interest of and may even sideline Spanland as a creditor of the Company.
SDBB Submissions
[12] SDBB contends that Chan is a qualified,
